MAG Silver Corp. (TSX and NYSE AMERICAN: MAG)
(“MAG” or the
“Company”) announces the
Company’s unaudited financial results for the three and nine months
ended September 30, 2018. For details of the September 30, 2018
unaudited condensed interim consolidated Financial Statements and
Management's Discussion and Analysis, 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.
HIGHLIGHTS - SEPTEMBER 30,
2018
- 5,159 metres of underground development realized in the nine
months ended September 30, 2018, accounting for 32% of the total
underground development advanced on the Juanicipio Project to
date.
- Over 16 kilometres (10 miles) of total underground development
at Juanicipio has now been achieved.
- The Company advanced $8,470 to Minera Juanicipio in the quarter
ended September 30, 2018, representing its 44% share of a $19,250
cash call to fund ongoing development and exploration expenditures
on the property.
- Current project development is focused on:
- advancing three internal spiral footwall ramps at depth to
access the full strike length of the Valdecañas Vein system;
- excavating and constructing the underground crushing
chamber;
- advancing the conveyor ramp to the planned mill site (the box
cut for the underground conveyor exit portal is well advanced and
approximately 450 metres of the underground conveyor ramp is also
complete);
- integrating additional ventilation and other associated
underground infrastructure; and,
- progressing the construction of surface infrastructure
facilities.
- Detailed engineering continues for the internal shaft and other
mine infrastructure, and mill-site preparation is
underway.
- The Joint Venture Partners are currently reviewing an
Engineering, Procurement and Construction Management (“EPCM”)
agreement for the construction of the process plant and associated
surface infrastructure, and an Operator Services agreement which
will become effective upon commercial production being
achieved.
- Fresnillo recently reiterating production to start-up by
mid-2020, and is in discussion with suppliers to order long lead
time equipment.
- Exploration drilling continued throughout the quarter and
approximately 48 holes representing 46,060 metres of drilling is
now complete with assays pending:
- Program designed to convert Inferred Resources in the Deep Zone
into Indicated Resources, and to further trace the Deep Zone
laterally and to depth; and,
- Program designed to pursue other high priority drill targets
within the Juanicipio property on the western extension of the
Juanicipio Vein.
- MAG is well funded with cash and cash equivalents totaling
$141,776 as at September 30, 2018.
A photo gallery of current progress on the
Juanicipio development is available at
http://www.magsilver.com/s/PhotoGallery.asp
George Paspalas, President and CEO, commented,
“We continue to enjoy watching the consistent advancement of the
Juanicipio project. I encourage our shareholders to
visit our website to view pictures of the ongoing
development. The current drill program to flesh out the
Valdecañas Deep Zone has been completed and we are starting to work
through the results. As always, the joint venture continues to
focus on exploring the balance of the property where many highly
prospective targets still remain to be drilled. It is worth
remembering that the joint venture has only worked on a very small
area of the property.”
Juanicipio Project Update
Total Juanicipio Project expenditures incurred
and capitalized directly by Minera Juanicipio (on a 100% basis) for
the three and nine months ended September 30, 2018 amounted to
approximately $11,301 and $29,795 respectively (September 30, 2017:
$6,962 and $24,540 respectively).
Underground and other development actively
continues on site with emphasis on: developing the three internal
spiral footwall ramps at depth to access the full strike length of
the Valdecañas Vein system; excavating and constructing the
underground crushing chamber; advancing the conveyor ramp to the
planned mill site (with the box cut for the underground conveyor
exit portal already well advanced); integrating additional
ventilation and other associated underground infrastructure, and
progressing the construction of surface infrastructure facilities.
As well, according to the operator, Fresnillo, discussions with
suppliers of long-term delivery equipment and construction
contractors have been initiated.
As well, the partners of Minera Juanicipio are
currently reviewing a draft EPCM agreement which defines the
specific terms by which Fresnillo will oversee the construction of
the process plant and associated surface infrastructure. An
Operator Services agreement is also under review by the partners
which will become effective upon commercial production being
achieved.
