Get the Latest Investment Ideas Delivered Straight to Your Inbox. Subscribe

TICKERS: MAG

Silver Co.'s Q2/23 EPS Beats Estimates
Research Report

View Important Disclosures for this Article
Share on Stocktwits

Source:

The miner's priority now is advancing its Utah project given the production ramp-up at its Mexico plant is nearly done, noted a CIBC report.

MAG Silver Corp. (MAG:TSX; MAG:NYSE American) announced its Q2/23 results, reported CIBC analyst Cosmos Chiu in an Aug. 8 research note.

CIBC maintained its Neutral rating and CA$21 per share target price on the Canadian producer, trading now at about CA$15.47 per share. These prices imply an attractive potential return for investors of 30%.  

Q2/23 By the Numbers

Chiu presented the key figures from MAG's Q2/23.

Production, all from MAG's joint venture project Juanicipio in Mexico, was 4,877,460 ounces (oz) of silver, 9,537 oz gold, 3,066 tons of lead, and 4,582 tons of zinc.

Overall, this was lower than its pre-reported figures, of 5,275,000 oz silver, 10,639 oz gold, 3,402 tons of lead, and 5,418 tons of zinc, because of provisional pricing adjustments and "payability factors," Chiu wrote.

The average head grade was 498 grams per ton (498 g/t), higher than the 363 g/t average in Q1/23.

At Juanicipio, 377,018 tons of material were processed in Q2/23 versus 222,023 tons in Q1/23.

Quarterly earnings were a beat, driven by lower tax expenses. Earnings per share was US$0.19, whereas consensus and CIBC's forecasts were US$0.17 and US$0.16, respectively.

The Canadian silver company had US$52.6 million and no long-term debt at the quarter's end.

Progress at Juanicipio

During the quarter, ramp-up at the Juanicipio mill progressed to 85% of its nameplate capacity. It is expected to reach the full 4,000 tons per day in Q3/23.

Focus Shifts to Deer Trail

Given Juanicipio is nearly running at full capacity, and thus almost completely derisked, "investor attention now turns to MAG's next steps in growing the company to support its valuation," Chiu pointed out.

These efforts include exploration work at the Deer Trail project in Utah, from which MAG recently reported phase two drill results. They indicate Deer Trail has key features of a major carbonate replacement deposit/skarn system, according to MAG's management. Findings included these outstanding intercepts:

  • 23.55 meters (23.55m) of 61 g/t silver with lead and zinc
  • 33m of 0.6 g/t gold, including 1.5m of 6.1 g/t gold
  • 4.25m of 29 g/t silver, 2.2 g/t gold and 2.1% copper

The third phase of drilling Deer Trail is underway.


Want to be the first to know about interesting Gold, Base Metals and Silver investment ideas? Sign up to receive the FREE Streetwise Reports' newsletter. Subscribe

Important Disclosures:

  1. 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. 
  2. Doresa Banning wrote this article for Streetwise Reports LLC and provides services to Streetwise Reports as an independent contractor.
  3. 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.

For additional disclosures, please click here.

Disclosures for CIBC Equity Research, MAG Silver Corp., August 8, 2023

Analyst Certification: Each CIBC World Markets Inc. research analyst named on the front page of this research report, or at the beginning of any subsection hereof, hereby certifies that (i) the recommendations and opinions expressed herein accurately reflect such research analyst's personal views about the company and securities that are the subject of this report and all other companies and securities mentioned in this report that are covered by such research analyst and (ii) no part of the research analyst's compensation was, is, or will be, directly or indirectly, related to the specific recommendations or views expressed by such research analyst in this report.

Potential Conflicts of Interest: Equity research analysts employed by CIBC World Markets Inc. are compensated from revenues generated by various CIBC World Markets Inc. businesses, including the CIBC World Markets Investment Banking Department. Research analysts do not receive compensation based upon revenues from specific investment banking transactions. CIBC World Markets Inc. generally prohibits any research analyst and any member of his or her household from executing trades in the securities of a company that such research analyst covers.

