Silver Mine Produces While Plant Waits for Power

MAG Silver Corp.’s Juanicipio mission continues to ship silver as the corporate waits for native officers to provide the go-ahead to energy up its personal plant.

MAG Silver Corp.’s (MAG:TSX; MAG:NYSE American) Juanicipio mission in Mexico continues to provide as the corporate waits for its processing plant to get hooked as much as the native energy grid.

Manufacturing totaled 2.4 million ounces (2.4 Moz) of silver and 5,609 ounces of gold through the second quarter, above ROTH Capital Companions’ estimate of two Moz. The fabric continues to be processed by vegetation owned by the mission’s operator, Fresnillo Plc.

“MAG acknowledged that vital progress had been made by the utility firm in preparation of the tie-in,” ROTH analyst Joe Reagor wrote on July 27. “Because of this, MAG anticipates connecting the mill to {the electrical} grid in ‘the approaching weeks.’ We imagine finishing the mill tie-in ought to function a major optimistic catalyst for the corporate.”

MAG Silver

Reagor reiterated ROTH’s Purchase ranking for the inventory with a goal of $26. Out of 12 analysts following MAG, 9 charge it a Purchase, and three charge it a maintain.

The mine produced 154,000 tonnes of mineralized materials at a mean head grade of 567 silver grams per tonne through the quarter. Reagor stated the manufacturing of 5,609 ounces of gold was “considerably beneath” ROTH’s 6,100-ounce estimate for the quarter.

“Nevertheless, we’re inspired by the continued improve in throughput through the quarter,” Reagor wrote.


‘Turning Level’ for MAG


Manufacturing from the Juanicipio plant will open many potentialities for MAG, in accordance with asset supervisor Chen Lin, who follows the corporate.

“This could possibly be the turning level in MAG historical past, as they are going to be having fun with nice money stream whereas persevering with exploring many initiatives,” Chen wrote.

Building of the Juanicipio plant started in 2019. It was anticipated to come back on-line by the tip of 2021, however the native electrical authority stated simply earlier than Christmas that extra tools wanted to be put in on the system.

“The remainder of the method plant has been absolutely commissioned and awaits the energizing of the mills,” MAG President and Chief Government Officer George Paspalas stated. “Goal ramp-up to 85-90% of nameplate capability by year-end stays inside attain.”

“MAG’s ‘exploration mindset’ has resulted within the discovery of a brand new mineralized vein set, which might drive further discoveries because the mannequin is utilized extra extensively.” 

—Stifel GMP analyst Stephen Soock

Fresnillo has been processing masses from Juanicipio’s mine. MAG owns 44% curiosity within the mission, and Fresnillo owns the remaining 56%. The mine generated practically 252,000 tonnes of mineralized materials final yr, together with 3.2 Moz silver and 6,577 ounces of gold, MAG stated.

Income from the supplies will maintain capital money necessities, the corporate stated. On the finish of the quarter, Juanicipio had $37 million in money.

The corporate is mining the Bonanza zone of the Valdecañas vein within the Zacatecas state of Mexico, a district characterised by veins that look like fed by an ore fluid upwelling zone. Valdecañas is one in all two such zones recognized within the development.

A preliminary financial evaluation (PEA) in 2017 estimated a 19-year lifetime of 4,000 tonnes per day for the mine.

Deposit Will Proceed to Develop, Analyst Says


Stifel GMP analyst Stephen Soock maintained his Purchase ranking for MAG as effectively with a CA$29.75 goal. Soock stated he expects the Juanicipio deposit to proceed to develop as it’s drilled.

“MAG’s ‘exploration mindset’ has resulted within the discovery of a brand new mineralized vein set, which might drive further discoveries because the mannequin is utilized extra extensively,” Soock wrote. “We imagine there are further financial ore deposits on the JV floor, the worth of which shall be realized available in the market after Juanicipio reaches business manufacturing within the second half of 2022 and focus shifts to regional exploration.”

The corporate accomplished a CA$46 million fairness financing final November, however “with spectacular silver grades and better mill throughput, the mission has been capable of self-fund in 2022 and never required any further capital injections,” analyst Ryan Thompson wrote for BMO Capital Markets.

MAG has a market cap of $1.76 billion with 98.72 million shares excellent. It trades in a 52-week vary of $26.94 and $13.60.

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