Drilling of the Deep Zone has continued under
the current exploration drill program and the Zone effectively
remains open to depth and laterally along its entire strike length
in both directions to the Joint Venture boundaries. Ongoing
drilling is designed with the intention to both convert the
Inferred Resources included in the 2017 PEA into Indicated
Resources, and to further trace the Deep Zone laterally and to
depth.
In the quarter ended September 30, 2018,
drilling also commenced on the western extension of the Juanicipio
Vein as part of the exploration program to pursue other high
priority drill targets within the Juanicipio property.
Exploration drilling under the current drill
program now totals approximately 46,060 metres of completed
drilling with all assays pending.
FINANCIAL RESULTS – THREE AND NINE
MONTHS ENDED SEPTEMBER 30, 2018
As at September 30, 2018, the Company had
working capital of $141,865 (September 30, 2017: $124,883)
including cash and cash equivalents of $141,776 (September 30,
2017: $121,638). The Company currently has no debt and
believes it has sufficient working capital to maintain all of its
properties and currently planned programs for a period in excess of
the next year. The Company makes cash advances to Minera
Juanicipio as 'cash called' by the operator, Fresnillo, based on
approved joint venture budgets. In the three and nine months ended
September 30, 2018, the Company funded cash advances to Minera
Juanicipio, which combined with MAG's Juanicipio expenditures on
its own account, totaled $8,542 and $14,387 respectively (September
30, 2017: $1,690 and $12,534 respectively).
The Company’s net income for the three months
ended September 30, 2018 was $597 (September 30, 2017: $786 net
loss) or $0.01/share (September 30, 2017: $(0.01)/share). The
Company’s net loss for the nine months ended September 30, 2018 was
$1,973 (September 30, 2017: $2,420) or $(0.02)/share (September 30,
2017: $(0.03)/share). The net income in the three months
ended September 30, 2018 is primarily because of the recognition of
a significant deferred tax recovery of $878 (September 30, 2017:
nil). The deferred tax recovery related to the impact of
foreign exchange on Mexican tax attributes (resulting from the Peso
strengthening against the $US in quarter). The deferred tax
recovery is a non-cash item and will only materialize once the
Company’s exploration properties are developed and in
production.
Qualified Person - Unless
otherwise specifically noted herein, all scientific or technical
information in this news release, including assay results and
reserve 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 the
Company.
About MAG Silver Corp.
(www.magsilver.com ) MAG Silver Corp. is a Canadian
exploration and development company focused on becoming a top-tier
primary silver mining company, by exploring and advancing
high-grade, district scale, silver-dominant projects in the
Americas. Our principal focus and asset is the Juanicipio Property
(44%), being developed in partnership with Fresnillo plc (56%) and
is located in the Fresnillo Silver District in Mexico, the world’s
premier silver mining camp. We are presently developing the
underground infrastructure on the property, under the operational
expertise of our joint venture partner, Fresnillo plc, to support
an expected 4,000 tonnes per day mining operation. As well,
we have an expanded exploration program in place investigating
other highly prospective targets across the property. In
addition, we continue to work on regaining surface access to our
100% owned Cinco de Mayo property in Mexico while we seek other
high grade, district scale opportunities.
On behalf of the Board ofMAG SILVER
CORP.
"Larry Taddei"
Chief Financial Officer
For further information on behalf of MAG Silver Corp.
Contact Michael J. Curlook, VP Investor
Relations and Communications |
Website:Phone:Toll free: |
www.magsilver.com(604) 630-1399(866) 630-1399 |
Email:Fax: |
info@magsilver.com(604) 681-0894 |
Neither the Toronto Stock Exchange nor the NYSE
American Stock Exchange have reviewed or accepted responsibility
for the accuracy or adequacy of this press release, which has been
prepared by management.
