Currency in USD
Last close As at 08/06/2023
USD15.35
▲ −0.25 (−1.60%)
Market capitalisation
USD5,594m
Research: Metals & Mining
Pan American Silver (PAAS) has reported that the Mexican Federal Economic Competition Commission approved the company’s plan of arrangement with Yamana and Agnico Eagle. This is the final regulatory approval that paves the way for the completion of the transaction, which is guided to occur by end March, in line with management’s expectations. In other news, PAAS recommended a Q123 cash dividend of US$0.10 per share, implying a 2.2% yield on an annualised basis.
Pan American Silver |
Yamana transaction fully approved |
Company update |
Metals and mining |
27 March 2023 |
Share price performance Business description
Analysts
Pan American Silver is a research client of Edison Investment Research Limited |
Pan American Silver (PAAS) has reported that the Mexican Federal Economic Competition Commission approved the company’s plan of arrangement with Yamana and Agnico Eagle. This is the final regulatory approval that paves the way for the completion of the transaction, which is guided to occur by end March, in line with management’s expectations. In other news, PAAS recommended a Q123 cash dividend of US$0.10 per share, implying a 2.2% yield on an annualised basis.
Year end |
Revenue |
EBITDA |
EPS* |
DPS |
P/E |
Yield |
12/20 |
1,338.8 |
469.1 |
0.57 |
0.22 |
31.6 |
1.2 |
12/21 |
1,632.8 |
593.2 |
0.60 |
0.34 |
30.0 |
1.9 |
12/22 |
1,494.7 |
272.0 |
(0.51) |
0.45 |
N/A |
2.5 |
Note: *EPS is normalised, excluding exceptional items.
PAAS announced that the Mexican Federal Economic Competition Commission approved its plan of arrangement to buy all non-Canadian assets of Yamana Gold. As part of the transaction, PAAS will issue up to 156.9m shares (c US$2.8bn at the current share price) to acquire all outstanding share capital of Yamana Gold, following the sale of Yamana’s Canadian assets to Agnico Eagle for US$1.0bn in cash and shares (c US$2.8bn in total consideration). This is the final regulatory approval and the transaction is now expected to be completed by the end of March 2023.
In other news, PAAS declared a cash dividend of US$0.10 per share for Q123 with the record date on 14 April 2023. The dividend announcement was made ahead of the release of the company’s Q123 financial results to harmonise the dividend payment schedule with that of Yamana. On an annualised basis, it implies a dividend yield of 2.2%.
Despite the recent recovery in the share price against the backdrop of generally supportive performance of gold and silver prices and the consistent execution of the Yamana transaction, we believe that the PAAS shares still do not fully reflect the accretive nature of the deal. The stock is currently trading at a consensus proforma FY23e EV/EBITDA of 8.2x (assuming new shares to be issued by PAAS, PAAS net debt at FY22 and Yamana net debt at Q322), which appears to be an undemanding multiple. We look forward to the release of the combined production and financial guidance by PAAS in the coming weeks, which might provide some welcome visibility for investors. Our estimates and valuation remain under review.
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Research: Consumer
OPAP’s FY22 results benefited from the ongoing retail recovery post COVID, and a still-growing contribution from online (despite the tough comparative) as the company’s enhanced offering attracts growing customer numbers. The higher-than-expected profit, despite relative disappointment about Q422’s revenue due to the FIFA World Cup, reinforces management’s cost control credentials against a background of higher external cost pressures. Management’s guidance for further profit growth in FY23 and an undergeared balance sheet should be supportive of high cash returns.
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