MAG Silver (MAG) - 2025 Q2 - Quarterly Report

Introduction This section outlines the MD&A's scope, currency, trading information, and important cautionary statements regarding forward-looking information and technical disclosures MD&A Scope and Currency This MD&A covers MAG Silver Corp.'s financial condition and operations for Q2 2025, prepared as of August 8, 2025, with all dollar amounts in thousands of US dollars and US$ as the functional currency - MD&A focuses on Q2 2025 financial condition and results of operations for MAG Silver Corp[5] - All dollar amounts are in thousands of United States dollars (US$), unless otherwise stated, with the functional currency of the parent, its subsidiaries, and its investment in Juanicipio being US$[6] Trading Information and Reporting Status MAG Silver's common shares trade on the TSX and NYSE American under the ticker symbol MAG, and the company is a reporting issuer in Canada and a foreign issuer in the U.S - Common shares trade on the Toronto Stock Exchange (TSX) and on the NYSE American, LLC both under the ticker symbol MAG[7] - MAG Silver is a reporting issuer in each of the provinces and territories of Canada and is a reporting 'foreign issuer' in the United States of America[7] Cautionary Statements and Qualified Persons The MD&A contains forward-looking statements and technical disclosures prepared in accordance with NI 43-101, with scientific and technical information approved by Qualified Persons Gary Methven and Lyle Hansen - This MD&A contains forward-looking statements which should be read in conjunction with the risk factors described in section 'Risks and Uncertainties' and the cautionary statements provided in section 'Cautionary Statements – Cautionary Note Regarding Forward-Looking Statements'[8] - Technical disclosure regarding the Company's properties, including use of 'Mineral Resources' and 'Mineral Reserves', has been prepared in accordance with National Instrument 43-101 (NI 43-101) and CIM Definition Standards[9] - All scientific or technical information in this MD&A is based upon information prepared by or under the supervision of, or has been approved by Gary Methven, P.Eng., Vice President, Technical Services and Lyle Hansen, P.Geo., Geotechnical Director; both are 'Qualified Persons' for the purposes of NI 43-101[10] Description of Business MAG Silver Corp. is a Canadian mining and exploration company focused on high-grade precious metals projects in the Americas, primarily through its 44% investment in the Juanicipio Mine in Mexico and exploration programs at the Deer Trail Project in Utah and Larder Project in Canada Company Overview and Core Assets MAG Silver Corp. is a growth-oriented Canadian mining and exploration company focused on high-grade precious metals projects in the Americas, primarily through its 44% investment in the Juanicipio Mine in Mexico and exploration programs at the Deer Trail Project in Utah and Larder Project in Canada - MAG Silver Corp. is a growth-oriented Canadian mining and exploration company focused on advancing high-grade, district scale precious metals projects in the Americas[12] - MAG is a top-tier primary silver mining company through its 44% investment in the 4,000 tonnes per day ('tpd') Juanicipio mine, operated by Fresnillo plc (56%)[12] - MAG is also executing multi-phase exploration programs at the 100% earn-in Deer Trail Project in Utah and the 100% owned Larder Project in the historically prolific Abitibi region of Canada[12] Pan American Silver Corp. Transaction MAG Silver entered a definitive agreement with Pan American Silver Corp. on May 11, 2025, for Pan American to acquire all MAG shares, with shareholder approval on July 10, 2025, and closing expected in H2 2025 - On May 11, 2025, the Company and Pan American Silver Corp. ('Pan American') entered into a definitive agreement whereby Pan American agrees to acquire all of the issued and outstanding common shares of the Company[13] - On July 10, 2025, MAG's shareholders approved the Transaction at its special shareholders meeting[13] - The Transaction is expected to close in the second half of 2025, subject to the satisfaction of customary closing conditions, including clearance under Mexican anti-trust laws, and approval of the listing of the Pan American common shares[13] Highlights – June 30, 2025 & Subsequent to Quarter End This section highlights MAG Silver's Q2 and H1 2025 financial and operational performance, including record net income, strong Juanicipio production, and corporate and exploration updates Q2 2025 Financial and Operational Highlights MAG reported record net income of $33.4 million and adjusted EBITDA of $56.4 million in Q2 2025, driven by strong performance from Juanicipio, which processed 342,515 tonnes of ore with high silver recovery and achieved record low cash and all-in sustaining costs MAG Silver Q2 2025 Financial Highlights | Metric | Q2 2025 (US$ thousands) | Per Share (US$) | | :----------------------------- | :---------------------- | :-------------- | | Net Income | 33,444 | 0.32 | | Adjusted EBITDA | 56,442 | | | Income from Juanicipio (equity) | 42,091 | | | Attributable Juanicipio Adj. EBITDA | 63,221 | | Juanicipio Q2 2025 Operational Highlights (100% basis) | Metric | Q2 2025 | | :----------------------------- | :---------------------- | | Ore Processed | 342,515 tonnes | | Silver Head Grade | 417 g/t | | Equivalent Silver Head Grade | 661 g/t | | Silver Recovery | 94.6% (up from 92.4% in Q2 2024) | | Silver Production | 4.3 million ounces | | Equivalent Silver Production | 6.6 million ounces | | Operating Cash Flow | $110,639 | | Free Cash Flow | $92,891 | | Cash Cost per Silver Ounce Sold | -$3.90 | | All-in Sustaining Cost per Silver Ounce