MAG Silver stock skyrockets on Sprott investment

Plant site at Juanicipio. Image from MAG Silver.

MAG Silver (TSX: MAG) announced on Monday it has arranged a non-brokered private placement with mining investor Eric Sprott, offering approximately 4.53 million common shares of the company at a price of C$13.25 ($9) per share for gross proceeds of C$60 million ($42m).

Shares of MAG skyrocketed more than 17% during Monday’s morning session to a six-month high of C$16.08 per share. The Vancouver-based silver miner has a market capitalization of C$1.39 billion.

MAG intends to use the net proceeds of the financing for its Juanicipio project in Mexico, as well as working capital and general corporate purposes.

Juanicipio is a joint venture project in which MAG owns a 44% interest, with Fresnillo, the world’s largest silver miner, holding the remaining 56%. The property is located in Zacatecas state, 8 kilometres (5 miles) away from the Fresnillo underground mine, which has been producing silver for more than five centuries.

Fresnillo, as operator, is currently constructing and developing the surface and underground infrastructure on the property to support a 4,000-tonne-per-day mining operation.

Earlier this year, Fresnillo brought forward the anticipated production start date of the silver-gold project to mid-2020. Once operational, the mine is expected to produce 11.7 million ounces of silver and 43,500 ounces of gold annually over an initial 12-year mine life.

6592 0

Comments

Your email address will not be published. Required fields are marked *

More Canada News