MAG Silver Corp. (TSX:MAG) (NYSE American: MAG) announces the Company’s unaudited consolidated financial results for the three months ended September 30, 2024. For details of the unaudited condensed interim consolidated financial statements of the Company for the three and nine months ended September 30, 2024 and management’s discussion and analysis for the three and nine months ended September 30, 2024, 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).
All amounts herein are reported in $000s of United States dollars unless otherwise specified (C$ refers to thousands of Canadian dollars).
KEY HIGHLIGHTS FOR Q3 2024 (on a 100% basis unless otherwise noted)
CORPORATE
EXPLORATION
_________________________________
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 Q3 2024 MD&A for a detailed reconciliation of these measures to the Q3 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 September 30, 2024 realized prices: $30.16/oz silver, $2,587.65/oz gold, $0.91/lb lead and $1.29/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 publication and are not incorporated into this publication 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 September 30, 2024 and 2023, unless otherwise noted.
Key mine performance data of Juanicipio (100% basis) | Three months ended | |||
September 30, | September 30, | |||
2024 | 2023 | |||
Metres developed (m) | 3,278 | 4,105 | ||
Material mined (t) | 331,194 | 297,575 | ||
Material processed (t) | 332,290 | 322,249 | ||
Silver head grade (g/t) | 481 | 523 | ||
Gold head grade (g/t) | 1.32 | 1.32 | ||
Lead head grade (%) | 1.58 | % | 1.33 | % |
Zinc head grade (%) | 2.83 | % | 2.25 | % |
Equivalent silver head grade (g/t) (1) | 735 | 760 | ||
Silver ounces sold (koz) | 4,462 | 4,289 | ||
Gold ounces sold (koz) | 9.12 | 7.76 | ||
Lead pounds sold (klb) | 9,984 | 7,603 | ||
Zinc pounds sold (klb) | 15,426 | 9,596 | ||
Equivalent silver ounces sold (koz) (2) | 6,204 | 5,710 | ||
(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 September 30, 2024 realized prices: $30.16/oz silver, $2,587.65/oz gold, $0.91/lb lead and $1.29/lb zinc (three months ended September 30, 2023 realized prices: $23.51/oz silver, $1,911.99/oz gold, $1.00/lb lead and $1.15/lb zinc). |
During the three months ended September 30, 2024, a total of 331,194 tonnes of ore were mined. This represents an increase of 11% over Q3 2023. Increases in mined tonnages at Juanicipio have been driven by the operational ramp-up of the mine towards steady state mining and milling targets.
During the three months ended September 30, 2024, a total of 332,290 tonnes of ore were processed through the Juanicipio plant. The 3% increase over Q3 2023 was mainly attributable to the Juanicipio plant operating at nameplate per operating day during 2024.
The silver head grade and equivalent silver head grade for the ore processed in the three months ended September 30, 2024 was 481 g/t and 735 g/t, respectively (three months ended September 30, 2023: 523 g/t and 760 g/t, respectively). The higher silver head grade and lower lead and zinc head grades in Q3 2023 were the result of processing ore from the upper levels of the mine, characterized by higher silver grade, compared to deeper areas in Q3 2024. Silver metallurgical recovery during the three months ended September 30, 2024 was 95% (three months ended September 30, 2023: 88%) reflecting the commencement of commercial pyrite and gravimetric concentrate production during Q2 2024 delivering incremental silver and gold recovery paired with ongoing optimizations in the processing plant.
The following table provides a summary of the total cash costs and all-in sustaining costs of Juanicipio for the three months ended September 30, 2024, and 2023.
Key mine performance data of Juanicipio (100% basis) | Three months ended | |||
September 30, | September 30, | |||
2024 | 2023 | |||
Total cash costs (1) | (555 | ) | 20,067 | |
Cash cost per silver ounce sold ($/oz) (1) | (0.12 | ) | 4.68 | |
Cash cost per equivalent silver ounce sold ($/oz) (1) | 8.38 | 9.37 | ||
All-in sustaining costs (1) | 14,631 | 39,411 | ||
All-in sustaining cost per silver ounce sold ($/oz) (1) | 3.28 | 9.19 | ||
All-in sustaining cost per equivalent silver ounce sold ($/oz) (1) | 10.83 | 12.75 | ||
(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 Q3 2024 MD&A for a detailed reconciliation of these measures to the Q3 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 September 30, 2024 realized prices: $30.16/oz silver, $2,587.65/oz gold, $0.91/lb lead and $1.29/lb zinc (three months ended September 30, 2023 realized prices: $23.51/oz silver, $1,911.99/oz gold, $1.00/lb lead and $1.15/lb zinc). |
Financial Results
The following table presents excerpts of the financial results of Juanicipio for the three months ended September 30, 2024 and 2023.
