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MAG Silver Remains Focused on Development, Exploration of Mexico Asset

Streetwise Reports
0 Comments|April 11, 2019

A project update and the company's full-year 2018 financials were reviewed in an H.C. Wainwright & Co. report.

In an April 2 research note, H.C. Wainwright & Co. analyst Heiko Ihle reported that MAG Silver Corp. (MAG:TSX; MAG:NYSE.MKT) continues to advance its joint venture Juanicipio project with partner Fresnillo Plc (FRES:LSE).

Progress is being made with respect to development at the asset in Mexico's Fresnillo Trend. To date, more than 18.5 kilometers of underground development have been finished. Current work involves extending three internal spiral footwall ramps along the entire strike length of the Valdecañas vein system, building the underground crushing chamber, installing the conveyor ramp between the mine and mill site and integrating other underground infrastructure.

The production start date for Juanicipio is sometime in H2/20. Yet before production can begin, MAG and Fresnillo must approve the feasibility study. Both companies are currently reviewing it. "We believe both boards should approve the document," commented Ihle.

Also taking place at the Juanicipio property is continued exploration. "With five drill rigs currently located at the site with another rig expected to begin turning underground, developing and exploring the Juanicipio property remains a top priority for the company," Ihle pointed out.

As for MAG Silver's 2018 financial results, Ihle relayed that the company posted a loss of $5.8 million, or $0.07 per share, which compares to last year's loss of $6.5 million, or $0.08 per share. The difference was due to an uptick in interest income, as well as a $4.3 million gain, net of costs, from the sale of some assets. That number in 2017 totaled $1.8 million.

Cash and cash equivalents at year-end 2018 were $130.2 million, lower than $160.4 million at year-end 2017, due to no term deposits having been redeemed during the year.

H.C. Wainwright has a Buy rating and a US$16.50 per share target price on MAG Silver, whose stock is trading now at around US$10.40 per share.

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