Large precious metals player entering ‘catalyst-rich period’ in Mexico

In a May 25 report, BMO analyst Andrew Kaip stated that the Juanicipio project, a joint venture between MAG Silver Corp. (MAG:TSX; MAG:NYSE.MKT) and Fresnillo Plc (FRES:LSE), is entering a “catalyst-rich period,” with a revised “development plan to access the ValdecaÒas Deep Zone, the Dilatant Zone and the Anticipada vein earlier.”

MAG Silver is will release an updated technical report in Q2/17 to incorporate recent drilling results “that will add to the current M&I resource (100%) of 248Moz silver and 1.4Moz gold.” At the same time the Fresnillo board is expected to provide the go ahead on the construction of the revised development plan, Kaip stated.

Kaip points out that although MAG Silver is a development company, its “44% share of the high-grade Juanicipio project with first ore production expected in 2019,” makes it a “defensive name.”

The analyst also noted that “exploration upside still exists as the JV approved another 20,000m exploration program for 2017E.” He also stated that “we believe a majority of this drill program will help to increase confidence in the near term mine life production and the remaining will be used to test regional targets within the JV property to confirm the continuation of other mineralized veins identified on the adjacent FRES property.”

Kaip upgraded MAG Silver’s recommendation “to Outperform (Speculative), taking advantage of recent share price weakness in front of key catalysts,” maintaining a CA20 target price.

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1) Melissa Farley compiled this article for Streetwise Reports LLC and provides services to Streetwise Reports as an employee. She owns, or members of her immediate household or family own, shares of the following companies mentioned in this article: None. She is, or members of her immediate household or family are, paid by the following companies mentioned in this article: None.
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Additional Disclosures for this Content

BMO Capital Markets, MAG Silver, May 25, 2017

Analyst’s Certification: I, Andrew Kaip, hereby certify that the views expressed in this report accurately reflect my personal views about the subject securities or issuers. I also certify that no part of my compensation was, is, or will be, directly or indirectly, related to the specific recommendations or views expressed in this report.

Analysts who prepared this report are compensated based upon (among other factors) the overall profitability of BMO Capital Markets and their affiliates, which includes the overall profitability of investment banking services. Compensation for research is based on effectiveness in generating new ideas and in communication of ideas to clients, performance of recommendations, accuracy of earnings estimates, and service to clients.

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