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ASA Gold and Precious Metals announced the adoption of a Discount Management Program, authorizing the repurchase of up to 5% of company stock. The program aims to enhance shareholder value by purchasing shares at a discount to Net Asset Value per share. The Board's decision follows shareholder input and aims to improve the company's trading discount while maintaining its investment strategy. The initiative may increase liquidity for shareholders and create value through share repurchases below NAV. The company will report repurchase activity quarterly, with purchases made opportunistically based on historical discount levels and market conditions.
ASA Gold and Precious Metals ha annunciato l'adozione di un Programma di Gestione degli Sconti, autorizzando il riacquisto di fino al 5% delle azioni della società. Il programma mira a migliorare il valore per gli azionisti acquistando azioni a un prezzo inferiore al Valore Netto dell'Attivo per azione. La decisione del Consiglio segue il feedback degli azionisti e mira a ridurre lo sconto di negoziazione della società pur mantenendo la sua strategia di investimento. L'iniziativa potrebbe aumentare la liquidità per gli azionisti e creare valore tramite il riacquisto di azioni sotto il NAV. La società riporterà l'attività di riacquisto su base trimestrale, con acquisti fatti in modo opportunistico basati sui livelli storici di sconto e sulle condizioni di mercato.
ASA Gold and Precious Metals anunció la adopción de un Programa de Gestión de Descuentos, autorizando la recompra de hasta un 5% de las acciones de la compañía. El programa tiene como objetivo aumentar el valor para los accionistas mediante la compra de acciones con descuento respecto al Valor Neto de los Activos por acción. La decisión de la Junta sigue la opinión de los accionistas y busca mejorar el descuento comercial de la compañía mientras se mantiene su estrategia de inversión. La iniciativa puede incrementar la liquidez para los accionistas y crear valor a través de recompras de acciones por debajo del NAV. La compañía informará sobre la actividad de recompra trimestralmente, realizando compras de forma oportunista basadas en los niveles históricos de descuento y las condiciones del mercado.
ASA Gold and Precious Metals는 최대 회사 주식의 5%를 매입할 수 있는 할인 관리 프로그램을 도입했다고 발표했습니다. 이 프로그램은 주당 순자산가치(NAV)에 할인된 가격으로 주식을 매입하여 주주 가치를 증진시키는 것을 목표로 합니다. 이사회의 결정은 주주들의 의견을 반영한 것이며 회사의 거래 할인율을 개선하면서도 투자 전략을 유지하기 위한 것입니다. 이 계획은 주주들에게 유동성을 증가시키고 NAV 이하의 주식 매입을 통해 가치를 창출할 수 있습니다. 회사는 분기별로 매입 활동을 보고할 예정이며, 역사적 할인 수준과 시장 조건을 바탕으로 기회주의적으로 매입을 진행할 것입니다.
ASA Gold and Precious Metals a annoncé l'adoption d'un Programme de Gestion des Décotes, autorisant le rachat de jusqu'à 5% des actions de l'entreprise. Le programme vise à améliorer la valeur pour les actionnaires en achetant des actions à un prix inférieur à la Valeur Nette d'Actif par action. La décision du Conseil fait suite aux retours des actionnaires et vise à améliorer la décote de négociation de l'entreprise tout en maintenant sa stratégie d'investissement. L'initiative pourrait accroître la liquidité pour les actionnaires et créer de la valeur grâce aux rachats d'actions en dessous de la NAV. La société rendra compte de l'activité de rachat chaque trimestre, avec des achats réalisés de manière opportuniste en fonction des niveaux de décote historiques et des conditions de marché.
