Investments

Energy Turned On at Silver Co.’s Mexico Plant

December 29, 2022 (Investorideas.com Newswire) MAG Silver Corp.’s processing plant at its large-scale Juanicipio property in Mexico is lastly linked to the ability grid and ramping up.

After a delay of greater than a yr, MAG Silver Corp.’s (MAG:TSX; MAG:NYSE American) 4,000 tonne-per-day processing plant at its large-scale Juanicipio property in Mexico has been linked to the ability grid and is on its technique to opening.

The state-owned Comisión Federal de Electricidad authorised the power’s connection to {the electrical} grid, and last testing of the downstream energy distribution and management techniques on the plant is now full. The plant is predicted to achieve full capability in Q2 2023.

“The complete system has now been energized,” MAG introduced.

Asset supervisor Chen Lin, who follows the corporate, mentioned the event was massive information for the corporate. Even earlier than the information, not less than eight analysts caught with MAG and saved their Purchase scores on the inventory regardless of the delay.


Juanicipio venture. Supply: MAG Silver.

“It’s a main milestone,” Chen instructed Streetwise Stories.

Development of the plant started in 2019, and it was anticipated to come back on-line by the tip of 2021, however the state electrical authority mentioned simply earlier than Christmas that yr that extra tools wanted to be put in on the system.

MAG is mining the Bonanza zone of the Valdecañas vein within the Zacatecas state of Mexico. A preliminary financial evaluation (PEA) in 2017 estimated a 19-year mine life with 4,000 tonnes per day.

“Connection to the ability grid is a long-awaited milestone for the Juanicipio Mission, our stakeholders, and shareholders alike, and we’re grateful for the understanding and persistence,” MAG President and Chief Government Officer George Paspalas mentioned.

The Catalyst: The Wait Is Over

Many analysts caught by the corporate by the watch for the ability hookup. Stifel GMP analyst Stephen Soock named the inventory one among his “high picks” for the third quarter. In November, he rated MAG a Purchase with a CA$28.25 goal.

“We stay up for the ultimate electrical connection permitting the ramp as much as business manufacturing on the Juanicipio mill, inaugural outcomes from the (Los Tajos) goal on the JV (simply 4km from the Juanicipio mine), and preliminary assays from MAG’s lately acquired, 100%-owned Larder property within the Abitibi as near-term catalysts,” Soock wrote in August.

MAG’s operator for the venture, Fresnillo Plc., has been processing masses from Juanicipio’s mine all through 2022. Greater than 180,000 tonnes of mineralized supplies have been handed by the close by Saucito and Fresnillo crops in the course of the third quarter for web gross sales of greater than US$25 million, in comparison with 154,000 tonnes in Q2.

The 2 crops produced 2.4 million payable silver ounces, greater than 4,900 payable gold ounces, greater than 1,300 payable lead tonnes, and greater than 2,000 payable zinc tonnes throughout that quarter.

About 70% of the quantity processed was by the Saucito plant, which extra intently resembles the brand new Juanicipio plant, which ought to assist give perception to the brand new operators.

On the energy of these totals, MAG recorded a web earnings for Q3 of greater than US$8.2 million versus a lack of US$2.3 million throughout the identical quarter in 2021.

MAG owns 44% curiosity within the Juanicipio venture, and Fresnillo owns the remaining 56%. The mine generated practically 252,000 tonnes of mineralized materials final yr, together with 3.2 Moz silver and 6,577 ounces of gold, MAG mentioned.

New Demand for Silver

The Silver Institute has predicted that world silver demand will attain a brand new excessive of 1.21 billion ounces in 2022, up 16% from 2021. Industrial demand, together with automobile electrification and different inexperienced applied sciences, is on target to develop to 539 million ounces (Moz).

“That is what I’ve been predicting for some time,” Chen wrote in his e-newsletter What’s Chen Shopping for? What’s Chen Promoting? “It’s fairly apparent we’re having an enormous surge in silver calls for as photo voltaic panels are the most important utilization of silver.”

MAG continues to discover and develop the remaining Juanicipio property, its Deer Path venture in Utah, and the Larder gold venture, which it gained with the acquisition of Gatling Exploration Inc. earlier this yr.

Possession and Share Construction

High shareholders embody Juanicipio venture operator Fresnillo with 10%, BlackRock Asset Administration with 6.9%, Sprott Asset Administration with 5.2%, Van Eck Associates with 4.7%, mining financier Eric Sprott with 4.6%, First Eagle Funding Administration with 4.2%, and ETF Managers Group with 2.6%.

The corporate is roofed by a plethora of analysts, together with Stephen Soock of Stifel, amongst others. Publication writers Peter Krauth of the Gold Useful resource Investor, Chen Lin of What Is Chen Shopping for? What Is Chen Promoting? and Bob Moriarty of 321 Gold. Click on “See Extra Reside Information” within the information field above to view all of them.

MAG Silver has a market cap of US$2.17 billion and 98.8 million shares excellent, 97.8 million of them floating. It trades in a 52-week vary of US$25.16 to US$13.60.

Disclosures:

1) Steve Sobek wrote this text for Streetwise Stories LLC. He or members of his family personal securities of the next firms talked about within the article: None. He or members of his family are paid by the next firms talked about on this article: None.

2) The next firms talked about on this article are billboard sponsors of Streetwise Stories: MAG Silver Corp. Click on right here for necessary disclosures about sponsor charges. The knowledge supplied above is for informational functions solely and isn’t a advice to purchase or promote any safety.

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Extra Data:

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