All amounts herein are reported in $000s of
KEY HIGHLIGHTS (on a 100% basis unless otherwise noted)
- Following a successful commissioning and ramp-up period, the Juanicipio processing facility has achieved nameplate capacity during
September 2023 with silver recovery consistently above 88% marking a step change in performance relative to the comparative quarter and a successful transition to a fully independent producer. - A total of 322,249 and 921,990 tonnes of mineralized material were processed across the Juanicipio and Saucito plants during the three and nine months ended
September 30, 2023 , respectively. 92% of all material processed in Q3 was processed through the Juanicipio plant. - Average head grade for the three and nine months ended
September 30, 2023 was 523 and 474 grams per tonne (“g/t”), yielding silver production of 4.78 million and 12.29 million ounces, respectively. - Juanicipio delivered robust cost performance with cash cost1 of
$4.68 per silver ounce sold and all-in sustaining cost1 of$9.19 per silver ounce sold in Q3. - Juanicipio generated strong operating cash flow of
$57,346 and free cash flow1 of$40,649 in Q3. - At the end of the quarter, Juanicipio held cash balances of
$23,434 , representing an increase of$14,895 over the second quarter, mainly as a result of strong operating cash flows driven by the mine reaching its intended production levels.
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1 Total cash costs, cash cost per ounce, all-in sustaining costs, all-in sustaining cost per ounce and free cash flow are non-IFRS measures, please refer to “Non-IFRS Measures” section of the Q3 2023 MD&A for a detailed reconciliation of these measures to the Q3 2023 Financial Statements.
- Juanicipio returned a total of
$11,295 in interest and loan principal repayments to MAG during Q3. - MAG concluded a
$40,000 senior secured revolving Credit Facility with the Bank of Montreal onOctober 4, 2023 . - As Juanicipio ramped up its operations and transitioned to full capacity, there was a progressive reduction of Juanicipio’s reliance on the nearby
Fresnillo and Saucito plants (100% owned byFresnillo ). Notably, no feed was supplied to these plants in both August and September. This transition had a direct impact on total milling and, consequently, overall production for the quarter. Positively, this was partially offset by higher grade feed and continued efforts to optimize the Juanicipio plant as it ramped up to full capacity. - Effective
June 20, 2023 , MAG was included in the NYSE Arca Gold Miners Index which is tracked by the VanEck Vectors Gold Miners ETF. - MAG reported net income of
$8,862 ($0.09 per share) and Adjusted EBITDA1 of$29,920 for the three months endedSeptember 30, 2023 .
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1 Adjusted EBITDA is a non-IFRS measure, please refer to “Non-IFRS Measures” section of the Q3 2023 MD&A for a detailed reconciliation of this measure to the Q3 2023 Financial Statements.
CORPORATE
- In September the Company published its second annual Sustainability Report underscoring its commitment to transparency with its stakeholders while providing a comprehensive overview of the Company’s environmental, social and governance (“ESG”) commitments, practices and performance for the 2022 year. The 2022 Sustainability report is supported by the
MAG Silver 2022 ESG Data Table which discloses MAG’s historical ESG performance data. MAG’s 2022 Sustainability report and ESG Data Table are available on the Company’s website at https://magsilver.com/esg/reports/.
EXPLORATION
- Juanicipio:
- Infill drilling at Juanicipio continued in Q3 2023, with one rig on surface and one underground with the goal of upgrading and expanding the Valdecañas Vein system at depth and further defining areas to be mined in the near to mid term. During the quarter, 3,349 metres (nine months ended
September 30, 2023 , 13,273 metres) and 4,874 metres, (nine months endedSeptember 30, 2023 , 15,329 metres) were drilled from surface and underground respectively. The 2023 surface drilling program was completed during Q3 with results pending.
- Infill drilling at Juanicipio continued in Q3 2023, with one rig on surface and one underground with the goal of upgrading and expanding the Valdecañas Vein system at depth and further defining areas to be mined in the near to mid term. During the quarter, 3,349 metres (nine months ended
Deer Trail Project ,Utah :- Results from the 12,157 metres in surface-based Phase 2 drilling on the Deer Trail Carbonate Replacement Deposit (“CRD”) project were reported on
January 17 andAugust 3, 2023 (see News Releases under the Company’s SEDAR+ profile at www.sedarplus.ca) - On
May 29, 2023 MAG started a Phase 3 drilling program focused on up to three porphyry “hub” targets thought to be the source of the manto, skarn and epithermal mineralization and extensive alteration throughout the project area including that at Deer Trail and Carissa. During Q3 2023, 1,994 metres were drilled at high elevation with results pending. An early onset of winter snowfall impacted the commencement of the third porphyry “hub” target which will be drilled next season and drilling has shifted to offset the Carissa discovery and test other high-potential targets.
