Shares of Trevali Mining Corporation (TSE:TV) have powered more than 40% higher since the beginning of the summer
SmallCapPower | September 5, 2017: Trevali Mining Corporation (TSX: TV) announced recently that it has completed the acquisition of a portfolio of zinc assets from Glencore, and its subsidiaries. The acquisition includes an 80% interest in the Rosh Pinah mine in Namibia, a 90% interest in the Perkoa mine in Burkina Faso, an effective 39% interest in the Gergarub project in Namibia, an option to acquire 100% interest in the Heath Steele project in Canada including certain related exploration properties and assets. The aggregate purchase price of US$417.86 million is comprised of cash consideration of US$245.21 million, and an aggregate of 193,432,310 common shares in the capital of the Company at a deemed price of C$1.20 per common share. Post the announcement, Trevali’s share price surged 6% to reach $1.53 on September 1, 2017.
Shares of Trevali Mining have powered more than 40% higher since the beginning of the summer to its current price of $1.53.
Trevali Mining President and CEO Dr. Mark Cruise said, “These assets complement our successful Santander and Caribou mines and provide significant upside to shareholders in this strengthening macro-zinc environment through scale of production as well as an attractive package of exploration ground. All of the deposits remain open for expansion and active resource expansion programs are in progress. Additionally, we welcome Glencore as a key strategic shareholder in Trevali, expanding on the strong, proven business relationship we’ve enjoyed since 2010 at our Santander operation.”
With the closing of the transaction, the Canadian zinc miner has added additional high-quality zinc production to its existing portfolio and has expanded its asset and geographic diversification, taking it to global top-10 zinc producer status with one of the highest zinc leverage ratios, as a percentage of revenue.
In terms of valuation, Trevali Mining currently trades at TTM price to sales value of 2.85x, price to book value of 2.36x and forward PE of 7.29x.
Disclosure: Neither the author nor any of the principals at SmallCapPower, or their family members, own shares in the company mentioned above.
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