ASA Gold and Precious Metals hat die Einführung eines Discount-Management-Programms bekannt gegeben, das den Rückkauf von bis zu 5% der Unternehmensaktien autorisiert. Das Programm zielt darauf ab, den Aktionärswert zu steigern, indem Aktien zu einem Preis unterhalb des Nettoinventarwerts pro Aktie gekauft werden. Die Entscheidung des Vorstands folgt dem Input der Aktionäre und zielt darauf ab, den Handelsabschlag des Unternehmens zu verbessern, während die Investitionsstrategie beibehalten wird. Die Initiative könnte die Liquidität für Aktionäre erhöhen und durch Aktienrückkäufe unter dem NAV Wert schaffen. Das Unternehmen wird vierteljährlich über die Rückkaufaktivitäten berichten, wobei Käufe opportunistisch basierend auf historischen Abschlagsniveaus und Marktbedingungen getätigt werden.
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Insights
The introduction of a stock repurchase program can be a significant indicator of management's confidence in the intrinsic value of the company and its commitment to deliver shareholder value. From a financial perspective, repurchasing shares when they trade below their Net Asset Value (NAV) can be an astute use of capital. This can signal to the market that the company's leadership believes the stock is undervalued, which might be a positive driver for the stock price.
When evaluating the potential market implications, the critical aspect to note is the size of the repurchase authorization - up to 5% of company stock. This size is substantial enough to potentially reduce share count, which can increase earnings per share (EPS) and, consequently, could lead to a re-rating of the stock by the market. Another element to consider is the timing and execution strategy, which the company states will be 'opportunistic'. This suggests a strategic approach, buying when the discount to NAV is significant, which can protect against overpaying for shares and potentially provide a better return on investment.
However, investors should maintain a degree of caution. Stock repurchase programs do not guarantee share price appreciation, especially if broader market conditions are unfavorable, or if the company's fundamental performance deteriorates. Additionally, the opportunity cost of not investing in other areas such as business expansion or debt reduction must be evaluated.
Within the precious metals sector, NAV trading discounts are a common occurrence due to market volatility and investor sentiment. ASA Gold’s statement that the discount has been stable and within a narrow range suggests a level of market consistency that has been recognized by independent advisory firms. However, the repurchase initiative should be regarded within the framework of the company's overall strategy and the sector's cyclical nature.
The market’s reaction to such buyback programs often depends on concurrent operational performance and the macroeconomic environment influencing commodity markets. Given that the adoption of this program follows shareholder communication and a proxy contest, it demonstrates responsiveness to investor concerns, which might be viewed favorably in terms of governance.
For investors, understanding the nuances of buyback programs in the context of precious metals and their impact on liquidity and NAV is essential. It is not solely about share price appreciation but also about enhancing shareholder value through potential capital gains and dividend yield improvements. Shareholders might see this move as a sign of the board's alignment with their interests.
PORTLAND, Maine--(BUSINESS WIRE)--
ASA Gold and Precious Metals Limited (the “Company”) (NYSE: ASA) announced today that its Board of Directors (the “Board”) authorized the purchase of up to 5% of Company stock under the Company’s stock repurchase program. The authorization to repurchase shares will be effective on May 1, 2024 and expire on April 30, 2025, unless terminated sooner. The timing and actual number of shares repurchased will depend on a variety of factors. The Company anticipates that such purchases will be made opportunistically when shares are trading at a significant discount to the Net Asset Value per share (“NAV”) of the Company, based on historical discount levels and current market conditions, as determined by the Board and its Investment Advisor. The Company will report repurchase activity on the Company’s website at least quarterly.
The Board actively monitors the Company’s trading discount and considers possible actions that may enhance shareholder value and potentially decrease the discount. After recent communication with shareholders in the context of the proxy contest with Saba Capital Management, L.P., the Board believes a stock repurchase program is appropriate and consistent with shareholder input regarding the Board’s efforts to improve the Company’s trading discount while continuing to execute its investment strategy. This initiative may also enhance liquidity for shareholders and generate value for the Company through share repurchases below NAV.
In a recent report endorsing the election of the current Board members, independent proxy advisory firm Glass, Lewis & Co. noted, "We observe that the Company's average NAV trading discount over various short-, medium- and long-term periods has remained fairly stable and generally within a narrow range (mostly in the mid-teens).” The report further states, “…we see no evidence to suggest a consistent worsening of the Company's NAV trading.”1 However, the Board recognizes that stock repurchases are meaningful to shareholders and trusts that this initiative is responsive to shareholders.
