In a July 28 research note, analyst Joe Reagor reported that ROTH Capital Partners raised its target price on MAG Silver Corp. (MAG:TSX; MAG:NYSE American) to $27 per share from $26. This is because the company's new mill at Juanicipio remains on schedule for commissioning in Q4/21 and because silver prices are expected to remain high for some time. MAG is currently trading at about $19.46 per share.
The fact that the mill will be ready as planned is "a material positive as Fresnillo has been able to avoid delays in construction in 2021 despite the ongoing pandemic," Reagor wrote. Fresnillo is MAG Silver's joint venture partner on the Juanicipio project and its operator.
The analyst also reported total Q2/21 production at Juanicipio. Overall, it slightly missed ROTH's forecast, coming in at 434,885 ounces of silver and 787 ounces of gold compared to 500,000 ounces and 2,100 ounces, respectively.
"However," Reagor wrote, "we do not consider the miss material as the company is continuing to process small amounts of development ore through Fresnillo's neighboring mill." The number of tons processed in Q2/21 at Fresnillo's mill exceeded ROTH's expectation.
Metals prices outperformed during the quarter, and continue to look strong in the near term. ROTH revised its model on MAG Silver accordingly and maintained its Buy rating on the silver producer.
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Disclosures from ROTH, MAG Silver, July 28, 2021
ROTH makes a market in shares of MAG Silver Corp. and as such, buys and sells from customers on a principal basis.
A Research Analyst and/or a member of the Analyst's household own(s) debt or equity securities of MAG Silver Corp. stock.
Our rating system attempts to incorporate industry, company and/or overall market risk and volatility. Consequently, at any given point in time, our investment rating on a stock and its implied price movement may not correspond to the stated 12-month price target.
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. The material, information and facts discussed in this report other than the information regarding ROTH Capital Partners, LLC and its affiliates, are from sources believed to be reliable, but are in no way guaranteed to be complete or accurate. This report should not be used as a complete analysis of the company, industry or security discussed in the report. Additional information is available upon request. This is not, however, an offer or solicitation of the securities discussed. Any opinions or estimates in this report are subject to change without notice. An investment in the stock may involve risks and uncertainties that could cause actual results to differ materially from the forward-looking statements. Additionally, an investment in the stock may involve a high degree of risk and may not be suitable for all investors.