BMO Nesbitt Burns Inc. (BMO Capital Markets) Analyst Ryan Thompson, CFA commented in a July 28 research note that MAG Silver Corp. (MAG:TSX; MAG:NYSE American) is on-track to complete construction and commence operations at its new material processing plant in Q4/21.
The Analyst noted that MAG Silver is proceeding with normal operations on the ground at the JV as construction efforts continue in parallel at the new processing facility. At present, the development ore mined from Juanicipio JV project is being processed at the Fresnillo processing plant. BMO Capital Markets advised that its attributed share of the production during Q2/21 was 191 Koz Ag and remarked that the total was a bit below its 225 Koz Ag forecast. Thompson added that MAG's attributed share of gold production in Q2/21was 346 oz.
Analyst Thompson indicated that 44,435 tonnes of material were processed at Fresnillo, which was just below the goal of 48,000 tonnes, or about 16,000 tonnes monthly. It is expected that production will remain steady at these levels until the new plant is finished later this year.
BMO estimates that the JV which generated approximately $12 million in revenue from current operations and mentioned that it plans to utilize those proceeds to offset the projects capital expenditures. MAG Silver advised that floatation cells and filters were installed at the new plant in Q2/21 and stated that it anticipates that the new plan will be ready to open in as scheduled in Q4/21.
BMO Capital Markets advised that it presently has a "Market Perform" rating for MAG Silver Corp. with a target price of CA$23.50 per share. The company's shares trade on the Toronto Stock Exchange under the symbol MAG and are currently trading at CA$24.47/share.
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Disclosures from BMO, MAG Silver, July 28, 2021
I, Ryan Thompson, hereby certify that the views expressed in this report accurately reflect my personal views about the subject securities or issuers. 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.
Analysts who prepared this report are compensated based upon (among other factors) the overall profitability of BMO Capital Markets and their affiliates, which includes the overall profitability of investment banking services. Compensation for research is based on effectiveness ingenerating new ideas and in communication of ideas to clients, performance of recommendations, accuracy of earnings estimates, and service to clients.
Analysts employed by BMO Nesbitt Burns Inc. and/or BMO Capital Markets Limited are not registered as research analysts with FINRA. These analysts may not be associated persons of BMO Capital Markets Corp. and therefore may not be subject to the FINRA Rule 2241 restrictions on communications with a subject company, public appearances and trading securities held by a research analyst account.
Company Specific Disclosures
Disclosure 2: BMO Capital Markets has provided investment banking services with respect to MAG Silver within the past 12 months.
Disclosure 4: BMO Capital Markets or an affiliate has received compensation for investment banking services from MAG Silver within the past12 months.
Disclosure 6A: MAG Silver is a client (or was a client) of BMO Nesbitt Burns Inc., BMO Capital Markets Corp., BMO Capital Markets Limited or an affiliate within the past 12 months: A) Investment Banking Services
Disclosure 9B: BMO Capital Markets makes a market in MAG Silver in United States.