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TICKERS: MAG

Gold Offsets Silver in Co.'s Q4/23 Production
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The quarterly operational results overall, all from the firm's joint venture mine in Mexico, were in line with forecasts, noted a BMO Capital Markets report.

Production at MAG's Silver Corp. (MAG:TSX; MAG:NYSE American) joint venture Juanicipio project with Fresnillo in Q4/23 met the expectations of BMO Capital Markets, analyst Kevin O'Halloran reported in a January 24 research note.

"Throughput continues to ramp up," O'Halloran wrote.

Attractive Return on Investment

Based on the quarterly production results, BMO reiterated its CA$24 per share target price on the Canadian explorer-developer, now at about CA$12.54 per share, noted O'Halloran.

The difference between these two prices implies a potential return for investors of 91%.

MAG remains rated Outperform.

Gold Numbers a Beat

O'Halloran reviewed Juanicipio's Q4/23 operational performance, noting silver production and grades were lower than gold's.

The analyst indicated that the Q4/23 gold production beat offset the Q4/23 silver production miss. Specifically, silver production was 4,500,000 ounces (4.5 Moz), below BMO's 4.7 Moz estimate. Gold production was 10,600 ounces (10.6 Koz), above BMO's 9.9 Koz forecast.

In full-year 2023 (FY23) Juanicipio produced 16.8 Moz of silver, 36.7 Koz of gold, 28,400,000 pounds (28.4 Mlb) of lead, and 44.8 Mlb of zinc.

Regarding grades, noted O'Halloran, the Q4/23 silver grade exceeded BMO's projection, coming in at 467 grams per ton (467 g/t) compared to 450 g/t. However, the Q4/23 silver grade was lower than that of Q3/23, 523 g/t.

The Q4/23 gold grade also surpassed BMO's expectation, coming in at 1.37 g/t versus 1.2 g/t.

As for throughput, it was up quarter over quarter in Q4/23, at 347,000 tons (347 Kt) compared to 322 Kt but less than BMO's 360 Kt estimate, O'Halloran reported.

What To Watch For

O'Halloran ended his report by reminding investors that "an updated technical report is planned to be released by Q1/24E that will include updated operating costs and grade profiles for Juanicipio."


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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.  This article does not constitute investment advice and is not a solicitation for any 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. Each reader is encouraged to consult with his or her personal financial adviser and perform their own comprehensive investment research. By opening this page, each reader accepts and agrees to Streetwise Reports' terms of use and full legal disclaimer. Streetwise Reports does not endorse or recommend the business, products, services or securities of any company. 

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Disclosures for BMO Capital Markets, MAG Silver Corp., January 24, 2024

Analyst's Certification I, Kevin O'Halloran, hereby certify that the views expressed in this report accurately reflect my personal views about the subject securities or issuers. I also certify that no part of my compensation was, is, or will be, directly or indirectly, related to the specific recommendations or views expressed in this report. Analysts who prepared this report are compensated based upon (among other factors) the overall profitability of BMO Capital Markets and their affiliates, which includes the overall profitability of investment banking services. Compensation for research is based on effectiveness in generating new ideas and in communication of ideas to clients, performance of recommendations, accuracy of earnings estimates, and service to clients. Analysts employed by BMO Nesbitt Burns Inc. and/or BMO Capital Markets Limited are not registered as research analysts with FINRA. These analysts may not be associated persons of BMO Capital Markets Corp. and therefore may not be subject to the FINRA Rule 2241 restrictions on communications with a subject company, public appearances and trading securities held by a research analyst account.

Company Specific Disclosures Disclosure 1: BMO Capital Markets has undertaken an underwriting liability with respect to MAG Silver within the past 12 months. Disclosure 2: BMO Capital Markets has provided investment banking services for remuneration with respect to MAG Silver within the past 12 months. Disclosure 3: BMO Capital Markets has managed or co-managed a public offering of securities with respect to MAG Silver within the past 12 months. Disclosure 4: BMO Capital Markets or an affiliate has received compensation for investment banking services from MAG Silver within the past 12 months. Disclosure 5: BMO Capital Markets or an affiliate received compensation for products or services other than investment banking services within the past 12 months from MAG Silver. Disclosure 6A: MAG Silver is a client (or was a client) of BMO Nesbitt Burns Inc., BMO Capital Markets Corp., BMO Capital Markets Limited or an affiliate within the past 12 months: A) Investment Banking Services Disclosure 6C: MAG Silver is a client (or was a client) of BMO Nesbitt Burns Inc., BMO Capital Markets Corp., BMO Capital Markets Limited or an affiliate within the past 12 months: C) Non-Securities Related Services. Disclosure 16: A research analyst has extensively viewed the material operations of MAG Silver. Disclosure 17: MAG Silver has provided at its expense some or all of the itinerant travel for the research analyst related to facilitating a material site visit.

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