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TICKERS: MAG

Production Start Moved Up for Silver Project in Mexico
Research Report

Source:

MAG Silver's two recent announcements about its project in Mexico are relayed and commented on in a ROTH Capital Partners report.

In a Feb. 27 research note, ROTH Capital Partners analyst Joe Reagor noted that MAG Silver Corp. (MAG:TSX; MAG:NYSE A) and joint venture partner Fresnillo Plc (FRES:LSE) moved up the production start for Juanicipio and raised preproduction capex estimates. "These results are essentially offsetting," Reagor noted.

Production from Juanicipio's underground mine now is slated to begin in mid-2020. "The pull forward of production as a significant positive for the company as it should provide cash flow to offset ongoing capital expenditures," Reagor wrote.

The joint venture partners will not commission the flotation plant at Juanicipio until mid-2021, however. In the interim, ore will be processed at one of Fresnillo's nearby plants.

Now, preproduction capex for Juanicipio is forecast to be $440 million, up 11.4% from $395 million. "This had a negative impact on our discounted cash flow, but we still estimate the company has the necessary funding to complete construction without further dilution," Reagor commented.

ROTH has a Buy rating and a US$23 per share price target on MAG, whose stock is currently trading at around US$9.64 per share.

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Disclosure:
1) Doresa Banning compiled this article for Streetwise Reports LLC and provides services to Streetwise Reports as an independent contractor. She or members of her household own securities of the following companies mentioned in the article: None. She or members of her household are paid by the following companies mentioned in this article: None.
2) The following companies mentioned in this article are billboard sponsors of Streetwise Reports: MAG Silver. Click here for important disclosures about sponsor fees.
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Disclosures from ROTH Capital Partners, MAG Silver Corp., Company Note, February 27, 2020

Regulation Analyst Certification ("Reg AC"): The research analyst primarily responsible for the content of this report certifies the following under Reg AC: I hereby certify that all views expressed in this report accurately reflect my personal views about the subject company or companies and its or their securities. I also certify that no part of my compensation was, is or will be, directly or indirectly, related to the specific recommendations or views expressed in this report.

ROTH makes a market in shares of MAG Silver Corp. and as such, buys and sells from customers on a principal basis.

ROTH Capital Partners, LLC expects to receive or intends to seek compensation for investment banking or other business relationships with the covered companies mentioned in this report in the next three months.




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