- Results from the 12,157 metres in surface-based Phase 2 drilling on the Deer Trail Carbonate Replacement Deposit (“CRD”) project were reported on
Larder Project ,Ontario :- After completing the 2023 initial drilling campaign, the geological team embarked on a comprehensive property-wide data re-evaluation which included review of all historic drilling, selective relogging, re-assaying all available pulps with 4-acid digestion, additional geophysics, field mapping and sampling. These datasets were used to build a unified project model which will be systematically reinterpreted with additional information from future drill programs. Multiple well-defined high-priority drill targets are currently being tested by multiple rigs which are expected be turning over the next eighteen months.
- On
July 12, 2023 drilling resumed at theLarder Project to test additional targets by the end of the year on the Cheminis and Bear areas. During Q3 2023 4,594 metres were drilled at Cheminis. A minimum of 17,000 metres of drilling is planned.
JUANICIPIO RESULTS
All results of Juanicipio in this section are on a 100% basis, unless otherwise noted.
Operating Performance
The following tables and subsequent discussion provide a summary of the operating performance of Juanicipio for the three months ended
Key mine performance data of Juanicipio (100% basis) | Three months ended | |||
2023 | 2022 | |||
Metres developed (m) | 4,105 | 3,276 | ||
Material mined (t) | 313,139 | 225,385 | ||
Material processed (t) | 322,249 | 180,808 | ||
Silver head grade (g/t) | 523 | 513 | ||
Gold head grade (g/t) | 1.32 | 1.22 | ||
Lead head grade (%) | 1.33 | % | 0.93 | % |
Zinc head grade (%) | 2.25 | % | 1.81 | % |
Silver payable ounces (koz) | 4,289 | 2,425 | ||
Gold payable ounces (koz) | 7.76 | 4.90 | ||
Lead payable pounds (klb) | 7,690 | 2,969 | ||
Zinc payable pounds (klb) | 9,595 | 4,494 | ||
During the three months ended
The average silver head grade for the mineralized material processed in the three months ended
During the three months ended
Mineralized Material Processed at Juanicipio and Saucito Plants (100% basis)
Three Months Ended | Q3 2022 Amount $ | |||||
Payable Metals | Quantity | Average Price $ | Amount $ | |||
Silver | 4,288,747 ounces | 23.51 per oz | 100,841 | 44,518 | ||
Gold | 7,761 ounces | 1,911.99 per oz | 14,839 | 8,219 | ||
Lead | 3,448 tonnes | 1.00 per lb. | 7,571 | 2,578 | ||
Zinc | 4,352 tonnes | 1.15 per lb. | 11,005 | 6,511 | ||
Treatment, refining, and other processing costs | (9,211 | ) | (12,111 | ) | ||
Net Revenue | 125,046 | 49,715 | ||||
Production cost | (43,782 | ) | (18,127 | ) | ||
Depreciation and amortization (1) | (21,646 | ) | (6,376 | ) | ||
Gross Profit | 59,618 | 25,212 |
(1) The underground mine was considered readied for its intended use on
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.
The following table provides a summary of the total cash costs1 and all-in sustaining costs1 (“AISC”) of Juanicipio for the three months ended
Key mine performance data of Juanicipio (100% basis) | Three months ended | |||
2023 | 2022 | |||
Total operating cash costs (1) | 18,432 | 13,987 | ||
Operating cash cost per silver ounce sold ($/oz) | 4.30 | 5.77 | ||
Total cash costs (1) | 20,067 | 14,050 | ||
Cash cost per silver ounce sold ($/oz) | 4.68 | 5.79 | ||
All-in sustaining costs (1) | 39,411 | 23,281 | ||
All-in sustaining cost per silver ounce sold ($/oz) | 9.19 | 9.60 |
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1 Total operating cash costs, operating cash cost per ounce, total cash costs, cash cost per ounce, all-in sustaining costs, and all-in sustaining cost per ounce are non-IFRS measures, please refer to “Non-IFRS Measures” section of the Q3 2023 MD&A for a detailed reconciliation of these measures to the Q3 2023 Financial Statements.
