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Pan American Silver (PAAS) Gains on Prospects of a Project Restart

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Pan American Silver Corp. PAAS shares have gained 10% since Dec 15 as local legislature Chubut, Argentina approved a new a new zoning law, which triggered expectations that the company might be able to start the Navidad Silver Project after an 18-year long wait.

The Province of Chubut had passed a law in 2003 (“Law 5001”) that banned open-pit mining and the use of cyanide in mineral processing in the entire province. This effectively prevented the development of the Pan American’s 100% owned Navidad silver project — one of the world’s largest undeveloped silver deposits. However, the company remained committed to the development of Navidad. It contributed toward the positive economic and social development of the province of Chubut, while awaiting the adoption of a favorable legislative framework.

On Dec 15, 2021, the legislature of the Province of Chubut in Argentina approved a legislative bill that would modify the mining law to allow open-pit mining in certain zones in the Departments of Gastre and Telsen. This new law was subsequently promulgated on Dec 16, 2021 by the Chubut governor, Mariano Arcioni.

Pan American Silver had acquired the Navidad silver project in 2010 following the acquisition of Aquiline Resources Inc. The Navidad properties are located in north-central Chubut Province in Argentina. It is within the designated zone that would potentially allow open-pit mining. Per the law, any mining project, including Navidad, would be required to undergo relevant review processes and apply for permission under provincial laws. This will remove a bottleneck for Pan American Silver and other mining companies operating in the region whose operations have remained stalled so far due to the restrictions.

Pan American Silver owns and operates silver and gold mines located in Mexico, Peru, Canada, Argentina and Bolivia. It owns the Escobal mine in Guatemala, which is currently not operating.

Price Performance

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Shares of the company have fallen 27.9% in the past year compared with the industry’s decline of 30.8%.

Zacks Rank & Stocks to Consider

Pan American Silver currently carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the basic materials space are Olin Corporation OLN, Bunge Limited BG and Nucor Corporation NUE. While OLN and BG flaunt a Zacks Rank #1 (Strong Buy), NUE carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Olin’s third-quarter 2021 adjusted earnings beat the Zacks Consensus Estimate but revenues missed the same. It has an expected earnings growth rate of around 740% for the current fiscal year. The Zacks Consensus Estimate for current-year earnings has been revised upward by 20.5% in the past 60 days.

Olin’s shares have soared 111% in the past year. The company has a long-term earnings growth of 56%.

Bunge’s third-quarter 2021 earnings and sales beat the respective Zacks Consensus Estimate. It has a trailing four-quarter earnings surprise of 105.7%, on average. The company has an estimated earnings growth rate of around 45% for the current year. In the past 60 days, the Zacks Consensus Estimate for current-year earnings has been revised upward by 36%.

Bunge’s shares have appreciated 36% in the past year. It has a long-term earnings growth of 6.7%.

Nucor’s third-quarter adjusted earnings missed the Zacks Consensus Estimate but sales beat the same. NUE has a trailing four-quarter earnings surprise of 2.74%, on average.

Nucor has a projected earnings growth rate of around 583% for 2021. The Zacks Consensus Estimate for current-year earnings has been revised upward by 18.1% in the past 60 days. The company’s shares have surged a whopping 128% in a year.


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Pan American Silver Corp. (PAAS) : Free Stock Analysis Report

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Olin Corporation (OLN) : Free Stock Analysis Report

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