MAG Silver Announces Intention to Make Normal Course Issuer Bid for Common Shares
On May 15, 2024, MAG Silver announced the approval of a Normal Course Issuer Bid (NCIB) by the Toronto Stock Exchange (TSX). The NCIB allows MAG to repurchase up to 8,643,374 common shares, representing about 10% of the public float as of May 8, 2024. This repurchase will be conducted via the TSX, NYSE American, and other trading systems in Canada and the U.S. from May 17, 2024, to May 16, 2025.
The company emphasizes that the NCIB is a strategic move to enhance shareholder value by repurchasing shares at attractive prices. An Automatic Share Purchase Plan (ASPP) will also be implemented to facilitate repurchases during blackout periods. MAG believes this move will benefit shareholders by increasing the proportionate interest for those who retain their shares while enhancing liquidity for sellers.
- Approval to repurchase up to 8,643,374 common shares, approximately 10% of the public float.
- The repurchase is expected to enhance shareholder value and per share growth.
- The company can purchase shares at attractive market prices, optimizing the use of cash resources.
- Implementation of an Automatic Share Purchase Plan (ASPP) to facilitate repurchases during blackout periods.
- Increase in liquidity for shareholders seeking to sell.
- No common shares have been repurchased under an NCIB in the past twelve months.
- Regulatory restrictions and blackout periods might limit the repurchase activity.
- The repurchase plan could lead to significant cash outflows affecting liquidity.
Insights
MAG Silver Corp.'s announcement of a Normal Course Issuer Bid (NCIB) is a notable financial strategy. The company plans to purchase up to 8,643,374 common shares, representing approximately
Such a repurchase indicates that the company's management believes its shares are undervalued and that buying back shares is a good use of cash reserves. This can be interpreted as a signal of management's confidence in the company's future prospects. Moreover, the automatic share purchase plan (ASPP) will allow for purchases even during blackout periods, ensuring consistency in the buyback program.
For retail investors, understanding the potential benefits is crucial. A share buyback can provide a quick boost to share value and improve financial ratios like EPS. However, it's important to scrutinize whether the company has sufficient free cash flow to sustain these buybacks or if it might lead to liquidity issues in the future.
The initiation of a Normal Course Issuer Bid (NCIB) by MAG Silver offers insight into the company's assessment of its current market position. The decision to repurchase up to
This buyback also has implications for market liquidity. While reducing the number of shares outstanding can bolster the stock price, it may also reduce the liquidity of the shares. Investors should consider whether the potential for higher share prices outweighs the downside of reduced trading volumes, which could make buying and selling shares more challenging in the future.
Furthermore, investors should keep an eye on market conditions and the company's financial health. If market conditions worsen or if MAG Silver's cash reserves dwindle, the company might be forced to halt buybacks, which could negatively affect investor sentiment.
MAG Silver's announcement to engage in an NCIB also involves compliance with a variety of securities regulations across jurisdictions. The company's adherence to both Canadian and United States federal securities laws underscores the importance of regulatory compliance in such financial maneuvers. For example, the involvement of a designated broker to manage purchases during blackout periods through an ASPP ensures that the company remains within legal boundaries.
Investors should understand that regulatory compliance is important in maintaining market integrity. Any missteps could result in penalties or legal challenges, thereby affecting the company's reputation and financial standing. MAG Silver's proactive measures, such as the ASPP, indicate a thorough understanding of these regulatory frameworks, which should give investors some confidence in the company's operational governance.
However, legal complexities should not be underestimated. The plan's execution must be meticulously managed to avoid any inadvertent breaches, especially as it involves cross-border transactions under different sets of securities laws.
VANCOUVER, British Columbia, May 15, 2024 (GLOBE NEWSWIRE) -- MAG Silver Corp. (TSX / NYSE American: MAG) (“MAG”, or the “Company”) today announced that the Toronto Stock Exchange (the “TSX”) has accepted the Company’s Notice of Intention to Make a Normal Course Issuer Bid (“NCIB”).
Under the NCIB, the Company may purchase for cancellation up to an aggregate of 8,643,374 common shares in the capital of the Company (“Common Shares”), representing approximately
The NCIB will commence on May 17, 2024 and terminate May 16, 2025, or earlier if the maximum number of Common Shares under the NCIB have been purchased or if the NCIB has been terminated by the Company. As of May 8, 2024, the Company had 103,143,078 Common Shares issued and outstanding and a public float of 86,433,740 Common Shares.
Under the NCIB, other than purchases made under a block purchase exception in accordance with the rules and policies of the TSX, the Company may acquire, from time to time, up to 66,371 Common Shares per day on the TSX, being
Under the NCIB, purchases will be made through the facilities of the TSX, the NYSE American and/or permitted alternative trading systems in Canada and the United States at prevailing market prices or such other prices as permitted under the rules and policies of the TSX and the NYSE American, as applicable, and applicable securities laws. All Common Shares purchased by the Company under the NCIB will be cancelled. Repurchases will be subject to compliance with applicable Canadian securities laws and United States federal securities laws.
