Silver X Mining Corp. (AGX:TSX.V) released its Q3/23 financials and got a target price boost to CA$0.80 per share from CA$0.75 by Red Cloud Securities after it updated its valuation of the Canadian metals producer, reported mining analyst Timothy Lee in a Nov. 30 research note.
"These results are about in line with expectations," Lee wrote.
Compelling return implied
Compared to the new target price, Silver X's current price is about CA$0.27 per share, noted Lee. From here, the return to target represents a significant gain for investors of 196%.
Red Cloud rates the company Buy.
Numbers as expected
Lee reviewed British Columbia-based miner's key financial figures from Q3/23.
Silver X reported a net loss of US$1.5 million (US$1.5M), or (US$0.01) per share, consistent with Red Cloud's forecast.
In Q3/23 revenue was down as expected year over year (YOY) because the miner temporarily halted production between July 26, 2023 and Sept. 19, 2023 to evaluate and optimize its operations in Peru. The company's revenue in the third quarter was US$2.1M; a year earlier it was more than double this amount, at US$5.5M.
Silver X experienced an operating loss in Q3/23 of US$0.8M whereas in Q3/22, it achieved an operating gain, of US$2M.
"Production, since resumption of operations, has been returning to the highs seen before the break," Lee reiterated.
Q3/23 cash costs averaged US$22.01 per ounce of silver equivalent (US$22.01/oz Ag eq). The all-in sustaining cost was US$33.45/oz Ag eq. US$11.44/oz Ag eq, or US$1.3M, of this was sustaining capex for development work at the Tangana mining unit.
Near-term outlook positive
Given Silver X has been rapidly increasing production since restarting it on Sept. 20, Lee wrote, an "upswing" is expected in Q4/23.
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