
MAG Silver Corp. (TSX:MAG) (NYSE American: MAG) announces the Company’s unaudited financial results for the three months ended March 31, 2023. For details of the unaudited condensed interim consolidated financial statements and Management’s Discussion and Analysis for the three months ended March 31, 2023, please see the Company’s filings on SEDAR (www.sedar.com) or on EDGAR (www.sec.gov).
All amounts herein are reported in $000s of United States dollars (“US$”) unless otherwise specified (C$ refers to Canadian dollars).
KEY HIGHLIGHTS (on a 100% basis unless otherwise noted)
OPERATIONAL (on a 100% basis unless otherwise noted)
CORPORATE
EXPLORATION
JUANICIPIO PROJECT UPDATE
Underground Mine Production
With the Juanicipio plant now in the ramp-up phase, excess mineralized material from the Juanicipio Project continues to be campaign processed, subject to capacity availability, at the nearby Saucito and Fresnillo plants (both 100% owned by Fresnillo). Metals are refined and sold on commercial terms under long-term off-take agreements with an affiliate of Fresnillo.
In the three months ended March 31, 2023, a total of 222,023 tonnes of mineralized development and stope material were processed through the Juanicipio, Saucito and Fresnillo plants. The resulting payable metals sold and associated processing details are summarized in Table 1 below. The sales and treatment charges for tonnes processed in Q1 2023 were recorded on a provisional basis and will be adjusted in the second quarter of 2023 based on final assay and pricing adjustments in accordance with the offtake contracts
Table 1: Mineralized Material Processed at Juanicipio, Saucito and Fresnillo Plants (100% basis)
Three Months Ended March 31, 2023 (222,023 tonnes processed) | Q1 2022 Amount $ |
|||||
Payable Metals | Quantity | Average Per Unit $ |
Amount $ |
|||
Silver | 2,000,974 ounces | 22.93 per oz | 45,875 | 55,899 | ||
Gold | 5,291 ounces | 1,959.50 per oz | 10,367 | 10,291 | ||
Lead | 1,281 tonnes | 0.94 per lb. | 2,661 | 2,483 | ||
Zinc | 1,656 tonnes | 1.43 per lb. | 5,208 | 5,712 | ||
TCRCs and other processing costs | (12,629) | (9,469) | ||||
Net Revenue | 51,482 | 64,916 | ||||
Production and transportation costs | (27,378) | (15,264) | ||||
Depreciation and amortization(1) | (7,955) | (3,431) | ||||
Gross Profit | 16,149 | 46,221 |
(1) The underground mine is now in stopes with mineralized development and stope material being processed through the Juanicipio, Saucito and Fresnillo plants and refined and sold. The mine was considered readied for its intended use on January 1, 2022.
The average silver head grade for the mineralized development and stope material processed in the three months ended March 31, 2023 was 363 g/t (three months ended March 31, 2022: 597 g/t). The lower head grade was a direct result of the processing of lower grade stockpiles which were earmarked for the commissioning of the Juanicipio processing facility. Mining operations continue to perform as planned and will ramp up high grade feed as the Juanicipio plant approaches commercial production and recovery rates are in line with design. Over the course of Q1 2023 the Juanicipio plant delivered recovery rates averaging 84% for silver, slightly above expectations at this stage of the commissioning.
Processing Plant Construction & Outlook
Commissioning commenced in early January 2023 with feed of lower grade mineralized material to the grinding mills. Juanicipio produced and shipped its first commercial lead and zinc concentrates in March 2023 and has commenced regular concentrate shipments. Processing of higher-grade material has commenced in April with commensurate improvements in silver recovery and associated concentrate grades.
With the plant now in the commissioning and ramp-up phase, final project capital costs are winding down as Juanicipio approaches full commercial production. Additional funding requirements related to market conditions, delayed ramp up to nameplate capacity, tax payments or additional sustaining capital in excess of the operating cash flow generated is expected to be funded by further cash calls required from Fresnillo and MAG.
FINANCIAL RESULTS – THREE MONTHS ENDED MARCH 31, 2023
As at March 31, 2023, MAG had working capital of $53,998 (December 31, 2022: $29,232) including cash of $54,613 (December 31, 2022: $29,955) and no long-term debt. As well, as at March 31, 2023, Juanicipio had a working capital of $48,351 including cash of $8,454 (MAG’s attributable share is 44%).
The Company’s net income for the three months ended March 31, 2023 amounted to $4,713 (March 31, 2022: $2,680) or $0.05/share (March 31, 2022: $0.03/share). MAG recorded its 44% income from equity accounted investment in Juanicipio of $7,919 (March 31, 2022: $13,762) which included MAG’s 44% share of net income from the sale of pre-production development and stope material as well as loan interest earned on loans advanced to Juanicipio (see Table 2 below).
Table 2: MAG’s share of income from its equity accounted Investment in Juanicipio
Three months ended | ||||
March 31, | March 31, | |||
2023 | 2022 | |||
$ | $ | |||
Gross profit from processing mineralized development material (see Underground Mine Production – Juanicipio Project above) | 16,149 | 46,221 | ||
Consulting and administrative expenses | (1,499) | (1,532) | ||
Extraordinary mining duty | (520) | (103) | ||
Exchange losses, interest expenses, and other | (6,680) | (821) | ||
Net income before tax | 7,450 | 43,765 | ||
Income tax benefit (expense) | 6,731 | (12,487) | ||
Net income for the period (100% basis) | 14,181 | 31,278 | ||
MAG’s 44% share of income | 6,240 | 13,762 | ||
Interest on loans advanced to Juanicipio – MAG 44% | 1,679 | – | ||
MAG’s 44% share of income from equity accounted Investment in Juanicipio | 7,919 | 13,762 |
Qualified Person: All scientific or technical information in this press release including assay results referred to, and Mineral Resource estimates, if applicable, is based upon information prepared by or under the supervision of, or has been approved by Dr. Peter Megaw, Ph.D., C.P.G., a Certified Professional Geologist who is a “Qualified Person” for purposes of National Instrument 43-101, Standards of Disclosure for Mineral Projects (“National Instrument 43-101” or “NI 43-101”). Dr. Megaw is not independent as he is an officer and a paid consultant of MAG.
About MAG Silver Corp.
MAG Silver Corp. is a growth-oriented Canadian development and exploration company focused on becoming a top-tier primary silver mining company by exploring and advancing high-grade, district scale, precious metals projects in the Americas. Its principal focus and asset is the 4,000 tonnes per day Juanicipio Project (44%), operated by Fresnillo Plc (56%). The project 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 mineralized material, an expanded exploration program is in place targeting multiple highly prospective targets. MAG is also executing multi-phase exploration programs at the Deer Trail 100% earn-in Project in Utah and the Larder Lake Project, located in the historically prolific Abitibi region of Canada.
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