Since March, the stock price has risen by more than 50%. Sylvie Metal Mining Co., Ltd. (SVM.US), which focuses on the development, operation and investment of precious metal mines, has recently won the attention of many investors. Meanwhile, Sylvie's recent announcement of the merger and acquisition of Canada's Adventus Mining Corporation has once again attracted the attention of the industry. Many analysts said bluntly that Hilway's stock price is undervalued, and now there is a good opportunity to buy it.

M&A operations create organic growth, high-quality targets that are undervalued by the market

Regarding Hilway's stock price and this merger and acquisition incident, Canadian analyst GoldStreetBets Research mentioned in his research report that the current market value of Sylvie (SVM.US) is 560 million US dollars, and according to the company's latest financial data, the company has 200 million US dollars in cash and 140 million US dollars in equity investment, and the company's corporate value (EV) is 220 million US dollars.

The analyst also said that it is conservatively estimated that Sylway's net asset value (NAV) is over 600 million US dollars, which means that the current corporate value/net asset value of Sylvie is only 0.36 times, which is seriously underestimated.

Interestingly, after calculation, the author discovered that according to this valuation method, as of May 9, the market value of Sylvie was only 594 million US dollars, and the corporate value/net asset value was only 0.42. This shows that there is still a possibility that Hilway is deeply undervalued.

So, how can we properly understand the value of Sylvie? And why do you think this is the best time to buy? Consider further discussions based on the company's project development and operation capabilities, profitability, and the merger and acquisition project itself.

Hilway issued an announcement stating that it has reached an agreement with Canada's Adventus Mining Corporation to acquire all of Adventus' common shares issued and in circulation in the form of a share exchange, and Hilway has obtained two large-scale gold and silver mine and copper-gold mining projects in Ecuador, El Domo and Condor.

According to observations, before the announcement, Hilway's stock price had risen close to 50% since March, but after the announcement was issued, there was a certain correction in the stock price. According to international market rules, the stock price correction is within expectations. However, although the short-term decline in stock prices may cause market concerns, a close look at this trading project reveals that there are multiple benefits behind the project, which will be the driving force for Sylvie's long-term growth, which also provides an excellent entry opportunity for investors who can recognize and believe in the company's long-term value.

According to the author, through this transaction, Hilway can add low-risk, low-cost copper, silver, and gold mining projects that have obtained key permits, greatly increasing Sylvie's mineral resources and reserves. It is expected to increase production by more than 50% in 2026, and at the same time facilitate Sylway's multi-country allocation and metal diversification layout. This merger and acquisition may eventually become a catalyst for stock ratings to be readjusted.

Let's take a look specifically:

First, this merger and acquisition can further consolidate the company's mineral reserve base and further enhance the company's imagination for future growth. The El Domo project is one of the world's high-grade copper and gold projects. According to a feasibility study report released by Adventus, El Domo will produce an average of about 21,000 tons of copper equivalent per year during the 10-year mine life, with a total maintenance cost of 1.26 US dollars/pound of copper equivalent. This is very competitive in the current market. In particular, the current trading price of copper is 4.50 US dollars/lb, and demand for copper will continue to rise in the next few years. Currently, the project can be put into production as soon as possible. Multiple data indicators show that the project has strong profit potential, can produce good economic benefits, and help Hilway diversify metals, especially copper.

The Condor project, another project in this merger and acquisition, revealed in the 2021 pre-feasibility study report that the mine is expected to have a lifespan of 12 years, with an average annual output of 6 tons of gold and 24 tons of silver. It is not a major project, but it is a high-grade gold and silver project, and future exploration potential will be further enhanced. The merger of this project will greatly increase Hilway's overall resources while laying a solid foundation for an international and diversified metal layout.

Photo Source: Company Information

Second, favorable policies and broad community support for the mining industry will also provide strong support for the production and operation of future projects. According to public information, the “Free Trade Agreement between the Government of the People's Republic of China and the Government of the Republic of Ecuador” has been mutually implemented since May 1, 2024. China and Eritrea have each gradually abolished tariffs on about 90% of the tax items, raised the level of trade and investment liberalization and facilitation between the two countries, and promoted the all-round upgrading of bilateral economic and trade cooperation. The favorable policies at the national level have undoubtedly strengthened Sylvie's diversified regional management strategy.

According to reports, Adventus has previously reached a preliminary agreement with the Ecuadorian government on the investment protection agreement for the El Domo copper and gold mine project. The Ecuadorian government will guarantee the company's ownership and investment safety, and further reduce the tax burden of income tax and capital outflow tax. This agreement further guarantees the normal operation of Sylvie's infrastructure construction and subsequent mining work, and strengthens the company's profitability.

Furthermore, the Condor project is 55 km away from the Mirador copper mine. The Mirador copper mine is the first large-scale solid mine development project in Ecuador. It is a copper mine invested, designed, constructed and operated by China. The copper ore processing capacity is 20 million tons/year, and it produces about 90,000 tons of copper concentrate corresponding to the amount of copper metal each year. Over the years of mining development, it has also continued to benefit the local community. It has won widespread support from the local community for the mining industry. Having a good foundation of community relationships will also benefit the construction and operation of the Condor project.

In addition, with Hilway's rich experience and strong expertise in mine development, etc., it is expected that costs will be further optimized and profit margins increased. At present, Hilway has successfully operated mines in China with its professional technical advantages for nearly 20 years, built 8 mines, has very mature mine operation and management capabilities, and has excellent financial performance for many years. The operating cash flow in the past year is close to 90 million US dollars. Sylvie has also been committed to ESG and corporate social responsibility for a long time.

Seen from this perspective, Hilway's expansion not only partially confirms Sylvie's accurate grasp of industry trends and forward-looking thinking about its own development. More importantly, the deal can help Hilway complete the vertical extension of its industrial chain at a lower cost.

Photo Source: Company Information

epilogue

Over the past half year, the price of gold and silver has continued to break through new highs, and the market has also generally reached a consensus that the price of gold may maintain a long-term upward trend. This means that when futures and spot prices of gold and silver remain stable and the medium- to long-term upward trend is clear, companies with sufficient mineral resources and reserves such as Sylvie will usher in new development opportunities.

More importantly, in more than 20 years of being deeply involved in the development of overseas mineral resources, Hilway has always closely focused on exploration and incubation and merger and acquisition operators, continuously integrating resources, and the company has developed strong comprehensive competitiveness in terms of capital, management, technology, mechanisms, and experience. By continuously building a moat for the company's development with high-quality technology in a diversified layout, Sylvie can not only provide sufficient capital for the construction and exploration of more projects, but also use the leading technology it has mastered to continuously empower the development and operation of more projects.

It can be seen from this that as Hilway continues to enhance its ability to integrate and allocate global resources, the company will open up a new development situation. With the future rise in gold and silver prices, the room for imagination about the company's performance continues to be opened up, and the stock price is expected to gradually reflect its true intrinsic value and provide investors with an attractive buying point.