Gatos Silver Prices IPO – Trading Begins Oct 28

Posted on October 28, 2020 by Mathieu Litalien

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Late yesterday evening, Gatos Silver announced it had priced its IPO at the low range of expectations. The company expected to price its offering between $US7.00-$9.00 and it was priced at the very bottom ($US7.00 per share).

It will be a quick turnaround for this IPO. Although it is not expected to close until October 30 (Friday), shares will begin trading today. The company is dual listed and will trade on both the NYSE and TSX Indices. 

As a reminder, this is a company that has low leverage and has real nice asset in the Cerros Los Gatos Mine. Here is a snapshot of their expected revenue and free cash flow profile.


The company is valued at $418.703M which gives it a valuation of around ~4 times forward sales. In comparison PAAS.TO, FVI.TO and SVM.TO are trading at 3.55, 2.86 and 9.31 times forward sales. 

As we discussed previously, Gatos looks fairly valued here and pricing at the low end indicates less than expected demand. Given this, it is not a stock we would rush into, but could be an interesting silver play down the road. We would however, give this time to settle. 

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Disclaimer: The writer of this article or employees of Stocktrades Ltd may have positions in securities listed in this article. Stocktrades Ltd may also be compensated via affiliate links in this post. Stocktrades Ltd will run advertisements on our posts. These advertisements do not represent an endorsement by us.

Mathieu Litalien

About the author

Mathieu is an individual investor and has been investing part-time for the better part of the past 20 years. He is primarily interested in fundamental analysis, focusing on the long-term and his portfolio is composed primarily of dividend-paying equities. Mathieu has a moderate risk profile and also looks for growth and value. His passion for finance and the markets have led him to his MBA and writing for Seeking Alpha and Stocktrades. Mathieu also focuses primarily on stock research and content production for Stocktrades.ca Premium and the Stocktrades blog.