In an April 2 research note, H.C. Wainwright & Co. analyst Heiko Ihle reported that MAG Silver Corp. (MAG:TSX; MAG:NYSE.MKT) continues to advance its joint venture Juanicipio project with partner Fresnillo Plc (FRES:LSE).
Progress is being made with respect to development at the asset in Mexico's Fresnillo Trend. To date, more than 18.5 kilometers of underground development have been finished. Current work involves extending three internal spiral footwall ramps along the entire strike length of the Valdecañas vein system, building the underground crushing chamber, installing the conveyor ramp between the mine and mill site and integrating other underground infrastructure.
The production start date for Juanicipio is sometime in H2/20. Yet before production can begin, MAG and Fresnillo must approve the feasibility study. Both companies are currently reviewing it. "We believe both boards should approve the document," commented Ihle.
Also taking place at the Juanicipio property is continued exploration. "With five drill rigs currently located at the site with another rig expected to begin turning underground, developing and exploring the Juanicipio property remains a top priority for the company," Ihle pointed out.
As for MAG Silver's 2018 financial results, Ihle relayed that the company posted a loss of $5.8 million, or $0.07 per share, which compares to last year's loss of $6.5 million, or $0.08 per share. The difference was due to an uptick in interest income, as well as a $4.3 million gain, net of costs, from the sale of some assets. That number in 2017 totaled $1.8 million.
Cash and cash equivalents at year-end 2018 were $130.2 million, lower than $160.4 million at year-end 2017, due to no term deposits having been redeemed during the year.
H.C. Wainwright has a Buy rating and a US$16.50 per share target price on MAG Silver, whose stock is trading now at around US$10.40 per share.
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Disclosures from H.C. Wainwright & Co., MAG Silver Corp., Company Update, Apr. 2, 2019
I, Heiko F. Ihle, CFA and Tyler Bisset, certify that 1) all of the views expressed in this report accurately reflect my personal views about any and all subject securities or issuers discussed; and 2) no part of my compensation was, is, or will be directly or indirectly related to the specific recommendation or views expressed in this research report; and 3) neither myself nor any members of my household is an officer, director or advisory board member of these companies.
None of the research analysts or the research analyst’s household has a financial interest in the securities of MAG Silver Corp. (including, without limitation, any option, right, warrant, future, long or short position).
As of March 31, 2019, neither the Firm nor its affiliates beneficially own 1% or more of any class of common equity securities of MAG Silver Corp.
Neither the research analyst nor the Firm has any material conflict of interest in of which the research analyst knows or has reason to know at the time of publication of this research report.
The research analyst principally responsible for preparation of the report does not receive compensation that is based upon any specific investment banking services or transaction but is compensated based on factors including total revenue and profitability of the Firm, a substantial portion of which is derived from investment banking services.
The Firm or its affiliates did not receive compensation from MAG Silver Corp. for investment banking services within twelve months before, but will seek compensation from the companies mentioned in this report for investment banking services within three months following publication of the research report.
The Firm does not make a market in MAG Silver Corp. as of the date of this research report.
H.C. Wainwright & Co., LLC and its affiliates, officers, directors, and employees, excluding its analysts, will from time to time have long or short positions in, act as principal in, and buy or sell, the securities or derivatives (including options and warrants) thereof of covered companies referred to in this research report.