Additionally, CIBC World Markets Inc. generally prohibits any research analyst from serving as an officer, director or advisory board member of a company that such analyst covers. In addition to 1% ownership positions in covered companies that are required to be specifically disclosed in this report, CIBC World Markets Inc. may have a long position of less than 1% or a short position or deal as principal in the securities discussed herein, related securities or in options, futures or other derivative instruments based thereon. Recipients of this report are advised that any or all of the foregoing arrangements, as well as more specific disclosures set forth below, may at times give rise to potential conflicts of interest.

CIBC World Markets Inc. does and seeks to do business with companies covered in its research reports. As a result, investors should be aware that CIBC World Markets Inc. may have a conflict of interest that could affect the objectivity of this report. Investors should consider this report as only a single factor in making their investment decision. Analysts employed outside the U.S. are not registered as research analysts with FINRA. These analysts may not be associated persons of CIBC World Markets Corp. and therefore may not be subject to FINRA Rule 2241 restrictions on communications with a subject company, public appearances and trading securities held by a research analyst account.

Important Disclosure Footnotes for MAG Silver Corp. (MAG.TO) • 2g CIBC World Markets Inc. expects to receive or intends to seek compensation for investment banking services from these companies in the next 3 months: MAG Silver Corp. For important disclosure footnotes for companies mentioned in this report that are covered by CIBC World Markets Inc., click here: CIBC Disclaimers & Disclosures

Legal Disclaimer This report is issued by CIBC Capital Markets. CIBC Capital Markets is a trademark brand name under which Canadian Imperial Bank of Commerce (“CIBC”), its subsidiaries and affiliates (including, without limitation, CIBC World Markets Inc., CIBC World Markets Corp. and CIBC Capital Markets (Europe) S.A.) provide different products and services to our customers around the world. Products and/or services offered by CIBC include corporate lending services, foreign exchange, money market instruments, structured notes, interest rate products and OTC derivatives. CIBC’s Foreign Exchange Disclosure Statement relating to guidelines contained in the FX Global Code can be found at https://cibccm.com/en/disclosures/fx-disclosure-statement/. Other products and services, such as exchange-traded equity and equity options, fixed income securities and futures execution of Canadian securities, are offered through directly or indirectly held subsidiaries of CIBC as indicated below. CIBC World Markets Inc. is a member of the Canadian Investor Protection Fund and the Investment Industry Regulatory Organization of Canada. In the United States, CIBC World Markets Corp. is a member of the Financial Industry Regulatory Authority and the Securities Investor Protection Fund. In Luxembourg. CIBC Capital Markets (Europe) S.A. (RCS Luxembourg: B236326) is authorised by the European Central Bank (the “ECB”) and supervised by the Luxembourg Financial Supervisory Authority (Commission de Surveillance du Secteur Financier) under the oversight of the ECB. CIBC Australia Ltd (AFSL No: 240603) is regulated by the Australian Securities and Investment Commission (“ASIC”). CIBC World Markets (Japan) Inc. is a member of the Japanese Securities Dealer Association. CIBC (TSX/NYSE: CM) is a bank chartered under the Bank Act (Canada) having its registered office in Toronto, Ontario, Canada, and regulated by the Office of the Superintendent of Financial Institutions. CIBC New York Branch is licensed and supervised by the New York State Department of Financial Services.

