VANCOUVER, British Columbia, Nov. 12, 2024 (GLOBE NEWSWIRE) -- MAG Silver Corp. (TSX / NYSE American: MAG) ("MAG”, or the "Company”) announces the Company's unaudited consolidated financial results for the three months ended September 30, 2024 ("Q3 2024”). For details of the unaudited condensed interim consolidated financial statements of the Company for the three and nine months ended September 30, 2024 ("Q3 2024 Financial Statements”) and management's discussion and analysis for the three and nine months ended September 30, 2024 ("Q3 2024 MD&A”), please see the Company's filings on the System for Electronic Document Analysis and Retrieval Plus ("SEDAR+”) at (www.sedarplus.ca) or on the Electronic Data Gathering, Analysis, and Retrieval ("EDGAR”) at (www.sec.gov).
All amounts herein are reported in $000s of United States dollars ("US$”) unless otherwise specified (C$ refers to thousands of Canadian dollars).
KEY HIGHLIGHTS FOR Q3 2024 (on a 100% basis unless otherwise noted)
- MAG reported net income of $22,292 ($0.22 per share) driven by income from Juanicipio (equity accounted) of $25,552, and adjusted EBITDA1 (as defined herein) of $55,720.
- A total of 332,290 tonnes of ore at a silver head grade of 481 grams per tonne ("g/t”) (equivalent silver head grade2 735 g/t) was processed at Juanicipio.
- Juanicipio achieved silver production and equivalent silver production2 of 4.9 and 7.1 million ounces, respectively.
- Juanicipio generated strong operating cash flow of $109,836 and free cash flow1 of $96,948.
- Building on the robust cost performance of the first half of 2024, Juanicipio continued to improve delivering negative cash cost1 of $0.12 per silver ounce sold ($8.38 per equivalent silver ounce sold3) and all-in sustaining cost1 of $3.28 per silver ounce sold ($10.83 per equivalent silver ounce sold3).
- With continued operational outperformance, as reported by Fresnillo, silver grades are expected to be at the top end of the revised grade guidance range (420g/t to 460g/t) for 2024.
- Juanicipio returned a total of $22,649 in interest and loan principal repayments to MAG further augmenting MAG's cash position to $113,491 at the end of the quarter.
- The Company published its 2023 sustainability report on July 18, 2024, underscoring its continued commitment to transparency with its stakeholders while providing a comprehensive overview of the Company's environmental, social and governance ("ESG”) performance for 2023. A copy of MAG's 2023 sustainability report and 2023 ESG Data Table are available on the Company's website at https://magsilver.com/esg/reports4.
- On September 20, 2024, MAG and Apollo Silver Corp. ("Apollo”) entered into an exploration, earn-in and option agreement (the "Option”) pursuant to which Apollo has the option to acquire the Cinco de Mayo Project ("Cinco”). In order for Apollo to exercise the Option, Apollo is required to obtain the necessary licensing to access and conduct exploration activities on Cinco, and subsequently complete no less than 20,000 metres of drilling, all within a five-year period, and then finally issue consideration shares equivalent to 19.9% of the then issued and outstanding common shares of Apollo to MAG.
- Juanicipio:
- Underground infill drilling at Juanicipio continued in Q3 2024, primarily focused on upgrading mineralization in areas expected to be mined in the near to mid-term. During Q3 2024, 8,248 metres were drilled from underground. Results to date (mainly first half of 2024) focus on infill and confirm vein continuity including grade and thicknesses.
- Surface drilling started in April 2024 and is currently focused on the Cañada-Honda structure with three rigs turning. Since the beginning of the program, nine holes have been completed, with three in progress. During Q3 2024, 9,768 metres were drilled from surface.
- Results from three holes are showing thin mineralized epithermal veins with vein textures and negligible base metals consistent with being at high level and possibly above a productive boiling zone. Some holes were drilled deep enough to intercept the Juanicipio vein previous deepest holes including a 0.7 metre, base metal rich intercept extending the Juanicipio vein by 450 metres downdip.
