June 2018 Corporate Presentation
MAG: TSX / NYSE A
MAGSILVER.COM
Cautionary / Forward Looking Statements MAG Silver Corp. is a - - PowerPoint PPT Presentation
MAG: TSX / NYSE A MAGSILVER.COM June 2018 Corporate Presentation Cautionary / Forward Looking Statements MAG Silver Corp. is a Canadian issuer. This presentation is prepared by MAG Silver Corp (MAG TSX / MAG NYSE: A) management
June 2018 Corporate Presentation
MAG: TSX / NYSE A
MAGSILVER.COM
MAG : TSX / NYSE A
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MAG Silver Corp. is a Canadian issuer.
Peter Megaw, C.P.Geo, MAG’s Chief Exploration Officer is a non-independent Qualified Person and has reviewed this presentation and its content derived from industry information and 43-101 reports and news releases with specific underlying Qualified Persons as set out in the releases and reports. Industry Information has been compiled from publicly available sources and may not be complete, up to date or reliable. Neither the TSX nor the New York Stock Exchange American has reviewed or accepted responsibility for the accuracy or adequacy of this presentation, which has been prepared by management.
subject to risks and uncertainties which could cause actual results to differ materially from estimated results. Such risks and uncertainties include, but are not limited to: the Company’s ability to raise capital to fund development and exploration, changes in general economic conditions or financial markets, changes in metal prices, general cost increases, litigation, legislative, environmental and other judicial, regulatory, political and competitive developments in Mexico or Canada, technological and operational difficulties or inability to obtain permits encountered in connection with the Company’s exploration activities, community and labor relations matters and changes in foreign exchange rates, all of which are described in more detail in the Company’s filings with the Canadian securities regulators at www.sedar.com and the US. Securities and Exchange Commission at www.sec.gov/edgar.com There is no certainty that any forward looking statement will come to pass and investors should not place undue reliance upon forward-looking statements. MAG does not assume any obligation to update forward looking information, other than as required by applicable law.
Resources” and “Inferred Mineral Resources". MAG advises investors that although these terms are recognized and required by Canadian regulations (under National Instrument 43-101 Standards of Disclosure for Mineral Projects), the U.S. Securities and Exchange Commission does not recognize these
addition, "Inferred Mineral Resources" have a great amount of uncertainty as to their existence. It cannot be assumed that all or any part of an Inferred Mineral Resource will ever be upgraded to a higher category. Under Canadian rules, estimates of Inferred Mineral Resources are considered too speculative geologically to have the economic considerations applied to them to enable them to be categorized as mineral reserves and, accordingly, Inferred Mineral Resources may not form the basis of feasibility or pre-feasibility studies, or economic studies except for a “Preliminary Economic Assessment” as defined under Canadian National Instrument 43-101.Investors are cautioned not to assume that part or all of an Inferred Mineral Resource exists, or is economically or legally mineable. Please see additional information on SEDAR and on EDGAR.
investment representative / advisor prior to making any investment decision.
West Pender, Vancouver BC, Canada, V6C 2V6 or from the SEC: 1(800)-SEC-0330. The Company may access safe harbor rules.
at www.sedar.com and www.sec.gov/edgar/searchedgar/companysearch.html
payable ounces of silver projected to be produced over the life of mine. AISC is not a recognized measure under IFRS and this projected financial measure may not be comparable to AISC metrics presented by other silver producers.
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MAG : TSX / NYSE A
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“High Grade” High IRR District Scale
ZINC LEAD GOLD
in Mexico STRONG FINANCIAL POSITION
+
NO DEBT
*As of March 31, 2018
SIGNIFICANT EXPLORATION UPSIDE
JUANICIPIO JV
(MAG 44%)
BONANZA ZONE
145M oz Ag1 @ 550 g/t InD 41M oz Ag1 @ 648 g/t InF 848M lb Zn+Pb1 InD
DEEP ZONE
31M oz Ag1 InD, 49M oz Ag InF 790M lb Zn+Pb1 InD 1.73B lb Zn+Pb1 InF
After Tax IRR 44% 19 yr Mine Life @ 4000tpd Fresnillo Operator
InD = Indicated Resources InF = Inferred Resources See 2017 PEA
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1. March 31, 2018 2. Includes PSU, RSU & DSU’s = 723,932
CAD USD
Market Cap $1.2 Billion $1 Billion Recent $14.70 $11.50 52 wk L/H $11.71 – $17.62 $9.29 – $13.84 Daily AVG Vol 215,136 214,482
I think MAG is one of the best pure silver stories out there."
