MAG Silver Corp. (TSX NYSE American: MAG) ("MAG", or the "Company") announces the Company's unaudited consolidated financial results for the three months ended June 30, 2024 ("Q2 2024"). For details of the unaudited condensed interim consolidated financial statements of the Company for the three and six months ended June 30, 2024 ("Q2 2024 Financial Statements") and management's discussion and analysis for the three and six months ended June 30, 2024 ("Q1 2024 MD&A"), please see the Company's filings on the System for Electronic Document Analysis and Retrieval Plus ("SEDAR+") at ( www.sedarplus.ca ) or on the Electronic Data Gathering, Analysis, and Retrieval ("EDGAR") at ( www.sec.gov ).
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Silver Crown Royalties: Creating the World’s Premier Silver-only Royalty Company
Silver Crown Royalties is a revenue-generating silver-only royalty company offering shareholders an economically and ecologically efficient investment. The company has two current sources of revenue (Gold Mountain and Pilar Gold) and continues to build on this foundation, targeting additional operational silver-producing projects.
As a pure-play silver equity company, Silver Crown offers organic growth, exploration upside and dividend payments using a business model that includes acquiring a guaranteed amount of silver delivered as by-product from mining operations, paying a dividend to shareholders, and keeping all excess cash in silver bullion.
“An investment in Silver Crown is a protection against currency devaluation,” says Peter Bures, founder, chairman and CEO of Silver Crown.
Silver Crown is led by board members, founders and advisors with hundreds of years of collective experience in world renowned international brokerage, royalty, fund management and mining companies.
Company Highlights
- Silver Crown Royalties is a unique investment opportunity in the financial sector, focused on generating consistent and growing income sources through its expanding portfolio of silver mining royalty interests.
- Silver Crown is continuing to advance a number of royalty acquisition opportunities and progress towards its public listing in Q3 2024.
- Silver Crown offers shareholders both an economically and ecologically efficient investment. Since the silver that the company invests in is typically a byproduct of metal mining, it has no discernible mining cost or environmental impact.
- The company is looking all over the world for projects that have silver as a byproduct and aims to unlock the value of those operations for both its partners and shareholders.
This Silver Crown Royalties profile is part of a paid investor education campaign.*
Click here to connect with Silver Crown Royalties to receive an Investor Presentation
Silver Crown Exercises Option to Upsize Pilar Royalty to 90% of Silver Produced at PGDM Complex
Silver Crown Royalties Inc. (“Silver Crown”, “SCRi” or the “Corporation”, or the “Company”) is pleased announced it has exercised its additional royalty option (the “Option”) under its amended and restated royalty agreement dated April 26, 2024 with Pilar Gold Inc. (“Pilar”) and its Brazilian subsidiary (the “Vendor”) to increase its royalty to 90% of the aggregate net proceeds of silver sold as a result of the processing of ores from the PGDM complex and related milling operations (“PGDM”) in Goias State, Brazil. To exercise the Option, SCRi paid Pilar US$1,310,000 (less SCRi’s transaction expenses and other previously agreed upon deductions) in cash to increase the net smelter return royalty to 90% from 31% of the cash equivalent of the silver produced from the PGDM complex. The exercise of the Option allows Pilar to pursue certain productivity enhancements at PGDM while allowing Silver Crown Royalties to increase its revenue base.
Peter Bures, Silver Crown’s Chief Executive Officer, commented: “We’re excited to expand our ongoing partnership with Pilar’s management and economic interest in the PGDM complex by increasing our royalty to 90% of the cash equivalent of the silver produced. We believe the capital injection will enable Pilar to ramp up operations toward full capacity over the next twelve months providing additional benefit to SCRi beyond the upsized minimum cash equivalent of 4,000 ounces of silver per quarter payment obligation.”
Jeremy Grey, Pilar’s Chief Executive Officer, commented: “With this capital injection, we should be able to achieve self-sustaining throughput at Pilar in the near-term, paving the way for a successful operation in the latter part of this year. We thank Peter and his team at SCRi for their tremendous support and look forward to making Pilar a success for both of us.”
ABOUT SILVER CROWN ROYALTIES INC.
Founded by industry veterans, SCRi is a publicly traded, revenue-generating silver-only royalty company focusing on silver as byproduct credits. SCRi aims to minimize the economic impact on mining projects while maximizing returns for shareholders. SCRi presently has two sources of revenue and continues to build on this foundation, targeting additional operational silver-producing projects.
For further information, please contact:
Silver Crown Royalties Inc.
Peter Bures
Chairman and CEO
Telephone: (416) 481-1744
Email: pbures@silvercrownroyalties.com
FORWARD-LOOKING STATEMENTS
This release contains certain “forward looking statements” and certain “forward-looking information” as defined under applicable Canadian and U.S. securities laws. Forward-looking statements and information can generally be identified by the use of forward-looking terminology such as “may”, “will”, “should”, “expect”, “intend”, “estimate”, “anticipate”, “believe”, “continue”, “plans” or similar terminology. The forward-looking information contained herein is provided for the purpose of assisting readers in understanding management’s current expectations and plans relating to the future. Readers are cautioned that such information may not be appropriate for other purposes. Forward-looking statements and information include, but are not limited to, statements with respect to Pilar’s ramp up of operations at the PGDM complex towards full capacity; the Option providing additional benefit to SCRi beyond the upsized minimum cash equivalent of 4,000 ounces of silver per quarter payment obligation and Pilar’s able to achieve self-sustaining throughput at the PGDM Complex in the near-term, paving the way for a successful operation in the latter part of this year. Forward-looking statements and information are based on forecasts of future results, estimates of amounts not yet determinable and assumptions that, while believed by management to be reasonable, are inherently subject to significant business, economic and competitive uncertainties and contingencies. Forward-looking information is subject to known and unknown risks, uncertainties and other factors that may cause the actual actions, events or results to be materially different from those expressed or implied by such forward-looking information, including but not limited to: the impact of general business and economic conditions; the absence of control over mining operations from which SCRi will purchase gold and other metals or from which it will receive royalty payments and risks related to those mining operations, including risks related to international operations, government and environmental regulation, delays in mine construction and operations, actual results of mining and current exploration activities, conclusions of economic evaluations and changes in project parameters as plans continue to be refined; accidents, equipment breakdowns, title matters, labor disputes or other unanticipated difficulties or interruptions in operations; SCRi’s ability to enter into definitive agreements and close proposed royalty transactions; the inherent uncertainties related to the valuations ascribed by SCRi to its royalty interests; problems inherent to the marketability of gold and other metals; the inherent uncertainty of production and cost estimates and the potential for unexpected costs and expenses; industry conditions, including fluctuations in the price of the primary commodities mined at such operations, fluctuations in foreign exchange rates and fluctuations in interest rates; government entities interpreting existing tax legislation or enacting new tax legislation in a way which adversely affects SCRi; stock market volatility; regulatory restrictions; liability, competition, the potential impact of epidemics, pandemics or other public health crises on SCRi’s business, operations and financial condition, loss of key employees. SCRi has attempted to identify important factors that could cause actual results to differ materially from those contained in forward-looking statements, there may be other factors that cause results not to be as anticipated, estimated or intended. There can be no assurance that such statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers are advised not to place undue reliance on forward-looking statements or information. SCRi undertakes no obligation to update forward-looking information except as required by applicable law. Such forward-looking information represents management's best judgment based on information currently available.
This document does not constitute an offer to sell, or a solicitation of an offer to buy, securities of the Company in Canada, the United States or any other jurisdiction. Any such offer to sell or solicitation of an offer to buy the securities described herein will be made only pursuant to subscription documentation between the Company and prospective purchasers. Any such offering will be made in reliance upon exemptions from the prospectus and registration requirements under applicable securities laws, pursuant to a subscription agreement to be entered into by the Company and prospective investors. There can be no assurance that forward-looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, the reader is cautioned not to place undue reliance on forward-looking statements.
Click here to connect with Silver Crown Royalties to receive an Investor Presentation
ASX Silver Stocks: 5 Biggest Companies in 2024
The precious metal silver is often compared to gold, and is important in jewellery and as a safe haven.
Unlike gold, silver also has many industrial uses, including in the production of electronics, automobiles, medicine and photography, and, of course, silverware. Energy transition applications are a growing demand sector for silver — the metal is valued for its conductive capacity, which makes it particularly useful in the production of photovoltaic panels.
Silver supply has tightened in recent years as industrial demand rises, and this was one of the factors that helped the silver price break through the US$30 per ounce mark in May for the first time since 2013.
Silver also set a new all-time high in Australian dollars on May 29, when it climbed to AU$48.46. While the price of silver has pulled back below US$30 in recent weeks, it has still been trading at levels not seen since 2021.
The majority of silver is produced as a byproduct at gold and base metal operations, with companies primarily focused on silver being much rarer. In this silver price environment, it is a good time to learn about the largest primary silver companies listed on the ASX.
These ASX silver stocks are sorted by market cap, and data was gathered using TradingView’s stock screener on August 6, 2024.
