Equity Research




MAG Silver Corp.

MAG / NYSE / $16.94

October 30, 2020


Business Overview



MAG is developing one of the highest grade and largest primary silver assets in the world, as a 44%-owned JV (Minera Juanicipio S.A. de C.V.) with Fresnillo Plc. The Juanicipio Property is located in the Fresnillo Silver Trend in Mexico.


The global resource (indicated) is 176 Moz Silver, 867 Koz gold, 598 Mlb lead, 1041 Mlb zinc, and 38 Mlb copper. The inferred category includes 91 Moz Ag, 562 Koz Au, 658 Mlb Pb, 1252 Mlb Zn, and 71 Mlb Cu.


Fresnillo is presently constructing and developing the surface and underground infrastructure on the property to support a 4,000 tonnes per day mining operation. Total capex is estimated at $395m ($174m MAG share), with approximately 27% expended to date. Development material from the Juanicipio Project commenced processing at the Fresnillo beneficiation plant during the quarter ended September 30, 2020.The first production stope is planned to come online during the current quarter.


The property has significant exploration potential, with only 5% explored.



2020 Focus



On April 22, the Company announced that in an effort to slow the spread of COVID-19, it has temporarily stopped surface exploration and construction work and reduced the underground operation to a minimum working level under rigid hygienic protocols. All work has since resumed, but the impact of this pandemic could include significant COVID-19 specific costs, further restrictions or temporary closures, additional travel restraints, other supply chain disruptions, and workforce and contractor interruptions, including loss of life.


Finish underground access ramp, stope development, and underground infrastructure.


Mill procurement and construction. Much of the plant equipment is modular to facilitate installation.


A scaling up of production.



Exploration Potential



All historic mineralized veins in the area are oriented W to NW, but a more recent discovery is a mineralized vein (Valdecanas) is NE oriented. The company has now mapped in the surface other NE trending structures.


A north/south structure (Casantoni) shows particular promise.


The company has identified a number of what appear to be upwelling fluid zones on the property.






The backgrounds of the management and directors are outlined on the MAG web site. The individuals have significant experience in exploration and mining, as well as in corporate finance and capital markets.






Income Statement (6 months through 06/30/20 vs. 06/30/19; USD)


Revenue: 0 vs. 0

Operating expense: 4,309,000 vs. 4,320,000

Other income (expense): 384,000 vs. 1,587,000

Equity pick up from Juanicipio: (3,498,000) vs. 762,000

Pretax income (loss): (7,423,000) vs. (1,971,000)

Comprehensiveincome (loss): (6,975,000) vs. (1,851,000)

Earnings (loss) per basic and diluted common share: (0.15) vs. (0.02)

Basic weighted average number of shares outstanding: 88,111,492 vs. 85,800,468



Balance Sheet (06/30/20; USD)


Cash & equivalents: 87,108,000

Total current assets: 88,441,000

Current liabilities: 759,000

Non-current liabilities: 9,854,000

Stockholders equity: 251,986,000

Common shares outstanding: 91,194,860

Stock options outstanding: 1,431,456 at a weighted average exercise price of C$13.77



On September 8, 2020, the Company completed a US$50M at-the-market equity program.


On April 30, 2020, the Company announced that it has closed a non-brokered private placement with Mr. Eric Sprott, through 2176423 Ontario Ltd., offering 4,528,302 common shares at a price per share of C$13.25 for gross proceeds of C$60,000,002.



Valuation Considerations



Multiple brokerage firms have issued MAG research reports, and the average stock price target is substantially above the current price (see MAG investor deck for details).


The stock has plenty of liquidity, with NYSE average daily volume of 571,060 shares and additional volume on the Canadian exchange.


The impact from COVID-19 remains an uncertainly. In addition, the Company website and SEDAR filings list a number of risks and are hereby incorporated by reference.






Executive offices: 770-800 West Pender Street, Vancouver, BC, V6C 2V6, Canada


Investor contact: Michael J. Curlook, VP Investor Relations and Communications, 866.630.1399






TickerBuzz, LLC ("TickerBuzz"), a Florida limited liability company is the author of this Profile. TickerBuzz is not and does not act as a broker-dealer, investment advisor, placement agent, or crowdfunding portal. Furthermore, it does not offer any securities, nor does it provide any investment advice or analysis. The source material for this Profile is the Company presentation materials. Certain information, particularly information relating to future performance and other business matters, constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act. TickerBuzz cautions that these forward-looking statements are subject to numerous assumptions, risks, and uncertainties that may change over time and cause actual results to differ materially from the results discussed herein. The forward-looking statements are neither predictions nor guarantees of future events or performance. TickerBuzz has no obligation to update any forward-looking statements after they are made, except as required by applicable law. All of this information is intended for discussion purposes only, is not a solicitation to buy or sell any security, and must not be relied upon for financial, legal, tax, or any other professional advice. This company has not paid TickerBuzz any compensation for publication of this Profile. Analyst: William J. Ritger.



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Contact: William J. Ritger, writger@gmail.com, 561.891.1903

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