In a May 25 report, BMO analyst Andrew Kaip stated that the Juanicipio project, a joint venture between MAG Silver Corp. (MAG:TSX; MAG:NYSE.MKT) and Fresnillo Plc (FRES:LSE), is entering a "catalyst-rich period," with a revised "development plan to access the Valdecañas Deep Zone, the Dilatant Zone and the Anticipada vein earlier."
MAG Silver is will release an updated technical report in Q2/17 to incorporate recent drilling results "that will add to the current M&I resource (100%) of 248Moz silver and 1.4Moz gold." At the same time the Fresnillo board is expected to provide the go ahead on the construction of the revised development plan, Kaip stated.
Kaip points out that although MAG Silver is a development company, its "44% share of the high-grade Juanicipio project with first ore production expected in 2019," makes it a "defensive name."
The analyst also noted that "exploration upside still exists as the JV approved another 20,000m exploration program for 2017E." He also stated that "we believe a majority of this drill program will help to increase confidence in the near term mine life production and the remaining will be used to test regional targets within the JV property to confirm the continuation of other mineralized veins identified on the adjacent FRES property."
Kaip upgraded MAG Silver's recommendation "to Outperform (Speculative), taking advantage of recent share price weakness in front of key catalysts," maintaining a CA20 target price.
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