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'Drilling Update Reminds of Resource Upside at Juanicipio,' Analyst Says
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Results of MAG Silver's 2020 drill program at its Mexico joint venture project Juanicipio are interpreted in a National Bank of Canada report.

In an Aug. 5 research note, National Bank of Canada analyst Don DeMarco discussed the results of MAG Silver Corp.'s (MAG:TSX; MAG:NYSE American) 2020 drill program at its Juanicipio joint venture property.

DeMarco reiterated that the campaign encompassed 110 holes, 33 surface and 77 underground, in two primary locations plus in some additional zones. Definition drilling was done in the Valdecañas Bonanza zone, and infill and expansion drilling was conducted in the Valdecañas Deep zone.

"Overall, we ascribe a neutral bias, noting potential for resource expansion is tangible," DeMarco wrote.

As for the Bonanza zone, from which ore is planned to be mined initially at Juanicipio, 55 holes were drilled there. Intercept grades were high, 655 grams per ton silver equivalent (655 g/t Ag eq) on average, and generally consistent with the resource grade of 789 g/t Ag eq. Highlight hole MIC-6 showed 3.3 g/t gold and 1,356 g/t silver, or 1,599 Ag eq, over 5.2 meters (5.2m).

"Results confirm and add confidence in the high-grade silver resource within the upper parts of the Valdecañas Bonanza zone," DeMarco wrote.

In the Valdecañas Deep zone, 21 holes were drilled, seven of them from surface. Average grade shown in the intercepts was 565 Ag eq, and it, too, was mostly in line with the zone's resource grade of 601 Ag eq. Highlight hole-D1-6-1 returned 1,046 g/t Ag eq over 18.1m.

"Results confirm, expand, and allow improved modeling of the continuous wide mineralization of the Valdecañas Deep zone," wrote DeMarco.

Regarding the additional zones drilled, results indicate they "bode well for mining flexibility in later years of the mine life, including expansion and improved modeling of the Anticipada vein," DeMarco noted. For instance, the hanging wall veins returned an average grade of 489.3 g/t Ag eq over 3.1m; the Venadas family veins, 472.4 g/t Ag eq over 0.8m; and the footwall veins, 306.2 g/t Ag eq over 1.6m.

The National Bank of Canada has an Outperform rating and a CA$31 per share target price on MAG Silver, the stock of which is currently trading at about CA$24.47 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.
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.  
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 NBF, MAG Silver, August 5, 2021

The Research Analyst(s) who prepared these reports certify that their respective report accurately reflects his or her personal opinion and that no part of his/her compensation
was, is, or will be directly or indirectly related to the specific recommendations or views as to the securities or companies.

NBF compensates its Research Analysts from a variety of sources. The Research Department is a cost center and is funded by the business activities of NBF including Institutional Equity Sales and Trading, Retail Sales, the correspondent clearing business, and Corporate and Investment Banking. Since the revenues from these businesses vary, the funds for research compensation vary. No one business line has a greater influence than any other for Research Analyst compensation.

Non-Operator: MAG’s primary asset is the Juanicipio property (44%) being developed in partnership with Fresnillo Plc (56%). As a non-operator, MAG does not directly control the future production or development of the asset and any delays in the forecasted production schedule could negatively impact revenue and indirectly impact the valuation of the company.

Financing & Liquidity Risk: MAG is responsible for its share of development capex for Juanicipio. Post-development of the Juanicipio property, MAG will be exposed to risks related to fluctuating silver, gold, zinc, lead and fuel/power prices.

National Bank Financial Inc. has acted as an underwriter with respect to this issuer within the past 12 months.

National Bank Financial Inc. has provided investment banking services for this issuer within the past 12 months.

National Bank Financial Inc. or an affiliate has managed or co-managed a public offering of securities with respect to this issuer within the past 12 months.

National Bank Financial Inc. or an affiliate has received compensation for investment banking services from this issuer within the past 12 months.

National Bank Financial Inc. or an affiliate has a non-investment banking services related relationship during the past 12 months.

The issuer is a client, or was a client, of National Bank Financial Inc. or an affiliate within the past 12 months.

National Bank Financial Inc. or its affiliates expects to receive or intends to seek compensation for investment banking services from this issuer in the next 3 months.
As of the end of the month immediately preceding the date of publication of this research report (or the end of the second most recent month if the publication date is less than 10 calendar days after the end of the most recent month), National Bank Financial Inc. or an affiliate beneficially own 1% or more of any class of common equity securities of this issuer.

National Bank Financial Inc. makes a market in the securities of this issuer, at the time of this report publication.

A partner, director, officer or research analyst involved in the preparation of this report has, during the preceding 12 months provided services to this issuer for remuneration other than normal course investment advisory or trade execution services.

A research analyst, associate or any other person (or a member of their household) directly involved in preparing this report has a financial interest in the securities of this issuer.

A partner, director, officer, employee or agent of National Bank Financial Inc., is an officer, director, employee of, or serves in any advisory capacity to the issuer.

A member of the Board of Directors of National Bank Financial Inc. is also a member of the Board of Directors or is an officer of this issuer.

A redacted draft version of this report has been shown to the issuer for fact-checking purposes and changes may have been made to the report before publication.

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