Three months ended | ||||
September 30, | September 30, | |||
2024 | 2023 | |||
$ | $ | |||
Sales | 176,393 | 125,046 | ||
Cost of sales: | ||||
Production cost | (38,596 | ) | (43,782 | ) |
Depreciation and amortization | (23,440 | ) | (21,646 | ) |
Gross profit | 114,357 | 59,618 | ||
Consulting and administrative expenses | (2,497 | ) | (3,458 | ) |
Extraordinary mining and other duties | (2,810 | ) | (1,635 | ) |
Interest expense | (1,839 | ) | (5,214 | ) |
Exchange gains (losses) and other | 1,961 | 420 | ||
Net income before tax | 109,172 | 49,731 | ||
Income tax expense | (52,937 | ) | (23,824 | ) |
Net income (100% basis) | 56,235 | 25,907 | ||
MAG’s 44% portion of net income | 24,743 | 11,399 | ||
Interest on Juanicipio loans – MAG’s 44% | 809 | 2,293 | ||
MAG’s 44% equity income | 25,552 | 13,692 |
Sales increased by $51,348 during the three months ended September 30, 2024, mainly due to 26% higher realized metal prices and 13% higher metal volumes.
Production costs decreased by $5,186 due to Juanicipio depleting higher-cost stockpiles in Q3 2023 ($2,085), resulting from the operational ramp-up and processing facility commissioning in the first half of 2023, and lower mining, milling and general and administrative expenses (“G&A expenses”) ($3,101).
Depreciation increased by $1,794 impacted by an increased depreciable asset cost base as the Juanicipio mill achieved commercial production and commenced depreciating the processing facility and associated equipment in June 2023. In addition, Juanicipio processed 3% more tonnes during Q3 2024, impacting units of production depreciation.
Cash operating margin increased from 65% to 78%, mainly due to positive commodity price movements, reduced operating costs, as well as operational leverage.
Other expenses decreased by $4,701 mainly as a result of lower consulting and administrative expenses ($960), higher exchange gains ($1,542) and lower interest expense ($3,375) as Juanicipio reduced its outstanding shareholder loans balance by $223,192 ($206,712 loan repayments and $16,480 converted to equity) over the course of September 2023 to September 2024, offset by higher selling costs and other duties ($1,176) which were impacted by the commencement of commercial pyrite and gravimetric concentrate production during Q2 2024.
Taxes increased by $29,113 mainly due to higher taxable profits generated during Q3 2024, as well as non-cash deferred tax charges on fixed assets driven by a weakening in the Mexican peso versus the US dollar.
Gross Profit from Ore Processed at Juanicipio Plant (100% basis)
Three Months Ended September 30, 2024 (332,290 tonnes processed) | Three Months Ended September 30, 2023 Amount $ |
|||||||
Metals Sold | Quantity | Average Price $ |
Amount $ |
|||||
Silver | 4,461,644 ounces | 30.16 per oz | 134,580 | 100,841 | ||||
Gold | 9,118 ounces | 2,588 per oz | 23,594 | 14,839 | ||||
Lead | 4,529 tonnes | 0.91 per lb. | 9,067 | 7,571 | ||||
Zinc | 6,997 tonnes | 1.29 per lb. | 19,885 | 11,005 | ||||
Treatment, refining, and other processing costs (1) | (10,733 | ) | (9,211 | ) | ||||
Sales | 176,393 | 125,046 | ||||||
Production cost | (38,596 | ) | (43,782 | ) | ||||
Depreciation and amortization | (23,440 | ) | (24,646 | ) | ||||
Gross Profit | 114,357 | 59,618 |
(1) | Q3 2023 includes toll milling costs from processing mineralized material at the Saucito plant. |
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 SEPTEMBER 30, 2024
As at September 30, 2024, MAG had working capital of $113,657 (December 31, 2023: $67,262) including cash of $113,491 (December 31, 2023: $68,707) and no long-term debt. As well, as at September 30, 2024, Juanicipio had working capital of $187,234 including cash of $96,782 (MAG’s attributable share is 44%).
The Company’s net income for the three months ended September 30, 2024 amounted to $22,292 (September 30, 2023: $8,862) or $0.22/share (September 30, 2023: $0.09/share). MAG recorded its 44% income from equity accounted investment in Juanicipio of $25,552 (September 30, 2023: $13,692) 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 | ||||
September 30, | September 30, | |||
2024 | 2023 | |||
$ | $ | |||
Income from equity accounted investment in Juanicipio | 25,552 | 13,692 | ||
General and administrative expenses | (3,529 | ) | (4,094 | ) |
General exploration and business development | (138 | ) | (468 | ) |
Operating Income | 21,885 | 9,130 | ||
Interest income | 1,336 | 663 | ||
Other income | 533 | 269 | ||
Financing costs | (211 | ) | – | |
Foreign exchange loss | (41 | ) | (192 | ) |
Income before income tax | 23,502 | 9,870 | ||
Deferred income tax expense | (1,210 | ) | (1,008 | ) |
Net income | 22,292 | 8,862 |
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 Q3 2024 Financial Statements.
