reported Q2/23 production surpassed Canaccord Genuity's expectation, reported analyst Lucas Pamatat in a July 26 research note.
Possible Gain Notable
Given this result, Canaccord reiterated its Speculative Buy rating and CA$24 per share price target on the Canadian producer, noted Pamatat. MAG's current share price, in comparison, is about CA$14.82 per share.
Thus, the potential gain for investors in the company is significant, at 62%.
Q2/23 production at Juanicipio, MAG's joint venture project with operator Fresnillo in Mexico, totaled 6,500 ounces of silver equivalent (6.5 Koz of Ag eq), 51% higher than Canaccord's estimate of 4.3 Koz Ag eq, Pamatat reported. Production of silver alone was 5.275 Koz, and this surpassed Canaccord's forecast of 63%.
The amount of processed ore was 377,000 tons (377 Kt), also higher than Canaccord's estimate of 300 Kt.
The latter "implies 104% of mill capacity as ore continues to be processed at Fresnillo's nearby processing plants," wrote Pamatat.
Reasons for the Beat
The analyst ascribed the production beat to higher mill throughput during the quarter and greater-than-expected mill feed grade. Throughput was 70% higher in Q2/23 than in the previous quarter.
Feed grade came in at 498 grams per ton (498 g/t) Ag; Canaccord's projection was 400 g/t Ag. Higher-grade feed is being introduced as the ramp-up of the Juanicipio mill continues.
That is progressing well, Pamatat pointed out, with processing having been taken during Q2/23 to 85% of its 4,000-tons-per-day design capacity. Canaccord expects the mill to reach full capacity by the end of Q3/23.
"Production is expected to increase through Q3/23 as the Juanicipio mill ramps up," added Pamatat.
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- MAG Silver Corp. is a billboard sponsor of Streetwise Reports and pays SWR a monthly sponsorship fee between US$4,000 and US$5,000.
- Doresa Banning wrote this article for Streetwise Reports LLC and provides services to Streetwise Reports as an independent contractor.
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Disclosures for Canaccord Genuity, MAG Silver Corp., July 26, 2023
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