Scene from the Fresnillo's IPO in May this yearEver since Fresnillo split away from the Mexican mining giant Peñoles, there has been speculation about not "if" but "when" it would make a move on MAG Silver (MAG.to in Toronto, MVG in the US). The two companies share a very large silver project in development in Mexico, and Fresnnillo made it crystal clear at the time of its London IPO that it would be using the raised funds for acquisitions and expansion.
Now that junior mine valuations have been put in the dumpster, Fresnillo is finally making its move. According to the PR released by MVG today, Fresnillo has recently bought large slugs of its stock at around $5 and now owns a touch under 20% of the company. It makes sense for Fresnillo to stop accumulating just under the 20% barrier to stop the shareholders' rights program from kicking in (check the link above for details, or check this Reuters report).
Make no mistake; MVG in now most definitely in play. Fresnillo has decided to risk this bear market and try for MVG while prices are still low. Whatever, but Fresnillo has drawn a clear line under this current share price and the risk/reward equation most definitely favours buying MVG.
Now that junior mine valuations have been put in the dumpster, Fresnillo is finally making its move. According to the PR released by MVG today, Fresnillo has recently bought large slugs of its stock at around $5 and now owns a touch under 20% of the company. It makes sense for Fresnillo to stop accumulating just under the 20% barrier to stop the shareholders' rights program from kicking in (check the link above for details, or check this Reuters report).
Make no mistake; MVG in now most definitely in play. Fresnillo has decided to risk this bear market and try for MVG while prices are still low. Whatever, but Fresnillo has drawn a clear line under this current share price and the risk/reward equation most definitely favours buying MVG.
DYODD, dude.
UPDATE: Here's a PR from MVG released tonight with an update on drill results at the JV MAG/Fresnillo silver project. Have a read and find out why Fresnillo is clearly keen to get 100% control of the future mine.