MAG Silver Corp. (MAG:TSX; MAG:NYSE American) adopted a dividend policy, announced the first dividend to be paid and released its Q4/24 financial results, reported BMO Capital Markets Analyst Kevin O'Halloran in a March 24 research note.
The Canadian mining company is currently priced at CA$22.65 per share (CA$22.65/share), and BMO's price target on it is CA$27/share. Thus, the implied return for investors is 19%.
MAG is rated Outperform.
Dividend to Start
Notably, reported O'Halloran, MAG's new dividend policy includes a US$0.02/share per quarter fixed dividend and when the silver price exceeds US$20 per ounce (US$20/oz), a second dividend of about 30% of cash flow received from Juanicipio. This is MAG's joint venture project in Mexico with operator Fresnillo Plc (FRES:LSE).
MAG's inaugural dividend, for Q4/24 and payable on April 21, 2025, will consist of the US$0.02/share fixed dividend plus a US$0.16/share cash flow-linked dividend for a total dividend of US$0.18/share. (The US$0.16/share equals about 30% of the US$53.85 million (US$53.85M) in cash MAG received from Juanicipio in Q4/24.)
Financials At a Glance
O'Halloran presented the highlights of MAG's Q4/24 financial results, noting that these metrics either were in line with or beat BMO's estimates. The producer's earnings per share for Q4/24 was US$0.18, consistent with BMO's forecast but lower than consensus' estimate of US$0.22.
Revenue from Juanicipio was a beat at US$160M versus BMO's US$153M projection. Production costs were US$38M, in line with BMO's US$39M estimate after prereported production.
Mine level operating cash flow in Q4/24 was higher year over year (YOY), at US$111M versus US$110M. Free cash flow, though, was lower YOY, at US$78M versus US$97M.
A Look At Costs
O'Halloran covered costs in his report, too. Cash costs in Q4/24 were US$8.80/oz and lower than BMO's US$9.32/oz forecast. All-in sustaining cost (AISC) was higher at US$15/oz of silver equivalent (Ag eq) than BMO's US$12.25/oz Ag eq estimate. For the full year (2024), overall cash costs were US$8.67/oz, and AISC was US$12.03/oz Ag eq.
Sustaining capex was US$70−80M, including for the tailings dam expansion, was higher than BMO's US$38M estimate. Expansion capex of US$22−28M was in line with BMO's US$22M.
Corporate Guidance
For 2025 silver production, MAG, in January, guided to 14,700,000−16,700,000 ounces at 380−430 grams per ton, reported the analyst.
For 2025 byproduct cash cost, MAG guided to (US$1)−$1/oz versus US$0.88/oz in 2024. For AISC, MAG guided to $US6−8/oz versus US$5.54/oz last year.
On The Horizon
Starting in H2/25, MAG plans to strategically drill test the targets identified last year at both its Larder and Deer Trail projects, O'Halloran noted.
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