CA - MAG Silver: A Strong Start To 2024 But Limited Upside Potential

2024-05-06 23:52:52 ET

Summary

• MAG Silver reported strong Q1 2024 production results, with silver production doubling year-over-year, with Juanicipio now running at full capacity.
• Meanwhile, the updated technical for Juanicipio has de-risked the asset and makes it one of the lowest-cost and longest-life silver mines operating today.
• In this update, we'll dig into MAG Silver's Q1 2024 production results, recent developments, and how the stock's valuation looks after its recent rally.

The Q1 Earnings Season for the Silver Miners Index ( SIL ) is underway with Coeur Mining ( CDE ) reporting last week and other names like Hecla ( HL ) and First Majestic ( AG ) set to report later this week. And while most of the silver continues to struggle with a strong Mexican Peso that remains at 5-year highs vs. the US Dollar ( UUP ), MAG Silver ( MAG ) is fortunate given that it has one of the highest-margin silver assets globally even if Juanicipio (44% owned by MAG) is located in Mexico. In fact, the asset's recently released 2023 LOMP has pegged all-in sustaining costs [AISC] below $12.50/oz, translating to ~53% AISC margins at spot silver prices....

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