MAG Silver Corp. (TSX / NYSE American: MAG) (“MAG”
or the
“Company”) announces the Company’s audited
consolidated financial results for the year ended December 31,
2018. For details of the audited consolidated financial
statements, Management's Discussion and Analysis, Annual
Information Form and Annual Report on Form 40-F for the year ended
December 31, 2018, 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.
2018 HIGHLIGHTS
• Juanicipio development is actively ongoing with a current
focus 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 from both ends to and from the
planned mill site (the box cut for the underground conveyor exit
portal is complete along with approximately one kilometre of the
underground conveyor ramp advancement); and,
- integrating additional ventilation and other associated
underground infrastructure.
• Over 18.5 kilometres (11.5 miles) of total underground
development at Juanicipio has now been completed, with 6.6
kilometres (4.1 miles) (36% of the total) achieved in
2018
• Detailed engineering continues for the internal shaft
and other mine infrastructure, and mill-site preparation is in
progress.
• According to Fresnillo, contractual commitments with
suppliers of processing equipment (in the amount of $23,100) and
with development contractors (in the amount of $69,500) have been
committed to with respect to the Juanicipio Project as at December
31, 2018
• Partners are currently negotiating 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, as well
as lead and zinc off-take agreements.
• Fresnillo plc (operator) recently provided guidance that
production will commence in H2-2020.
• Exploration drill program completed late in 2018 and
assays for 46,060 metres (“m”) announced subsequent to the year end
(see Press Release dated March 4, 2019):
- Valdecañas Deep Zone expanded o Deep Zone West: Infill Hole P22
11.6 m (true width) grading 783 grams per tonne (“g/t”) (22.9
ounces per ton (“opt”)) silver, 2.57 g/t gold, 6.52% lead, 9.46%
zinc, 0.32% copper. o Deep Zone East: Step-out Hole P26: 6.3m (true
width) grading 246 g/t (7.2 opt) silver, 1.78 g/t (capped) gold,
7.20% lead, 11.63% zinc, 0.40% copper
- New “Pre-Anticipada” hangingwall vein discovered in step-out
Hole P28: 3.2 m (estimated true width) grading 472 g/t (13.8 opt)
silver, 0.31 g/t gold, 0.39% lead, 0.43% zinc and 0.03%
copper.
- New “Venadas Vein” discovered with unique North-East (“NE”)
orientation: Hole VEN-1 cut 3.0 m (drilling width) grading 392 g/t
(11.5 opt) silver & 5.6 g/t gold providing new Juanicipio
exploration potential.
• MAG remains well funded with cash and cash
equivalents as at December 31, 2018 of $130,180 while Minera
Juanicipio S.A. de C.V. (“Minera Juanicipio”) held $16,715 as at
December 31, 2018.
George Paspalas, President and CEO, commented,
“The Juanicipio Joint Venture property continues to be the gift
that keeps on giving. Discovering two new mineralized veins readily
accessible from the underground workings we have been developing
over the last 5 years, once again demonstrates Juanicipio’s
exceptional mineral endowment. We are pleased with the progress we
are making with our JV partner Fresnillo, finalizing construction
and operating agreements, and look forward to commencing the
process plant construction in the near term.”
Juanicipio Project Update
On site, underground and other development
actively continues 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 from both
ends to and from the planned mill site (with the box cut for the
underground conveyor exit portal now complete and development
started); integrating additional ventilation and other associated
underground infrastructure, and progressing the construction of
surface infrastructure facilities. According to the operator
Fresnillo, negotiations with suppliers of process equipment and
construction contractors have begun, and contractual commitments of
$23.1 million (for equipment) and $69.5 million (for development
contractors) have been committed to as at December 31,
2018.
The partners of Minera Juanicipio are currently
negotiating 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 being negotiated by the partners which will
become effective upon commercial production being achieved. And
finally, both lead and zinc off-take agreements are being prepared
by the partners.
The underground development in the year ended
December 31, 2018 totaled 6,636 metres advanced, and accounts for
36% of the total underground development advanced on the project to
date. Total underground development at Juanicipio is now in excess
of 18.5 kilometres. Concurrent with this development, detailed
engineering continues for the internal shaft and other mine
infrastructure, and mill-site preparation is underway. Fresnillo
has publicly advised that it now expects Minera Juanicipio to be in
production by H2-2020.
A photo gallery of current progress on the
Juanicipio development is available at
http://www.magsilver.com/s/PhotoGallery.asp
On the exploration front, there are currently
five drill rigs on site with another underground rig expected
shortly. There are two Devico directional drills turning on the
Valdecañas Vein, and three conventional rigs elsewhere: one on the
newly discovered Venadas Vein (See press release Dated March 4,
2019); one on a prospective target on the property; and, one
drilling from underground.
