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Investing.com - BMO Capital downgraded Probe Gold Inc (TSX:PRB) (OTC:PROBF) from Outperform to Market Perform and slashed its price target to C$3.65 from C$5.50 following the company’s acquisition announcement.
Probe Gold revealed it will be acquired by Fresnillo in an all-cash transaction valued at C$780 million, representing a premium of approximately 39% over the previous day’s closing price. The deal is expected to close in the first quarter of 2026.
BMO Capital noted the strong all-cash nature of the deal would likely discourage competing bidders from entering the fray. The firm calculated the transaction’s P/NAV take-out multiple at 0.2x to 0.3x (BMO/Consensus), which it suggested might be below precedent valuations for more advanced assets.
The acquisition further reduces the number of quality mining assets not already owned by producers, according to BMO Capital’s analysis. This trend continues the consolidation pattern observed in the mining sector.
BMO Capital adjusted its price target to match the takeover offer price of C$3.65 and downgraded its rating to Market Perform, aligning its recommendation with the pending acquisition terms.
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