MAG Silver Corp.'s (MAG:TSX; MAG:NYSE American) Q1/24 financial results were in line with the estimates of Roth MKM, 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 US$14.50 per share from US$14.
"Earnings per share of US$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."
At the time of the report, the Canadian mining company's share price was about US$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 US$17.5 million (US$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 US$5.1M on exploration work at its other projects and US$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 US$123.7M in revenue in Q1/24, beating Roth's estimate of US$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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Important Disclosures:
- 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.
- Doresa Banning wrote this article for Streetwise Reports LLC and provides services to Streetwise Reports as an independent contractor.
- This article does not constitute investment advice and is not a solicitation for any 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. Each reader is encouraged to consult with his or her personal financial adviser and perform their own comprehensive investment research. By opening this page, each reader accepts and agrees to Streetwise Reports' terms of use and full legal disclaimer. Streetwise Reports does not endorse or recommend the business, products, services or securities of any company.
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Disclosures for Roth MKM, Mag Silver Corp., May 14, 2024
Regulation Analyst Certification ("Reg AC"): The research analyst primarily responsible for the content of this report certifies the following under Reg AC: I hereby certify that all views expressed in this report accurately reflect my personal views about the subject company or companies and its or their securities. I also certify that no part of my compensation was, is or will be, directly or indirectly, related to the specific recommendations or views expressed in this report.
Disclosures: ROTH makes a market in shares of MAG Silver Corp. and as such, buys and sells from customers on a principal basis. A Research Analyst and/or a member of the Analyst's household own(s) debt or equity securities of MAG Silver Corp..
ROTH Capital Partners, LLC expects to receive or intends to seek compensation for investment banking or other business relationships with the covered companies mentioned in this report in the next three months. The material, information and facts discussed in this report other than the information regarding ROTH Capital Partners, LLC and its affiliates, are from sources believed to be reliable, but are in no way guaranteed to be complete or accurate. This report should not be used as a complete analysis of the company, industry or security discussed in the report. Additional information is available upon request. This is not, however, an offer or solicitation of the securities discussed. Any opinions or estimates in this report are subject to change without notice. An investment in the stock may involve risks and uncertainties that could cause actual results to differ materially from the forward-looking statements. Additionally, an investment in the stock may involve a high degree of risk and may not be suitable for all investors. No part of this report may be reproduced in any form without the express written permission of ROTH. Copyright 2024. Member: FINRA/SIPC