1. Adriatic Metals (ASX:ADT)
Market cap: AU$950.72 million; share price: AU$2.95
Adriatic Metals is a precious and base metals miner in South-Central Europe that is now producing silver from the Rupice mine at its Vareš project, located near Vareš, a historic mining town in Bosnia and Herzegovina. In late February, Adriatic produced its first silver-lead concentrate and zinc concentrate at the Vareš processing plant.
Adriatic’s mining efforts at Vareš are focused on the Rupice deposit, for which it released an ore reserve estimate in December 2023. The estimate indicates an 18 year mine life and probable reserves of 83 million ounces of silver, 640,000 ounces of gold, 723,000 tonnes of zinc, 457,000 tonnes of lead, 64,000 tonnes of copper and 24,000 tonnes of antimony.
In an update on July 29, Adriatic announced in its quarterly activities report that the ramp up was continuing at Vareš, with nameplate production expected during the fourth quarter of the year. It also said that during Q2, 257 metric tons of silver-lead concentrate and 128 metric tons of zinc concentrate were produced and had all been sold.
2. Silver Mines (ASX:SVL)
Market cap: AU$233.75 million; share price: AU$0.145
Silver Mines is an advanced-stage silver exploration and development company focused on its Bowdens silver project, which is located in Central New South Wales, 26 kilometres east of Mudgee.
Bowdens is made up of 2,115 square kilometres of titles, covers 80 kilometres of strike and represents the largest-known undeveloped silver resource in Australia. In its latest mineral resource estimate, released in March 2023, the company reported 169 million ounces of silver and 96,000 ounces of gold in the measured and indicated categories, with an additional inferred resource of 20 million ounces of silver and 96,000 ounces of gold.
The project was approved to proceed to the development and production stage in April 2023. Silver Mines is currently working on updating the mineral reserve estimate and subsequently the ore reserve for completion in the first half of 2024.
In the meantime, Silver Mines continues to explore the Bowdens District. In an announcement on June 28, the company reported that "exploration of the district has been significantly enhanced with the completion of a major seismic surveying program." Exploration at Bowdens will now focus on the five calderas modelled by the program.
3. Investigator Resources (ASX:IVR)
Market cap: AU$64,94 million; share price: AU$0.041
Investigator Resources is a polymetallic exploration and development company with assets throughout Australia and Tasmania. Its flagship property is the Paris silver project, located on South Australia’s Eyre Peninsula. The company has referred to Paris as Australia’s highest-grade undeveloped silver project.
In a July 2023 update, Investigator increased Paris' indicated and inferred resources to 57 million ounces of silver and 99,000 tonnes of lead with average grades of 73 grams per tonne (g/t) silver and 0.41 percent lead from 24 million tonnes.
A November 2021 prefeasibility study for the project shows it could operate as a high-grade, near-surface, open-pit mine with a life of five to seven years. Investigator is working to produce a definitive feasibility study for the project. That work includes a regional exploration program with 5,000 metres of drilling for which it released the first results in May of this year.
Paris also hosts the Apollo silver deposit, which is 5 kilometres from the main zone. The company's drilling at Apollo has revealed high grades, including an interval grading 1,262 g/t silver over 8 metres in August 2022.
On July 29, Investigator released its quarterly activities report for its June quarter, in which it said it was working to advance a definitive feasibility study for Paris. Investigator indicated that packages for the study are either substantially complete or nearing completion and expects to release the study during the September quarter of this year.
4. Unico Silver (ASX:USL)
Market cap: AU$45.61 million; share price: AU$0.145
Formerly known as E2 Metals, Unico Metals changed its name in March 2023. The company is focused on the development of assets in Southern Argentina, and its flagship project is Cerro Leon, which consists of two vein fields — the greenfields Conserrat project, in which Unico has an 80 percent stake, and the more advanced Pingüino project.
In its latest mineral resource estimate for Cerro Leon, released in May of last year, the company reported indicated and inferred resources of 40.9 million ounces of silver and 344,200 ounces of gold, as well as over 150,500 tonnes of zinc and 58,500 tonnes of lead.
On May 20 of this year, Unico entered into a purchasing agreement to acquire a 100 percent interest in the Sierra Blanca silver-gold project from Austral Gold (ASX:AGD,OTCQB:AGLDF) and Capella Metals (TSXV:CMIL,OTCQB:CMILF). The acquisition will allow Unico to expand Cerro Leon and consolidate the Pingüino vein into a single entity. The purchase was completed on July 24.
5. Lode Resources (ASX:LDR)
Market cap: AU$10.14 million; share price: AU$0.089
Lode Resources is an exploration company focused on the development of assets within the New England Fold Belt. Its flagship property is the Webbs Consol silver-base metals project, located 16 kilometres southwest of Emmaville, New South Wales. The resource was originally discovered in 1890 and was mined until the mid-1950s.
The company explored the property’s Tangoa West lode throughout 2023 and delivered a series of high-grade results. In February of last year, it reported 254 g/t silver over 116.1 metres, including 419 g/t silver over 41.4 metres; a few months later, Lode Resources returned 389 g/t silver over 24.5 metres.
The firm has continued to test the Tangoa West lode down to a depth of 450 metres. According to the company, the increasing depth has provided it with greater confidence in the size and high value of the target, as well as a better understanding of its scale.
In its June 2024 quarterly update, Lode reported that it was continuing to plan for follow-up drilling at the Webbs Consol project, with a 17 hole program set to commence after the end of the quarter. The program will be focused on testing for extensions of areas at Webbs Consol North with known high-grade intercepts, as well as untested silver occurrences at the Canoon prospect.Don't forget to follow us @INN_Australiafor real-time news updates!
Securities Disclosure: I, Dean Belder, hold no direct investment interest in any company mentioned in this article.
Drilling Underway to Test New, High-Priority Targets
Drilling to test newly-identified targets at Kelpie Hill and Windmill Dam, along strike from the high-grade Evergreen zone on the highly prospective Woorara Fault
Eastern Metals Limited (ASX: EMS) (“Eastern Metals” or “the Company”) is pleased to advise that Reverse Circulation (RC) drilling has commenced to test newly identified high-priority targets at its Cobar Project in the southern Cobar Basin, NSW (refer to Figure 1).
HIGHLIGHTS
- Reverse Circulation (RC) drilling is underway to test new, high-priority areas at the Company’s Cobar Project in the Cobar Basin, NSW.
- The ‘Kelpie Hill’ and ‘Windmill Dam’ targets, located to the north and south of the high-grade Evergreen Zone within EL6321, have previously returned strongly anomalous base metal grades in surface rock chip sampling.
- The drilling is designed to further unlock the potential along the highly prospective Woorara Fault, a key regional structure associated with mineralisation in the southern Cobar Basin.
The drilling will initially focus on the Kelpie Hill and Windmill Dam targets, located to the north and south of the high-grade Evergreen Zone at Browns Reef (EL6321), both of which returned highly anomalous grades from surface rock chip sampling. In-fill and extensional drilling is also planned at other areas within the tenement including at Evergreen (refer to Figure 2).
The drilling program, which is expected to comprise approximately 2,000 metres, will be undertaken by Drillit Consulting Pty Ltd – an experienced drilling contractor based in the Cobar Basin. The drilling is expected to take three weeks to complete (weather dependent), with initial assay results expected in September 2024.
Eastern Metals’ Chief Executive Officer Ley Kingdom said: “Strong alteration at surface and rock chip sampling across Kelpie Hill and Windmill Dam have returned anomalous copper, lead, zinc and silver results, which lie along the highly prospective Woorara Fault along strike from Evergreen. We are delighted to now be drill testing these new and exciting base metal targets.”
Figure 1: Location of the Cobar Project, southern Cobar Basin, NSW and EL6321, ‘Browns Reef’.
Browns Reef (EL6321) is an advanced exploration project located 5km west of Lake Cargelligo in the southern Cobar Basin, NSW. It is a structurally controlled, polymetallic system extending along the inferred Woorara Fault and the Preston Formation and Clements Formation contact.
Assay results from recent fieldwork programs to the north and south of the known high-grade mineralisation at Evergreen have returned highly anomalous grades from surface rock chip samples.
Mapping and pXRF traverses along the Woorara Fault, a regional-scale structure related to known mineralisation at the high-grade Pineview and Evergreen zones, identified new anomalous zones north and south of Evergreen, named “Kelpie Hill” and “Windmill Dam”.
Kelpie Hill is located approximately 700 metres to the north-west of Evergreen, and Windmill Dam is 500 metres to the south-east. Refer to Figure 2.
The pXRF demonstrated that soil anomalism of lead (Pb) and arsenic (As) were readily traceable within the soil profiles and decreasing Pb results could effectively map out the basalt and Clements Formation contact zones. Rock chip samples paired with the pXRF readings were able to distinguish further prospective zones to the south and north of Evergreen.
The RC program has been designed to test whether the anomalous grades from surface rock chip samples and results from pXRF soil readings represent further zones of mineralisation between Pineview and Evergreen and, potentially, to the north of Evergreen.
