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Impending Construction Decision Positions Miner for Rerating
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Tara Hassan, an analyst with Raymond James, provided an update on this company's joint venture project in Mexico.

Juanicipio project

In a Feb. 27 research note, analyst Tara Hassan with Raymond James reported that MAG Silver Corp.'s (MAG:TSX; MAG:NYSE.MKT) Juanicipio project, according to joint venture partner Fresnillo Plc (FRES:LSE), is still on track for initial production in mid-2020, the target date provided in guidance. This is despite the feasibility study delivery date being extended a month, from February to March 2018. The board will get the study for review and approval in April 2018.

The advancement of Juanicipio to this stage is positive for MAG, Hassan concluded: "With the construction decision for Juanicipio expected in the coming months, we believe MAG is well positioned to attract a market rerating as it transitions to production."

Based on the Juanicipio preliminary economic assessment, Raymond James models a mine with an average annual production of 9.3 million ounces of gold, or 19.4 million ounces of gold equivalent, at a capital cost of US$361 million. However, the feasibility study is expected "to consider a smaller mineable resource that is more focused on the silver-rich Bonanza zone which contains the bulk of the Indicated resource," Hassan noted. Further, the budgeted US$305 million capex for Juanicipio is also likely to change in the feasibility study.

Raymond James has an Outperform rating and a CA$21 per share price target on MAG, whose stock is trading today at around CA$13.63 per share.

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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.
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Disclosures from Raymond James, MAG Silver Corp., "Fresnillo Confirms Juanicipio Timeline," Feb. 27, 2018


Analyst Compensation: Equity research analysts and associates at Raymond James are compensated on a salary and bonus system. Several factors enter into the compensation determination for an analyst, including i) research quality and overall productivity, including success in rating stocks on an absolute basis and relative to the local exchange composite Index and/or a sector index, ii) recognition from institutional investors, iii) support effectiveness to the institutional and retail sales forces and traders, iv) commissions generated in stocks under coverage that are attributable to the analyst's efforts, v) net revenues of the overall Equity Capital Markets Group, and vi) compensation levels for analysts at competing investment dealers.

The views expressed in this report accurately reflect the personal views of the analyst(s) covering the subject securities. No part of said person's compensation was, is, or will be directly or indirectly related to the specific recommendations or views contained in this research report. In addition, said analyst has not received compensation from any subject company in the last 12 months.

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