AGXPF - Q1/24 Results Show Silver Co. Improving Operations | Benzinga
Source: Timothy Lee 05/20/2024
This Canadian miner grew revenue and lowered costs during this first quarter, noted a Red Cloud Securities report.
Silver X Mining Corp. (OTC: AGXPF) reported positive Q1/24 financial results that reflect "a trend of operational improvement" reported Red Cloud Securities mining analyst Timothy Lee in a May 17 research note.
"With costs under control, Silver X is strongly positioned to benefit from continued topline growth with production ramp-up in a strong commodity price environment" Lee wrote.
188% Return on Investment
As such, Red Cloud reiterated its CA$0.75 per share target price on the Canadian silver producer. Given that Silver X was trading at the time of the report at about CA$0.26 per share, the implied return for investors is 188%.
"Ramp-up to full production at Nueva Recuperada, along with plans for further expansion, could lead to a rerating of the stock" purported Lee.
Further, the analyst pointed out that the company provides strong leverage to the silver price, but this is not yet reflected in its share price. Specifically, the silver price is up more than 20% year to date, but Silver X's stock has increased only about 5% in this time frame.
The company remains a Buy.
Revenue is Growing
Silver X's Q1/24 results were notable for higher revenue plus lower costs and general and administrative (G&A) expenses, quarter over quarter (QOQ), and year over year (YOY), Lee highlighted. Collectively, these elements led to positive operating income, operating cash flow, and adjusted EBITDA, which resulted in "significant improvements from prior periods" wrote the analyst.
Q1/24 revenue from its Nueva Recuperada mine in Peru was US$4.8 million (US$4.8M), up 10% QOQ and up 4% YOY. During this year's first quarter, Silver X produced 298,000 ounces of silver equivalent (298 Koz Ag eq) and sold 265 Koz Ag eq.
Operating income in Q1/24 was US$6,000 (US$6K), up from (US$980K) in Q4/23 and up from (US$410K) in Q1/23. Q4/24 operating cash flow was US$1.1M.
Adjusted EBITDA also showed improvement, coming in at US$420K in Q1/24. In the previous quarter, it was (US$1.1M), and a year ago, it was (US$640K).
Costs are Declining
Also, in his report, Lee highlighted Silver X's success in continuing to lower costs.
Operating costs in Q1/24, for example, including US$1.15M in amortization, were US$4.77M. This total is down 10% decrease QOQ and down 4% YOY. Q1/24 G&A expense, too, was down 10% QOQ and down 2% YOY.
As for cash costs during Q1/24, they averaged US$15.4 per ounce (US$15.4/oz), 15% lower than in Q4/23 and 17% better than in ...