MAG Silver Corp (MAG) 2024 Q1 法說會逐字稿

Hello everybody. Welcome to MAG Silver's Q1 2024 results videocast. Please refer to our financial statements and MD&A posted on our website or filed on SEDAR and EDGAR for further details.

Okay. So firstly, let's take a look at the Q1 results from the Juanicipio Mine, which is operated by Fresnillo plc, our 56% partner in the project. All information related to the Juanicipio Mine is discussed here on a 100% basis. All reference to dollars are in US dollars.

We had a strong first quarter with 4.5 million ounces of silver produced, which together with strong gold, lead, and zinc production delivered 6.4 million ounces of silver equivalent production. The processing plant continued to perform well despite a prolonged planned maintenance shutdown.

For the quarter, Juanicipio milled 326,000 tonnes of ore at an average silver grade of 476 grams per tonne and an average silver recovery of 89%. With continued strong silver prices, silver revenue totaled $95 million during the period on silver sales of 4 million ounces.

Total revenue, including byproducts, totaled $134 million on silver equivalent sales of 5.6 million ounces. Silver prices continue to be margin supportive, with the mine realizing an average silver price of $23.73 for the quarter. Treatment and refining costs for the quarter were around $10 million in aggregate, delivering total sales of $124 million.

Pivoting now to operating costs. The mine's cash operating costs were $2.50 per silver ounce sold, with all in sustaining cash costs of $6.11 per silver ounce sold. On an equivalent basis, the mine delivered equally impressive cash operating costs of $8.66, and all in sustaining cash costs of $11.22 per silver equivalent outsold. This performance was a record for Juanicipio. And we're very proud of this result as it showcases how far Juanicipio has come in this optimization and cost control journey since commissioning commenced just over a year ago.

The positive cost performance delivered robust margins with Juanicipio delivering a record all-in sustaining margin of $70.4 million in Q1. Q1 continued to be a strong cash generation quarter for Juanicipio. Driven by the delivery of reductions in operating costs in a stable yet elevated commodity price environment, specifically in the precious metal complex.

Juanicipio generated cashflow from operations of $42.5 million for the quarter, with the mine generating $27.8 million in free cashflow. From a corporate perspective, at MAG, our equity accounted income from the joint venture was $19.4 million, yielding net income of $15 million or $0.14 per share for the quarter. Our adjusted EBITDA was $32.5 million.

During the quarter, MAG continued to repatriate excess cash from Juanicipio, with $17.5 million in interest and loan repayments received here in Vancouver. MAG's cash position remained strong, with $74.7 million as of March 31, and with no debt.

We continued to progress our exploration programs during the first quarter. In late March, we closed the acquisition of a gold stake property adjacent to our Larder Project in Ontario. This acquisition doubles our land holding in one of the most prolific gold producing camps in the world. Our team are working on integrating the property into our programs and we look forward to providing updates in the coming quarters.

On the Larder Project, drilling targeted the Cheminis and Bear areas and totaled 5,391 meters in Q1 of 2024. Targets tested included the down plunge extension of the high-grade double knuckle at the Bear East Zone and extending the Cheminis South Mine Sequence down plunge. Initial results showed robust grades at economic thicknesses in the North Bear Zone.

At the deer trail project in Utah, phase 3 drilling delivered exciting results with two of the hub holes intercepting alteration and mineralization consistent with what is expected on the edges of porry systems. Phase 4 drilling, which was focused on offsetting the Carisa discovery, was accelerated as the early onset of snowfall last year impacted the commencement of the 3rd Porphyreehub target.

During 11 1,208 m were drilled at Carissa, with final results pending.

Deertra continues to confirm the hub and spoke thesis, and we continue to be encouraged by the results as we enter the final stages of the 100% earn into the property.

Beyond larder and deer trail, we must not lose sight of the fact that only 5% of the Juanocipio property has been explored.

We continue to work with FresNO, our partner and operator of Juan CPO, to unlock the potential of both near mine and regional exploration of Juan CPO to expand the resources and reserves, as well as proving up potential new upwelling targets.

At MAG, ESG continues to be something we take very seriously and something we believe we do very well.

We are committed to running our operations to the highest international standards. We are well underway with the preparation of our 2023 sustainability report, which we expect to publish later this year. The report will underscore our continued commitment to transparency with our stakeholders while providing a comprehensive overview of the company's ESG commitments, practices, and most importantly, performance.

Looking forward, we announced production and cost guidance for one of CPO for 2024, which is expected to produce between 14.3 million and 15.8 million silver ounces, yielding between 13.2 and $14.6 million payable ounces at all in sustaining cash costs between $9.50 and $10.50 per ounce of silver sold.

Our Q1 performance positions us well for the achievement of guidance in 2024.

We also published our updated technical report on Juno SippiO outlining robust economics with an after-tax NPV of $1.2 billion over an initial 13 year mine life, generating annual average free cash flow exceeding $130 million.

Remember, the 13 year mine life is the reserve mine life only. The actual mine life will significantly exceed the 13 years as resources are incorporated into the reserve base and the mine plan.

Mineral resources increased by 33% from the 2017 PEA with substantial growth in measured and indicated categories. Inferred resources also expanded, highlighting significant near-term, high grade upside potential, while the inaugural mineral reserve estimate enhances economic confidence.

I encourage you to view the technical report presentation available on our website as it clearly portrays the quality of the Juan OsipO asset and reinforces Juan Osippio as a high margin, long-life tier one mining asset.

Thank you for watching today and I look forward to our next video cast in August, when I'll update you on our 2nd quarter, 2024 results.