MAG believes that when a disconnect exists between the share price and the intrinsic value of the business, an NCIB can increase shareholder value and per share growth. Further, the Company believes that current market conditions provide opportunities for the Company to acquire Common Shares at attractive prices. In the Company’s view, having the option to opportunistically repurchase Common Shares could be an effective use of its cash resources and could be in the best interests of the Company and its shareholders. It would both enhance liquidity for shareholders seeking to sell and provide an increase in the proportionate interests of shareholders wishing to maintain their positions.
In connection with the NCIB, the Company expects to enter into an automatic share purchase plan ("ASPP") in relation to purchases made under the NCIB. The ASPP is intended to facilitate repurchases of Common Shares at times under the NCIB when the Company would ordinarily not be permitted to make purchases due to regulatory restriction or customary self-imposed blackout periods. Before the commencement of any particular trading black-out period, the Company may, but is not required to, instruct its designated broker to make purchases of Common Shares under the NCIB during the ensuing black-out period in accordance with the terms of the ASPP. Such purchases will be determined by the designated broker at its sole discretion based on purchasing parameters set by the Company in accordance with the rules of the TSX and NYSE American, as applicable, and applicable securities laws and the terms of the ASPP. All purchases of Common Shares made under the ASPP will be included in determining the number of Common Shares purchased under the NCIB. The ASPP will constitute an "automatic securities purchase plan" under applicable securities laws. Outside of pre-determined blackout periods, Common Shares may be purchased under the NCIB based on management's discretion, in compliance with TSX and NYSE American rules, as applicable, and applicable securities laws.
To the knowledge of MAG, no director or senior officer of the Company currently intends to sell any Common Shares under the NCIB. However, sales by such persons through the facilities of the TSX may occur if the personal circumstances of any such person change or any such person makes a decision unrelated to these normal course purchases. The benefits to any such person whose Common Shares are purchased would be the same as the benefits available to all other holders whose Common Shares are purchased.
This press release shall not constitute an offer to sell or the solicitation of an offer to buy securities in the United States, nor shall there by any sale of these securities in any jurisdiction in which such offer, solicitation or sale would be unlawful.
About MAG Silver Corp.
MAG Silver Corp. is a growth-oriented Canadian exploration company focused on advancing high-grade, district scale precious metals projects in the Americas. MAG is emerging as a top-tier primary silver mining company through its (
Neither the Toronto Stock Exchange nor the NYSE American has reviewed or accepted responsibility for the accuracy or adequacy of this press release, which has been prepared by management.
Cautionary Note Regarding Forward-Looking Statements
This release includes certain statements that may be deemed to be “forward-looking statements” within the meaning of the US Private Securities Litigation Reform Act of 1995 or “forward-looking information” within the meaning of applicable Canadian securities laws (collectively, “forward-looking statements”). Forward-looking statements in this news release include statements regarding its intention to make an NCIB and enter into an ASPP, the reasons for the NCIB, the timing and amount of purchases under the NCIB and the ASPP and the cancellation of the Common Shares purchased under the NCIB. Forward-looking statements are often, but not always, identified by the use of words such as “seek”, “anticipate”, “plan”, “continue”, “estimate”, “expect”, “may”, “will”, “project”, “predict”, “potential”, “targeting”, “intend”, “could”, “might”, “should”, “believe” and similar expressions. These statements involve known and unknown risks, uncertainties and other factors that may cause actual results or events to differ materially from those anticipated in such forward-looking statements. Although MAG believes the expectations expressed in such forward-looking statements are based on reasonable assumptions, such statements are not guarantees of future performance and actual results or developments may differ materially from those in the forward-looking statements. Factors that could cause actual results to differ materially from those in the forward-looking statements identified herein include, but are not limited to, changes in applicable laws, continued availability of capital and financing, and general economic, market or business conditions, political risk, currency risk and capital cost inflation. In addition, forward-looking statements are subject to various risks, including those risks disclosed in MAG Silver’s filings with the Securities Exchange Commission (the “SEC”) and Canadian securities regulators. All forward-looking statements contained herein are made as at the date hereof and MAG Silver undertakes no obligation to update the forward-looking statements contained herein. There is no certainty that any forward-looking statement will come to pass, and investors should not place undue reliance upon forward-looking statements.
The annual information form of the Company dated March 27, 2024 and other documents filed by it from time to time with securities regulatory authorities describe in greater detail the risks, uncertainties, material assumptions and other factors that could influence actual results and such factors are incorporated herein by reference. Copies of these documents are available under our profile on SEDAR+ at www.sedarplus.ca.
Please Note: Investors are urged to consider closely the disclosures in MAG’s annual and quarterly reports and other public filings, accessible through the Internet at www.sedarplus.ca and www.sec.gov.
LEI: 254900LGL904N7F3EL14
FAQ
What is the purpose of MAG Silver's NCIB announced on May 15, 2024?
How many shares is MAG Silver planning to repurchase under the NCIB?
When does MAG Silver's NCIB start and end?
What trading systems will MAG Silver use for the NCIB?
How many common shares can MAG Silver purchase per day under the NCIB?
What is the significance of the Automatic Share Purchase Plan (ASPP) in MAG Silver's NCIB?