Figure 2: Location of Browns Reef, EL6321 and the Pineview, Evergreen, Kelpie Hill & Windmill Dam prospects.
Forward-Looking Statements
This document may include forward-looking statements. Forward-looking statements include, but are not limited to, statements concerning the Company’s planned activities, including mining and exploration programs, and other statements that are not historical facts. When used in this document, the words such as “could”, “plan”, “estimate”, “expect”, “intend”, “may”, “potential”, “should” and similar expressions are forward-looking statements. In addition, summaries of Exploration Results and estimates of Mineral Resources and Ore Reserves could also be forward looking statements.
Although Eastern Metals believes that its expectations reflected in these forward-looking statements are reasonable, such statements involve risks and uncertainties and no assurance can be given that actual results will be consistent with these forward-looking statements.
Click here for the full ASX Release
This article includes content from Eastern Metals, licensed for the purpose of publishing on Investing News Australia. This article does not constitute financial product advice. It is your responsibility to perform proper due diligence before acting upon any information provided here. Please refer to our full disclaimer here.
MAG Silver Reports Second Quarter Financial Results
All amounts herein are reported in $000s of United States dollars ("US$") unless otherwise specified (C$ refers to thousands of Canadian dollars).
KEY HIGHLIGHTS FOR Q2 2024 (on a 100% basis unless otherwise noted)
- MAG reported net income of $21,614 ($0.21 per share) driven by income from Juanicipio (equity accounted) of $25,123, and adjusted EBITDA 1 of $50,353.
- A total of 336,592 tonnes of ore at a silver head grade of 498 grams per tonne ("g/t") (equivalent silver head grade 2 746 g/t) was processed at Juanicipio.
- Juanicipio achieved silver production and equivalent silver production 2 of 5.0 and 7.1 million ounces, respectively.
- Juanicipio generated strong operating cash flow of $92,766 and free cash flow 1 of $88,637.
- Building on the robust Q1 2024 cost performance, Juanicipio continued to improve with cash cost 1 of $1.15 per silver ounce sold ($8.86 per equivalent silver ounce sold 3 ) and all-in sustaining cost 1 of $4.49 per silver ounce sold ($11.31 per equivalent silver ounce sold 3 ).
- With the continued operational outperformance in the first half of 2024, full year guidance has been increased. As reported by Fresnillo plc ("Fresnillo"), Juanicipio's operator, silver head grade at Juanicipio is expected to be between 420g/t and 460g/t for 2024 (previously 380g/t to 420g/t). Juanicipio is expected to produce between 16.3 million and 17.3 million (previously 14.3 million and 15.8 million) silver ounces yielding between 14.5 million and 15.4 million (previously 13.2 million and 14.6 million) silver ounces sold at all-in sustaining costs 1 of between $8.50 and $9.25 (previously $9.50 and $10.50) per silver ounce sold.
- Juanicipio returned a total of $29,818 in interest and loan principal repayments to MAG further augmenting MAG's liquidity position to $97,337 million at the end of the quarter.
CORPORATE
- On May 15, 2024, MAG announced that the Toronto Stock Exchange ("TSX") had accepted the Company's Notice of Intention to Make a Normal Course Issuer Bid ("NCIB"). Under the NCIB, the Company may purchase for cancellation up to an aggregate of 8,643,374 common shares of the Company ("Common Shares"), representing approximately 10% of the public float (as defined in the rules and policies of the TSX) of the Common Shares as of May 8, 2024.
- On May 31, 2024, MAG filed a final short form base shelf prospectus with the securities commissions in all of the provinces and territories of Canada ("Final Shelf Prospectus") and a corresponding registration statement on Form F-10 with the United States Securities and Exchange Commission under the United States Securities Act of 1933, as amended and the U.S./Canada Multijurisdictional Disclosure System allowing the Company to offer up to $250,000 of common shares, preferred shares, debt securities, subscription receipts, units and warrants or any combination thereof during the 25-month period that the Final Shelf Prospectus remains effective. In order to maintain financial flexibility, and consistent with past practice, the Company has historically maintained a base shelf prospectus, and has no present intention to offer securities pursuant to this Final Shelf Prospectus.
- The Company published its 2023 sustainability report on July 18, 2024, underscoring its continued commitment to transparency with its stakeholders while providing a comprehensive overview of the Company's environmental, social and governance ("ESG") performance for 2023. A copy of MAG's 2023 sustainability report and 2023 ESG Data Table are available on the Company's website at https://magsilver.com/esg/reports/ 4 .
EXPLORATION
- Juanicipio:
- Underground infill drilling at Juanicipio continued in Q2 2024 primarily focussed on upgrading mineralization in areas expected to be mined in the near to mid-term. During Q2 2024, 10,699 metres were drilled from underground.
- Surface drilling focused on expanding and upgrading the deeper zones and broader regional exploration started in April 2024 and is currently focused on the Cañada-Honda Structure. 4,546 metres have been drilled from surface during Q2 2024.
- During 2024, Juanicipio plans to drill a total of 50,000 metres, with 33,000 metres from underground and 17,000 metres from surface.
- Deer Trail Project, Utah:
- Drilling moved on to Phase 4 in the last quarter of 2023 and continued through Q2 2024, focussed on lower elevations and aimed at offsetting the Carissa discovery and testing other high-potential targets in the Deer Trail mine area. During Q2 2024, 1,610 metres were drilled with results pending.
- On July 11, 2024, MAG reported that the Deer Trail Project was being affected by the Silver King Fire in Piute County with a temporary pause of exploration operations with all personnel safe and the Deer Trail site and infrastructure secure. As of July 29, 2024, 82% of the fire has been contained and the Company has resumed exploration operations.
- Larder Project, Ontario:
- Drilling at Cheminis, Bear and new regional targets, totalled 10,776 metres in Q2 2024. Targets tested include:
- the down plunge extension of the high-grade "double knuckle" at the Bear East zone;
- the "Twist" zone in an underexplored area along the Cadillac-Larder Break ("CLB") where the major structure switches from south dipping to north dipping, which is located between Cheminis and Bear;
- the extension of the Cheminis south mine sequence down plunge to 900 vertical metres; and
- regional targets along the second order structure and unconformity.
- Cheminis Update: The final two holes of the current Cheminis drilling program totalled 1,455 metres and were designed to delineate the mine sequence down from the 700 metre level to the 900 metre level. Both holes have extended the ore shoots from surface down to 900 metres below surface doubling the depth extent of known mineralization at the Cheminis mine which remains open at depth.
Bear Update: Two directional holes totalling 126 metres, extended the Bear East zone down plunge 1,200 metres below surface, intersecting gold mineralization within a mixing zone of strongly altered komatiites-syenites and ultramafics. Bear East remains open in all directions.
Twist Update: The Twist target was identified in the geololgical review program of 2023, where the CLB main structure switches from south dipping (Cheminis) to north dipping (Bear). It is interpreted to host a potential dilation zone either in the central part of the fold/fault or along the limbs, similar to the historic Kerr Addison mine 5km east of the Larder Project. In Q2 2024 initial drilling started and 4,830 metres have been drilled testing this target. Assays received to date have identified an alteration zone, that is hosted in multiple rock types including volcanics, mafic tuff, sediments and syenites, which is atypical along the CLB. The alteration consists of pervasive silica-carbonate-sericite and the structures associated with the widespread zones are indicative of a series of brittle shears likely sourced from a larger central dilation zone. Approximately 10 holes in total are planned for this target, with 7 remaining.
Regional Targets: The first set of regional targets lie along a 4km second order structure and unconformity and have been identified through Magnetotellurics-Induced Polarization ("MT-IP") geophysics, surface mapping/sampling and geological importance. Targets include mixed zones of greywackes, trachytes, syenites, conglomerates and volcanics, litho-structural breaks in the MT-IP survey and alteration packages identified on the surface including hydrothermally altered conglomerates and syenites. During Q2 2024, 9 holes were drilled for a total of 4,655 metres with results pending.
- Drilling at Cheminis, Bear and new regional targets, totalled 10,776 metres in Q2 2024. Targets tested include:
________________________
1 Adjusted EBITDA, cash cost per ounce, all-in sustaining cost per ounce and free cash flow are non-IFRS measures, please see below " Non-IFRS Measures " section and section 12 of the Q2 2024 MD&A for a detailed reconciliation of these measures to the Q2 2024 Financial Statements.
2 Equivalent silver head grade and equivalent silver production have been calculated using the following price assumptions to translate gold, lead and zinc to "equivalent" silver head grade and "equivalent" silver production: $23/oz silver, $1,950/oz gold, $0.95/lb lead and $1.15/lb zinc.
3 Equivalent silver ounces sold have been calculated using realized prices to translate gold, lead and zinc to "equivalent" silver ounces sold (metal quantity, multiplied by metal price, divided by silver price). Three months ended June 30, 2024 realized prices: $30.17/oz silver, $2,379.85/oz gold, $0.99/lb lead and $1.33/lb zinc.
4 Information contained in or otherwise accessible through the Company's website, including the 2023 sustainability report and 2023 ESG Data Table, do not form part of this MD&A and are not incorporated into this MD&A by reference.
