MAG Silver Corp. (MAG:TSX; MAG:NYSE American) and joint venture (JV) partner Fresnillo began precommissioning of their Juanicipio plant, which should "mitigate capital costs" before the next two milestones, reported H.C. Wainwright & Co. analyst Heiko Ihle in an Oct. 29 research note.
"Revenues from this production should ultimately provide the necessary capital to offset the project's cash requirements, thereby de-risking the plant commissioning and ramp-up phases expected by the end of 2021," Ihle wrote.
MAG is well on its way to its next Juanicipio catalysts. By year-end, the new plant is expected to hit 40–50% of its 4,000 tons per day nameplate production capacity and then sometime in 2022, achieve 90–95%.
"We currently do not anticipate any meaningful delays to this timeline," Ihle commented. He pointed out that this schedule is "significantly faster than the initial three-year timeline to reach full capacity that was given in the 2017 preliminary economic assessment."
He also noted the JV continues to utilize Fresnillo's nearby plant to process all Juanicipio mineralized development material.
"We highlight that the (silver rich) lead and zinc concentrates are currently treated at market terms under offtake agreements with Met-Mex Peñoles, S.A. de C.V. (private)," Ihle wrote.
The analyst also reported the Q3/21 production numbers from Juanicipio. The mine generated 57,127 tons of development material, 29% more than it did in Q2/21.
The JV's Q3/21 metals production, on a 100% basis, amounted to 667,532 ounces (667,532 oz) of silver, 53% more quarter over quarter (QOQ), and 1,107 oz of gold, 41% higher QOQ. MAG's portion amounted to 293,714 oz of silver and 487 oz of gold.
Ihle mentioned upcoming catalysts for MAG's stock. One is market clarity on the company's potential profitability once Juanicipio achieves commercial production. Another is additional drill results from MAG's Deer Trail project.
H.C. Wainwright & Co. has a Buy rating and a $22.50 per share target price on MAG Silver, the stock of which is currently trading at about $19.78 per share.
Disclosures:
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.
4) The article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility. By opening this page, each reader accepts and agrees to Streetwise Reports' terms of use and full legal disclaimer. This article is not a solicitation for investment. Streetwise Reports does not render general or specific investment advice and the information on Streetwise Reports should not be considered a recommendation to buy or sell any security. Streetwise Reports does not endorse or recommend the business, products, services or securities of any company mentioned on Streetwise Reports.
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.
Important Disclaimers From H.C. WAINWRIGHT & CO, LLC, MAG Silver Corp,. Oct. 29, 2021
This material is confidential and intended for use by Institutional Accounts as defined in FINRA Rule 4512(c). It may also be privileged or otherwise protected by work product immunity or other legal rules. If you have received it by mistake, please let us know by e-mail reply to [email protected] and delete it from your system; you may not copy this message or disclose its contents to anyone. The integrity and security of this message cannot be guaranteed on the Internet.
H.C. WAINWRIGHT & CO, LLC RATING SYSTEM: H.C. Wainwright employs a three tier rating system for evaluating both the potential return and risk associated with owning common equity shares of rated firms. The expected return of any given equity is measured on a RELATIVE basis of other companies in the same sector. The price objective is calculated to estimate the potential movements in price that a given equity could reach provided certain targets are met over a defined time horizon. Price objectives are subject to external factors including industry events and market volatility.
Investment Banking Services include, but are not limited to, acting as a manager/co-manager in the underwriting or placement of securities, acting as financial advisor, and/or providing corporate finance or capital markets-related services to a company or one of its affiliates or subsidiaries within the past 12 months.
I, Heiko F. Ihle, CFA and Marcus Giannini , certify that 1) all of the views expressed in this report accurately reflect my personal views about any and all subject securities or issuers discussed; and 2) no part of my compensation was, is, or will be directly or indirectly related to the specific recommendation or views expressed in this research report; and 3) neither myself nor any members of my household is an officer, director or advisory board member of these companies.
None of the research analysts or the research analyst’s household has a financial interest in the securities of MAG Silver Corp (including, without limitation, any option, right, warrant, future, long or short position).
As of September 30, 2021 neither the Firm nor its affiliates beneficially own 1% or more of any class of common equity securities of MAG Silver Corp.
Neither the research analyst nor the Firm knows or has reason to know of any other material conflict of interest at the time of publication of this research report.
The research analyst principally responsible for preparation of the report does not receive compensation that is based upon any specific investment banking services or transaction but is compensated based on factors including total revenue and profitability of the Firm, a substantial portion of which is derived from investment banking services.
The Firm or its affiliates did not receive compensation from MAG Silver Corp for investment banking services within twelve months before, but will seek compensation from the companies mentioned in this report for investment banking services within three months following publication of the research report.
The Firm does not make a market in MAG Silver Corp as of the date of this research report.
The securities of the company discussed in this report may be unsuitable for investors depending on their specific investment objectives and financial position. Past performance is no guarantee of future results. This report is offered for informational purposes only, and does not constitute an offer or solicitation to buy or sell any securities discussed herein in any jurisdiction where such would be prohibited. This research report is not intended to provide tax advice or to be used to provide tax advice to
any person.
H.C. Wainwright & Co., LLC does not provide individually tailored investment advice in research reports. This research report is not intended to provide personal investment advice and it does not take into account the specific investment objectives, financial situation and the particular needs of any specific person. Investors should seek financial advice regarding the appropriateness of investing in financial instruments and implementing investment strategies discussed or recommended in this research report.
H.C. Wainwright & Co., LLC’s and its affiliates’ salespeople, traders, and other professionals may provide oral or written market commentary or trading strategies that reflect opinions that are contrary to the opinions expressed in this research report.
H.C. Wainwright & Co., LLC and its affiliates, officers, directors, and employees, excluding its analysts, will from time to time have long or short positions in, act as principal in, and buy or sell, the securities or derivatives (including options and warrants) thereof of covered companies referred to in this research report.
