Property Gives Junior More Room to Explore

This exploration and improvement firm is increasing its alternatives with the acquisition of an Ontario property with three related, high-grade gold deposits.

Canadian junior MAG Silver Corp.’s (MAG:TSX; MAG:NYSE American) settlement to amass Gatling Exploration Inc. (GTR:TSX.V; GATGF:OTCQX) offers it a brand new avenue for exploration that matches properly into its portfolio, a number of analysts mentioned.

As a part of the transaction, MAG will get Gatling’s 3,370-hectare Larder gold undertaking in a jurisdiction that is favorable to mining.

Larder spans 4.5 kilometers in northern Ontario’s Abitibi Greenstone Belt, 35 kilometers east of Kirkland Lake, a longtime gold camp the place greater than 70 Moz of gold have been produced. It hosts three related, high-grade deposits — Bear, Cheminis, and Fernland— and is simply 7 kilometers from the Kerr Addison mine, which produced 11 Moz of gold.

“This acquisition supplies an extra progress avenue for MAG whereby money generated from Juanicipio could be reinvested into exploration at Larder,” Stifel GMP analyst Stephen Soock mentioned in a March 13 analysis report.

At its flagship high-grade, large-scale Juanicipio undertaking within the Zacatecas state of Mexico, MAG is shifting to being a producer and opening a 4,000-tonne-per-day processing plant within the second quarter of this 12 months. It additionally is continuous its exploration at its Deer Path property in Utah.

A number of analysts maintained their rankings for MAG after the transfer to amass Gatling, together with Richard Grey of Cormark Securities Inc., who continued to price the corporate Market Carry out with a goal value of CA$23.00.

“This acquisition supplies an extra progress avenue for MAG whereby money generated from Juanicipio could be reinvested into exploration at Larder.”

—Stifel GMP analyst Stephen Soock

“With commissioning of the Juanicipio plant anticipated to begin in Q2/22 (with operations ramping to 85-90% capability by year-end), we’re inspired to see MAG reprioritize exploration,” Grey wrote March 14. “The corporate is within the midst of its Section 2 drill program at its Deer Path undertaking in Utah and can now look to leverage Gatling’s present exploration workforce (and) increase sources on the Larder undertaking in Ontario.”

Within the deal for Gatling, every Gatling shareholder will get 0.017 of a standard share of MAG for every share of Gatling held. The consideration values Gatling at roughly CA$0.40 a share, representing a premium of 47.4% to Gatling shareholders, based mostly on the five-day quantity weighted common value of every firm as of shut on March 10. Upon completion, Gatling shareholders will maintain 0.79% of MAG shares on an excellent foundation, MAG mentioned.

The boards of administrators of each corporations have accredited the association, which ought to be accomplished by late Might, MAG mentioned.

In keeping with Gatling, a 2021 world mineral useful resource estimate (MRE) pegged the Larder useful resource at 388,000 indicated ounces gold, with one other 933,000 inferred ounces. The useful resource spans all three gold deposits. All components of the property are accessible by truck or all-terrain autos on non-service roads and trails.

“Gatling represents a extremely good alternative for MAG Silver,” MAG President and Chief Govt Officer George Paspalas instructed Streetwise Experiences. “What’s made us profitable is our means to get on the properties that tick the placement location location field.”

Juanicipio Plant on Monitor


MAG’s Juanicipio plant in Mexico was dealt a blow over the vacations when an electrical energy regulator’s choice delayed its commissioning. However the firm mentioned the operator of the undertaking, Fresnillo plc, is processing further masses to take up the slack. MAG joined with Fresnillo in 2005 to develop the property, which it calls a “sturdy, high-grade, high-margin underground silver undertaking exhibiting low improvement dangers.”

The JV is mining the Bonanza and Deep zones of the Valdecañas vein within the Zacatecas state of Mexico. A 2017 preliminary financial evaluation on the undertaking estimated a 19-year mine lifetime of 4,000 tonnes per day.

MAG owns 44% curiosity in Juanicipio, whereas Fresnillo owns the remaining 56%. The mine generated a complete of 251,907 tonnes of mineralized materials in 2021, leading to 3.2 million ounces of silver and 6,577 ounces of gold, the corporate introduced Jan. 26.

Paspalas mentioned the Juanicipio plant was nonetheless on monitor. “I feel individuals are going to be shocked once they see the grade of what we’re processing, the tonnage, the cashflow,” he mentioned.

On Monday, MAG additionally introduced the appointment of a brand new chief monetary officer. Fausto Di Trapani is changing Larry Taddei, who stepped down after 12 years with the corporate. Di Trapani has held roles at BHP Billiton Ltd. (BHP:NYSE; BHPLF:OTCPK), Norilsk Nickel (GMKN:RTS; NILSY:NASDAQ; MNOD:LSE), and Mantra Sources Ltd. (MRU:TSX) earlier than most not too long ago serving as chief monetary officer at Galiano Gold Inc. (GAU:NYSE)



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