JUANICIPIO RESULTS
All results of Juanicipio in this section are on a 100% basis, unless otherwise noted.
Operating Performance
The following table and subsequent discussion provide a summary of the operating performance of Juanicipio for the three months ended June 30, 2024 and 2023, unless otherwise noted.
Key mine performance data of Juanicipio (100% basis) | Three months ended | |||
June 30, | June 30, | |||
2024 | 2023 | |||
Metres developed (m) | 3,520 | 3,434 | ||
Material mined (t) | 349,460 | 259,438 | ||
Material processed (t) | 336,592 | 377,718 | ||
Silver head grade (g/t) | 498 | 498 | ||
Gold head grade (g/t) | 1.20 | 1.25 | ||
Lead head grade (%) | 1.56 | % | 1.05 | % |
Zinc head grade (%) | 2.99 | % | 1.92 | % |
Equivalent silver head grade (g/t) (1) | 746 | 708 | ||
Silver ounces sold (koz) | 4,272 | 4,877 | ||
Gold ounces sold (koz) | 7.20 | 9.54 | ||
Lead pounds sold (klb) | 9,224 | 6,760 | ||
Zinc pounds sold (klb) | 15,237 | 10,103 | ||
Equivalent silver ounces sold (koz) (2) | 5,817 | 6,390 | ||
(1) Equivalent silver head grades have been calculated using the following price assumptions to translate gold, lead and zinc to "equivalent" silver head grade in 2024: $23/oz silver, $1,950/oz gold, $0.95/lb lead and $1.15/lb zinc (2023: $21.85/oz silver, $1,775/oz gold, $0.915/lb lead and $1.30/lb zinc).
(2) Equivalent silver ounces sold have been calculated using realized prices to translate gold, lead and zinc to "equivalent" silver ounces sold (metal quantity, multiplied by metal price, divided by silver price). Three months ended June 30, 2024 realized prices: $30.17/oz silver, $2,379.85/oz gold, $0.99/lb lead and $1.33/lb zinc (three months ended June 30, 2023 realized prices: $23.69/oz silver, $1,957.47/oz gold, $0.94/lb lead and $1.07/lb zinc).
During the three months ended June 30, 2024, a total of 349,460 tonnes of ore were mined. This represents an increase of 35% over Q2 2023. Increases in mined tonnages at Juanicipio have been driven by the operational ramp-up of the mine towards steady mining and milling targets.
During the three months ended June 30, 2024, a total of 336,592 tonnes of ore were processed through the Juanicipio plant; no ore was processed at the nearby Fresnillo and Saucito processing plants (100% owned by Fresnillo). The 11% decrease over Q2 2023 was mainly attributable to Juanicipio capitalizing on available milling capacity at the nearby Fresnillo and Saucito plants (100% owned by Fresnillo) while undergoing operational ramp-up and processing facility commissioning in the first half of 2023.
The silver head grade and equivalent silver head grade for the ore processed in the three months ended June 30, 2024 was 498 g/t and 746 g/t, respectively (three months ended June 30, 2023: 498 g/t and 708 g/t, respectively). Head grades in Q2 2024 were slightly higher than Q2 2023 (5% on a silver equivalent basis, with silver head grade being consistent), due to low-grade commissioning stockpiles being processed through the Juanicipio plant in the first half of 2023. Silver metallurgical recovery during the three months ending June 30, 2024 was 92% (three months ending June 30, 2023: 87%) reflecting the commencement of commercial pyrite production during Q2 2024 delivering incremental silver and gold recovery as well as ongoing optimizations in the processing plant.
The following table provides a summary of the total cash costs and all-in sustaining costs ("AISC") of Juanicipio for the three months ended June 30, 2024, and 2023.
Key mine performance data of Juanicipio (100% basis) | Three months ended | |||
June 30, | June 30, | |||
2024 | 2023 | |||
Total cash costs (1) | 4,911 | 35,584 | ||
Cash cost per silver ounce sold ($/oz) (1) | 1.15 | 7.30 | ||
Cash cost per equivalent silver ounce sold ($/oz) (1) | 8.86 | 11.18 | ||
All-in sustaining costs (1) | 19,161 | 48,456 | ||
All-in sustaining cost per silver ounce sold ($/oz) (1) | 4.49 | 9.93 | ||
All-in sustaining cost per equivalent silver ounce sold ($/oz) (1) | 11.31 | 13.19 | ||
(1) Total cash costs, cash cost per ounce, cash cost per equivalent ounce, all-in sustaining costs, all-in sustaining cost per ounce, and all-in sustaining cost per equivalent ounce are non-IFRS measures, please see below "Non-IFRS Measures" section and section 12 of the Q2 2024 MD&A for a detailed reconciliation of these measures to the Q2 2024 Financial Statements. Equivalent silver ounces sold have been calculated using realized prices to translate gold, lead and zinc to "equivalent" silver ounces sold (metal quantity, multiplied by metal price, divided by silver price). Three months ended June 30, 2024 realized prices: $30.17/oz silver, $2,379.85/oz gold, $0.99/lb lead and $1.33/lb zinc (three months ended June 30, 2023 realized prices: $23.69/oz silver, $1,957.47/oz gold, $0.94/lb lead and $1.07/lb zinc).
Financial Results
The following table presents excerpts of the financial results of Juanicipio for the three months ended June 30, 2024 and 2023.
Three months ended | ||||
June 30, | June 30, | |||
2024 | 2023 | |||
$ | $ | |||
Sales | 167,079 | 134,775 | ||
Cost of sales: | ||||
Production cost | (39,866 | ) | (54,571 | ) |
Depreciation and amortization | (22,455 | ) | (17,400 | ) |
Gross profit | 104,757 | 62,804 | ||
Consulting and administrative expenses | (4,283 | ) | (4,159 | ) |
Extraordinary mining and other duties | (2,773 | ) | (1,377 | ) |
Interest expense | (3,241 | ) | (4,886 | ) |
Exchange gains (losses) and other | 696 | 31 | ||
Net income before tax | 95,156 | 52,413 | ||
Income tax (expense) recovery | (41,299 | ) | (6,349 | ) |
Net income (100% basis) | 53,857 | 46,065 | ||
MAG's 44% portion of net income | 23,697 | 20,268 | ||
Interest on Juanicipio loans - MAG's 44% | 1,426 | 2,150 | ||
MAG's 44% equity income | 25,123 | 22,418 |
Sales increased by $32,304 during the three months ended June 30, 2024, mainly due to 25% higher realized metal prices and $8,217 lower treatment, refining and toll milling costs driven mainly by no toll milling at the Saucito and Fresnillo processing facilities during Q2 2024 vs toll milling in Q2 2023 – as explained in ‘ Juanicipio Results – Operating Performance ' section above, offset by 5% lower metal volumes.
Production costs decreased by $14,705 to Juanicipio depleting higher-cost, lower-grade commissioning stockpiles during operational ramp-up and processing facility commissioning in the first half of 2023.
Depreciation increased by $5,056 as the Juanicipio mill achieved commercial production and commenced depreciating the processing facility and associated equipment in June 2023.
Cash operating margin increased from 60% to 76%, mainly due to reduced operating costs as well as positive commodity prices augmented by operational leverage and no processing at the nearby Fresnillo and Saucito processing facilities.
Other expenses decreased by $790 mainly as a result of higher exchange gains ($664) and lower interest expense ($1,645) as Juanicipio reduced its outstanding shareholder loans balance by $173,339 ($156,859 loan repayments and $16,480 converted to equity) over the course of September 2023 to June 2024, offset by higher extraordinary mining and other duties ($1,396) which were impacted by the commencement of pyrite production during Q2 2024.
Taxes increased by $34,951 mainly due to non-cash deferred tax charges on fixed assets driven by a weakening in the Mexican peso versus the US dollar, as well as higher taxable profits generated during Q2 2024.
Ore Processed at Juanicipio Plant (100% basis)
Three Months Ended June 30, 2024 (336,592 tonnes processed) | Three Months Ended June 30, 2023 Amount $ | |||||
Metals Sold | Quantity | Average Price $ | Amount $ | |||
Silver | 4,271,991 ounces | 30.17 per oz | 128,876 | 115,555 | ||
Gold | 7,195 ounces | 2,380 per oz | 17,124 | 18,668 | ||
Lead | 4,184 tonnes | 0.99 per lb. | 9,151 | 6,367 | ||
Zinc | 6,911 tonnes | 1.33 per lb. | 20,333 | 10,807 | ||
Treatment, refining, and other processing costs ( 2 ) | (8,405 | ) | (16,622 | ) | ||
Sales | 167,079 | 134,775 | ||||
Production cost | (39,866 | ) | (54,571 | ) | ||
Depreciation and amortization ( 1 ) | (22,455 | ) | (17,400 | ) | ||
Gross Profit | 104,757 | 62,804 |
(1) The underground mine was considered readied for its intended use on January 1, 2022, whereas the Juanicipio processing facility started commissioning and ramp-up activities in January 2023, achieving commercial production status on June 1, 2023.
