MAG Silver Corp. (TSX / NYSE American: MAG) (“MAG”
or the
“Company”) announces the Company’s
unaudited financial results for the three and six months ended June
30, 2019. For details of the unaudited condensed interim
consolidated financial statements and Management's Discussion and
Analysis for the three and six months ended June 30, 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 – JUNE 30,
2019
- Joint formal Juanicipio Project
mine development approval by Fresnillo plc (“Fresnillo”) and MAG
announced in the quarter (see Press Release dated April 11, 2019),
and an Engineering Procurement Construction Management contract
finalized to oversee the mine development.
- Progress on Juanicipio has been
rapid with multiple engineering milestones delivered, and
construction on track for H2-2020 commissioning target according to
the operator Fresnillo.
- Estimated pre-operative initial
capital of $395,000 (100% basis) as of January 1, 2018, less
development expenditures incurred since that date to June 30, 2019
of approximately $67,100 (Company therefore estimates approximately
$327,900 of remaining initial capital on a 100% basis as at June
30, 2019).
- MAG is well funded with cash and
cash equivalents as at June 30, 2019 of $113,833 while Minera
Juanicipio had working capital of $26,315 as at June 30, 2019.
- Subsequent to quarter end, the
Company advanced $17,820 to Minera Juanicipio, representing its 44%
share of a $40,500 cash call to fund equipment purchases, the
commencement of the process plant construction and further
underground development on the Juanicipio property.
- Underground development continues
at Juanicipio and is now approaching 22 kilometres (or 13.7 miles)
to date.
- 46,060 metre (“m”) infill and
step-out exploration drill program completed late in 2018 with
assays announced in 2019 (see Press release 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.
- “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.
- “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.
- Significant exploration on the JV property continues given the
recent successes:
- Four rigs currently drilling the
deeper areas of the Valdecañas vein suite, and another rig is
following up the discovery of the Venadas vein announced March 4,
2019.
“This was a landmark quarter for MAG,” said
George Paspalas, President and CEO. “The jointly announced go-ahead
decision for the process plant construction marks the final stage
in bringing Juanicipio into production. On top of that, the
discovery of the North-South oriented Venadas veins opens a new
chapter of vein discovery on the joint venture ground, most
importantly, in the area where we will be mining. Juanicipio
remains a property with remarkable exploration potential.”
Juanicipio Project Update
Mine Development
On April 11, 2019, Fresnillo 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 as part of the
approval process which defines the specific terms by which
Fresnillo is overseeing the continued project development and the
construction of the process plant and associated surface
infrastructure. Orders have been placed and the manufacturing
of the long lead items for the process plant is well advanced with
deliveries expected late 2019 and early 2020. According to
Fresnillo, good progress has been made on engineering and early
stage construction, with multiple engineering milestones delivered,
and construction on track for commissioning by H2-2020. The
mill-site preparation is underway and the construction of surface
infrastructure facilities continues.
Pre-operative initial capital is estimated on a
100% basis as $395,000 as of January 1, 2018, which does not
reflect expenditures incurred since that date to June 30, 2019 of
approximately $67,100, leaving an estimated $327,900 of remaining
initial capital (MAG’s 44% remaining share estimated $144,276 as at
June 30, 2019).
An Operator Services agreement was also
finalized by the partners in the project approval process 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 at market
terms 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.
Underground Development
Total underground development at Juanicipio now
approaching 22 kilometres (or 13.7 miles) to date, with the current
emphasis on: developing the three internal spiral footwall ramps at
depth along the full strike length of the Valdecañas Vein system;
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); integrating additional ventilation and other associated
underground infrastructure, and starting of the internal shaft
sinking (head chamber for the shaft has been excavated and winding
equipment ordered).
A photo gallery of current progress on the
Juanicipio development is available at
http://www.magsilver.com/s/PhotoGallery.asp
Exploration To date in 2019, 18
drill holes have been completed, 11 being infill holes and 7
exploration holes (all assays pending). There are currently
five drill rigs on site. There are four on the Valdecañas Vein
which are using Devico directional drilling technology and one
conventional drill rig on the newly discovered Venadas Vein.
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 AND SIX MONTHS
ENDED JUNE 30, 2019
As at June 30, 2019, the Company had working
capital of $114,326 (June 30, 2018: $151,765) including cash and
cash equivalents of $113,833 (June 30, 2018: $151,404). 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 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. In the three and six months ended June 30, 2019, the
Company funded advances to Minera Juanicipio, which combined with
MAG’s Juanicipio expenditures on its own account, totaled $15,375
and $15,456 respectively (June 30, 2018: $78 and $5,845
respectively). Subsequent to the period end, the Company also
advanced $17,820 to Minera Juanicipio, representing its 44% share
of a $40,500 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 and six
months ended June 30, 2019 amounted to $961 and $1,403 respectively
(June 30, 2018: $2,753 and $2,570 respectively) or $0.01/share and
$0.02/share respectively (June 30, 2018: $0.03/share and
$0.03/share respectively).
Share based payment expense incurred in the
three and six months ended June 30, 2019 amounted to $1,284 and
$1,508 respectively (June 30, 2018: $407 and $811 respectively),
and is determined based on the fair value of equity incentives
granted and vesting in the period. The increase is primarily due to
DSUs granted in the period whereas the comparable prior period
grant was recorded in a subsequent quarter. In the three and
six months ended June 30, 2019, the Company earned interest income
on its cash and cash equivalents of $782 and $1,626 respectively
(June 30, 2018: $783 and $1,465 respectively). The Company recorded
its 44% equity income pick up of $480 and $762 respectively (June
30, 2018: $1,623 and $740 equity loss pick up respectively) from
Minera Juanicipio related primarily to exchange and deferred taxes.
In addition, the Company recorded a deferred income tax benefit of
$249 and $568 respectively (June 30, 2018: $1,300 and $102 deferred
income tax expense respectively) 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: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 has 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.
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
LEI: 254900LGL904N7F3EL14
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