– The Gold Report Interview with John Hathaway, Tocqueville Assets Total Options2
2.9 M
Issued/Out
85.5 M
Fully Diluted
88.4 M
CASH
1
NO DEBT
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1 2 3 4 5 6 7
Cinco de Mayo
MAG Silver/Fresnillo JV (Minera Juanicipio)
MAG Silver Success
Juanicipio Vein* 2003 Valdecañas Vein* (Bonanza Zone) 2006 Pozo Seco* 2009 Upper Manto* 2011 Pegaso (Cinco) 2012 Valdecañas Deep Zone West* 2015 Valdecañas Deep Zone East* 2016 Anticipada Vein* 2017 1 2 3 4 5 6 7 8
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THE FRESNILLO SILVER TREND
Over 6.2 Billion oz of Silver > 10% of world historical production
2017: 38 Moz Ag
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+11 km ~7 km
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+2km Fresnillo Mine
2011: 30Moz Ag 2017: 16.5Moz Ag
Saucito I & II
2017: 21Moz Ag
Silver discoveries since 1552
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Valdecañas Vein Deep Zone, Dilatant Zone, Anticipada Vein
9 2,000m 1200m
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Zone Resource Category Tonnes (Mt) Ag (g/t) Au (g/t) Pb (%) Zn (%) Cu (%) Metal Contained in Resource Ag (Moz) Au (Koz) Pb (Mlb) Zn (Mlb) Cu (Mlb) Bonanza Zone Indicated 8.2 550 1.9 1.6 3.1 0.1 145 509 294 554 14 Inferred 2.0 648 0.8 1.3 2.8 0.1 41 52 58 123 3 Deep Zone Indicated 4.7 209 2.4 3.0 4.7 0.2 31 359 304 486 24 Inferred 10.1 151 1.6 2.7 5.1 0.3 49 510 601 1,129 69 Resource Category Tonnes (Mt) Ag (g/t) Au (g/t) Pb (%) Zn (%) Cu (%) Metal Contained in Resource Ag (Moz) Au (Koz) Pb (Mlb) Zn (Mlb) Cu (Mlb) Indicated 12.8 427 2.1 2.1 3.7 0.1 176 867 598 1041 38 Inferred 12.1 232 1.4 2.5 4.7 0.3 91 562 658 1252 71
Global Resource by Classification Bonanza and Deep Zone by Classification
As per 2017 PEA
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Description
PEA 2012 PEA 2017
CAPEX
$302M (100%) / $132M (44%) $360M (100%) / $159M (44%)
IRR (after tax)
43% 44%
Effective Tax Rate
~28% ~36%
AISC1
N/A2 $5.02 Ag /oz
Life of Mine
15 yr+ 19 yr (initially)
Throughput
2,650 tpd 4,000 tpd
Off site costs
$39/t $41/t
On Site Operating Cost
$67/t $59/t
Silver Price
$23.39 $17.90
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1“AISC” means All-in sustaining costs. The projected AISC was calculated by the authors of the 2017 PEA at a cost of $5.02/Ag by summing life of mine offsite and operating costs,
taxes, duties and royalties and sustaining capital, all net of by-product revenues, and dividing the resulting total by the total payable ounces of silver projected to be produced over the life of mine. AISC is not a recognized measure under IFRS and this projected financial measure may not be comparable to AISC metrics presented by other silver producers.2 not calculated in 2012 UPEA
3 calculations based on 100% of asset
As per 2017 PEA
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Total Capex $US 360M (MAG 44% = $US 159M)*
2016 2017 2018 2019 2020
Mill Procurement & Construction Initial Decline Completed
Production H1 2020
Ventilation Development Vent Fan Operating
*Source: PEA 2017
UG Access Ramp, Stope Development UG Infrastructure in progress Twin Decline
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Initial Decline Completed! 2nd Decline in progress
Valdecañas Vein
Portal (2,324 m elev.)
