Q4/23 production results slightly missed Roth MKM forecasts, but other factors made up for it, analyst Joe Reagor reported in a January 24 research note.
"While Q4/23 production was somewhat below our estimates, this was more than offset by our higher precious metal price forecasts," Reagor wrote.
Significant Return Potential
The Canadian miner's stock is now about CA$9.28 per share, yet a higher price is imminent, noted Reagor.
"MAG is poised for a rerating as the Juanicipio joint venture begins to distribute cash in the coming quarters," he added. Juanicipio is MAG's mining project in Zacatecas, Mexico with partner Fresnillo.
Given the production numbers, ROTH reiterated its CA$19 per share target price and Buy rating on MAG.
The implied return for investors now is 105%.
Production Keeps Growing
Reagor provided MAG's Q4/24 production numbers and ROTH's estimates for comparison.
Total production was 4,500,000 ounces (4.5 Moz) of silver versus ROTH's forecast 5.2 Moz), 10.6 Moz of gold versus 12.6 Moz, 9,200,000 pounds (9.2 Mlb) of lead versus 9.7 Mlb and 15.1 Mlb of zinc versus 16.5 Mlb.
The miss, the analyst wrote, was due to grades and recovery rates coming in slightly lower than expected.
"However," he added, "we note throughput was above expectations and production continues to grow, which we view as positive."
Price Deck Increased
ROTH expects the gold and silver price to rise if and when the U.S. Federal Reserve lowers real interest rates "and shifts to a stable interest rate policy," noted Reagor. Given the Fed has signaled it will likely make its first rate cut this year, ROTH increased its precious metals price forecasts for 2024.
It now forecasts a 2024 gold price of US$2,075 per ounce (US$2,075/oz), up from US$1,856/oz, and a 2024 silver price of US$25.19/oz, up from US$23.13/oz.
ROTH also boosted its long-term gold price to US$1,950/oz from US$1,900/oz.
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- [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.
- [Doresa Banning] wrote this article for Streetwise Reports LLC and provides services to Streetwise Reports as an independent contractor.
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Disclosures for Roth MKM, MAG Silver Corp., January 24, 2024
Regulation Analyst Certification ("Reg AC"): The research analyst primarily responsible for the content of this report certifies the following under Reg AC: I hereby certify that all views expressed in this report accurately reflect my personal views about the subject company or companies and its or their securities. 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.
Disclosures: Within the last twelve months, ROTH Capital Partners, or an affiliate to ROTH Capital Partners, has received compensation for investment banking services from MAG Silver Corp.. ROTH makes a market in shares of MAG Silver Corp. and as such, buys and sells from customers on a principal basis. A Research Analyst and/or a member of the Analyst's household own(s) debt or equity securities of MAG Silver Corp.. Within the last twelve months, ROTH Capital Partners, or an affiliate to ROTH Capital Partners, has managed or co-managed a public offering for MAG Silver Corp..
ROTH Capital Partners, LLC expects to receive or intends to seek compensation for investment banking or other business relationships with the covered companies mentioned in this report in the next three months. The material, information and facts discussed in this report other than the information regarding ROTH Capital Partners, LLC and its affiliates, are from sources believed to be reliable, but are in no way guaranteed to be complete or accurate. This report should not be used as a complete analysis of the company, industry or security discussed in the report. Additional information is available upon request. This is not, however, an offer or solicitation of the securities discussed. Any opinions or estimates in this report are subject to change without notice. An investment in the stock may involve risks and uncertainties that could cause actual results to differ materially from the forward-looking statements. Additionally, an investment in the stock may involve a high degree of risk and may not be suitable for all investors. No part of this report may be reproduced in any form without the express written permission of ROTH. Copyright 2024. Member: FINRA/SIPC.