Can you give us a brief overview of MAG Silver’s origins and how the Juanicipio project came about?

The project was discovered under the leadership of our then-chief geologist, Dr. Peter Megaw, who recognized the potential of the 17 km by 7 km property located on the Fresnillo Silver Trend—in the heart of the Fresnillo District, which has produced roughly one out of every 10 ounces of silver ever mined globally. Our first drill hole after going public was a discovery, something quite rare. In 2005, our neighbor Fresnillo, the world’s largest silver producer, approached us for an earn-in agreement. Since then, Fresnillo has become the operator with a 56% interest, while MAG Silver retains a 44% stake in the joint venture. Juanicipio entered commercial production in 2023. How has the mine performed in its first two years of operation?

Juanicipio is a Tier 1 primary silver mine with 85% of revenues derived from precious metals (75% silver and 10% gold). The plant has been operating at nameplate capacity of 4,000 t/d since Q3 2023 and, following some optimizations completed over the course of 2024, we are achieving silver recoveries of up to 95%. In 2024, we produced 18.6 million oz Ag Eq. This year, we are turning our attention to increasing the mining rate as we believe the mill can accommodate more ore. Moreover, we have the opportunity to process additional material at Fresnillo’s Saucito plant, which allows us to incrementally ramp up production at a low-cost, in a highly value-accretive manner. Based on our recent Q3 reports, Juanicipio is producing at an AISC of US$2.38/oz sold, leaving us with considerable margins at a silver price of over US$34/oz. Could you comment on the exploration upside?

In March 2024 we released a technical report declaring inaugural reserves of 15.4 million t proven and probable mineral reserves with an average grade of 628 g/t AgEq (248 g/t Ag, 1.58 g/t Au, 2.64% Pb, and 4.8% Zn). Based on this reserve estimate, Juanicipio has an initial 13-years LOM, however, the property remains vastly underexplored with significant potential for further discoveries. Moreover, the technical report shows that inferred resources mirror the size of the declared reserves, and in this area, inferred material converts to reserves at a rate of over 90%. Are you considering acquiring additional producing assets, on top of the the two exploration projects in Canada and the US, respectively?

MAG Silver had US$162 million in cash at the end of 2024, and we expect robust margins to continue in the coming quarters. Drilling the Deer Trail project in Utah or the Larder project in Ontario will not absorb more than US$8 to US$10 million a year each. To address the single-asset risk, we are looking at acquiring another operating silver and/or gold mine that could become a second source of cash flow.

MAG recently announced a capital allocation framework, comprising of a recurring fixed quarterly dividend of US$0.02 per share, and an additional quarterly dividend, paid in arrears, of 30% of the Juanicipio cash flow for the previous quarter as long as the silver price is above US$20/oz. This is a very enticing dividend in the silver space, and underlies the long-term value proposition that Juanicipio provides. Is Mexico still part of your inorganic strategy?

If you had asked me this question in October last year, my answer may have been different, but today, yes, we remain open to investing in Mexico. Mexico has a wonderful geological endowment and mining companies have become semi-proxies for government in terms of investments in infrastructure, health, schooling, and employment, benefitting primarily rural areas. The relationship between the industry and the government has been strained in the past but we see early signs that this may be changing for the better. Do you have a final message?

It is a great time to be a silver producer. We are in the sixth consecutive year of global silver supply deficits, whereby inventories are falling and demand keeps growing. The fundamentals for a bullish silver price are remarkable. MAG Silver, with 75% of revenues from silver, a generational mine with close to 30 years of life potential, and high margins, is not just a strong investment in today’s climate, but also well positioned even if silver prices were to pull back.