This release includes certain statements that
may be deemed to be “forward-looking statements” within the meaning
of the US Private Securities Litigation Reform Act of 1995 and
applicable Canadian Securities laws. All statements in this
release, other than statements of historical facts are forward
looking statements, including the anticipated time and capital
schedule to production; expectations on the approval of the
development of the project; estimated project economics, including
but not limited to, mill recoveries, payable metals produced,
production rates, payback time, capital and operating and other
costs, IRR and mine plan; expected upside from additional
exploration; expected capital requirements and adequacy of current
working capital for the next year; and other future events or
developments. Forward-looking statements are often, but not always,
identified by the use of words such as "seek", "anticipate",
"plan", "continue", "estimate", "expect", "may", "will", "project",
"predict", "potential", "targeting", "intend", "could", "might",
"should", "believe" and similar expressions. These statements
involve known and unknown risks, uncertainties and other factors
that may cause actual results or events to differ materially from
those anticipated in such forward-looking statements.
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. Factors that could cause actual results
to differ materially from those in forward-looking statements
include, but are not limited to, changes in
commodities prices; changes in expected mineral
production performance; unexpected increases in capital costs;
exploitation and exploration results; continued availability of
capital and financing; differing results and recommendations in the
Feasibility Study; and general economic, market or business
conditions. In addition, forward-looking statements are
subject to various risks, including but not limited to operational
risk; political risk; currency risk; capital cost inflation risk;
that data is incomplete or inaccurate; the limitations and
assumptions within drilling, engineering and socio-economic studies
relied upon in preparing the PEA; and market risks. The reader
is referred to the Company’s filings with the SEC and Canadian
securities regulators for disclosure regarding these and other risk
factors. There is no certainty that any forward-looking statement
will come to pass and investors should not place undue reliance
upon forward-looking statements. The Company does not undertake to
provide updates to any of the forward-looking statements in this
release, except as required by law.
This news release presents certain financial
performance measures, including all in sustaining costs (AISC),
cash cost and total cash cost that are not recognized measures
under IFRS. This data may not be comparable to data presented by
other silver producers. The Company believes that these generally
accepted industry measures are realistic indicators of operating
performance and are useful in allowing comparisons between periods.
Non-GAAP financial performance measures should be considered
together with other data prepared in accordance with IFRS. This
news release contains non-GAAP financial performance measure
information for a project under development incorporating
information that will vary over time as the project is developed
and mined. It is therefore not practicable to reconcile these
forward-looking non-GAAP financial performance measures.
Cautionary Note to Investors Concerning
Estimates of Indicated Resources
This press release uses the term "Indicated
Resources". MAG advises investors that although this term is
recognized and required by Canadian regulations (under National
Instrument 43-101 - Standards of Disclosure for Mineral Projects),
the U.S. Securities and Exchange Commission does not recognize this
term. Investors are cautioned not to assume that any part or all of
mineral deposits in this category will ever be converted into
reserves.
Cautionary Note to Investors Concerning
Estimates of Inferred Resources
This press release uses the term "Inferred
Resources". MAG advises investors that although this term is
recognized and required by Canadian regulations (under National
Instrument 43-101 Standards of Disclosure for Mineral Projects),
the U.S. Securities and Exchange Commission does not recognize this
term. Investors are cautioned not to assume that any part or all of
the mineral deposits in this category will ever be converted into
reserves. In addition, "Inferred Resources" have a great amount of
uncertainty as to their existence, and economic and legal
feasibility. It cannot be assumed that all or any part of an
Inferred Mineral Resource will ever be upgraded to a higher
category. Under Canadian rules, estimates of Inferred Mineral
Resources may not form the basis of feasibility or pre-feasibility
studies, or economic studies except for Preliminary Assessment as
defined under Canadian National Instrument 43-101. Investors are
cautioned not to assume that part or all of an Inferred Resource
exists, or is economically or legally mineable.
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.sedar.com and
www.sec.gov/edgar/searchedgar/companysearch.html.
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