In the United Kingdom, CIBC London Branch is authorised by the Prudential Regulation Authority and subject to regulation by the Financial Conduct Authority and limited regulation by the Prudential Regulation Authority. Canadian Imperial Bank of Commerce, Sydney Branch (ABN: 33 608 235 847) is an authorised foreign bank branch regulated by the Australian Prudential Regulation Authority (APRA). Canadian Imperial Bank of Commerce, Hong Kong Branch is a registered institution under the Securities and Futures Ordinance, Cap 571, and a limited liability foreign company registered with the Hong Kong Companies Registry. Canadian Imperial Bank of Commerce, Singapore Branch is a wholesale bank licensed and regulated by the Monetary Authority of Singapore. This report is issued and approved for distribution by (a) in Canada, CIBC World Markets Inc., a member of the Investment Industry Regulatory Organization of Canada (“IIROC”), the Toronto Stock Exchange, the TSX Venture Exchange and a Member of the Canadian Investor Protection Fund and (b) in the United States either by (i) CIBC World Markets Inc. for distribution only to U.S. Major Institutional Investors (“MII”) (as such term is defined in SEC Rule 15a-6) or (ii) CIBC World Markets Corp., a member of the Financial Industry Regulatory Authority (“FINRA”). U.S. MIIs receiving this report from CIBC World Markets Inc. (the Canadian broker-dealer) are required to effect transactions (other than negotiating their terms) in securities discussed in the report through CIBC World Markets Corp. (the U.S. broker-dealer). CIBC World Markets Corp. accepts responsibility for the content of this research report.

Legal Disclaimer (Continued) United States This report is provided, for informational purposes only, to Major US Institutional Investor clients of CIBC World Markets Corp. in the United States, and does not constitute an offer or solicitation to buy or sell any securities discussed herein in any jurisdiction where such offer or solicitation would be prohibited.

Legal Disclaimer (Continued) Past performance is not a guarantee of future results, and no representation or warranty, express or implied, is made regarding future performance of any security mentioned in this report. The price of the securities mentioned in this report and the income they produce may fluctuate and/or be adversely affected by exchange rates, and investors may realize losses on investments in such securities, including the loss of investment principal. CIBC World Markets accepts no liability for any loss arising from the use of information contained in this report, except to the extent that liability may arise under specific statutes or regulations applicable to CIBC World Markets. Information, opinions and statistical data contained in this report were obtained or derived from sources believed to be reliable, but CIBC World Markets does not represent that any such information, opinion or statistical data is accurate or complete (with the exception of information contained in the Important Disclosures section of this report provided by CIBC World Markets or individual research analysts), and they should not be relied upon as such.

All estimates, opinions and recommendations expressed herein constitute judgments as of the date of this report and are subject to change without notice. Nothing in this report constitutes legal, accounting or tax advice. Since the levels and bases of taxation can change, any reference in this report to the impact of taxation should not be construed as offering tax advice on the tax consequences of investments. As with any investment having potential tax implications, clients should consult with their own independent tax adviser. This report may provide addresses of, or contain hyperlinks to, Internet web sites. CIBC World Markets has not reviewed the linked Internet web site of any third party and takes no responsibility for the contents thereof. Each such address or hyperlink is provided solely for the recipient's convenience and information, and the content of linked third party web sites is not in any way incorporated into this document.

Recipients who choose to access such third-party web sites or follow such hyperlinks do so at their own risk. Although each company issuing this report is a wholly owned subsidiary of CIBC, each is solely responsible for its contractual obligations and commitments, and any securities products offered or recommended to or purchased or sold in any client accounts (i) will not be insured by the Federal Deposit Insurance Corporation (“FDIC”), the Canada Deposit Insurance Corporation or other similar deposit insurance, (ii) will not be deposits or other obligations of CIBC, (iii) will not be endorsed or guaranteed by CIBC, and (iv) will be subject to investment risks, including possible loss of the principal invested. CIBC Capital Markets and the CIBC Logo Design are trademarks of CIBC, used under license. © 2023 CIBC World Markets Inc., CIBC World Markets Corp. and CIBC Capital Markets (Europe) S.A. All rights reserved. Unauthorised use, distribution, duplication or disclosure without the prior written permission of CIBC World Markets is prohibited by law and may result in prosecution.





Want to read more about Gold, Base Metals and Silver investment ideas?
Get Our Streetwise Reports' Resources Report Newsletter Free and be the first to know!

A valid email address is required to subscribe