Three months ended September 30, | ||||
(in thousands of US$, except per ounce amounts) | 2024 | 2023 | ||
Production cost as reported | 38,596 | 43,782 | ||
Depreciation on inventory movements | (147 | ) | (1,145 | ) |
Adjusted production cost | 38,448 | 42,637 | ||
Treatment, refining, and other processing costs | 10,733 | 9,211 | ||
By-product revenues (2) | (52,546 | ) | (33,415 | ) |
Extraordinary mining and other duties | 2,810 | 1,635 | ||
Total cash costs (1) | (555 | ) | 20,067 | |
Add back by-product revenues (2) | 52,546 | 33,415 | ||
Total cash costs for equivalent silver (1) | 51,992 | 53,482 | ||
Silver ounces sold | 4,461,644 | 4,288,747 | ||
Equivalent silver ounces sold (3) | 6,203,678 | 5,709,900 | ||
Cash cost per silver ounce sold ($/ounce) | (0.12 | ) | 4.68 | |
Cash cost per equivalent silver ounce sold ($/ounce) | 8.38 | 9.37 |
(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 September 30, 2024 realized prices: $30.16/oz silver, $2,587.65/oz gold, $0.91/lb lead and $1.29/lb zinc (three months ended September 30, 2023 realized prices: $23.51/oz silver, $1,911.99/oz gold, $1.00/lb lead and $1.15/lb zinc). |
The following table provides a reconciliation of AISC of Juanicipio to production cost and various operating expenses of Juanicipio on a 100% basis (the nearest IFRS measure), as presented in the notes to the Q3 2024 Financial Statements.
Three months ended September 30, | ||||
(in thousands of US$, except per ounce amounts) | 2024 | 2023 | ||
Total cash costs | (555 | ) | 20,067 | |
General and administrative expenses | 2,497 | 3,458 | ||
Exploration | 2,728 | 2,059 | ||
Sustaining capital expenditures | 9,676 | 13,604 | ||
Sustaining lease payments | 232 | 174 | ||
Interest on lease liabilities | (13 | ) | (15 | ) |
Accretion on closure and reclamation costs | 66 | 64 | ||
All-in sustaining costs (1) | 14,631 | 39,411 | ||
Add back by-product revenues (2) | 52,546 | 33,415 | ||
All-in sustaining costs for equivalent silver (1) | 67,177 | 72,827 | ||
Silver ounces sold | 4,461,644 | 4,288,747 | ||
Equivalent silver ounces sold (3) | 6,203,678 | 5,709,900 | ||
All-in sustaining cost per silver ounce sold ($/ounce) | 3.28 | 9.19 | ||
All-in sustaining cost per equivalent silver ounce sold ($/ounce) | 10.83 | 12.75 | ||
Average realized price per silver ounce sold ($/ounce) | 30.16 | 23.51 | ||
All-in sustaining margin ($/ounce) | 26.88 | 14.32 | ||
All-in sustaining margin ($/equivalent ounce) | 19.34 | 10.76 | ||
All-in sustaining margin | 119,949 | 61,430 |
(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 September 30, 2024 realized prices: $30.16/oz silver, $2,587.65/oz gold, $0.91/lb lead and $1.29/lb zinc (three months ended September 30, 2023 realized prices: $23.51/oz silver, $1,911.99/oz gold, $1.00/lb lead and $1.15/lb zinc). |
For the three months ended September 30, 2024 the Company incurred corporate G&A expenses of $3,429 (three months ended September 30, 2023: $3,961), which exclude depreciation expense.
The Company’s attributable silver ounces sold and equivalent silver ounces sold for the three months ended September 30, 2024 were 1,963,123 and 2,729,618 respectively (three months ended September 30, 2023: 1,887,049 and 2,512,356 respectively), resulting in additional all‐in sustaining cost for the Company of $1.75/oz and $1.26/oz respectively (three months ended September 30, 2023: $2.10/oz and $1.58/oz respectively), in addition to Juanicipio’s all-in-sustaining costs presented in the above table.
The following table provides a reconciliation of EBITDA and Adjusted EBITDA attributable to the Company based on its economic interest in Juanicipio to net income (the nearest IFRS measure) of the Company per the Q3 2024 Financial Statements. All adjustments are shown net of estimated income tax.
Three months ended September 30, | ||||
(in thousands of US$) | 2024 | 2023 | ||
Net income after tax | 22,292 | 8,862 | ||
Add back (deduct): | ||||
Taxes | 1,210 | 1,008 | ||
Depreciation and depletion | 100 | 133 | ||
Finance costs (income and expenses) | (1,617 | ) | (740 | ) |
EBITDA (1) | 21,985 | 9,263 | ||
Add back (deduct): | ||||
Adjustment for non-cash share-based compensation | 991 | 822 | ||
Share of net earnings related to Juanicipio | (25,552 | ) | (13,692 | ) |
MAG attributable interest in Junicipio Adjusted EBITDA | 58,296 | 33,527 | ||
Adjusted EBITDA (1) | 55,720 | 29,920 |
(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 Q3 2024 Financial Statements.
Three months ended September 30, | ||||
(in thousands of US$) | 2024 | 2023 | ||
Cash flow from operating activities | 109,836 | 57,271 | ||
Less: | ||||
Cash flow used in investing activities | (12,656 | ) | (16,524 | ) |
Sustaining lease payments | (232 | ) | (174 | ) |
Juanicipio free cash flow (1) | 96,948 | 40,573 |
(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.
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