MAG Silver Corp.'s (MAG:TSX; MAG:NYSE American) Q1/24 financial results were in line with the estimates of ROTH Capital Partners, its managing director Joe Reagor reported in a May 14 research note. Due to ROTH slightly adjusting some estimates in its model on the silver producer, the target price rose to $14.50 per share from $14.
"Earnings per share of $0.14 was in line with our estimate," Reagor wrote. "We continue to believe MAG is in the process of receiving a rerating from the market as it generates positive cash flow."
Currently, the Canadian mining company's share price is about $12.44, noted Reagor. From here, the return to the new target is 17%.
ROTH still considers MAG a Buy.
Dividend paying potential
Reagor highlighted that in Q1/24 MAG received $17.5 million ($17.5M) in cash from its Juanicipio joint venture (JV) project in Mexico, "a significant development."
This amount allowed the Canadian miner to report a cash balance increase during the quarter despite having spent $5.1M on exploration work at its other projects and $3.8M on acquiring the Goldstake property.
"We believe cash distributions are likely to increase in the quarters ahead, allowing MAG to consider paying a dividend by year-end 2024," commented Reagor.
Other key points
Reagor reported that Juanicipio generated $123.7M in revenue in Q1/24, beating ROTH's estimate of $115.8M.
The JV revenue beat resulted from higher metal sales revenue, but the latter, in turn, was partially offset by greater consulting costs, the analyst explained.
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