MAG Silver Corp. (MAG:TSX; MAG:NYSE American) reported Q1/24 production results from its joint venture (JV) mine in Juanicipio that met the expectations of ROTH Capital Markets, analyst Joe Reagor reported in an April 24 company update.
"Production rates are normalizing, and recovery rates are improving," Reagor wrote.
Target, Rating the Same
ROTH maintained its US$14 per share target price on the Canadian silver producer, trading at about US$12.13 per share at the time of the report, noted Reagor. The return to target from here implies a 15% return for investors.
Reagor reported that ROTH recently made several changes to its model on MAG, but they did not affect the firm's existing target price. These revisions included updates of Q1/24 production and average metal prices and adjustments to ROTH's gold and silver price forecasts.
MAG, based in British Columbia, remains a Buy.
Numbers at a Glance
Reagor provided Juanicipio's Q1/24 production numbers for each of the various metals and compared them to ROTH's estimates.
Overall, during the year's first quarter, the JV produced 4,400,000 ounces (4.4 Moz) of silver versus ROTH's 3.9 Moz estimate and 9,927 ounces of gold compared to ROTH's expected 13,000 ounces. Production of lead was 8,700,000 pounds (8.7 Mlb), below ROTH's 9.1 Mlb forecast, and zinc came in at 14.7 Mlb, above ROTH's 14.6 Mlb projection.
These numbers did not impact ROTH's Q1/24 earnings per share estimate on MAG, Reagor pointed out, because the "higher silver and zinc production offset lower gold and lead production."
Also of note, according to the analyst, mill recovery rates were better in Q1/24 than in Q4/23.
Potential Catalyst
Reagor purported that throughout the rest of 2024 investors will be watching the cash flow moving from Juanicipio to MAG Silver as it could result in a catalyst for the miner later this year.
"If MAG can demonstrate consistent cash flow from the JV then the company could look to pay dividends or institute share buybacks," wrote the analyst.
| Want to be the first to know about interesting Silver, Base Metals and Gold investment ideas? Sign up to receive the FREE Streetwise Reports' newsletter. | Subscribe |
Important Disclosures:
- 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.
- 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.
For additional disclosures, please click here.
Disclosures for Roth MKM, Mag Silver Corp., April 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: 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.
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.
