Source: Joe Reagor 05/16/2024
If these cash distributions continue, as expected, the company may consider paying a dividend by year-end 2024, noted Roth MKM.
MAG Silver Corp.'s (AMEX:MAG) Q1/24 financial results were in line with the estimates of Roth MKM, its managing director Joe Reagor reported in a May 14 research note. Due to Roth slightly adjusting some estimates in its model on the silver producer, the target price rose to US$14.50 per share from US$14.
"Earnings per share of US$0.14 was in line with our estimate" Reagor wrote. "We continue to believe MAG is in the process of receiving a rerating from the market as it generates positive cash flow."
At the time of the report, the Canadian mining company's share price was about US$12.44, noted Reagor. From here, the return to the new target is 17%.
Roth still considers MAG a Buy.
Dividend Paying Potential
Reagor highlighted that in Q1/24, MAG received US$17.5 million (US$17.5M) in cash from its Juanicipio joint venture (JV) project in Mexico, "a significant development."
This amount allowed the Canadian miner to report a cash balance increase during the quarter despite having spent US$5.1M on exploration work at its other projects and US$3.8M on acquiring the Goldstake property.
"We believe cash distributions are likely to increase in the quarters ahead, allowing MAG to ...