In a report released on Aug. 21, ROTH Capital Partners analyst Joe Reagor described a meeting he had with MAG Silver Corp.'s (MAG:TSX; MAG:NYSE.MKT) management regarding its Juanicipio project in Mexico. The meeting with management focused on Juanicipio "mine plan changes and the potential for further increases in production in the future. . .now we believe the company is planning for additional production increases over time."
Reagor pointed out that MAG Silver's plans "to provide a revised mine plan during Q3 2017 and an FS by year end. We believe these could both provide significant positive catalysts and in particular, the FS could provide a glimpse into the ultimate production potential of the mine."
Exploration was also discussed during the meeting and Reagor believes that "the Juanicipio project has the potential for additional vein discoveries in the future. With this in mind, management said the company plans to revisit exploring for new veins during 2018 now that it is comfortable with the infill drilling completed at Valdecanas."
Reagor stated, "We believe the rest of 2017 could have significant catalysts that lead to revisions in our modeling to the positive side and as such, we are reiterating our Buy rating."
"As a result of the significant production and exploration upside we see in MAG, we are increasing our price target from $19 to $22," Reagor wrote. MAG Silver is currently trading $12.91.
Bhakti Pavani, an analyst with Euro Pacific Capital, also focused on the Juanicipio project in an Aug. 16 report by highlighting the plan to intensify "underground development activity to support a planned increase in mining rate and processing capacity from 2,650 tonnes per day (tpd) to 4,000 tpd." She pointed out that "the permitting for the upgraded design has already been commenced and the new resource estimate and the design upgrades are expected to be incorporated into a revised mine plan and new MAG technical report, which is expected to be released sometime in 3Q."
Pavani noted, "While we reiterate [a] Buy rating on the stock, we are reducing our PT from $17.00 to $15.70."
In an Aug. 15 summary, Raymond James analyst Chris Thompson highlighted that "recent exploration success supports an expanded production scenario larger than originally envisaged, which, with significant additional exploration upside offered by the company's prospective JV ground offers potential to potentially catalyze share price performance in 2017." He continued by explaining "that current prices represent an attractive entry point for investors looking for high margin silver-focused precious metals exposure underpinned by development and exploration upside."
Raymond James' recommendation for MAG Silver is "Stong Buy" with a target price of $25.00.
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