MAGs Juanicipio On Track for Q4/21 Commissioning, Rerating Should Follow

A Stifel report noted MAG Silver “demands a higher premium given its ‘royalty-like’ structure and strong, near-term-free cash flow.”

In a July 28 research note, Stifel analyst Stephen Soock reported that the new mill being built at MAG Silver Corp.’s (MAG:TSX; MAG:NYSE American) Juanicipio joint venture project with Fresnillo should be ready for the planned Q4/21 commissioning.

Also, Soock highlighted that MAG should rerate and will likely begin paying a dividend once commercial production at the new Juanicipio plant gets underway. Currently, the company’s stock is trading at about CA$24 per share, and Stifel’s target price on it is CA$29 per share.

MAG “demands a higher premium given its ‘royalty-like’ structure and strong, near-term free cash flow,” Soock wrote.

He described the status of development work at the plant, where all major equipment is in place. Initial construction of the tailings dam has been resequenced and resized. In progress are construction of the fine ore bin, cladding of the building’s exterior, and preparation of the stopes for full production.

While construction continues at the project, Soock pointed out, the Juanicipio deposit continues to grow via drilling. The newly discovered mineralized vein network could lead to additional discoveries.

“We believe there are additional economic ore deposits on the joint venture ground, the value of which will be realized in the market as Juanicipio comes into production (at the end of 2021) and focus shifts to regional exploration,” the analyst added.

Soock also reported that during Q2/21, Juanicipio produced a total of 435,000 ounces of silver and 787 ounces of gold from ore processed at the nearby Fresnillo plant. Production fell short of Stifel’s estimate because slightly fewer tonnes were processed. Until the Juanicipio plant is commissioned, ore processing at the project will continue at Fresnillo’s plant.

Stifel rates MAG Silver Buy.

Disclosures:
1) Doresa Banning compiled this article for Streetwise Reports LLC and provides services to Streetwise Reports as an independent contractor. She or members of her household own securities of the following companies mentioned in the article: None. She or members of her household are paid by the following companies mentioned in this article: None.
2) The following companies mentioned in this article are billboard sponsors of Streetwise Reports: MAG Silver Corp. Click here for important disclosures about sponsor fees.  
3) Comments and opinions expressed are those of the specific experts and not of Streetwise Reports or its officers. The information provided above is for informational purposes only and is not a recommendation to buy or sell any security.
4) The article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility. By opening this page, each reader accepts and agrees to Streetwise Reports’ terms of use and full legal disclaimer. This article is not a solicitation for 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. Streetwise Reports does not endorse or recommend the business, products, services or securities of any company mentioned on Streetwise Reports.
5) From time to time, Streetwise Reports LLC and its directors, officers, employees or members of their families, as well as persons interviewed for articles and interviews on the site, may have a long or short position in securities mentioned. Directors, officers, employees or members of their immediate families are prohibited from making purchases and/or sales of those securities in the open market or otherwise from the time of the decision to publish an article until three business days after the publication of the article. The foregoing prohibition does not apply to articles that in substance only restate previously published company releases. As of the date of this article, officers and/or employees of Streetwise Reports LLC (including members of their household) own securities of MAG Silver Corp., a company mentioned in this article.

Related Articles