Pan American shares fell 9% on Thursday once the reports started to emerge from Bolivia. However, it rebounded on Friday and climbed more than 2%. According to analyst Chris Lichtenheldt of UBS Securities, the Bolivian risks have “arguably now been priced in.”
So is Pan American fairly valued? He calculated that it is worth US$37.75 a share without San Vicente, and US$41.50 with it. If the company gets a positive outcome on San Vicente and its other high-risk project, the Navidad project in Argentina, then the stock is worth an estimated US$58.50 a share at spot silver prices, he wrote.
While the Bolivia news could be trouble for Pan American, it appears that Coeur d’Alene Mines Corp. is off the hook. The company said it was assured that its Bolivia-based San Bartolomé mine will not be nationalized.
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