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Explorer's 39,700 Meter Infill and Expansion Drill Program Yields High Grades at Mexico Silver Property
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CIBC World Markets Inc. stated in a research report that MAG Silver posted solid results from its 2020 110-hole drill program at its Juanicipio JV Project in Fresnillo, Mexico. CIBC commented that when the new 4,000 tpd Juanicipio mill comes online it will provide a key catalyst towards growing throughput processing capabilities and expanding the resource.

In an August 5 research report, CIBC World Markets Inc. (CIBC) Analyst Cosmos Chiu, CFA commented regarding the 2020 drill results reported by advanced stage silver explorations and development company MAG Silver Corp. (MAG:TSX; MAG:NYSE American) from its Juanicipio JV project, which is located in the historic district of Fresnillo, Mexico.   

The analyst noted that MAG Silver owns 44% of the Juanicipio JY project. During its 2020 drill program, it completed 27,900 meters of drilling in 33 surface holes and 11,800 meters of drilling in 77 underground definition holes. The firm's main strategy was to start with definition drilling to improve its understanding of the upper part of the Bonanza Zone. In addition, MAG conducted extensive infill and expansion drilling of the existing defined inferred resource in the Deep Zone.   

CIBC stated that the 2020 results returned demonstrate significant increases in drill hole intercept densities and growth of the Deep Zone area of the Valdecañas vein.

The report mentioned that MAG Silver 2021 drill program is currently underway and the company has activated five drill rigs on surface and is continuing with underground definition drilling. MAG's JV investment partner and mine operator Fresnillo Plc (FRES:LSE) has stated that mining operations and mill construction efforts remain on budget and that it anticipates that the new mill be commissioned in Q4/2021 as scheduled.    

The analyst highlighted that definition drilling at the Bonanza Zone was successful pointing out that assay results from Hole MIC-6 returned 3.3 g/t Au and 1,356 g/t Ag over a width of 5.2 meters.

CIBC listed that infill and expansion drilling at the Valdecañas vein's Deep Zone produced some key intercepts including Hole D1-6-1, which struck 3.9 g/t Au and 198 g/t Ag, 14.2% Pb plus Zn, and 0.4% Cu over a width of 18.1 m and Hole D5-3-3 which returned 0.9 g/t Au and 357 g/t Ag, 4.7% Pb plus Zn, and 0.2% Cu over a "true width" of 21.0 meters.

The analyst summarized the weighted average results across all four of the veins targeted. CIBC indicated that the Valdecañas vein averaged 331 g/t Ag and 1.6 g/t Au over a width of 4.4 meters, the Hangingwall veins averaged 130 g/t Ag and 1.0 g/t Au over a width of 3.1 m, the Venadas family veins averaged 251 g/t Ag and 2.9 g/t Au over 0.8 meters, and the Footwall veins averaged 61 g/t Ag and 0.6 g/t Au over 1.6 meters.

Analyst Chiu noted that MAG Silver is an emerging silver producer that is well-positioned to benefit from the upward trend in silver prices. MAG Silver owns a 44% interest in the Juanicipio mine in Fresnillo, Mexico. CIBC believes that when the 4,000 tpd Juanicipio mill comes online, it will serve as a key catalyst and improve prospects for the company to grow processing capacity and expand the resource.

The analyst advised that its base case valuation forecasts for MAG Silver were based upon silver prices of $29/oz in 2021, $31/oz in 2022, $30/oz in 2023, and $28/oz thereafter.

CIBC World Markets currently has a "Neutral" rating for MAG Silver Corp. with a 12-to-18-month price target of CA$33.00/share. The company's shares trade under the symbol MAG on the Toronto Stock Exchange and closed for trading on August 25, 2021 at CA$23.23 per share.


1) Stephen Hytha compiled this article for Streetwise Reports LLC and provides services to Streetwise Reports as an independent contractor. He or members of his household own securities of the following companies mentioned in the article: None. He or members of his 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 Corp. Click here for important disclosures about sponsor fees. The information provided above is for informational purposes only and is not a recommendation to buy or sell any security.
3) Comments and opinions expressed are those of the specific experts and not of Streetwise Reports or its officers. The information provided above is for informational purposes only and is not a recommendation to buy or sell any security.
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5) From time to time, Streetwise Reports LLC and its directors, officers, employees or members of their families, as well as persons interviewed for articles and interviews on the site, may have a long or short position in securities mentioned. Directors, officers, employees or members of their immediate families are prohibited from making purchases and/or sales of those securities in the open market or otherwise from the time of the decision to publish an article until three business days after the publication of the article. The foregoing prohibition does not apply to articles that in substance only restate previously published company releases. As of the date of this article, officers and/or employees of Streetwise Reports LLC (including members of their household) own securities of MAG Silver Corp., a company mentioned in this article.

Disclosures from CIBC, MAG Silver Corp., Company Update, August 5, 2021

Analyst Certification:
Each CIBC World Markets Corp./Inc. research analyst named on the front page of this research report, or at the beginning of any subsection hereof, hereby certifies that (i) the recommendations and opinions expressed herein accurately reflect such research analyst's personal views about the company and securities that are the subject of this report and all other companies and securities mentioned in this report that are covered by such research analyst and (ii) no part of the research analyst's compensation was, is, or will be, directly or indirectly, related to the specific recommendations or views expressed by such research analyst in this report.

Potential Conflicts of Interest:
Equity research analysts employed by CIBC World Markets Corp./Inc. are compensated from revenues generated by various CIBC World Markets Corp./Inc. businesses, including the CIBC World Markets Investment Banking Department. Research analysts do not receive compensation based upon revenues from specific investment banking transactions. CIBC World Markets Corp./Inc. generally prohibits any research analyst and any member of his or her household from executing trades in the securities of a company that such research analyst covers. Additionally, CIBC World Markets Corp./Inc. generally prohibits any research analyst from serving as an officer, director or advisory board member of a company that such analyst covers.

In addition to 1% ownership positions in covered companies that are required to be specifically disclosed in this report, CIBC World Markets Corp./Inc. may have a long position of less than 1% or a short position or deal as principal in the securities discussed herein, related securities or in options, futures or other derivative instruments based thereon.

Recipients of this report are advised that any or all of the foregoing arrangements, as well as more specific disclosures set forth below, may at times give rise to potential conflicts of interest.

CIBC World Markets Inc. does and seeks to do business with companies covered in its research reports. As a result, investors should be aware that CIBC World Markets Inc. may have a conflict of interest that could affect the objectivity of this report. Investors should consider this report as only a single factor in making their investment decision.

Important Disclosure Footnotes for MAG Silver Corp. (MAG.TO)
• 2g CIBC World Markets Inc. expects to receive or intends to seek compensation for investment banking services from these companies in the next 3 months: MAG Silver Corp.

For important disclosure footnotes for companies mentioned in this report that are covered by CIBC World Markets Inc., click here: Disclaimers & Disclosures.

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