First Majestic Silver’s takeover of SilverCrest Mines was the 9th Ubika 20 index component company to be acquired. Replacing SilverCrest in the Mining 20 index is another Latin American focused base and precious metals producer, one that is cash-flow positive and shows great liquidity on its balance sheet.
First Majestic Silver Corp. (TSX: FR) recently completed its acquisition of Ubika Mining 20 (UM20) index component company SilverCrest Mines Inc. The acquisition was announced in late July. SilverCrest shareholders received 0.2769 of a common share of First Majestic plus C$0.0001 in cash for SilverCrest common share held. The acquisition represented a premium of approximately 35% to SilverCrest’s closing price on the day prior to the acquisition announcement.
SilverCrest Mines is the 9th component company to be acquired since the inception of the Ubika 20 indexes (see the other index reports here). The other eight companies taken over in the past include Romarco Minerals, Rio Alto Mining, and Rainy River Resources (Read more).
Replacing SilverCrest in the Ubika Mining 20 index is another Latin American focused base and precious metals producer – Sierra Metals Inc. (TSX: SMT). The Company has three underground mines in Mexico and Peru, with revenues of US$166 million during the last 12 months. Ubika analysts like Sierra Metals as it displays one of the lowest cash costs in its industry, with H1 2015 copper equivalent cash costs of $0.89/lb and silver equivalent cash costs of $5.92/ounce. As well, the Company is cash-flow positive, shows great liquidity on its balance sheet, and trades at 9.6x LTM operating income.
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The Ubika Mining 20 index (UM20) climbed 7.1% during the past month, compared with a 12.1% gain by the TSX Mining Index, outperforming the TSX Venture Index during this time. Sierra Metals Inc. (TSX: SMT) was the top-performing component this month, powering 33% higher after reporting production increases from its two mines in Mexico.
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Ubika Research is an investment research and capital market services firm based in Toronto and Vancouver with a proven track record of identifying and launching coverage of high potential small-cap stocks (<$2 billion) at an early stage. Ubika has created five industry-based indexes with a focus on Canadian small-cap companies, tracking and updating their performance on a monthly basis.
