Mag Silver Corp (NYSEMKT:MVG)

CAPS Rating: 2 out of 5


Player Avatar silverincite (33.98) Submitted: 8/29/2009 12:47:06 PM : Outperform Start Price: $5.40 MVG Score: -120.91

MAG Silver Corp (AMEX:MVG and TSE:MAG) has really underperformed compared to other silver companies in the past year and it could be a good candidate for a quick gain. However, ever since the "takeunder" bid from Fresnillo (LON:FRES), their joint venture partner and operator of their main asset, the Juanicipio property, they have languished. It seems to me MAG picked a very good spot and have found very nice grades right next to Fresnillo's massive silver property and thought that they would get a decent return for the solid exploration work they put into it, but the problem is Fresnillo does not want to pay a fair price. They want it at their price and are big enough to wait MAG out. Also, it seems no other silver company wants to have to deal with an uncooperative partner like Fresnillo, so no other bids for MAG's property have been made and MAG was relying on Fresnillo to develop the property. It is very unclear how things will work out going forward with this property and for this reason it seems MAG is making an effort to establish other viable projects through acquisitions of promising properties in other parts of Mexico.

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