(2) Includes toll milling costs from processing mineralized material at the Saucito and Fresnillo plants for Q2 2023.
Sales and treatment charges are recorded on a provisional basis and are adjusted based on final assay and pricing adjustments in accordance with the offtake contracts.
MAG FINANCIAL RESULTS – THREE MONTHS ENDED JUNE 30, 2024
As at June 30, 2024, MAG had working capital of $96,460 (December 31, 2023: $67,262) including cash of $97,337 (December 31, 2023: $68,707) and no long-term debt. As well, as at June 30, 2024, Juanicipio had working capital of $129,111 including cash of $51,422 (MAG's attributable share is 44%).
The Company's net income for the three months ended June 30, 2024 amounted to $21,614 (June 30, 2023: $19,390) or $0.21/share (June 30, 2023: $0.19/share). MAG recorded its 44% income from equity accounted investment in Juanicipio of $25,123 (March 31, 2023: $22,419) which included MAG's 44% share of net income from operations as well as loan interest earned on loans advanced to Juanicipio (see above for a discussion of MAG's share of income from its equity accounted investment in Juanicipio).
For the three months ended | ||||
June 30, | June 30, | |||
2024 | 2023 | |||
$ | $ | |||
Income from equity accounted investment in Juanicipio | 25,123 | 22,419 | ||
General and administrative expenses | (3,622 | ) | (3,233 | ) |
General exploration and business development | (95 | ) | (40 | ) |
Operating income | 21,406 | 19,146 | ||
Interest income | 928 | 641 | ||
Other income | 650 | 233 | ||
Financing costs | (134 | ) | - | |
Foreign exchange gain (loss) | 60 | 168 | ||
Income before income tax | 22,910 | 20,188 | ||
Deferred income tax expense | (1,296 | ) | (798 | ) |
Net income | 21,614 | 19,390 | ||
NON-IFRS MEASURES
The following table provides a reconciliation of cash cost per silver ounce of Juanicipio to production cost of Juanicipio on a 100% basis (the nearest IFRS measure) as presented in the notes to the Q2 2024 Financial Statements.
Three months ended June 30, | ||||
(in thousands of US$, except per ounce amounts) | 2024 | 2023 | ||
Production cost as reported | 39,866 | 54,571 | ||
Depreciation on inventory movements | 474 | (1,145 | ) | |
Adjusted production cost | 40,340 | 53,426 | ||
Treatment, refining, and other processing costs | 8,405 | 16,622 | ||
By-product revenues (2) | (46,608 | ) | (35,842 | ) |
Extraordinary mining and other duties | 2,773 | 1,377 | ||
Total cash costs (1) | 4,911 | 35,584 | ||
Add back by-product revenues (2) | 46,608 | 35,842 | ||
Total cash costs for equivalent silver (1) | 51,519 | 71,426 | ||
Silver ounces sold | 4,271,991 | 4,877,460 | ||
Equivalent silver ounces sold (3) | 5,816,940 | 6,390,310 | ||
Cash cost per silver ounce sold ($/ounce) | 1.15 | 7.30 | ||
Cash cost per equivalent silver ounce sold ($/ounce) | 8.86 | 11.18 |
(1) As Q3 2023 represented the first full quarter of commercial production, information presented for total cash costs and total cash costs for equivalent silver together with their associated per unit values are not directly comparable.
(2) By-product revenues relate to the sale of other metals namely gold, lead, and zinc.
(3) Equivalent silver ounces sold have been calculated using realized prices to translate gold, lead and zinc to "equivalent" silver ounces sold (metal quantity, multiplied by metal price, divided by silver price). Three months ended June 30, 2024 realized prices: $30.17/oz silver, $2,379.85/oz gold, $0.99/lb lead and $1.33/lb zinc (three months ended June 30, 2023 realized prices: $23.69/oz silver, $1,957.47/oz gold, $0.94/lb lead and $1.07/lb zinc).
The following table provides a reconciliation of AISC of Juanicipio to production cost and various operating expenses of Juanicipio on a 100% basis (the nearest IFRS measure), as presented in the notes to the Q2 2024 Financial Statements.
Three months ended June 30, | ||||
(in thousands of US$, except per ounce amounts) | 2024 | 2023 | ||
Total cash costs | 4,911 | 35,584 | ||
General and administrative expenses | 4,283 | 4,159 | ||
Exploration | 2,235 | 1,928 | ||
Sustaining capital expenditures | 7,329 | 6,535 | ||
Sustaining lease payments | 349 | 199 | ||
Interest on lease liabilities | (17 | ) | (11 | ) |
Accretion on closure and reclamation costs | 72 | 62 | ||
All-in sustaining costs (1) | 19,161 | 48,456 | ||
Add back by-product revenues (2) | 46,608 | 35,842 | ||
All-in sustaining costs for equivalent silver (1) | 65,768 | 84,298 | ||
Silver ounces sold | 4,271,991 | 4,877,460 | ||
Equivalent silver ounces sold (3) | 5,816,940 | 6,390,310 | ||
All-in sustaining cost per silver ounce sold ($/ounce) | 4.49 | 9.93 | ||
All-in sustaining cost per equivalent silver ounce sold ($/ounce) | 11.31 | 13.19 | ||
Average realized price per silver ounce sold ($/ounce) | 30.17 | 23.69 | ||
All-in sustaining margin ($/ounce) | 25.68 | 13.76 | ||
All-in sustaining margin ($/equivalent ounce) | 18.86 | 10.50 | ||
All-in sustaining margin | 109,715 | 67,099 |
(1) As Q3 2023 represented the first full quarter of commercial production, information presented for all-in sustaining costs, all-in sustaining costs for equivalent silver, and all-in sustaining margin together with their associated per unit values are not directly comparable.
(2) By-product revenues relate to the sale of other metals namely gold, lead, and zinc.
(3) Equivalent silver ounces sold have been calculated using realized prices to translate gold, lead and zinc to "equivalent" silver ounces sold (metal quantity, multiplied by metal price, divided by silver price). Three months ended June 30, 2024 realized prices: $30.17/oz silver, $2,379.85/oz gold, $0.99/lb lead and $1.33/lb zinc (three months ended June 30, 2023 realized prices: $23.69/oz silver, $1,957.47/oz gold, $0.94/lb lead and $1.07/lb).
For the three months ended June 30, 2024 the Company incurred corporate G&A expenses of $3,473 (three months ended June 30, 2023: $3,175), which exclude depreciation expense.
The Company's attributable silver ounces sold and equivalent silver ounces sold for the three months ended June 30, 2024 were 1,879,676 and 2,559,454 respectively (three months ended June 30, 2023: 2,146,082 and 2,811,736 respectively), resulting in additional all‐in sustaining cost for the Company of $1.85/oz and $1.36/oz respectively (three months ended June 30, 2023: $1.48/oz and $1.13/oz respectively), in addition to Juanicipio's all-in-sustaining costs presented in the above table.
The following table provides a reconciliation of EBITDA and Adjusted EBITDA attributable to the Company based on its economic interest in Juanicipio to net income (the nearest IFRS measure) of the Company per the Q2 2024 Financial Statements. All adjustments are shown net of estimated income tax.
Three months ended June 30, | ||||
(in thousands of US$) | 2024 | 2023 | ||
Net income after tax | 21,614 | 19,390 | ||
Add back (deduct): | ||||
Taxes | 1,296 | 798 | ||
Depreciation and depletion | 149 | 58 | ||
Finance costs (income and expenses) | (1,504 | ) | (1,042 | ) |
EBITDA (1) | 21,555 | 19,204 | ||
Add back (deduct): | ||||
Adjustment for non-cash share-based compensation | 1,053 | 1,012 | ||
Share of net earnings related to Juanicipio | (25,123 | ) | (22,419 | ) |
MAG attributable interest in Junicipio Adjusted EBITDA | 52,868 | 32,859 | ||
Adjusted EBITDA (1) | 50,353 | 30,656 | ||
(1) As Q3 2023 represents the first full quarter of commercial production, information presented for EBITDA and Adjusted EBITDA is not directly comparable.
The following table provides a reconciliation of free cash flow of Juanicipio to its cash flow from operating activities on a 100% basis (the nearest IFRS measure), as presented in the notes to the Q2 2024 Financial Statements.
Three months ended June 30, | ||||
(in thousands of US$) | 2024 | 2023 | ||
Cash flow from operating activities | 92,766 | 33,557 | ||
Less: | ||||
Cash flow used in investing activities | (3,780 | ) | (26,125 | ) |
Sustaining lease payments | (349 | ) | (199 | ) |
Juanicipio free cash flow (1) | 88,637 | 7,233 | ||
(1) As Q3 2023 represents the first full quarter of commercial production, comparative information presented for free cash flow of Juanicipio is not directly comparable.