East Vein West Vein
Valdecañas Vein
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from 67 drillholes through the Valdecañas vein system.
flotation of a silver-rich lead concentrate, a zinc concentrate and a gold-rich pyrite concentrate.
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Silver Gold Lead Zinc Mill Recovery
95% 82% 93% 90%
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Area Cost ($/t mill feed) Mining 34.95 Processing 20.37 G & A 3.35
Total:
58.67 Metal Treatment Charges Cost ($/t mill feed) Silver refining 4% of Ag price 5.44 Gold refining $5/ounce of Au payable 0.16 Lead TCs $235(1)/dry metric tonne of concentrate 9.37 Zinc TCs $235(1)/dry metric tonne of concentrate 13.85 Transportation $115(2)/wet metric tonne of concentrate 12.50
Total:
41.32
Lead, Zinc and Pyrite concentrates
(1) Although current spot TCs for lead and zinc concentrates are approximately $50-$60/dry metric tonne (“dmt”),
rates above ($235/dmt) reflect projected long term sustainable rates.
(2) Assumes that both the lead and zinc concentrates will be treated in Asia, and assumes a moisture content of 10%
See 2017 PEA.
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Discount Rate (5%)
Base Case
Apples to Apples Metal Prices: 2012 Metal Prices (1) Silver ($/oz) 14.50
17.90
19.50 23.00 23.39 Gold ($/oz) 1,000
1,250
1,300 1,450 1,257 Lead ($/lb) 0.75
0.95
0.95 1.15 0.95 Zinc ($/lb) 0.75
1.00
1.05 1.20 0.91 Copper ($/lb) N/A – Copper excluded for purposes of PEA (2) Economics: 2017(3) 2012 (4) Pre-Tax NPV (M) $1,080
$1,860
$2,104 $2,776 $2,427 $1,762 After-Tax NPV (M) $635
$1,138
$1,295 $1,729 $1,503 $1,233 Pre-Tax IRR 45%
64%
71% 86% 83% 54% After-Tax IRR 30%
44%
49% 61% 58% 43% Undiscounted life of mine (“LOM”) after tax cash flow(M) $1,170
$1,995
$2,243 $2,945 $2,542 $2,162 Cash cost $/oz Ag (net of credits) (5) (0.35)
(3.94)
(4.45) (6.90) (3.11) (0.03) Total Cash cost $/oz Ag(6) 3.50
2.39
2.63 2.29 4.89 N/A(1) AISC $/oz Ag(7) 6.13
5.02
5.25 4.92 7.51 N/A(1) Payback (Years) From Plant Start up 2.6
1.8
1.6 1.2 1.2 2.1
1) Based on metal prices used in the previous 2012 Juanicipio PEA, this column has been provided in order to demonstrate the economic effect on the project given the expanded resource and enhanced project scope – and compares PEA economics. Corporate tax rate in 2012 used was 28% (with no special mining duty or gold/silver royalties). 2) Although the resource for the Deep Zone includes copper (see below), no copper circuit has been included in the PEA as no metallurgical testing and recovery assessment has yet been completed on copper. 3) See 2017 PEA 4) See Press Release June 14, 2012. Total Cash cost and AISC per oz. of silver were not calculated for the 2012 report. 5) Cash costs include all operating costs, smelter, refining and transportation charges, net of by-product (gold, lead and zinc) revenues. 6) Total cash costs include cash costs and all corporate taxes, special mining duties, and precious metals royalties. 7) “AISC” means All-in sustaining costs. The projected AISC was calculated by the authors of the 2017 PEA at a cost of $5.02/Ag by summing life of mine offsite and operating costs, taxes, duties and royalties and sustaining capital, all net of by-product revenues, and dividing the resulting total by the total payable ounces of silver projected to be produced over the life of mine. AISC is not a recognized measure under IFRS and this projected financial measure may not be comparable to AISC metrics presented by other silver producers.
