On June 1, 2020, immediately after the Mexican government lifted its Covid-19 mandate on May 30, work was restarted at Juanicipio, a joint venture project of MAG and Fresnillo Plc, the operator. The company reported that construction of the flotation plant continues, detailed engineering is nearly done, earthmoving and foundation construction for the plant are progressing nicely and nearly 30 kilometers have been developed underground.
"We continue to work carefully at the Juanicipio project, respecting social distancing and maintaining very high levels of hygiene," MAG Silver President and CEO George Paspalas said in the release.
Despite the government's ban on activity in the spring, Juanicipio remains on schedule. Underground mine production is expected to start soon, the company noted. About 16,000 tons of mineralized material will be processed monthly through the Fresnillo plant until the Juanicipio plant is commissioned, which is slated for mid-2021.
As a test, in August Fresnillo successfully processed 8,858 tons of material through its plant. "We are expecting processing of two days per month, representing a major milestone for the project and early cash flow to the joint venture," Paspalas added.
Regarding MAG's finances, the Vancouver-based company closed a nonbrokered private placement offering in April 2020 and issued 4,528,302 common shares at CA$13.25 for gross proceeds of CA$60 million, or US$43 million, to 2176423 Ontario Ltd., a corporation beneficially controlled by Eric Sprott.
On June 29, 2020, MAG established an at-the-market (ATM) equity program, through which it subsequently sold and issued 2,305,463 common shares at an average per share price of US$16.16. Gross proceeds came to around US$37 million.
At June 30, 2020, MAG had about $87 million in cash and cash equivalents. This does not include proceeds from the ATM equity program. Minera Juanicipio had roughly $35 million in cash.
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