In an Aug. 12 research note, Raymond James analyst Brian MacArthur reported the results of MAG Silver Corp.'s (MAG:TSX; MAG:NYSE American) Q2/21 and provided a near-term outlook on its joint venture project Juanicipio.
In Q2/21 at Juanicipio, 44,435 tons were processed. Sales from processed tons totaled 404,518 ounces of payable silver, 709 ounces of payable gold, 133 tons of lead and 209 tons of zinc.
Gross sales during the quarter amounted to $11.3 million ($11.3M). Subtracting Q2/21 mining and transportation costs of $2.4M, total Q2/21 gross profit from Juanicipio was $8.9M. These monies were put back into the project.
MAG is responsible for an additional $49M in Juanicipio development costs. With $66M in cash at the end of Q2/21, the company should be able to easily cover this, MacArthur wrote.
Looking forward, commissioning of the Juanicipio production plant is expected to start in Q4/21. Construction remains on schedule and on budget.
Meanwhile, MacArthur indicated, drilling, now with five rigs, continues at Juanicipio, stepout and infill of the Valdecañas vein system primarily. However, other places slated for drilling are the Venadas and Anticipada veins and three key targets elsewhere on the property.
Raymond James rates MAG Silver's shares Outperform, "given the high quality of the [Juanicipio] asset, a strong partner, its near-term start-up which could lead to a market rerating and the company's financial position and excellent exploration potential," MacArthur wrote. Raymond James' target price on MAG is CA$28 per share. In comparison, the current share price is about CA$23.81.
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