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A Look At Andean Silver’s Valuation As Capital Raise Backs Cerro Bayo Growth Plans

Simply Wall St · 4d ago

Why Andean Silver’s latest capital raise matters for investors

Andean Silver (ASX:ASL) is back on investor radars after doubling its share purchase plan to A$6 million and completing a roughly A$6.0 million follow on equity offering at A$1.85 per share.

Together, these moves expand the company’s funding pool for its Cerro Bayo silver gold project in Chile while also changing the mix between existing shareholders and new equity issued into the market.

See our latest analysis for Andean Silver.

That capital raise comes after a strong run in the shares, with a 30 day share price return of 20.1% and a 90 day share price return of 21.26%, while the 1 year total shareholder return of 174.32% and very large 3 year total shareholder return of around 8x point to momentum that has been building rather than fading. This has taken place alongside other recent developments, such as the shift in financial year end to better match Cerro Bayo reporting timelines.

If Andean Silver’s recent fundraising has you rethinking where growth stories might emerge next, it could be a good time to check out fast growing stocks with high insider ownership for other ideas.

With the shares recently returning 174.32% over 1 year and the latest equity issued at A$1.85 now trading at A$2.51, you have to ask: is Andean Silver still mispriced, or is the market already banking on future growth?

Price-to-book of 18.6x: Is it justified?

On a P/B of 18.6x against a last close of A$2.51, Andean Silver trades at a far richer level than both its closest peers and the wider sector.

P/B compares the company’s market value to its book value. For an early stage explorer like Andean Silver, this is one of the few available yardsticks while it remains unprofitable and has limited revenue. A higher P/B often signals that investors are placing a premium on the company’s assets or future potential rather than its current financials.

Here, that premium is clearly visible. Andean Silver’s 18.6x P/B is above the 17.4x peer average, which already sits at an elevated level, and far above the Australian Metals and Mining industry average of 2.5x. That gap suggests the market is assigning a much higher valuation per dollar of book value than is typical for the sector.

See what the numbers say about this price — find out in our valuation breakdown.

Result: Price-to-book of 18.6x (OVERVALUED)

However, you still need to weigh risks such as limited revenue of A$1.41m, a net loss of A$17.46m, and very high 18.6x P/B expectations.

Find out about the key risks to this Andean Silver narrative.

Build Your Own Andean Silver Narrative

If you interpret the numbers differently, or if you simply prefer to rely on your own analysis, you can build a complete view in just a few minutes, starting with Do it your way

A great starting point for your Andean Silver research is our analysis highlighting 4 important warning signs that could impact your investment decision.

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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.