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Explorer's Mexico JV On Pace to Become World's Largest Primary Silver Mine
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MAG Silver Corp.'s Fresnillo joint venture project is on track heading towards annual production of 27 Moz Ag eq. Stifel Canada has issued a "Buy" rating for the company and recently added the company to its list of Top Picks for Q4/21.

In a September 30 research report, Stifel Nicolaus Canada Inc. (Stiefel
GMP) Analyst Stephen Soock, P.Eng., CFA commented that Stiefel GMP
has added advanced-stage silver developer and explorer MAG Silver Corp. (MAG:TSX; MAG:NYSE American) to its list of top picks for the fourth quarter of 2021.

The analyst stated that MAG Silver currently holds a 44% interest in the Juanicipio project with its partner and the JV's operator, Fresnillo Plc., owning the remaining interest.

Construction at the mining complex is nearing completion and the site's new 4,000 tpd processing plant is scheduled to commence operations this month and is expected to reach 40-50% of production capacity by December 2021. The JV's mining operations have continued during the new plant's construction which has served to alleviate a substantial amount of production metallurgy scaling risk with the project processing around 16,000 tons of material per month at the nearby Fresnillo mill.

The analyst advised that as of September 30, 2021, the company held approximately $42 million in cash on its balance sheet and is sufficiently funded to meet the remaining estimated $21 million in construction expenditures and production ramp up costs.

Stifel GMP highlighted that on a 100% basis, "When in full swing, Juanicipio will produce 27 Moz Ag eq per year making it the world's largest primary silver mine."

The report indicated that MAG is expected to net $178 million in free cash flow in 2022 with a free cash flow yield of 13% over the next 3 years. Stifel stated that the cash generated will be available to fund the company's dividend payments and fund further exploration at both the JV and its wholly owned Utah Deer Trail project. In addition, cash from operations will utilized to double the throughput of the new mill which in turn will produce even greater long-term cash flows from the Juanicipio mine.

Stiefel GMP advised that it believes that the stock will re-rate higher in the next several months as mill commissioning starts and commercial operations get underway. The firm expects that MAG Silver's "impending mountains of free cash flow on the horizon" warrant a substantial premium considering its 'royalty-like' structure and management's exploration expertise.

Stifel Canada currently has a "Buy" rating for MAG Silver Corp. with a 12-month price target of CA$30.50/share. The company's shares trade under the symbol MAG on the Toronto Stock Exchange and last closed for trading on November 9, 2021 at CA$20.88 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.  
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) This 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 Disclosures and Certifications for Stifel, MAG Silver Corp., Sept. 30, 2021
The authors of this document certify that the views expressed in this research report accurately reflect their personal views about the subject securities or issuers; and the authors of this document certify that no part of their compensation was, is, or will be directly or indirectly related to the specific recommendations or views contained in this research report.
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Of the securities we rate, 57% are rated Buy, 1% are rated Speculative Buy, 28% are rated Hold, 2% are rated Sell and 12% are rated Suspended.

Within the last 12 months, Stifel or an affiliate has provided investment banking services for 25%, 8%, 0% and 8% of the companies whose shares are rated Buy (includes Speculative Buy), Hold, Sell and Suspended respectively.

Within the last 12 months, Stifel or an affiliate has provided material services for 42%, 60%, 20%, 23% and 14% of the companies whose shares are rated Buy, Speculative Buy, Hold, Sell and Suspended respectively.

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