- Deer Trail Project, Utah:
- During Q3 2024, 1,745 metres have been drilled from surface. During the first nine months of the year, three holes have been completed, two at Carrisa and one in the Deer Trail Mine Corridor. One hole is currently in progress at Carissa.
- Larder Project, Ontario:
- Surface drilling at Twist, Swansea, Long Conglomerate and Kir Vit, totalled 12,661 metres in Q3 2024. Targets tested include:
- the central and western portions of the Twist zone;
- a large induced polarization ("IP”) target at Swansea that coincides with the recent drill program results and historic green carbonate altered komatiite horizons believed to be a second order splay off the Cadillac-Larder Break ("CLB”) at the Swansea zone;
- an approximately 4km long conglomerate zone (which runs through the central portion of the property), that is a second order structure coincident with a parallel unconformity; and
- the southeast extensions of the Kir Vit zone with four high priority geophysical targets to test in 2024.
- Regional and field programs at the recently acquired Goldstake property led to outcrop stripping programs that discovered high grade gold values in both channel and grab samples at the T trench, including 32.1 g/t gold, 16.7 g/t gold, and 14.8 g/t gold.
- Surface drilling at Twist, Swansea, Long Conglomerate and Kir Vit, totalled 12,661 metres in Q3 2024. Targets tested include:
1
Adjusted EBITDA, cash cost per ounce, all-in sustaining cost per ounce and free cash flow are non-IFRS measures, please see below "Non-IFRS Measures” section and section 12 of the Q3 2024 MD&A for a detailed reconciliation of these measures to the Q3 2024 Financial Statements.2 Equivalent silver head grade and equivalent silver production have been calculated using the following price assumptions to translate gold, lead and zinc to "equivalent” silver head grade and "equivalent” silver production: $23/oz silver, $1,950/oz gold, $0.95/lb lead and $1.15/lb zinc.
3 Equivalent silver ounces sold have been calculated using realized prices to translate gold, lead and zinc to "equivalent” silver ounces sold (metal quantity, multiplied by metal price, divided by silver price). Three months ended September 30, 2024 realized prices: $30.16/oz silver, $2,587.65/oz gold, $0.91/lb lead and $1.29/lb zinc.
4 Information contained in or otherwise accessible through the Company's website, including the 2023 sustainability report and 2023 ESG Data Table, do not form part of this publication and are not incorporated into this publication by reference.
JUANICIPIO RESULTS
All results of Juanicipio in this section are on a 100% basis, unless otherwise noted.
Operating Performance
The following table and subsequent discussion provide a summary of the operating performance of Juanicipio for the three months ended September 30, 2024 and 2023, unless otherwise noted.
| Key mine performance data of Juanicipio (100% basis) | Three months ended | |||
| September 30, | September 30, | |||
| 2024 | 2023 | |||
| Metres developed (m) | 3,278 | 4,105 | ||
| Material mined (t) | 331,194 | 297,575 | ||
| Material processed (t) | 332,290 | 322,249 | ||
| Silver head grade (g/t) | 481 | 523 | ||
| Gold head grade (g/t) | 1.32 | 1.32 | ||
| Lead head grade (%) | 1.58 | % | 1.33 | % |
| Zinc head grade (%) | 2.83 | % | 2.25 | % |
| Equivalent silver head grade (g/t) (1) | 735 | 760 | ||
| Silver ounces sold (koz) | 4,462 | 4,289 | ||
| Gold ounces sold (koz) | 9.12 | 7.76 | ||
| Lead pounds sold (klb) | 9,984 | 7,603 | ||
| Zinc pounds sold (klb) | 15,426 | 9,596 | ||
| Equivalent silver ounces sold (koz) (2) | 6,204 | 5,710 | ||
| (1) | Equivalent silver head grades have been calculated using the following price assumptions to translate gold, lead and zinc to "equivalent” silver head grade in 2024: $23/oz silver, $1,950/oz gold, $0.95/lb lead and $1.15/lb zinc (2023: $21.85/oz silver, $1,775/oz gold, $0.915/lb lead and $1.30/lb zinc). |
| (2) | Equivalent silver ounces sold have been calculated using realized prices to translate gold, lead and zinc to "equivalent” silver ounces sold (metal quantity, multiplied by metal price, divided by silver price). Three months ended September 30, 2024 realized prices: $30.16/oz silver, $2,587.65/oz gold, $0.91/lb lead and $1.29/lb zinc (three months ended September 30, 2023 realized prices: $23.51/oz silver, $1,911.99/oz gold, $1.00/lb lead and $1.15/lb zinc). |
During the three months ended September 30, 2024, a total of 331,194 tonnes of ore were mined. This represents an increase of 11% over Q3 2023. Increases in mined tonnages at Juanicipio have been driven by the operational ramp-up of the mine towards steady state mining and milling targets.
