The Silver Lake Resources Limited. (ASX: SLR) share price pushed higher on Monday. The gold producing and exploration company released an announcement regarding an on-market share buyback.
At market close, Silver Lake shares finished the day up 1.99% to $1.54. It's worth noting that its shares are down more than 10% in the past month.
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Silver Lake set to commence share buy back
In today's statement, Silver Lake advised it intends to begin an on-market share buyback over the next 12 months. This will see management begin to reduce surplus capital whilst increasing shareholder value.
Basically, this means that when Silver Lake buys back its shares, the number of shares on its registry will decrease. With a lesser amount, this effectively increases the value of each share as the revenue and profits remain the same.
The company is seeking to buy back up to 10% or approximately 912.48 million ordinary shares within the above period.
The proposed start date will commence on 24 February 2022 and run until 23 February 2023.
Silver Lake noted that its strong balance sheet, as well as forecasted free cash flow generation, provides it ample flexibility.
As such, the board made the decision to undertake the value accretive capital management initiative.
The company stated that the structure of an on-market buyback allows it to take advantage of share price volatility.
By conducting purchases during periods where the share price has fallen significantly, this is an opportunity to benefit the business.
The on-market buyback program does not require shareholder approval and will be executed at the company's discretion.
Silver Lake share price snapshot
Over the past 12 months, Silver Lake shares have fallen around 1% despite surging since late September. When looking at 2021 alone, its shares are down over 13%.
Silver Lake commands a market capitalisation of roughly $1.41 billion with approximately 912.46 million shares issued.
