Wednesday, April 20, 2016

Sprott Sold But Energold Bought - Impact Silver

Impact Silver is a small silver producer, currently running three mines in Mexico (additional two are temporarily suspended). 

In my last article I noted that Sprott Asset Management sold 573,500 shares of Impact and, after this transaction, it was holding 6,292,500 shares in the company. It means that Sprott decreased its initial holding from 8 million shares at the end of 2010 to 6.3 million now.

On the other hand, the biggest Impact's shareholder, Energold Drilling, did the opposite thing. Yesterday Impact and Energold announced that the latter company purchased 1 million shares in Impact, increasing its stake from 6,980,000 shares to 7,980,000 shares. Taking into account that the current share count is around 76.8 million, it means that Energold is holding a stake of 10.39% in the company. 

In my opinion, at the end of 2015 Impact was in an urgent need for cash - the company was holding cash of C$717 thousand. It was nearly nothing so the company most recently closed two private placements, bringing C$2,620 thousand in cash. Due to these placements, the share count increased by 8.67 million, compared to the end of 2015 (an increase of 12.7%). 

Looking at these developments in the short-term, it looks like Energold has made a nice deal - it purchased Impact shares at C$0.31 per share but today these shares are trading at C$0.67 a piece:


As the chart shows, Impact was no exception as far as the the last bull run in silver / gold related stocks is concerned. Since the beginning of February the company's share prices have gone up fivefold and Energold can write up a paper profit of C$360 thousand on the recently purchased stocks. However, other shareholders should not worry about fresh supply of new shares. According to the company:

"The shares issued under the private placement will be subject to a hold period until August 13 (the first placement of 6.67 million shares) and 20 (the second placement of 2 million shares), 2016"

Coming this week: Gold Standard Ventures

No comments:

Post a Comment