MAG - Technical Report Confirms Strong Economics of Mine | Benzinga
Source: Joe Reagor 03/29/2024
The figures in totality equate to a US$1.48 billion after-tax net present value at current spot prices, noted a ROTH MKM report.
MAG Silver Corp. (AMEX:MAG) released an updated technical report on Juanicipio, its joint venture project in Mexico with Fresnillo, which "confirms robust economics" reported Roth MKM analyst Joe Reagor in a March 27 research note. However, some differences between estimates in the report and in Roth's model led the investment bank to lower its target price on the Canadian silver producer to US$14 per share from US$15.50.
That said, Reagor wrote, "We are maintaining our Buy rating as we continue to believe MAG is undervalued by the market. Additionally, we continue to believe the market significantly undervalues the potential for new discoveries on the project."
In comparison to the new target, noted the analyst, MAG's current price is $9.01 per share, and this implies a 55% return for investors.
Overall Strong Economics
Reagor highlighted that the newly outlined economics of Juanicipio overall are favorable.
"The technical report showed a robust net present value of US$1.2 billion ($1.2B) after tax on base case prices, or US$1.48B at current spot prices" he wrote.
The report noted an increase in the size of the existing resource at Juanicipio, and it included a maiden mineral reserve estimate, both positives, noted Reagor. These updates led to Roth adding four years to its mine life estimate for this project.
Reasons for Target Price Reduction
Where the technical report diverges from Roth's model is in its lower estimates ...