To remind my readers, Silvercorp announced three such programs: in 2014, 2015 and now. The first two programs were very ambitious - the company wanted to repurchase around 16 million shares but until March 31, 2016 Silvercorp repurchased a mere 4.0 million shares. Since that time no single share was bought back.
Now they want to purchase "only" 8.4 million shares but...will they do it?
As a matter of fact - they have a lot of cash:
source: Simple Digressions
As the chart shows, at the end of 3Q 2017 the company had cash of $99M. Taking the current share price of $2.51, Silvercrop could repurchase as many as 39.4 million shares (in theory).
As SVM has repeatedly stated with all NR's concerning share buyback initiatives throughout the past years ..... "There can be no assurance as to the precise number of shares that will be repurchased under the share repurchase program. Silvercorp may discontinue its purchases at any time." In other words set expectation accordingly.
ReplyDeleteWith SVM being the highest margin, lowest cost, pure silver producer out there today, they continue to build shareholder value on 4 fronts ... Paying shareholders a (modest) dividend, buying back shares (perhaps), growing reserves and resources (Current LOM 15 years), growing assets through a recently acquired 31% equity interest in New Pacific Metals Corp., a high grade exploration project, with a quick timeline towards production.
If one is looking for a silver producer that last Qtr. AISC per ounce of silver, net of by-product credits (90 million lbs Lead & Zinc, came in at $2.26 per ounce silver (1/2 of MAG's projected AISC), with increased projected cash flow for 2018, you may want (re)research SVM.
Be careful with AISC. I agree that SVM is one of the lowest-cost producers in the world but it should report its costs using a co-product costing method (because silver accounts for around 50% of total revenue). For example, in 3Q 2017 the AISC was around $8.4 per ounce of silver eq (instead of $2.26 reported by the company).
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