MAG Silver To Further Unlock Juanicipio’s Potential in 2021

MAG Silver released its financial and operating results for 1Q21 and provided an update on its Juanicipio project, showing its strong opportunities and plans to further develop it during 2021.

The Juanicipio project is located in Zacatecas and is 56 percent owned by Fresnillo and 44 percent by MAG Silver. The deposit sits in the Fresnillo district and is being built, developed and operated by Fresnillo. It consists of two main vein systems: the Valdecañas vein system and the Juanicipio vein, which are important epithermal silver and gold structures.

The project is expected to produce 11.7Moz of silver and 43,500oz of gold per year over an initial operating life of 12 years. Its processing plant is expected to start operations in 4Q21 and reach between 40-50 percent of its 4,000tpd capacity by the end of 2021 and between 90-95 in 2022.

During the first quarter, the company reported that 36,395 tons of mineralized material were processed through Fresnillo plant, which was 40 percent higher silver grade than in 2020. The company announced that 108,254 tons have been processed since August, which are expected to contribute to the cash flow of the project's capital and significantly accelerate its development since the risk of its metallurgical performance has been reduced.

The estimated CAPEX for the project is US$440,000, minus US$272,000 that has been used for development expenses, leaving an initial capital of US$168,000. The company said it expects to continue generating cash flow from mineralized material at the Fresnillo plant until the Juanicipio processing plant begins operations. During 1Q21, its pre-commercial production sales were of US$10,085, resulting in US$8,199 as gross profit for the Juanicipio Joint Venture.

In the press release, MAG Silver highlighted the positive progress that has been made at the Juanicipio processing plant, including the installation of nearly 100 percent of the major equipment and further development of the building envelope, piping and electrical installations.

Exploration Update

MAG Silver highlighted that despite the impact of COVID-19, the Juanicipio exploration program in 2020, consisting of 33 drills and 27,900m drilled, was completed as planned. The 2021 exploration program has a budget of US$6 million, which will be used to step-out and infill drilling of the Valdecañas Vein and three other target areas.

 The company said it hopes to drill peripheral targets as well and, for this reason, it is currently conducting detailed mapping and sampling and submitting permits. In an interview with MBN, Thomas Eckert, Director of Government and Corporate Affairs at MAG Silver, said that the Juanicipio project is going well and there is a lot of positivity surrounding its development.