Qualified Persons: All scientific or technical information in this press release including assay results referred to, mineral resource estimates and mineralization, if applicable, is based upon information prepared by or under the supervision of, or has been approved by Gary Methven, P.Eng., Vice President, Technical Services and Lyle Hansen, P.Geo, Geotechnical Director; both are "Qualified Persons" for purposes of National Instrument 43-101, Standards of Disclosure for Mineral Projects .
About MAG Silver Corp.
MAG Silver Corp. is a growth-oriented Canadian mining and exploration company focused on advancing high-grade, district scale precious metals projects in the Americas. MAG is emerging as a top-tier primary silver mining company through its (44%) joint venture interest in the 4,000 tonnes per day Juanicipio Mine, operated by Fresnillo plc (56%). The mine is located in the Fresnillo Silver Trend in Mexico, the world's premier silver mining camp, where in addition to underground mine production and processing of high-grade mineralised material, an expanded exploration program is in place targeting multiple highly prospective targets. MAG is also executing multi-phase exploration programs at the 100% earn-in Deer Trail Project in Utah and the 100% owned Larder Project, located in the historically prolific Abitibi region of Canada.
Neither the Toronto Stock Exchange nor the NYSE American has reviewed or accepted responsibility for the accuracy or adequacy of this press release, which has been prepared by management.
Certain information contained in this release, including any information relating to MAG's future oriented financial information, are "forward-looking information" and "forward-looking statements" within the meaning of applicable Canadian and United States securities legislation (collectively herein referred as "forward-looking statements"), including the "safe harbour" provisions of provincial securities legislation, the U.S. Private Securities Litigation Reform Act of 1995, Section 21E of the U.S. Securities Exchange Act of 1934, as amended and Section 27A of the U.S. Securities Act. Such forward-looking statements include, but are not limited to:
- statements that address maintaining the nameplate 4,000 tpd milling rate at Juanicipio;
- statements that address our expectations regarding exploration and drilling;
- statements regarding production expectations and nameplate;
- statements regarding the expected use of the Credit Facility;
- statements regarding the NCIB and any future purchases to be made thereunder;
- statements regarding the Final Shelf Prospectus;
- statements regarding the additional information from future drill programs;
- estimated future exploration and development operations and corresponding expenditures and other expenses for specific operations;
- the expected capital, sustaining capital and working capital requirements at Juanicipio, including the potential for additional cash calls;
- expected upside from additional exploration;
- expected results from Deer Trail Project drilling;
- expected results from Larder Project at the Fernland, Cheminis, Bear, and Twist zones and other regional targets;
- expected capital requirements and sources of funding; and
- other future events or developments.
When used in this release, any statements that express or involve discussions with respect to predictions, beliefs, plans, projections, objectives, assumptions or future events of performance (often but not always using words or phrases such as "anticipate", "believe", "estimate", "expect", "intend", "plan", "strategy", "goals", "objectives", "project", "potential" or variations thereof or stating that certain actions, events, or results "may", "could", "would", "might" or "will" be taken, occur or be achieved, or the negative of any of these terms and similar expressions), as they relate to the Company or management, are intended to identify forward-looking statements. Such statements reflect the Company's current views with respect to future events and are subject to certain known and unknown risks, uncertainties and assumptions.
Forward-looking statements are necessarily based upon estimates and assumptions, which are inherently subject to significant business, economic and competitive uncertainties and contingencies, many of which are beyond the Company's control and many of which, regarding future business decisions, are subject to change. Assumptions underlying the Company's expectations regarding forward-looking statements contained in this release include, among others: MAG's ability to carry on its various exploration and development activities including project development timelines, the timely receipt of required approvals and permits, the price of the minerals produced, the costs of operating, exploration and development expenditures, the impact on operations of the Mexican tax and legal regimes, MAG's ability to obtain adequate financing, outbreaks or threat of an outbreak of a virus or other contagions or epidemic disease will be adequately responded to locally, nationally, regionally and internationally.
Although MAG believes the expectations expressed in such forward-looking statements are based on reasonable assumptions, such statements are not guarantees of future performance and actual results or developments may differ materially from those in the forward-looking statements. These forward-looking statements involve known and unknown risks, uncertainties and many factors could cause actual results, performance or achievements to be materially different from any future results, performance or achievements that may be expressed or implied by such forward-looking statements including amongst others: commodities prices; changes in expected mineral production performance; unexpected increases in capital costs or cost overruns; exploitation and exploration results; continued availability of capital and financing; general economic, market or business conditions; risks relating to the Company's business operations; risks relating to the financing of the Company's business operations; risks related to the Company's ability to comply with restrictive covenants and maintain financial covenants pursuant to the terms of the Credit Facility; the expected use of the Credit Facility; risks relating to the development of Juanicipio and the minority interest investment in the same; risks relating to the Company's property titles; risks related to receipt of required regulatory approvals; pandemic risks; supply chain constraints and general costs escalation in the current inflationary environment heightened by the invasion of Ukraine by Russia and the events relating to the Israel-Hamas war; risks relating to the Company's financial and other instruments; operational risk; environmental risk; political risk; currency risk; market risk; capital cost inflation risk; risk relating to construction delays; the risk that data is incomplete or inaccurate; the risks relating to the limitations and assumptions within drilling, engineering and socio-economic studies relied upon in preparing economic assessments and estimates, including the updated Technical Report filed on March 27, 2024; as well as those risks more particularly described under the heading "Risk Factors" in the Company's Annual Information Form dated March 27, 2024 available under the Company's profile on SEDAR+ at www.sedarplus.ca .
Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those described herein. This list is not exhaustive of the factors that may affect any of the Company's forward-looking statements. The Company's forward-looking statements are based on the beliefs, expectations and opinions of management on the date the statements are made and, other than as required by applicable securities laws, the Company does not assume any obligation to update forward-looking statements if circumstances or management's beliefs, expectations or opinions should change. For the reasons set forth above, investors should not attribute undue certainty to or place undue reliance on forward-looking statements.
Please Note: Investors are urged to consider closely the disclosures in MAG's annual and quarterly reports and other public filings, accessible through the Internet at www.sedarplus.ca and www.sec.gov .
LEI: 254900LGL904N7F3EL14
For further information on behalf of MAG Silver Corp., please contact Fausto Di Trapani, Chief Financial Officer. Phone: (604) 630-1399 Toll Free: (866) 630-1399 Email: info@magsilver.com
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First Majestic Announces Financial Results for Q2 2024, Increased Silver Inventory, and Quarterly Dividend Payment
First Majestic Silver Corp. (NYSE: AG) (TSX: AG) (FSE: FMV) (the "Company" or "First Majestic") is pleased to announce the Company's unaudited condensed interim consolidated financial results for the second quarter ended June 30, 2024. The full version of the financial statements and the accompanying management's discussion and analysis can be viewed on the Company's website at www.firstmajestic.com or on SEDAR+ at www.sedarplus.ca and on EDGAR at www.sec.govedgar. All amounts are in U.S. dollars unless stated otherwise.
SECOND QUARTER HIGHLIGHTS
Production of 5.3 million silver equivalent ("AgEq") ounces, consisting of 2,104,181 silver ("Ag") ounces and 39,339 gold ("Au") ounces, a 7% and 9% increase, respectively, when compared to Q1 2024. Management anticipates further improvements in the second half ("H2") of the year due to planned higher ore grades and throughput rates.
Quarterly revenues of $136.2 million, compared to $146.7 million in Q2 2023. The 7% decrease in revenue was driven by a 15% decrease in the total number of payable AgEq ounces sold due to higher silver inventory levels held at quarter end, lower production levels at San Dimas and La Encantada, and the temporary suspension of mining activities at Jerritt Canyon in March 2023, partially offset by increased production at Santa Elena and an increase in the average realized silver price.
The Company held 712,539 silver ounces in finished goods inventory as of June 30, 2024, inclusive of coins and bullion. The fair value of this inventory, which is not included in Q2 revenues, as of June 30, 2024 was $20.9 million.
Improved mine operating earnings of $15.5 million compared to $1.1 million in Q2 2023. The year over year increase in mine operating earnings was primarily attributed to an increase in operating earnings from Santa Elena and a decrease in operating losses from Jerritt Canyon, partially offset by higher operating costs at San Dimas and La Encantada.
Operating cash flows before movements in working capital and taxes amounted to $23.8 million.
Consolidated cash costs of $15.29 per AgEq ounce and all-in sustaining costs ("AISC") of $21.64 per AgEq ounce represented an improvement of 2% and a slight increase of 1%, respectively, compared to Q2 2023. Management continues to undertake a series of cost reduction initiatives across the organization aimed at improving efficiencies, and lowering production costs and other expenses while also increasing production.
At the end of the quarter, the Company had a cash and restricted cash balance of $269.7 million consisting of $152.2 million cash and cash equivalents and $117.5 million of restricted cash. Subsequent to the end of the quarter, there was a transfer of $11.0 million from restricted cash to unrestricted cash (see Note 19 in the financial statements for further details).
Declared a cash dividend of $0.0046 per common share for the second quarter of 2024 for shareholders of record as of the close of business on August 16, 2024, to be paid out on or about August 30, 2024.