There is no assurance that the market price of the Company’s shares, either absolutely or relative to NAV, will increase as a result of any share repurchases. Under the new stock purchase authorization, repurchases can be made from time to time using a variety of methods, including open market purchases, all in compliance with the rules of the Securities and Exchange Commission (“SEC”) and other applicable legal requirements. The authorization does not obligate the Company to acquire any particular number of shares and may be suspended or discontinued at any time at the Company’s discretion.
About ASA
The Company is a non-diversified, closed-end fund that seeks long-term capital appreciation primarily through investing in companies engaged in the exploration for, development of projects in, or mining of precious metals and minerals.
It is a fundamental policy of the Company that at least 80% of its total assets must be (i) invested in common shares or securities convertible into common shares of companies engaged, directly or indirectly, in the exploration, mining or processing of gold, silver, platinum, diamonds or other precious minerals, (ii) held as bullion or other direct forms of gold, silver, platinum or other precious minerals, (iii) invested in instruments representing interests in gold, silver, platinum or other precious minerals such as certificates of deposit therefor, and/or (iv) invested in securities of investment companies, including exchange traded funds, or other securities that seek to replicate the price movement of gold, silver or platinum bullion.
The Company employs bottom-up fundamental analysis and relies on detailed primary research including meetings with company executives, site visits to key operating assets, and proprietary financial analysis in making its investment decisions.
Investors are encouraged to visit the Company’s website for additional information, including historical and current share prices, news releases, financial statements, tax and supplemental information. The site may be found at www.asaltd.com, or you may contact the Company directly at (800) 432-3378.
About Merk Investments
Investment advisory services for the Company are provided by Merk Investments LLC (Merk), an SEC registered investment adviser. Merk provides investment advice on liquid global markets, including domestic and international equities, fixed income, commodities and currencies and their respective derivative markets. For more information on Merk, please visit www.merkinvestments.com.
Certain Tax Information
The Company is a “passive foreign investment company” for United States federal income tax purposes. As a result, United States shareholders holding shares in taxable accounts are encouraged to consult their tax advisors regarding the tax consequences of their investment in the Company’s common shares.
Forward-Looking Statements
This press release includes forward-looking statements within the meaning of U.S. federal securities laws that are intended to be covered by the safe harbors created thereunder. The Company’s actual performance or results may differ from its beliefs, expectations, estimates, goals and projections, and consequently, investors should not rely on these forward-looking statements as predictions of future events. Forward-looking statements are not historical in nature and generally can be identified by words such as “believe,” “anticipate,” “estimate,” “expect,” “intend,” “should,” “may,” “will,” “seek,” or similar expressions or their negative forms, or by references to strategy, plans, goals or intentions. The absence of these words or references does not mean that the statements are not forward-looking. The Company’s performance or results can fluctuate from month to month depending on a variety of factors, a number of which are beyond the Company’s control and/or are difficult to predict, including without limitation: the Company’s investment decisions, the performance of the securities in its investment portfolio, economic, political, market and financial factors, and the prices of gold, platinum and other precious minerals that may fluctuate substantially over short periods of time. The Company may or may not revise, correct or update the forward-looking statements as a result of new information, future events or otherwise.
The Company concentrates its investments in the gold and precious minerals sector. This sector may be more volatile than other industries and may be affected by movements in commodity prices triggered by international monetary and political developments. The Company is a non-diversified fund and, as such, may invest in fewer investments than that of a diversified portfolio. The Company may invest in smaller-sized companies that may be more volatile and less liquid than larger more established companies. Investments in foreign securities, especially those in the emerging markets, may involve increased risk as well as exposure to currency fluctuations. Shares of closed-end funds frequently trade at a discount to net asset value. All performance information reflects past performance and is presented on a total return basis. Past performance is no guarantee of future results. Current performance may differ from the performance shown.
This press release does not constitute an offer to sell or solicitation of an offer to buy any securities.
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1 Permission to use quoted material neither sought nor obtained.
