The Toronto Stock Exchange ("TSX") has accepted
Pan American Silver Corp
) notice stating its intention to repurchase shares. The silver
miner has proposed to make a normal course issuer bid for
repurchasing up to 7,570,535 amount of its common stock,
representing up to 5% of the company's issued and outstanding
shares as of Nov 14, 2013.
AGNICO EAGLE (AEM): Free Stock Analysis
GOLDEN STAR RES (GSS): Free Stock Analysis
PAN AMER SILVER (PAAS): Free Stock Analysis
SILVERCREST MIN (SVLC): Free Stock Analysis
To read this article on Zacks.com click here.
Repurchase of the shares can be made through open market
operations available at the TSX and the Nasdaq Global Select
Market (NASDAQ) and other Canadian trading platforms. The bidding
period will start from Dec 5, 2013, and will continue till Dec 4,
2014, or any earlier date if the company completes its
Pan American decided to undertake the bid as its Board believes
that the market price of its common shares, from time to time,
may not fully reflect the underlying value of its mining
operations, properties and future growth prospects. At such
times, the outstanding common shares will appeal as an investment
for Pan American since a portion of the company's excess cash
generated on an annual basis can be invested for an attractive
risk adjusted return on capital through the bid.
Pan American plans to pay the market price at the time of buying
the common shares as per the rules and policies set by TSX and
NASDAQ and applicable securities laws. Under the bid, all common
shares acquired by Pan American will be cancelled and the
subsequent purchases of the share will be funded by the company's
working capital. However, the company is not bound to make any
purchases despite its intention to acquire its common shares
pursuant to the bid.
Prior to this bid, Pan American declared another normal course
issuer bid program on Aug 29, 2012, and it completed its share
repurchase recently. Bidding period for the same had begun
from Sep 4, 2012, and ended on Sep 3, 2013. The company acquired
1,012,900 of its common shares at an average price of $17.21.
The total number of Pan American's issued and outstanding common
shares stood at 151,410,712 as of Nov 14, 2013. As per TSX, the
maximum daily purchases on the TSX under the normal course issuer
bid will be 91,404 shares, representing 25% of the average daily
trading volume for Pan American's common shares for the six month
ended Oct 31, 2013.
As per the terms of NASDAQ, the maximum daily purchases on NASDAQ
under this normal course issuer bid will be 25% of the average
daily trading volume for the company's common shares.
Pan American recently posted third-quarter 2013 adjusted earnings
(barring non-recurring items) of 8 cents per share, compared with
earnings of 25 cents per share in the year-ago quarter. The
results exceeded the Zacks Consensus Estimate of 5 cents. The
decrease was due to lower revenues, higher depreciation and
amortization costs, and higher losses on commodity and foreign
currency contracts, partly offset by favorable currency impact.
Revenues decreased roughly 15% year over year to $213.6 million
in the third quarter from $251.8 million registered in the
year-ago quarter. The results were ahead of the Zacks Consensus
Estimate of $194 million. The decrease in the top line was due to
lower metals prices, partly offset by higher volumes of all
metals produced by the company.
Pan American expects to achieve its 2013 production target of 25
million to 26 million ounces of silver and 125,000 to 135,000
ounces of gold at cash costs below the original forecast of
$11.50 to $12.80, net of by-product credits.
Pan American currently carries a Zacks Rank #3 (Hold).
Other companies in the mining industry with a favorable Zacks
Golden Star Resources Ltd.
Silvercrest Mines Inc.
Agnico Eagle Mines Ltd
). While Golden Star carries a Zacks Rank #1 (Strong Buy), both
Silvercrest and Agnico Eagle hold a Zacks Rank #2 (Buy).