April 19, 2017 | 11:33 AM by Jay Kunstman | jkunstman@jaguaranalytics.com

MAG Silver (MAG) – The Juanicipio Project

In the JaguarLive chat room over the past week, we began to highlight the following Bull Risk Reversals in this silver mining company:

On April 13th:

-300 November 10 Puts Sold to Open for 0.72
-400 November 12.5 Calls Bought to Open for 3.23
-400 November 20 Calls Sold to Open for 0.81

On April 17th:

-600 November 10 Puts Sold to Open for 0.62
-600 November 12.5 Calls Bought to Open for 2.85
-600 November 20 Calls Sold to Open for 0.58

MAG Silver is currently focused on advancing and exploring high grade district scale projects located within the Mexican Silver Belt. Their mission is to become one of the premiere companies in the silver mining industry. They currently have a 44% interest in the Juanicipio project (Fresnillo with 56% interest) comprising a single concession covering 7,679.21 hectares located in central Zacatecas State, Mexico. It also owns 100% interest in the Cinco de Mayo property consisting of 29 concessions covering an area of 25,113.2049 hectares located in the Municipio de Buenaventura, Chihuahua, Mexico.

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Back on October 4th, Roth Capital analyst Joe Reagor upgraded the stock to Buy from Neutral after attending an analyst site visit to the company’s Juanicipio project. Based on the visit, Mr. Reagor believed there was “significant” exploration potential beyond his prior expectations. Mr. Reagor also raised his price target on the shares to $18 from $16.

Then, on March 1st, TD Securities analyst Daniel Earle upgraded the stock to Speculative Buy citing major news regarding the Juanicipio joint venture and what appears to have reported actual growth.

These bullish comments were in line to what MAG Silver announced last month when it reported on exploration results and a new deep discovery beneath the Valdecañas Bonanza Grade Vein System on the Minera Juanicipio joint venture property.

The results from these drilling campaigns confirmed:

• Continuous mineralization extends below the Valdecañas Bonanza Grade mineralization
• Revealed a substantial widening of this deeper mineralization into a well-defined dilatant zone which resulted in the discovery of the new “Anticipada Vein”, within the vein system.

“A new resource estimate incorporating the drilling results from these programs is in progress and is expected to be completed in the second quarter of 2017.”

It was also reported that given the potential size of these additional mineralized zones, the Joint Venture partners, led by JV Operator Fre snillo, have been considering project design enhancements to maximize the value of both the Bonanza Zone and the new deeper zone. Considerations include increasing the processing plant nameplate capacity from 2,650 tonnes per day to 4,000 tonnes per day and sinking an internal shaft to access the deeper zone sooner.

“Fresnillo has indicated that permitting based on the upgraded design has already commenced, and that they expect their Board to give formal project approval in the next 3 to 4 months.”

Technically, the chart has fallen below the $13 support level. It may be prudent to wait and see if this is just a failed breakdown and if shares can bounce back above it.

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#MAG#SLV

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