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HIGHEST GRADE
DEVELOPING SILVER ASSET
FINANCIAL
MINIMAL RISK
GEOPOLITICAL
MINIMAL RISK
DEVELOPMENT
MINIMAL RISK SIGNIFICANT EXPLORATION UPSIDE
INFRASTRUCTURE
HISTORICAL GREAT
METALLURGY PROPERTY ACCESS
MINIMAL RISK
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Deep Zone, Dilatant Zone & Anticipada vein
20 2,000m 1200m
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Silver Lead Gold Zinc Copper
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Gold Vein Thickness
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SKARN
2000m
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Saucito I & II
2017: 21Moz Ag
Fresnillo Mine
2011: 30Moz Ag 2017: 16.5Moz Ag
~7 km
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+2km
FRS 2015 AR: Huizache Vein Inferred Resource 750KT @ 2.9 Au; 494 Ag; 0.06% Pb; 0.13% Zn
+11 km
Silver discoveries since 1552
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7km 16km
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Saucito I & II
2017: 21Moz Ag
Fresnillo Mine
2011: 30Moz Ag 2017: 16.5Moz Ag
~7 km
26
+2km
FRS 2015 AR: Huizache Vein Inferred Resource 750KT @ 2.9 Au; 494 Ag; 0.06% Pb; 0.13% Zn
+11 km
Silver discoveries since 1552
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27 7km 16km
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DEVELOPMENT
Bonanza Zone
>550 g/t Silver AISC1 $5.02 Ag/oz
4,000 tpd 19 yr Mine Life H1 2020 EVOLUTION
Deep Zone
>7.5% Zn + Pb >150 g/t Silver Copper Credit 4,000 tpd Year 6 Production EXPLORATION Deep Zone extensions NW Structures NE Structures Cesantoni 20,000m drill program
1“AISC” means All-in sustaining costs. The projected AISC was calculated by the authors of the 2017 PEA at a cost of $5.02/Ag by summing life of mine offsite and operating costs, taxes, duties and royalties and sustaining capital, all net of by-product revenues, and dividing the resulting total by the total payable ounces
comparable to AISC metrics presented by other silver producers.
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Firm Analyst Target (C$) ROTH Capital Partners Joe Reagor $28.49 Cormark Securities Tyron Breytenbach $26.00 Scotia Capital Trevor Turnbull $25.90 Macquarie Capital Markets Michael Gray $25.50 PI Financial Phil Ker $24.85 Rodman & Renshaw Heiko Ihle $24.60 Euro Pacific Capital Bhakti Pavani $22.66 BMO Capital Markets Ryan Thompson $22.00 TD Securities Daniel Earle $22.00 Raymond James Tara Hassan $21.00 Canaccord Genuity Kevin MacKenzie $21.00 National Bank Financial Shane Nagle $19.00 Average Target Price: $23.58
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87%
BlackRock Investment Mgmt 16.0% Fresnillo PLC 11.4% Tocqueville Asset 8.9% Van Eck Associates 5.4% Equinox / Mason Hill 3.3% Colonial First State 3.2% Vanguard/ PM&M 3.2% First Eagle 2.8% 1832 Asset Mgmt 1.6% GAMCO / Gabelli Asset Mgmt 1.6% Sprott Asset Mgmt 1.4% Global X Mgmt 1.3% RBC Global Asset Mgmt 1.2% Franklin Advisers 1.2% Institutions <1M shares 21% Total Institutions 87% Retail & Float 13%
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Directors Jonathan Rubenstein
Peter Barnes
Richard Clark
Richard Colterjohn
Jill Leversage
Dan MacInnis
Derek White
Officers George Paspalas
Larry Taddei
Michael Curlook
and Communications Jody Harris
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MAG: TSX / NYSE A
MAGSILVER.COM