Vancouver, British Columbia--(Newsfile Corp. - September 16, 2013) - PI Financial Corp. has initiated coverage on MAG Silver Corp. (TSX: MAG) (NYSE MKT: MVG). Analyst Philip Ker gives the company a buy recommendation, with a speculative risk rating, and a12-month target of $9.00, a premium of 15% to the $7.80 price the day the report was issued.
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MAG Silver is a silver explorer and developer with ideally situated projects located in two of Mexico's premier mineralized silver belts.
The Juanicipio property is MAG's flagship asset and lies within the prominent Fresinillo silver belt in the state of Zacatecas, which to date has produced more than 4 billion ounces of silver. MAG anticipates that once developed, this project will produce in excess of 15 million ounces of silver per year for the first 6 years of the 15 year mine life, or 10 million ounces per year for the life of the mine.
MAG first discovered the Juanicipio vein in 2003 and has since expanded known mineralization via additional drilling, encountered new veins, primarily the Valdecanas, which carries the abundance of tonnage and in-situ metal on the property, with grades in excess of 1,000 grams per tonne silver equivalent. Fresnillo became the joint venture partner and operator of the project via an earn-in agreement. With a resource outlined at approximately 200 million ounces at indicated grades in excess of 700 grams per tonne silver, these veins provide excellent profit margins and a significant internal rate of return.
Secondly, their Cinco de Mayo project is a Carbonate Replacement Deposit which is well positioned along trend with several other large CRD hosted systems and is primed for resource expansion through forthcoming drill programs. MAG benefits by having one of the great CRD experts, Peter Megaw, as one of the company's founders and key directors. PI Financial believes Cinco de Mayo has the potential to target 100 million ounces of silver given the high grade intercepts discovered and the early stage drilling done to date.
Analyst Philip Ker stated, "We believe MAG Silver possesses a solid management team with an attractive, world class project and offers upside through its expertise in CRD deposits and blue sky potential at its Cinco de Mayo project. With suppressed market valuations for quality assets such as Juanicipio, we believe this is an ideal time to take advantage of "on-sale" equities."
The shares have pulled back to $6.75, a 29% discount to the $9.00 target price, and with 60.1 million shares outstanding, the company is capitalized at $406 million.
For more information, please visit the company's website www.magsilver.com or contact Michael J. Curlook, VP Investor Relations and Communications at 604-681-0894 or email info@magsilver.com.
For more information about PI Financial or to obtain a copy of their research report, contact your nearest PI Financial office. Their branches are listed on their website at www.pifinancialcorp.com.
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