Why Are Roxgold (TSX:ROXG) Stocks Rocketing Today?

2 min read | April 26, 2021 01:24 PM EDT | By Team Kalkine Media

Why Are Roxgold (TSX:ROXG) Stocks Rocketing Today? — Image source: Christian Vinces,Shutterstock

Roxgold-Fortuna Silver Mines Acquisition Deal – Key Highlights

According to the official release, Fortuna Silver is set to buy Roxgold for about C$ 1 billion and enter the precious-metal mining region of West Africa. Presently, it operates in Peru, Argentina and Mexico.

Roxgold's team is experienced in the West Africa region, and this might help Fortuna to increase its production capacity. Following this deal, Fortuna plans to set its foot in Burkina Faso and Côte d’Ivoire.

The billion-dollar deal aims to create a low-cost platform for the production growth of gold and silver. It is estimated that the annual gold equivalent production will now be 450,000 ounces.

For Roxgold shareholders, this deal means that they will get 0.283 common shares of Fortuna Silver and C$ 0.001 per Roxgold common share.

A Look At Roxgold’s Stock And Financials

Roxgold has a debt-to-equity (D/E) ratio of 0.27 and its market cap is over C$ 824 million, as per TMX data. Its stock skyrocketed by 89 per cent in the past year.

Roxgold stocks grew by about 19 per cent year-to-date (YTD).

1-year chart of stock performance of Roxgold (Source: EODHD/Others/Thomson Reuters)

Over 1 million Roxgold shares were traded on the TSX in the past ten days. The company's return on equity (ROE) is 10.1 per cent and it offers a 5.71 per cent return on assets (ROA), based on TMX data.

In 2020, Roxgold’s net income increased to US$ 24.9 million, up from US$ 5.7 million in 2019. The company’s cash and cash equivalents amounted to US$ 61.9 million in 2020, up from US$ 41.8 million in 2019.

Its diluted earnings per share increased to US$ 0.05 in fiscal 2020.

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