VIDEO - MAG Silver: Higher Silver Price is Good, but Other Factors Matter Too

Precious Metals

Mexico-based Juanicipio, a joint venture between MAG Silver and operator Fresnillo, recently reached first production.

2020 has been a year of turmoil in many ways, but for exploration and development company MAG Silver (TSX:MAG,NYSEAMERICAN:MAG) business has largely continued as usual.

Dr. Peter Megaw, chief exploration officer at MAG, said that while COVID-19 caused some disruptions at the company’s flagship Mexico-based Juanicipio asset, first production was reached as planned.

Juanicipio, a joint venture between MAG and Fresnillo (LSE:FRES,OTC Pink:FNLPF), hit that milestone in mid-October. Project operator Fresnillo is the world’s leading silver producer.

The progress at Juanicipio this year has of course come not only during the coronavirus outbreak, but also in a rising silver price environment.

“We’re obviously very happy to see the higher silver price … (but) we’re so high grade that even if silver goes back to US$8 an ounce, which we haven’t seen in a couple of decades, this thing still has a 15 percent after-tax internal rate of return, and that’s really the measure that matters,” said Megaw.

“For an investor, that’s the kind of thing that lets you sleep at night. You don’t have to worry about whether the silver price is fluctuating a dollar or two.”

Aside from activities at MAG, Megaw also explained the relationship between MAG and newcomer Reyna Silver (TSXV:RSLV). Put simply, MAG contributed Guigui and Batopilas, two of its founding properties, to Reyna; MAG now holds a 20 percent stake in the company.

Reyna expects to start drilling before the end of the year after receiving permits, and Megaw said he will be involved as work begins to move forward.

MAG and Reyna were both discussed positively at September’s inaugural SilverFest, with multiple market watchers putting them forward as silver stock picks (click here and here for more).

Watch the video above for more from Megaw on MAG, Reyna and other topics.

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Securities Disclosure: I, Charlotte McLeod, hold no direct investment interest in any company mentioned in this article.

Editorial Disclosure: The Investing News Network does not guarantee the accuracy or thoroughness of the information reported in the interviews it conducts. The opinions expressed in these interviews do not reflect the opinions of the Investing News Network and do not constitute investment advice. All readers are encouraged to perform their own due diligence.

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