MAG Silver Corp.'s (MAG:TSX; MAG:NYSE American) Q1/25 financial results were ahead of consensus and notable for lower-than-expected operating costs, reported TD Cowen Analyst Wayne Lam in a May 8 research note.
As a result, Lam wrote, "We expect a positive reaction from MAG shares."
32% Return Potential
TD Cowen maintained its CA$28 per share target price on the Canadian silver company, trading at the time of the report at about CA$21.13 per share.
The price difference implies a possible return of 32%.
MAG Silver remains a Buy.
To Pay Second Dividend
Lam reported that MAG's second declared dividend, to be paid on May 28, is US$0.20 per share. The dividend implies a 5.3% annualized dividend yield, the highest in our precious metals universe, noted the analyst. The first dividend, announced in March, was US$0.18 per share.
At quarter's end, MAG had a strong balance sheet with US$156 million (US$156M) in cash, down from US$162M in Q4/24, and no debt.
Costs Surprisingly Low
MAG's Q1/25 earnings per share was US$0.27 versus TD Cowen and consensus' estimate of US$0.25 per share due to lower costs for labor, contractors and materials and due to robust production, noted Lam.
Lower operating costs "continued to showcase impressive margins" from MAG's joint venture project, Juanicipio, in Mexico. Specifically, in Q1/25, the cash cost was (US$0.91) per ounce of silver [(US$0.91/oz of Ag], and the all-in sustaining cost was US$2.04/oz of Ag. Both were at the lower end of cost guidance, (US$1)–1/oz and US$6–8/oz, respectively.
Exploration During Quarter
Lam noted the drilling that was done at MAG's projects during Q1/25. At Deer Trail in Utah, 1,783 meters (1,783m) of reverse circulation drilling was completed.
At Juanicipio, 6,992m of infill drilling was carried out. Drill testing was done of the areas to be mined in the near to medium term, of deep skarn targets and of new veins to the south.
Another 50,500m of drilling is planned for the joint venture project this year, to start with regional surface drilling in Q2/25.
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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 contrator.
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Disclosures for TD Cowen, MAG Silver Corp., May 8, 2025
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TD Cowen: Atlanta 866 544 7009 Boston 617 946 3700 Calgary 403 299 8572 Chicago 312 577 2240 Cleveland 440 331 3531 Montreal 514 289 1500 New York 646 562 1010 San Francisco 415 646 7200 Stamford 646 616 3000 Toronto 416 944 6978 Vancouver 604 654 3332 TD COWEN EQUITY RESEARCH RATING DEFINITIONS Buy (1): The stock is expected to achieve total return of +15% or more over the next 12 months Hold (2): The stock is expected to achieve a total return that falls between -10% to +15% over the next 12 months Sell (3): The stock is expected to achieve a total return of -10% or below over the next 12 months Suspended (4): Due to evolving circumstances and potential conflicts of interest, we can no longer generate what we consider a defensible rating at the current time Assumption: The expected total return calculation includes annual return and forecasted dividend yield TD Cowen Equity Research Rating Distribution Distribution of Ratings/Investment Banking Services (IB) as of 03/31/25 Rating Count Ratings Distribution Count IB Services/Past 12 Months Buy 815 66.05% 324 39.75% Hold 403 32.66% 103 25.56% Sell 16 1.30% 3 18.75% TD Cowen Equity Research Rating Distribution Table does not include any subject company for which the equity research rating is currently suspended.
