On Friday, BMO Capital Markets initiated coverage on Discovery (NASDAQ:WBD) Silver Corp (DSV:CN) (OTC: DSVSF) stock, assigning an Outperform rating and establishing a price target of Cdn$2.00.
The firm's analyst highlighted the potential of Discovery Silver's Cordero project in Chihuahua, Mexico, which is moving towards construction after a positive feasibility study released earlier this year.
The Cordero silver project is recognized as one of the largest undeveloped silver deposits in the world. The analyst from BMO Capital Markets noted that as the project progresses, the gap between Discovery Silver's current market valuation and its intrinsic value is expected to diminish. This anticipation is based on the significant scale and potential of the Cordero project.
The analyst also pointed out that key milestones for the project are on the horizon, with permitting and financing anticipated to be secured in late 2024 or early 2025. These developments are crucial as they are expected to pave the way for a construction decision in the following year, 2025.
Discovery Silver Corp's journey towards the construction of the Cordero project will be closely watched by investors as the company seeks to secure the necessary permits and financing. The positive outlook from BMO Capital Markets reflects confidence in the company's ability to advance the project and potentially enhance shareholder value.
The Outperform rating serves as a signal to the market that BMO Capital Markets sees a favorable future for Discovery Silver, especially in terms of the company's stock performance relative to its peers.
As the project moves forward, investors will be looking for updates on the permitting process and financing arrangements that will confirm the project's trajectory towards production.
InvestingPro Insights
In light of BMO Capital Markets' optimistic outlook on Discovery Silver Corp (OTC: DSVSF), a dive into the real-time data and InvestingPro Tips provides a more nuanced view of the company's financial health and stock performance. With a market capitalization of $258.6 million, the company holds a significant position in the silver mining sector. Notably, Discovery Silver holds more cash than debt on its balance sheet, which is a positive sign for investors concerned about the company's financial stability as it moves towards the construction phase of the Cordero project.
Despite a recent hit to the stock price over the last week, with a 14.36% drop, the six-month price total return shows a strong uptick of 33.6%, reflecting a degree of volatility but also the potential for significant gains. This volatility is something that investors should be mindful of, particularly as the company does not pay dividends and analysts do not expect profitability this year. Additionally, the company's price is currently at 71.43% of its 52-week high, which may suggest room for growth as it approaches key milestones.
For those seeking further analysis and tips on Discovery Silver Corp, InvestingPro offers additional insights with a total of 11 InvestingPro Tips available at: https://www.investing.com/pro/DSVSF. These tips may help investors make more informed decisions, especially in light of the company's expected net income drop and weak gross profit margins. To access these insights, investors can use the coupon code PRONEWS24 to get up to 10% off a yearly Pro and a yearly or biyearly Pro+ subscription, providing a valuable resource for those monitoring Discovery Silver's progress towards the Cordero project's construction.
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