During the quarter, ramp-up activities continued at First Mint, with new coin presses and laser-engraving equipment received at the facility. Subsequent to the quarter, installation of the equipment has commenced, and the Company expects to launch several new products including coins in the second half of 2024. These added capabilities will increase minting throughput by over 50% and provide new sales channels with an expected increase in retail sales.
OPERATIONAL AND FINANCIAL HIGHLIGHTS
Key Performance Metrics | 2024-Q2 | | | 2024-Q1 | | | Change Q2 vs Q1 | | | 2023-Q2 | | | Change Q2 vs Q2 | |||
Operational | | | | | ||||||||||||
Ore Processed / Tonnes Milled | 674,570 | 588,651 | 15% | 733,170 | (8%) | |||||||||||
Silver Ounces Produced | 2,104,181 | 1,975,176 | 7% | 2,633,411 | (20%) | |||||||||||
Gold Ounces Produced | 39,339 | 35,936 | 9% | 45,022 | (13%) | |||||||||||
Silver Equivalent Ounces Produced | 5,289,439 | 5,162,283 | 2% | 6,320,971 | (16%) | |||||||||||
Cash Costs per Silver Equivalent Ounce(1) | $ | 15.29 | $ | 15.00 | 2% | $ | 15.58 | (2%) | ||||||||
All-in Sustaining Cost per Silver Equivalent Ounce(1) | $ | 21.64 | $ | 21.53 | 1% | $ | 21.52 | 1% | ||||||||
Total Production Cost per Tonne(1) | $ | 113.16 | $ | 128.23 | (12%) | $ | 128.21 | (12%) | ||||||||
Average Realized Silver Price per Silver Equivalent Ounce(1) | $ | 27.81 | $ | 23.72 | 17% | $ | 24.95 | 11% | ||||||||
Financial (in $millions) | ||||||||||||||||
Revenues | $ | 136.2 | $ | 106.0 | 28% | $ | 146.7 | (7%) | ||||||||
Mine Operating Earnings (Loss) | $ | 15.5 | ($0.3 | ) | NM | $ | 1.1 | NM | ||||||||
Net Loss | ($48.3 | ) | ($13.6 | ) | NM | ($17.5 | ) | 175% | ||||||||
Operating Cash Flows before Non-Cash Working Capital and Taxes | $ | 23.8 | $ | 12.6 | 88% | $ | 26.9 | (12%) | ||||||||
Capital Expenditures | $ | 28.3 | $ | 28.2 | 0% | $ | 30.6 | (8%) | ||||||||
Cash and Cash Equivalents | $ | 152.2 | $ | 102.1 | 49% | $ | 160.2 | (5%) | ||||||||
Restricted Cash | $ | 117.5 | $ | 127.2 | (8%) | $ | 146.1 | (20%) | ||||||||
Working Capital(1) | $ | 229.9 | $ | 159.6 | 44% | $ | 237.2 | (3%) | ||||||||
Free Cash Flow(1) | $ | 6.4 | $ | 0.9 | NM | $ | 7.4 | (13%) | ||||||||
Shareholders | ||||||||||||||||
Loss per Share ("EPS") - Basic | ($0.17 | ) | ($0.05 | ) | NM | ($0.06 | ) | (183%) | ||||||||
Adjusted EPS(1) | ($0.07 | ) | ($0.06 | ) | (17%) | ($0.02 | ) | NM |
(1) The Company reports non-GAAP measures which include cash costs per AgEq ounce produced, cash costs per Au ounce produced, all-in sustaining cost per AgEq ounce produced, all-in sustaining cost per Au ounce produced, total production cost per tonne, average realized silver price per AgEq ounce sold, average realized Au price per ounce sold, working capital, adjusted EPS and free cash flow. These measures are widely used in the mining industry as a benchmark for performance, but do not have a standardized meaning under the Company's financial reporting framework and the methods used by the Company to calculate such measures may differ from methods used by other companies with similar descriptions. See "Non-GAAP Measures" below for further details of these measures.
SECOND QUARTER FINANCIAL RESULTS
Revenues generated during the quarter totaled $136.2 million compared to $146.7 million in the second quarter of 2023. The decrease in revenue was primarily attributable to a 15% decrease in the total number of payable AgEq ounces sold due to higher inventory levels held at quarter end, lower production levels at San Dimas and La Encantada, and the temporary suspension of mining activities at Jerritt Canyon in March 2023, partially offset by increased production at Santa Elena and an increase in the average realized silver price.
The Company realized an average selling price of $27.81 per AgEq ounce during the second quarter, representing an 11% increase compared to the second quarter of 2023 and a 17% increase compared to the prior quarter.
Operating cash flows before movements in working capital and taxes in the quarter was $23.8 million compared to $26.9 million in the second quarter of 2023.
The Company reported mine operating earnings of $15.5 million during the quarter compared to $1.1 million in the second quarter of 2023. The improvement in mine operating earnings was primarily attributed to a decrease in operating loss of $46.7 million at Jerritt Canyon compared to the first quarter of 2023 following management's decision to temporarily suspend mining activities at Jerritt Canyon in March 2023.
Net loss for the quarter amounted to $48.3 million (EPS of $(0.17)) compared to $17.5 million (EPS of $(0.06)) in the second quarter of 2023. Adjusted net loss, normalized for non-cash or non-recurring items such as share-based payments, deferred tax expense, unrealized losses on marketable securities and non-recurring write-downs on mineral inventory for the quarter was $20.4 million (adjusted EPS of $(0.07)) compared to $5.5 million (adjusted EPS of $(0.02)) in the second quarter of 2023, mainly driven by a non-cash foreign exchange loss of $11.1 million in the quarter.
As at June 30, 2024, the Company had a cash and restricted cash balance of $269.7 million consisting of $152.2 million of cash and cash equivalents and $117.5 million of restricted cash. Subsequent to the end of the quarter, there was a transfer of $11.0 million from restricted cash to unrestricted cash (see Note 19 in the financial statements for further details).
OPERATIONAL HIGHLIGHTS
The table below represents the quarterly operating and cost performance at each of the Company's three producing mines during the quarter.
Second Quarter Production Summary | Santa Elena | San Dimas | La Encantada | Jerritt Canyon(1) | Consolidated |
Ore Processed / Tonnes Milled | 256,427 | 183,188 | 234,955 | - | 674,570 |
Silver Ounces Produced | 376,947 | 1,141,906 | 585,329 | - | 2,104,181 |
Gold Ounces Produced | 27,176 | 12,043 | 46 | 74 | 39,339 |
Silver Equivalent Ounces Produced | 2,580,497 | 2,114,072 | 589,060 | 5,811 | 5,289,439 |
Cash Costs per Silver Equivalent Ounce(2) | $12.25 | $16.66 | $23.69 | $15.71 | $15.29 |
All-in Sustaining Cost per Silver Equivalent Ounce(2) | $15.07 | $21.78 | $27.87 | $15.71 | $21.64 |
Cash Cost per Gold Ounce(2) | N/A | N/A | N/A | $1,186 | N/A |
All-In Sustaining Costs per Gold Ounce(2) | N/A | N/A | N/A | $1,186 | N/A |
Total Production Cost per Tonne(2) | $107.47 | $193.02 | $57.11 | $- | $113.16 |
(1) Jerritt Canyon was placed on temporary suspension in March 2023. In-circuit recovery efforts performed in Q2 2024 resulted in the production of 74 gold ounces.
(2) See "Non-GAAP Financial Measures" below for further details regarding these measures.
Total production in the second quarter was 5.3 million AgEq ounces consisting of 2.1 million Ag ounces and 39,339 Au ounces, a 7% and 9% increase, respectively, when compared to Q1 2024.
Cash costs for the quarter were $15.29 per AgEq ounce, an improvement of 2% compared to $15.58 per AgEq ounce in the same period last year and $15.00 per AgEq ounce in the previous quarter. The increase in cash costs per ounce was primarily attributable to a 2% decrease in AgEq production mainly at San Dimas. Production at San Dimas was impacted as the mine sequencing transitioned from the Jessica and Victoria veins into the Roberta, Robertita and Elias vein systems which are slightly narrower in nature. In addition, ore flow and processing rates were impacted by union worker slowdowns while negotiations with the National Union continued throughout the second quarter and remain ongoing. Management anticipates improved production and efficiencies in the second half of 2024 once an agreement with the National Union is reached, which is reflected in the Company's updated 2024 guidance plan.
AISC in the second quarter was $21.64 per AgEq ounce compared to $21.52 in the same period last year and $21.53 per AgEq ounce in the previous quarter. The 1% increase in AISC was primarily attributable to higher cash costs.
Capital expenditure in the second quarter totaled $28.3 million, consisting of $13.5 million for underground development, $9.4 million in exploration, and $5.4 million in property, plant and equipment.
Q2 2024 DIVIDEND ANNOUNCEMENT
The Company is pleased to announce that its Board of Directors has declared a cash dividend in the amount of $0.0046 per common share for the second quarter of 2024. The dividend will be paid to holders of record of First Majestic's common shares as of the close of business on August 16, 2024, and will be paid out on or about August 30, 2024.