Qualified Person - All
scientific or technical information in this news release, including
assay results, 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.
Quality Assurance and Control:
The samples (half core) are shipped directly in security-sealed
bags to ALS-Chemex Laboratories preparation facility in
Guadalajara, Jalisco, Mexico (Certification ISO 9001). Samples
shipped also include intermittent standards and blanks. Pulp
samples are subsequently shipped to ALS-Chemex Laboratories in
North Vancouver, Canada for analysis. Two extra pulp samples are
also prepared and are analyzed (in progress) by SGS Laboratories
(Certification ISO 9001) and Inspectorate Laboratories
(Certification ISO 9001) (or another recognized lab). The
remaining half core is placed back into the core boxes and is
stored on site with the rest of the drill hole core in a secured
core storage facility. The bulk reject is subsequently sent to CIDT
(Center for Investigation and Technical Development) of Peñoles in
Torreon, Mexico for metallurgical testing where a fourth assay for
each sample is analyzed and a calculated head grade is received on
the basis of a concentrate balance. The CIDT also does a full
microscopic, XRF and XRD mineralogical analysis.
FINANCIAL RESULTS – YEAR ENDED DECEMBER
31, 2018
As at December 31, 2018, the Company had working
capital of $129,316 (December 31, 2017: $159,906) including cash
and cash equivalents of $130,180 (December 31, 2017: $160,395 cash
and term deposits). 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 year ended December 31,
2018, the Company funded advances to Minera Juanicipio, which
combined with MAG's Juanicipio expenditures on its own account,
totaled $23,942 (December 31, 2017: $19,435).
The Company’s net loss for the year ended
December 31, 2018 amounted to $5,802 (December 31, 2017: $6,497) or
$0.07/share (December 31, 2017: $0.08/share). Share based
payment expense, a non-cash item, recorded in the year ended
December 31, 2018 decreased slightly to $2,109 (December 31, 2017:
$2,268), and is determined based on the fair value of equity
incentives granted and vesting in the year. During the year
ended December 31, 2018, the Company sold its non-core Lagartos
concessions and related exploration data in the Zacatecas Silver
District to Defiance Silver Corp resulting in a net gain in other
income of $1,151 after transaction costs (December 31, 2017:
nil). The Company also earned interest income on its cash and
cash equivalents of $3,118 (December 31, 2017: $1,755) during the
year ended December 31, 2018, and recorded its 44% equity income
pick up of $227 (December 31, 2017: $308) from Minera
Juanicipio. In addition, the Company recorded an unrealized
loss of $622 (December 31, 2017: $342 unrealized gain) on warrants
held and designated as fair value through profit and loss. The
Company recorded a deferred tax expense of $796 for the year ended
December 31, 2018 (December 31, 2017: $728) in relation to the
change in temporary timing differences between the book and tax
base of its Mexican non-monetary assets.
Shareholders may receive, upon request and free
of charge, a hard copy of the Company's Audited Financial
Statements. The Company's 40-F has also been filed with the United
States Securities and Exchange Commission.
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 a Joint Venture partnership with
Fresnillo Plc (56%). Juanicipio is located in the Fresnillo Silver
Trend in Mexico, the world's premier silver mining camp and we are
currently developing the surface and underground infrastructure on
the property to support a 4,000 tonnes per day mining operation
with the operational expertise of our JV partner, Fresnillo plc. As
well, we have an aggressive exploration program in place targeting
multiple 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 |
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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 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. All
statements in this release, other than statements of historical
facts are forward looking statements, including statements that
address future mineral production, reserve potential,
exploration drilling, exploitation activities and 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 mineral
production performance, exploitation and exploration
successes, continued availability of capital and financing, and
general economic, market or business conditions, political risk,
currency risk and capital cost inflation. In addition,
forward-looking statements are subject to various risks, including
that data is incomplete and considerable additional work will be
required to complete further evaluation, including but not limited
to drilling, engineering and socio-economic studies and
investment. 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.
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 and information,
including, among others, the ability of the Company to successfully
close a financing pursuant to the base shelf prospectus or shelf
registration statement and those risks identified in MAG's
preliminary base shelf prospectus dated December 28, 2017 filed on
SEDAR at www.sedar.com . Forward-looking information is based on
the expectations and opinions of MAG's management on the date the
statements are made. The assumptions used in the preparation of
such statements, although considered reasonable at the time of
preparation, may prove to be imprecise. We do not assume any
obligation to update forward-looking information, whether as a
result of new information, future events or otherwise, other than
as required by applicable law. For the reasons set forth above,
prospective investors should not place undue reliance on
forward-looking information. Neither the TSX nor the NYSE American
has approved or disapproved of the information contained
herein.
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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