MAG Silver Corp. (TSX / NYSE American: MAG) (“MAG”
or the
“Company”) announces the Company’s
unaudited financial results for the three months ended March 31,
2019. For details of the unaudited condensed interim
consolidated financial statements and Management's Discussion and
Analysis for the three months ended March 31, 2019, 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 – MARCH 31, 2019
- Joint formal Juanicipio Project approval by Fresnillo plc and
MAG announced subsequent to the quarter end (see Press Release
dated April 11, 2019), and an Engineering, Procurement and
Construction Management (“EPCM”) contract finalized to oversee the
mine development.
- All principal permits have been obtained, orders for long
lead-time equipment have been placed, and the process plant
construction is to begin immediately; Fresnillo’s guidance is for
production to commence in H2-2020, subject to final detailed
engineering.
- Estimated pre-operative initial capital of $395,000 (100%
basis) as of January 1, 2018, less development expenditures
incurred since that date of approximately $50,600 (Company
therefore estimates approximately $344,400 of remaining initial
capital on a 100% basis).
- MAG is well funded with cash and cash equivalents as at March
31, 2019 of $128,607 while Minera Juanicipio had working capital of
$10,121 as at March 31, 2019.
- Underground development continues at Juanicipio with over 19
kilometres (11.8 miles) of total underground development now
achieved.
- 46,060 metre (“m”) infill and step-out exploration drill
program completed late in 2018 with assays announced in the quarter
ended March 31, 2019 (see Press Releases dated March 4,
2019):
- Valdecañas Deep Zone expanded
- 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.
- 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.
“It has been a landmark start to the year for
MAG,” commented George Paspalas, President and CEO. “The joint
formal approval of the Juanicipio project is the culmination of
what we as partners with Fresnillo have been working for some time
now, and provides surety for our shareholders about our pathway to
becoming a producer. I continue to emphasize however, that the
exploration potential of the joint venture property remains very
prospective, and the discovery of the NE oriented Venadas vein is
the start of what we believe to be the next exciting opportunity to
be unlocked at this remarkable property.”
Juanicipio Project Update
Mine DevelopmentOn April 11,
2019, Fresnillo plc and MAG, as shareholders of Minera Juanicipio,
jointly announced formal approval of the Juanicipio mine
development plan. The partners of Minera Juanicipio also finalized
an EPCM agreement which defines the specific terms by which
Fresnillo will oversee the construction of the process plant and
associated surface infrastructure. All principal permits and
licensing requirements have been obtained, orders for long
lead-time equipment have been placed and initial processing plant
groundwork has commenced. Final detailed engineering is underway,
while discussions with construction contractors are well advanced.
Pre-operative initial capital is estimated on a 100% basis as
$395,000 as of January 1, 2018, less expenditures incurred since
that date of approximately $50,600, leaving an estimated $344,400
of remaining initial capital (MAG’s 44% share estimated
$151,500).
Fresnillo has publicly advised that it expects
Minera Juanicipio to commence production in H2-2020. An
Operator Services agreement has been finalized by the partners
which will become effective on commencement of commercial
production. As well, both lead and zinc off-take agreements have
been agreed to by the partners whereby both concentrates will be
treated by Met-Mex Peñoles, S.A. De C.V., in Torreón, Mexico.
Both partners acknowledge that there is
considerable further exploration opportunity in the license area
with future potential to scale-up operations beyond the currently
planned 4,000 tonnes per day. The Juanicipio Project is expected to
create approximately 2,750 jobs during construction and 1,720 jobs
once at full production.
Underground and Other
DevelopmentTotal underground development at Juanicipio is
now in excess of 19 kilometres (or 11.8 miles), with the current
emphasis on: developing the three internal spiral footwall ramps 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 underground conveyor exit portal and over 1000
metres of ramp are now complete); integrating additional
ventilation and other associated underground infrastructure, and
continued construction of surface infrastructure facilities.
A photo gallery of current progress on the
Juanicipio development is available at
http://www.magsilver.com/s/PhotoGallery.asp
Exploration Assays were
reported in the quarter ended March 31, 2019 from 48-holes (46,060
metres) completed in late 2018 (see Press Release dated March 4,
2019). This drilling was designed to infill Indicated and Inferred
Resources and to further trace the Deep Zone laterally and to
depth.
There are currently five drill rigs on site. The
three on the Valdecañas Vein are using Devico directional drilling
technology with two conventional rigs elsewhere: one on the
newly discovered Venadas Vein and one on an outlying prospective
target.
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.
FINANCIAL RESULTS – THREE MONTHS ENDED
MARCH 31, 2019
As at March 31, 2019, the Company had working
capital of $128,011 (March 31, 2018: $152,864) including cash and
cash equivalents of $128,607 (March 31, 2018: $152,692 cash and
term deposits). Other than an office lease obligation under
IFRS 16, 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 capital contributions through cash
advances to Minera Juanicipio as ‘cash called’ by operator
Fresnillo, based on approved joint venture budgets. The Company
expended $81 on its own account on the Juanicipio joint venture
project during the quarter ended March 31, 2019, and made no
advances to Minera Juanicipio in the quarter (March 31, 2018:
$5,767). Subsequent to the quarter end, the Company advanced
$10,780 to Minera Juanicipio, representing its 44% share of a
$24,500 cash call to fund the commencement of process plant
construction and further underground development on the
property.
The Company’s net loss for the three months
ended March 31, 2019 amounted to $442 (March 31, 2018: $183 net
income) or $0.01/share (March 31, 2018: $0.00/share). Share
based payment expense recorded in the period ended March 31, 2019
decreased to $224 (March 31, 2018: $404), and is determined based
on the fair value of equity incentives granted and vesting in the
period. The Company also earned interest income on its cash
and cash equivalents of $844 (March 31, 2018: $682) during the
period ended March 31, 2019, and recorded its 44% equity income
pick up of $282 (March 31, 2018: $883) from Minera
Juanicipio. The Company recorded a deferred income tax
benefit of $319 for the period ended March 31, 2019 (March 31,
2018: $1,198) in relation to the change in temporary timing
differences between the book and tax base of its Mexican
non-monetary assets.
About MAG Silver Corp.
(www.magsilver.com ) MAG Silver Corp. (MAG: TSX / NYSE A)
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 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 |
|
Website: www.magsilver.comPhone: (604) 630-1399Toll
free: (866) 630-1399 |
Email: info@magsilver.comFax: (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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