Financial Results
The following table presents excerpts of the financial results of Juanicipio for the three months ended
Three months ended | ||||
2023 | 2022 | |||
$ | $ | |||
Sales | 125,046 | 49,715 | ||
Cost of sales: | ||||
Production cost | (43,782 | ) | (18,127 | ) |
Depreciation and amortization | (21,646 | ) | (6,376 | ) |
Gross profit | 59,618 | 25,212 | ||
Consulting and administrative expenses | (3,458 | ) | (1,192 | ) |
Extraordinary mining and other duties | (1,635 | ) | (64 | ) |
Interest expenses | (5,214 | ) | (369 | ) |
Exchange gains (losses) and other | 420 | 1,953 | ||
Net income before tax | 49,731 | 25,540 | ||
Income tax (expense) benefit | (23,824 | ) | 825 | |
Net income (100% basis) | 25,907 | 26,365 | ||
MAG’s 44% portion of net income | 11,399 | 11,601 | ||
Interest on Juanicipio loans - MAG's 44% | 2,293 | 180 | ||
MAG’s 44% equity income | 13,692 | 11,781 |
Sales increased by
Offsetting higher sales was higher depreciation (
Other expenses increased by
Taxes increased by
MAG FINANCIAL RESULTS – THREE MONTHS ENDED
As at
The Company’s net income for the three months ended
For the three months ended | ||||||
2023 | 2022 | |||||
$ | $ | |||||
Income from equity accounted investment in Juanicipio | 13,692 | 11,781 | ||||
General and administrative expenses | (4,094 | ) | (3,003 | ) | ||
General exploration and business development | (468 | ) | (20 | ) | ||
Exploration and evaluation assets written down | - | - | ||||
Operating income | 9,130 | 8,758 | ||||
Interest income | 663 | 216 | ||||
Other income | 269 | - | ||||
Foreign exchange loss | (192 | ) | (199 | ) | ||
Income before income tax | 9,870 | 8,775 | ||||
Deferred income tax expense | (1,008 | ) | (548 | ) | ||
Net income | 8,862 | 8,227 | ||||
Qualified Person: All scientific or technical information in this press release including assay results referred to, and Mineral Resource estimates, if applicable, is based upon information prepared by or under the supervision of, or has been approved by Dr.
About
Neither the
Certain information contained in this release, including any information relating to MAG’s future oriented financial information, are “forward-looking information” and “forward-looking statements” within the meaning of applicable Canadian and
- statements that address achieving the nameplate 4,000 tpd milling rate at Juanicipio;
- statements that address our expectations regarding exploration and drilling;
- statements regarding production expectations and nameplate;
- statements regarding the additional information from future drill programs;
- estimated future exploration and development operations and corresponding expenditures and other expenses for specific operations;
- the expected capital, sustaining capital and working capital requirements at Juanicipio, including the potential for additional cash calls;
- expected upside from additional exploration;
- expected results from Deer Trail Project Phase 3 drilling;
- expected capital requirements and sources of funding; and
- other future events or developments.
When used in this release, any statements that express or involve discussions with respect to predictions, beliefs, plans, projections, objectives, assumptions or future events of performance (often but not always using words or phrases such as “anticipate”, “believe”, “estimate”, “expect”, “intend”, “plan”, “strategy”, “goals”, “objectives”, “project”, “potential” or variations thereof or stating that certain actions, events, or results “may”, “could”, “would”, “might” or “will” be taken, occur or be achieved, or the negative of any of these terms and similar expressions), as they relate to the Company or management, are intended to identify forward-looking statements. Such statements reflect the Company’s current views with respect to future events and are subject to certain known and unknown risks, uncertainties and assumptions.
Forward-looking statements are necessarily based upon estimates and assumptions, which are inherently subject to significant business, economic and competitive uncertainties and contingencies, many of which are beyond the Company’s control and many of which, regarding future business decisions, are subject to change. Assumptions underlying the Company’s expectations regarding forward-looking statements contained in this release include, among others: MAG’s ability to carry on its various exploration and development activities including project development timelines, the timely receipt of required approvals and permits, the price of the minerals produced, the costs of operating, exploration and development expenditures, the impact on operations of the Mexican tax regime, MAG’s ability to obtain adequate financing, outbreaks or threat of an outbreak of a virus or other contagions or epidemic disease will be adequately responded to locally, nationally, regionally and internationally.
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. These forward-looking statements involve known and unknown risks, uncertainties and 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 including amongst others: commodities prices; changes in expected mineral production performance; unexpected increases in capital costs or cost overruns; exploitation and exploration results; continued availability of capital and financing; general economic, market or business conditions; risks relating to the Company’s business operations; risks relating to the financing of the Company’s business operations; risks related to the Company’s ability to comply with restrictive covenants and maintain financial covenants pursuant to the terms of the Credit Facility; the expected use of the Credit Facility; risks relating to the development of Juanicipio and the minority interest investment in the same; risks relating to the Company’s property titles; risks related to receipt of required regulatory approvals; pandemic risks; supply chain constraints and general costs escalation in the current inflationary environment heightened by the invasion of
Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those described herein. This list is not exhaustive of the factors that may affect any of the Company’s forward-looking statements. The Company’s forward-looking statements are based on the beliefs, expectations and opinions of management on the date the statements are made and, other than as required by applicable securities laws, the Company does not assume any obligation to update forward-looking statements if circumstances or management’s beliefs, expectations or opinions should change. For the reasons set forth above, investors should not attribute undue certainty to or place undue reliance on 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 andwww.sec.gov.
LEI: 254900LGL904N7F3EL14
For further information on behalf ofMAG Silver Corp. ContactMichael J. Curlook , Vice President, Investor Relations and Communications Phone: (604) 630-1399 Website: www.magsilver.com Toll Free: (866) 630-1399 Email: info@magsilver.com
Source:
2023 GlobeNewswire, Inc., source