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Stockchase Insights Mag Silver Corp MAG-T BUY Apr 29, 2024

Trevor Rose’s Insights - Trevor’s most-liked answers from 5i Research

We think MAG fits the bill. Its Mexican (safe) mine only recently went into production, and 2024 will be the first year of material revenue/cash flow for the company. The stock is acting well this year as it gets re-rated as a producer. It is not overly expensive and has good growht/exploration potential.
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TOP PICK

They are in development and should be in production next year. It is a world class asset. It should be a takeover target. (Analysts’ price target is $19.66)

TOP PICK

Mag is one of the highest-grade developers in the world. Fresnillo will likely take it out and would push the stock past $23. (Analysts’ price target is $19.79)

COMMENT

Gold will stay strong. Usually silver gets dragged along with it. It’s quite expensive for a silver stock. If you believe gold will hang in, and commodity will come back, then he would be a buyer. It would still be a long term hold still. (Analysts’ price target is $20.50)

BUY

The silver-gold ratio? The silver-gold ratio is artificial; scarcity shouldn't determine the price, rather by production costs. Gold (price) moves first, but silver moves later and further. He owns a lot of MAG, one of the highest-grade silver deposits in the world. Well-run. Will generates lots of free cash.

PAST TOP PICK

(A Top Pick Dec 20/18, Up 61%) He still likes this one. See his top picks today. It is getting closer to fair value here. He is still positive on precious metals over the long term. This one is more expensive than in 2000. The global economy has peaked and is in the process of rolling over.

COMMENT

MAG has a good project in Mexico. However, with Americas Silver, you have better leverage with active mines. Execution from a time perspective will come up faster. However, he has a $21 target for MAG. Silver will probably move faster than gold. If silver hits $20, he would go with SPM.

BUY

They have probably found the richest new silver discovery in the last 20 years, in central Mexico. They own 44% of it. Given the pullback from last week, this is a great time. They don't need leverage to silver.

BUY

MAG vs. SIL Both world-class deposits. At current prices, he likes both. Complication around MAG is that there's only one obvious bidder. SIL seems to get better and better, as they get farther along the development curve. He owns both, and both are in Buy range today.

BUY

Expectations got way too high a couple of years ago. Still a fair amount of exploration and operating upside. High quality silver companies are rare. At the end of a precious metals bull market, silver stocks tend to outperform.

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