Target Price Raised on MAG Silver Due to Q4/21 Mill Commissioning, Higher Metals Prices

Source: Streetwise Reports 08/24/2021

MAG Silver’s Q2/21 production at Juanicipio is reviewed in a ROTH Capital Partners report.

In a July 28 research note, analyst Joe Reagor reported that ROTH Capital Partners raised its target price on MAG Silver Corp. (MAG:TSX; MAG:NYSE American) to $27 per share from $26. This is because the company’s new mill at Juanicipio remains on schedule for commissioning in Q4/21 and because silver prices are expected to remain high for some time. MAG is currently trading at about $19.46 per share.

The fact that the mill will be ready as planned is “a material positive as Fresnillo has been able to avoid delays in construction in 2021 despite the ongoing pandemic,” Reagor wrote. Fresnillo is MAG Silver’s joint venture partner on the Juanicipio project and its operator.

The analyst also reported total Q2/21 production at Juanicipio. Overall, it slightly missed ROTH’s forecast, coming in at 434,885 ounces of silver and 787 ounces of gold compared to 500,000 ounces and 2,100 ounces, respectively.

“However,” Reagor wrote, “we do not consider the miss material as the company is continuing to process small amounts of development ore through Fresnillo’s neighboring mill.” The number of tons processed in Q2/21 at Fresnillo’s mill exceeded ROTH’s expectation.

Metals prices outperformed during the quarter, and continue to look strong in the near term. ROTH revised its model on MAG Silver accordingly and maintained its Buy rating on the silver producer.

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