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To own Discovery Silver today, you have to believe its rapid shift to profitability and strong top-line momentum can justify a still-rich valuation and recent dilution, even after a very large share price run. The investment case hinges on continued execution at its producing assets, integrating the Dome Mine acquisition with the new senior team, and using the US$250 million credit facility to grow without stretching the balance sheet. In that context, Sprott Mining trimming its roughly 10% stake by 1,400,000 shares looks more like a sentiment check than a thesis breaker, especially with management stepping up visibility at the Very Independent Research Virtual Conference. The bigger near term risk is that any stumble in growth, earnings quality or integration now has far less room for error at this price.
But one risk in particular could catch newer shareholders off guard. Discovery Silver's shares are on the way up, but they could be overextended by 17%. Uncover the fair value now.Explore 13 other fair value estimates on Discovery Silver - why the stock might be worth just CA$11.00!
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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