Under the Company's dividend policy, the quarterly dividend per common share is targeted to equal approximately 1% of the Company's net quarterly revenues divided by the number of the Company's common shares outstanding on the record date.
The amount and distribution dates of future dividends remain at the discretion of the Board of Directors. This dividend qualifies as an "eligible dividend" for Canadian income tax purposes. Dividends paid to shareholders outside Canada (non-resident investors) may be subject to Canadian non-resident withholding taxes.
ABOUT FIRST MAJESTIC
First Majestic is a publicly traded mining company focused on silver and gold production in Mexico and the United States. The Company presently owns and operates the San Dimas Silver/Gold Mine, the Santa Elena Silver/Gold Mine, and the La Encantada Silver Mine as well as a portfolio of development and exploration assets, including the Jerritt Canyon Gold project located in northeastern Nevada, U.S.A.
First Majestic is proud to own and operate its own minting facility, First Mint, LLC, and to offer a portion of its silver production for sale to the public. Bars, ingots, coins and medallions are available for purchase online at www.firstmint.com, at some of the lowest premiums available.
For further information, contact info@firstmajestic.com, visit our website at www.firstmajestic.com or call our toll-free number 1.866.529.2807.
FIRST MAJESTIC SILVER CORP.
"signed"
Keith Neumeyer, President & CEO
Non-GAAP Financial Measures
This news release includes reference to certain financial measures which are not standardized measures under the Company's financial reporting framework. These measures include cash costs per silver equivalent ounce produced, all-in sustaining cost (or "AISC") per silver equivalent ounce produced, cash costs per gold ounce produced, AISC per gold ounce produced, total production cost per tonne, average realized silver price per ounce sold, average realized gold price per ounce sold, working capital, adjusted net earnings and EPS and free cash flow. The Company believes that these measures, together with measures determined in accordance with IFRS, provide investors with an improved ability to evaluate the underlying performance of the Company. These measures are widely used in the mining industry as a benchmark for performance but do not have any standardized meaning prescribed under IFRS, and therefore they may not be comparable to similar measures disclosed by other companies. The data is intended to provide additional information and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with IFRS. For a complete description of how the Company calculates such measures and a reconciliation of certain measures to GAAP terms please see "Non-GAAP Measures" in the Company's most recent management discussion and analysis filed on SEDAR+ at www.sedarplus.ca and EDGAR at www.sec.gov/edgar.
Cautionary Note Regarding Forward Looking Statements
This news release contains "forward‐looking information" and "forward‐looking statements" under applicable Canadian and U.S. securities laws (collectively, "forward‐looking statements"). These statements relate to future events or the Company's future performance, business prospects or opportunities that are based on forecasts of future results, estimates of amounts not yet determinable and assumptions of management made in light of management's experience and perception of historical trends, current conditions and expected future developments. Forward‐looking statements in this news release include, but are not limited to, statements with respect to: improvements in production and efficiencies anticipated in H2 2024 due to planned higher ore grades and throughput rates in H2; and timing for the payment of the Company's cash dividend for the second quarter of 2024. Assumptions may prove to be incorrect and actual results may differ materially from those anticipated. Consequently, guidance cannot be guaranteed. As such, investors are cautioned not to place undue reliance upon guidance and forward‐looking statements as there can be no assurance that the plans, assumptions or expectations upon which they are placed will occur. All statements other than statements of historical fact may be forward‐looking statements. Statements concerning proven and probable mineral reserves and mineral resource estimates may also be deemed to constitute forward‐looking statements to the extent that they involve estimates of the mineralization that will be encountered as and if the property is developed, and in the case of measured and indicated mineral resources or proven and probable mineral reserves, such statements reflect the conclusion based on certain assumptions that the mineral deposit can be economically exploited. Any statements that express or involve discussions with respect to predictions, expectations, beliefs, plans, projections, objectives or future events or performance (often, but not always, using words or phrases such as "seek", "anticipate", "plan", "continue", "estimate", "expect", "may", "will", "project", "predict", "forecast", "potential", "target", "intend", "could", "might", "should", "believe" and similar expressions) are not statements of historical fact and may be "forward‐looking statements".
Actual results may vary from forward‐looking statements. Forward‐looking statements are subject to known and unknown risks, uncertainties and other factors that may cause actual results to materially differ from those expressed or implied by such forward‐looking statements, including but not limited to: the duration and effects of the COVID‐19, and any other pandemics on our operations and workforce, and the effects on global economies and society; general economic conditions including inflation risks; actual results of exploration activities; conclusions of economic evaluations; changes in project parameters as plans continue to be refined; commodity prices; variations in ore reserves, grade or recovery rates; availability of sufficient water for operating purposes; actual performance of plant, equipment or processes relative to specifications and expectations; accidents; labour relations; relations with local communities; changes in national or local governments; changes in applicable legislation or application thereof; delays in obtaining approvals or financing or in the completion of development or construction activities; exchange rate fluctuations; requirements for additional capital; government regulation; environmental risks; reclamation expenses; outcomes of pending litigation; limitations on insurance coverage as well as those factors discussed in the section entitled "Description of the Business ‐ Risk Factors" in the Company's most recently filed AIF, available under the Company's profile on SEDAR+ at www.sedarplus.ca, and as an exhibit to the Company's most recently filed Form 40‐F available on EDGAR at www.sec.gov/edgar. Although First Majestic has attempted to identify important factors that could cause actual results to differ materially from those contained in forward‐looking statements, there may be other factors that cause results not to be as anticipated, estimated or intended.
The Company believes that the expectations reflected in these forward-looking statements are reasonable, but no assurance can be given that these expectations will prove to be correct and such forward-looking statements included herein should not be unduly relied upon. These statements speak only as of the date hereof. The Company does not intend, and does not assume any obligation, to update these forward-looking statements, except as required by applicable laws.
To view the source version of this press release, please visit https://www.newsfilecorp.com/release/218501
News Provided by Newsfile via QuoteMedia
June 2024 Quarterly Activities Report
Exciting new targets identified at Browns Reef, with drilling imminent; Co-funding grant awarded for IP survey at Arunta
Eastern Metals Limited (ASX: EMS) (“Eastern Metals” or “the Company”) is pleased to present its Quarterly Report for the period ending 30 June 2024.
- Field work programs identify new strongly anomalous base metal zones at Browns Reef to the north and south of the high-grade Evergreen zone.
- A Reverse Circulation (RC) drilling program has been designed to test these anomalous zones, which have been named ‘Kelpie Hill’ and ‘Windmill Dam’.
- Drilling approvals in place and drill contract awarded, with drilling scheduled to commence in the coming weeks.
- Approvals are also in place for further diamond drilling at the high-grade Evergreen zone.
Arunta Project, NT
- Co-funding grant of up to $100,000 secured through the NT’s Geophysics and Drilling Collaborations Program, Round 17, under the ‘Innovative Targeting’ category.
- Funding will support the completion of an Induced Polarisation (IP) survey at the Arunta Project to generate drill targets along strike from Home of Bullion with its 3.1Mt @ 2.9% CuEq JORC resource.
- The area offers strong potential for the discovery of additional high-grade structurally controlled Volcanic Massive Sulphide-style lodes.
Corporate
- Completion of a successful ~$1M share placement, with funds to accelerate exploration activities across the Company’s highly prospective copper and base metals portfolio.
- Binding agreement to sell the Thomson Project in NSW to Legacy Minerals Holdings Ltd (ASX:LGM) for $200,000 in cash plus a 1.5% royalty. The cash sale allows Eastern Metals to focus its funds and human resources on the exploration of the Cobar and Arunta Projects.
Eastern Metals CEO, Ley Kingdom, said: “The June Quarter has been an exciting period for the Company, with field work programs at our Cobar Project in NSW identifying two high-priority targets to the north and south of the known high-grade mineralisation at Evergreen. Both targets are located along the highly prospective Woorara Fault, with the potential that they may define multiple mineralised zones that extend over about 2.5km from Pineview in the south to the new Kelpie Hill target in the north. Planning and approvals for an RC drilling campaign to test this theory are complete, with drilling expected to kick off in August.
“We were also delighted to receive a co-funding grant from the Northern Territory government to support the completion of an Induced Polarisation survey at the Arunta Project to help define drill targets along strike from Home of Bullion.
“With exploration programs at both the Cobar and Arunta Projects ramping up, we reached agreement during the Quarter to divest the Thomson Project in NSW to Legacy Minerals, providing Eastern Metals with an all-cash consideration of $200,000 plus a 1.5% NSR, while enabling us to prioritise our efforts on the more advanced assets within our portfolio.
“The sale of the Thomson Project, together with a successful $1 million strategic share placement completed during the Quarter, ensure the Company is well positioned to accelerate its exploration programs in both NSW and the NT.”
Click here for the full ASX Release
This article includes content from Eastern Metals, licensed for the purpose of publishing on Investing News Australia. This article does not constitute financial product advice. It is your responsibility to perform proper due diligence before acting upon any information provided here. Please refer to our full disclaimer here.
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