During the three months ended September 30, 2024, a total of 332,290 tonnes of ore were processed through the Juanicipio plant. The 3% increase over Q3 2023 was mainly attributable to the Juanicipio plant operating at nameplate per operating day during 2024.
The silver head grade and equivalent silver head grade for the ore processed in the three months ended September 30, 2024 was 481 g/t and 735 g/t, respectively (three months ended September 30, 2023: 523 g/t and 760 g/t, respectively). The higher silver head grade and lower lead and zinc head grades in Q3 2023 were the result of processing ore from the upper levels of the mine, characterized by higher silver grade, compared to deeper areas in Q3 2024. Silver metallurgical recovery during the three months ended September 30, 2024 was 95% (three months ended September 30, 2023: 88%) reflecting the commencement of commercial pyrite and gravimetric concentrate production during Q2 2024 delivering incremental silver and gold recovery paired with ongoing optimizations in the processing plant.
The following table provides a summary of the total cash costs and all-in sustaining costs ("AISC”) of Juanicipio for the three months ended September 30, 2024, and 2023.
| Key mine performance data of Juanicipio (100% basis) | Three months ended | |||
| September 30, | September 30, | |||
| 2024 | 2023 | |||
| Total cash costs (1) | (555 | ) | 20,067 | |
| Cash cost per silver ounce sold ($/oz) (1) | (0.12 | ) | 4.68 | |
| Cash cost per equivalent silver ounce sold ($/oz) (1) | 8.38 | 9.37 | ||
| All-in sustaining costs (1) | 14,631 | 39,411 | ||
| All-in sustaining cost per silver ounce sold ($/oz) (1) | 3.28 | 9.19 | ||
| All-in sustaining cost per equivalent silver ounce sold ($/oz) (1) | 10.83 | 12.75 | ||
| (1) | Total cash costs, cash cost per ounce, cash cost per equivalent ounce, all-in sustaining costs, all-in sustaining cost per ounce, and all-in sustaining cost per equivalent ounce are non-IFRS measures, please see below "Non-IFRS Measures” section and section 12 of the Q3 2024 MD&A for a detailed reconciliation of these measures to the Q3 2024 Financial Statements. Equivalent silver ounces sold have been calculated using realized prices to translate gold, lead and zinc to "equivalent” silver ounces sold (metal quantity, multiplied by metal price, divided by silver price). Three months ended September 30, 2024 realized prices: $30.16/oz silver, $2,587.65/oz gold, $0.91/lb lead and $1.29/lb zinc (three months ended September 30, 2023 realized prices: $23.51/oz silver, $1,911.99/oz gold, $1.00/lb lead and $1.15/lb zinc). |
Financial Results
The following table presents excerpts of the financial results of Juanicipio for the three months ended September 30, 2024 and 2023.
| Three months ended | ||||
| September 30, | September 30, | |||
| 2024 | 2023 | |||
| $ | $ | |||
| Sales | 176,393 | 125,046 | ||
| Cost of sales: | ||||
| Production cost | (38,596 | ) | (43,782 | ) |
| Depreciation and amortization | (23,440 | ) | (21,646 | ) |
| Gross profit | 114,357 | 59,618 | ||
| Consulting and administrative expenses | (2,497 | ) | (3,458 | ) |
| Extraordinary mining and other duties | (2,810 | ) | (1,635 | ) |
| Interest expense | (1,839 | ) | (5,214 | ) |
| Exchange gains (losses) and other | 1,961 | 420 | ||
| Net income before tax | 109,172 | 49,731 | ||
| Income tax expense | (52,937 | ) | (23,824 | ) |
| Net income (100% basis) | 56,235 | 25,907 | ||
| MAG's 44% portion of net income | 24,743 | 11,399 | ||
| Interest on Juanicipio loans - MAG's 44% | 809 | 2,293 | ||
| MAG's 44% equity income | 25,552 | 13,692 | ||
Sales increased by $51,348 during the three months ended September 30, 2024, mainly due to 26% higher realized metal prices and 13% higher metal volumes.
