"With over 100,000 tonnes of material stockpiled and continued advancement of underground development, the operations team are well positioned to deliver the first concentrates produced from the Juanicipio facility in H2 2022," MAG's president and CEO George Paspalas said.
The Juanicipio project (44% MAG) is on the Fresnillo Silver Trend in Mexico. Operator Fresnillo (56%) is developing an underground mine and constructing a 4,000 tonnes per day processing plant.
Juanicipio is MAG's principal asset.
While Juanicipio production was steady in Q2, MAG did flag a marginal delay to the project's electrical tie-in.
"We are pleased to report good progress on the required power system shutdowns to enable the final tie-in of the Juanicipio sub-station to the national power grid, and commencement of electrical commissioning of the plant is expected to occur in the coming weeks," MAG said.
The tie-in had previously been guided for mid-2022.
"Target ramp-up to 85-90% of nameplate capacity by year end remains within reach," Paspalas said.
MAG reported Juanicipio production of 2.37 million oz of silver in Q2, which was level quarter on quarter. Gold production was 5,609oz. MAG's share of the silver and gold production was 1.04 million oz and 2,468oz, respectively.
National Bank of Canada Financial Markets said: "We expect to see first ore through the Juanicipio mill in Q3/22. We estimate ~18 million oz (100%) in the first year of ramped-up production at Juanicipio (vs. Q2/22 annualised rate of ~9.6 million oz) but could top this if multiple mills are utilized to process ore".
MAG's share price rose 6% day on day to C$16.02 (US$12.49) on July 27. It had hit a year-to-date high of C$23.77 on March 10 before falling to a more-than-a-two-year low of C$14.02 on 13 July.
NBF has a target price for MAG of C$23.50. BMO Capital Markets targets C$20.50.
MAG has a market capitalization of C$1.58 million.
