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TICKERS: MAG

Q2/23 Production at Mexico Project Better Than Expected
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What led to this were higher quarter-over-quarter mill throughput and greater-than-estimated mill feed grades, noted a Canaccord Genuity report.

MAG Silver Corp.'s (MAG:TSX; MAG:NYSE American) reported Q2/23 production surpassed Canaccord Genuity's expectation, reported analyst Lucas Pamatat in a July 26 research note.

Possible Gain Notable

Given this result, Canaccord reiterated its Speculative Buy rating and CA$24 per share price target on the Canadian producer, noted Pamatat. MAG's current share price, in comparison, is about CA$14.82 per share.

Thus, the potential gain for investors in the company is significant, at 62%.

Amounts Achieved

Q2/23 production at Juanicipio, MAG's joint venture project with operator Fresnillo in Mexico, totaled 6,500 ounces of silver equivalent (6.5 Koz of Ag eq), 51% higher than Canaccord's estimate of 4.3 Koz Ag eq, Pamatat reported. Production of silver alone was 5.275 Koz, and this surpassed Canaccord's forecast of 63%.

The amount of processed ore was 377,000 tons (377 Kt), also higher than Canaccord's estimate of 300 Kt.

The latter "implies 104% of mill capacity as ore continues to be processed at Fresnillo's nearby processing plants," wrote Pamatat.

Reasons for the Beat

The analyst ascribed the production beat to higher mill throughput during the quarter and greater-than-expected mill feed grade. Throughput was 70% higher in Q2/23 than in the previous quarter.

Feed grade came in at 498 grams per ton (498 g/t) Ag; Canaccord's projection was 400 g/t Ag. Higher-grade feed is being introduced as the ramp-up of the Juanicipio mill continues.

That is progressing well, Pamatat pointed out, with processing having been taken during Q2/23 to 85% of its 4,000-tons-per-day design capacity. Canaccord expects the mill to reach full capacity by the end of Q3/23.

"Production is expected to increase through Q3/23 as the Juanicipio mill ramps up," added Pamatat.


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Important Disclosures:

  1. MAG Silver Corp. is a billboard sponsor of Streetwise Reports and pays SWR a monthly sponsorship fee between US$4,000 and US$5,000.
  2. Doresa Banning wrote this article for Streetwise Reports LLC and provides services to Streetwise Reports as an independent contractor.
  3. 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.

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Disclosures for Canaccord Genuity, MAG Silver Corp., July 26, 2023

Analyst Certification Each authoring analyst of Canaccord Genuity whose name appears on the front page of this research hereby certifies that (i) the recommendations and opinions expressed in this research accurately reflect the authoring analyst’s personal, independent and objective views about any and all of the designated investments or relevant issuers discussed herein that are within such authoring analyst’s coverage universe and (ii) no part of the authoring analyst’s compensation was, is, or will be, directly or indirectly, related to the specific recommendations or views expressed by the authoring analyst in the research, and (iii) to the best of the authoring analyst’s knowledge, she/he is not in receipt of material non-public information about the issuer. Analysts employed outside the US are not registered as research analysts with FINRA. These analysts may not be associated persons of Canaccord Genuity LLC and therefore may not be subject to the FINRA Rule 2241 and NYSE Rule 472 restrictions on communications with a subject company, public appearances and trading securities held by a research analyst account.

Required Company-Specific Disclosures (as of date of this publication) MAG Silver Corp. currently is, or in the past 12 months was, a client of Canaccord Genuity or its affiliated companies. During this period, Canaccord Genuity or its affiliated companies provided investment banking services to MAG Silver Corp.. In the past 12 months, Canaccord Genuity or its affiliated companies have received compensation for Investment Banking services from MAG Silver Corp. . Canaccord Genuity or one or more of its affiliated companies intend to seek or expect to receive compensation for Investment Banking services from MAG Silver Corp. in the next three months.

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