VANCOUVER, BC - Silvercorp Metals Inc . (TSX: NYSE:SVM) (NYSE American: SVM), a Canadian mining company, announced the launch of a new share buyback initiative. The normal course issuer bid (NCIB) is set to start on September 19, 2024, allowing the company to repurchase up to 8,670,700 of its common shares. This quantity represents about 4% of the 216,767,513 common shares issued and outstanding as of September 5, 2024. The program is scheduled to expire on September 18, 2025.
The company's directors will conduct purchases at prevailing market prices through the facilities of the TSX, the NYSE American, and alternative trading systems in both Canada and the United States, adhering to regulatory requirements. The exact number of shares to be repurchased is not guaranteed and Silvercorp retains the right to halt the buyback at any point, in compliance with regulatory obligations. Acquired shares will be cancelled.
Silvercorp stated that the repurchase program is being implemented to enhance flexibility in case market conditions lead to the undervaluation of the company’s shares compared to the value of its mining and corporate assets. The daily repurchase volume on the TSX is capped at 101,257 common shares, which is 25% of the average daily trading volume calculated from the past six months. This limitation, subject to certain exceptions, does not apply to purchases made in the United States.
The company also clarified that as of the NCIB's inception, no officers, directors, or persons holding 10% or more of the securities intend to sell their securities. However, they may choose to do so during the NCIB depending on their personal circumstances.
This new share buyback plan follows the 2023 NCIB, which ended on September 18, 2024, and saw the company acquire and cancel 191,770 shares at a weighted average price of CAD$3.16.
Silvercorp specializes in the production of silver, gold, lead, and zinc, focusing on generating free cash flow, organic growth through drilling, mergers and acquisitions, and a commitment to responsible mining and ESG principles.
The information provided is based on a press release statement from Silvercorp Metals Inc.
In other recent news, Silvercorp Metals Inc. is on track to finalize its acquisition of Adventus Mining Corporation. This follows a favorable court ruling in Ecuador regarding environmental litigation over Adventus's Curipamba-El Domo (NASDAQ:DOMO) project. The court validated the environmental license for the project, initially deemed a Material Adverse Effect by Silvercorp, paving the way for the completion of the acquisition.
This acquisition is part of Silvercorp's strategic expansion in the mining sector, combining Silvercorp's operational expertise and financial strength with Adventus's project development opportunities. However, investors should note that forward-looking statements are subject to change and uncertainty, as factors such as the pending appeal or other developments in the litigation could impact the project and the anticipated benefits of the transaction. These are recent developments, and the completion of the acquisition is still subject to customary closing conditions, including court and shareholder approval.
InvestingPro Insights
Silvercorp Metals Inc. has recently announced a new share buyback program, reflecting its management's confidence in the company's value. Supporting this perspective are key indicators from InvestingPro that offer further insights into Silvercorp's financial health and market performance. Notably, the company holds a stronger cash position than debt on its balance sheet, suggesting a solid liquidity stance that investors often appreciate. This is further evidenced by its liquid assets surpassing short-term obligations, indicating that Silvercorp is well-positioned to meet its immediate financial commitments.
From a profitability standpoint, Silvercorp is expected to see net income growth this year, which could be a driving factor behind the decision to initiate a share repurchase. Additionally, the company is trading at a low P/E ratio relative to its near-term earnings growth, signaling that the shares might be undervalued, which aligns with the rationale for the buyback program.
InvestingPro Data highlights several key metrics for Silvercorp as of the last twelve months up to Q1 2025. The company boasts a market capitalization of approximately $855.26 million, with a P/E ratio of 14.29 and a revenue growth of 11.15%. These figures, combined with a significant price return of 21.6% over the last week, suggest a strong market performance that could be attractive to investors.
For those interested in delving deeper into Silvercorp's prospects, InvestingPro offers additional tips and metrics, including a total of 11 more InvestingPro Tips, which can be accessed for a comprehensive analysis of the company's financial standing and market potential.
As Silvercorp embarks on this new share buyback initiative, these InvestingPro insights provide a valuable context for understanding the company's financial health and the potential implications of its latest strategic move.
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