Production costs decreased by $5,186 due to Juanicipio depleting higher-cost stockpiles in Q3 2023 ($2,085), resulting from the operational ramp-up and processing facility commissioning in the first half of 2023, and lower mining, milling and general and administrative expenses ("G&A expenses”) ($3,101).
Depreciation increased by $1,794 impacted by an increased depreciable asset cost base as the Juanicipio mill achieved commercial production and commenced depreciating the processing facility and associated equipment in June 2023. In addition, Juanicipio processed 3% more tonnes during Q3 2024, impacting units of production depreciation.
Cash operating margin increased from 65% to 78%, mainly due to positive commodity price movements, reduced operating costs, as well as operational leverage.
Other expenses decreased by $4,701 mainly as a result of lower consulting and administrative expenses ($960), higher exchange gains ($1,542) and lower interest expense ($3,375) as Juanicipio reduced its outstanding shareholder loans balance by $223,192 ($206,712 loan repayments and $16,480 converted to equity) over the course of September 2023 to September 2024, offset by higher selling costs and other duties ($1,176) which were impacted by the commencement of commercial pyrite and gravimetric concentrate production during Q2 2024.
Taxes increased by $29,113 mainly due to higher taxable profits generated during Q3 2024, as well as non-cash deferred tax charges on fixed assets driven by a weakening in the Mexican peso versus the US dollar.
Gross Profit from Ore Processed at Juanicipio Plant (100% basis)
| Three Months Ended September 30, 2024 (332,290 tonnes processed) | Three Months Ended September 30, 2023 Amount $ | |||||||
| Metals Sold | Quantity | Average Price $ | Amount $ | |||||
| Silver | 4,461,644 ounces | 30.16 per oz | 134,580 | 100,841 | ||||
| Gold | 9,118 ounces | 2,588 per oz | 23,594 | 14,839 | ||||
| Lead | 4,529 tonnes | 0.91 per lb. | 9,067 | 7,571 | ||||
| Zinc | 6,997 tonnes | 1.29 per lb. | 19,885 | 11,005 | ||||
| Treatment, refining, and other processing costs (1) | (10,733 | ) | (9,211 | ) | ||||
| Sales | 176,393 | 125,046 | ||||||
| Production cost | (38,596 | ) | (43,782 | ) | ||||
| Depreciation and amortization | (23,440 | ) | (24,646 | ) | ||||
| Gross Profit | 114,357 | 59,618 | ||||||
| (1) | Q3 2023 includes toll milling costs from processing mineralized material at the Saucito plant. |
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.
MAG FINANCIAL RESULTS - THREE MONTHS ENDED SEPTEMBER 30, 2024
As at September 30, 2024, MAG had working capital of $113,657 (December 31, 2023: $67,262) including cash of $113,491 (December 31, 2023: $68,707) and no long-term debt. As well, as at September 30, 2024, Juanicipio had working capital of $187,234 including cash of $96,782 (MAG's attributable share is 44%).
The Company's net income for the three months ended September 30, 2024 amounted to $22,292 (September 30, 2023: $8,862) or $0.22/share (September 30, 2023: $0.09/share). MAG recorded its 44% income from equity accounted investment in Juanicipio of $25,552 (September 30, 2023: $13,692) which included MAG's 44% share of net income from operations as well as loan interest earned on loans advanced to Juanicipio (see above for a discussion of MAG's share of income from its equity accounted investment in Juanicipio).
| For the three months ended | ||||
| September 30, | September 30, | |||
| 2024 | 2023 | |||
|
| ||||