MAG Silver Corp. (MAG:TSX; MAG:NYSE American) and joint venture partner Fresnillo started commissioning of the just built mill at their Juanicipio project in Mexico and expect it to reach nameplate capacity by Q2/23, reported ROTH Capital Partners analyst Joe Reagor in a Dec. 29 research note.
"We see this as a major milestone for MAG," wrote Reagor, noting that commissioning follows the tie-in of the Juanicipio mill to the area's electrical grid and subsequent requisite and additional testing, all successful.
"We see this as a major milestone for MAG," wrote Reagor.
The analyst pointed out the Juanicipio mill will initially produce material from low-grade ore stockpiles, as is common practice, and doing so "could drive lower grades and recoveries initially."
However, he added, it is expected that once mill ramp-up is completed, recovery rates will match those outlined in the plan. Also, ore will still be processed through Fresnillo's nearby mill during the Juanicipio mill's initial phase, in part offsetting any shortfalls.
ROTH already accounted for the electrification of the Juanicipio mill in its model on MAG and thus left it as is on the recent news the milestone was achieved, noted Reagor.
The investment bank did, however, reiterate its Buy rating and US$24 per share price target on the Canadian silver producer, the current share price of which is about US$16.41 in comparison.
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Disclosures For Roth Capital Partners, MAG Silver Corp., December 26, 2022
Regulation Analyst Certification ("Reg AC"): The research analyst primarily responsible for the content of this report certifies the following under Reg AC: I hereby certify that all views expressed in this report accurately reflect my personal views about the subject company or companies and its or their securities. 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.
Disclosures: 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.
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 uponrequest. 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. No part of this report may be reproduced in any form without the express written permission of ROTH.