BMO on MAG Silver: Speculative Outperform

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A project so robust that we can mess up and still make a lot of money

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BMO on MAG Silver: Speculative Outperform

posted on Jul 28, 2008 01:09PM

I highly recommend downloading the report and giving it a thorough read. There is a LOT going on in there. It succinctly sums up MAG's properties, their valuation and Frensnillo/Penoles' plans for the Valdecanas deposit.

A terrific resource for all MAG shareholders.

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Highlights:

• Based on our financial, resource and operating assumptions, MAG’s shares are trading at a 40% discount to our 0% NAV estimate of US$14.55 per share using our BMO metals price forecast and at a 57% discount to our 0% NAV of US$20.14 using the spot silver and gold prices of US$17.36/oz and US$920/oz, respectively.

• We are initiating coverage of MAG Silver Corp. with an Outperform (Speculative) rating. We do not assign target prices to exploration-level companies that have not completed a feasibility study, are not fully financed, are not permitted and whose major project is a number of years away from potential production.