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Silver Processing Grades 40% Higher than Last Year at JV Project
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A TD Securities report discusses MAG Silver's financial and operational update.

In a May 18 research note, TD Securities analyst Craig Hutchison highlighted MAG Silver Corp.'s (MAG:TSX; MAG:NYSE A) Q1/21 ore grades and sales related to its Juanicipio joint venture (JV) project with partner/operator Fresnillo.

During Q1/21, Hutchison noted, the JV processed 36,400 tons of ore, at a silver grade of 458 grams per ton, at the Fresnillo plant. This grade was 40% higher than the average silver grade in 2020 of 328 grams per ton. For the first month, in April, the JV exceeded its monthly processing target of 16,000 tons, reaching 16,771 tons.

As for the new Juanicipio mill, still under construction, commissioning slated for Q4/21 remains on schedule.

"The timely commissioning of the Juanicipio plant in a strong silver pricing environment should be supportive to the share price," Hutchison wrote.

During Q1/21, he indicated, the JV sold 431,000 ounces of silver, 631 ounces of gold, 199 tons of zinc and 137 tons of lead, yielding a gross profit of US$8.2 million.

In other news regarding Juanicipio, Hutchison reported, the JV spent, through the end of Q1/21, US$272.0 million of the total budgeted initial capex of US$440.0 million. Thus, US$168.0 million remains to be paid, MAG's portion of which is US$73.9 million. The analyst pointed out that three existing sources together can sufficiently fund MAG's portion of the remaining capex: the US$3.1 million in cash held in the JV, MAG's US$92.8 million in cash and cash currently being generated via the Fresnillo milling operation.

In his research report, Hutchison also briefly addressed MAG Silver's Deer Trail project in Utah. He noted that the phase 1 drill program the mining company commenced there in November 2020 is expected to be completed sometime during this quarter, Q2/21. All assays from the drilling done thus far are pending.

TD Securities maintained its Buy rating and CA$29.00 per share target price on MAG, the stock of which is currently trading at about CA$27.27 per share.


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.
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Disclosures from TD Securities, MAG Silver Corp., May 18, 2021

Disclosures for MAG Silver Corp.
9. TD Securities Inc. and/or an affiliated company is a market maker, or is associated with the specialist that makes a market, in the securities of the subject company.

Analyst Certification
Each analyst of TD Securities Inc. whose name appears on page 1 of this research report hereby certifies that (i) the recommendations and opinions expressed in the research report accurately reflect the research analyst's personal views about any and all of the securities or issuers discussed herein that are within the analystís coverage universe and (ii) no part of the research analyst's compensation was, is, or will be, directly or indirectly, related to the provision of specific recommendations or views expressed by the research analyst in the research report.

All of the views expressed in this research report accurately reflect the research analystsí personal views regarding any and all of the subject securities or issuers. No part of the analystsí compensation was, is, or will be, directly or indirectly, related to the specific recommendations or views expressed in this research report. The analyst responsible for the production of this report certifies that the views expressed herein reflect his or her accurate personal and technical judgment at the moment of publication. Because the views of analysts may differ, members of the National Bank Financial Group may have or may in the future issue reports that are inconsistent with this report, or that reach conclusions different from those in this report.

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