Sold | $0.65 | - During April 2025, Juanicipio returned a total of $61,500 to MAG: $59,400 as a second dividend payment, and $2,100 in interest and loan principal repayments, with all loans to Juanicipio now fully repaid[19] Six Months Ended June 30, 2025 Financial and Operational Highlights For the first half of 2025, MAG reported net income of $62.2 million and adjusted EBITDA of $112.2 million, with Juanicipio processing 679,532 tonnes of ore, achieving 95.3% silver recovery and exceeding silver production guidance with 8.8 million ounces, while maintaining strong cost performance MAG Silver H1 2025 Financial Highlights | Metric | H1 2025 (US$ thousands) | Per Share (US$) | | :----------------------------- | :---------------------- | :-------------- | | Net Income | 62,188 | 0.60 | | Adjusted EBITDA | 112,192 | | | Income from Juanicipio (equity) | 75,955 | | | Attributable Juanicipio Adj. EBITDA | 122,689 | | Juanicipio H1 2025 Operational Highlights (100% basis) | Metric | H1 2025 | | :----------------------------- | :---------------------- | | Ore Processed | 679,532 tonnes | | Silver Head Grade | 423 g/t | | Equivalent Silver Head Grade | 660 g/t | | Silver Recovery | 95.3% (up from 90.8% in H1 2024) | | Silver Production | 8.8 million ounces (surpassing guidance) | | Equivalent Silver Production | 13.1 million ounces | | Operating Cash Flow | $197,038 | | Free Cash Flow | $170,329 | | Cash Cost per Silver Ounce Sold | -$2.38 | | All-in Sustaining Cost per Silver Ounce Sold | $1.36 | - Juanicipio continued to maintain its strong cost performance with cash cost of negative $2.38 per silver ounce sold and all-in sustaining cost of $1.36 per silver ounce sold, significantly outperforming cost guidance driven by lower treatment costs, lower sustaining capital expenditures coupled with higher production output and higher by-product revenue for the first half of 2025[20] Corporate and Exploration Updates Corporate updates include a new board appointment and the release of the fourth annual sustainability report, while exploration efforts at Juanicipio, Deer Trail, and Larder Projects involved significant drilling and geophysical programs with notable gold intersections at Larder - John Armstrong was appointed to the Company's board of directors effective January 31, 2025, and later welcomed as the new Chairman of the Board on June 18, 2025[24] - On June 19, 2025, MAG released its fourth annual sustainability report, highlighting the Company's ongoing commitment to transparency and accountability[24] - During Q2 2025, 9,494 metres (six months ended June 30, 2025: 16,486 metres) were drilled from underground at Juanicipio, focusing on infill drilling and testing for a deep skarn target and near-mine veins, while surface drilling totaled 6,174 metres (six months ended June 30, 2025: 7,603 metres), testing the Cañada Honda and newly identified Magdalena structures[24] - During Q2 2025, MAG initiated a comprehensive geophysical program across the Deer Trail Project area, comprising an Ambient Noise Tomography ('ANT') survey as well as airborne radiometric and magnetic surveys, designed to enhance subsurface geological mapping and improve the identification of structural features, with new geochronological age dates continuing to confirm the Deer Trail Property belongs to the Bingham style family of rocks with strong mineralization potential[26][71] - During Q2 2025, MAG commenced its field program and Phase 1 drilling program at the Italian Zone (formerly the Instant Pond Zone at the Goldstake Property), completing 5,243 metres in nine drillholes, with significant intersections including: 21.0 g/t gold over 0.5 metre (LP-25-001), 12.4 g/t gold over 0.5 metre (LP-25-004) and 16.4 g/t gold over 0.7 metre (LP-25-005)[26][27] Results of Juanicipio This section details Juanicipio's ownership, strong operating performance, exploration updates, and significant financial and cash flow results for Q2 and H1 2025 Ownership and Structure MAG owns 44% of Minera Juanicipio, with Fresnillo plc operating the mine and holding the remaining 56%, while Equipos Chaparral, also 44% owned by MAG, holds the plant and mining equipment leased to Minera Juanicipio - MAG owns 44% of Minera Juanicipio, S.A. de C.V., which owns Juanicipio, with Fresnillo as the mine operator holding the remaining 56%[28] - Equipos Chaparral, S.A. de C.V., was incorporated in the same ownership proportions as Minera Juanicipio for the purpose of holding the Juanicipio plant and mining equipment to be leased to Minera Juanicipio[28] Operating Performance Juanicipio demonstrated strong operating performance in Q2 and H1 2025, with increased material mined and processed, improved silver recovery, and significantly reduced cash and all-in sustaining costs per silver ounce, despite a decrease in silver head grade compared to the prior year Juanicipio Key Mine Performance Data (100% basis) | Metric | Q2 2025 | Q2 2024 | H1 2025 | H1 2024 | | :----------------------------- | :------ | :------ | :------ | :------ | | Metres developed (m) | 3,596 | 3,520 | 7,250 | 7,589 | | Material mined (t) | 355,785 | 349,460 | 703,252 | 674,541 | | Material processed (t) | 342,515 | 336,592 | 679,532 | 662,275 | | Silver head grade (g/t) | 417 | 498 | 423 | 488 | | Equivalent silver head grade (g/t) | 661 | 746 | 660 | 730 | | Silver ounces sold (koz) | 3,829 | 4,272 | 7,811 | 8,267 | | Equivalent silver ounces sold (koz) | 5,648 | 5,817 | 11,127 | 11,421 | Juanicipio Safety Performance Data (100% basis) | Metric | Q2 2025 | Q2 2024 | H1 2025 | H1 2024 | | :----------------------------- | :------ | :------ | :------ | :------ | | Lost Time Injury Frequency Rate (LTIFR) | 4.8 | 8.5 | 3.9 | 6.3 | | Total Reportable Injury Frequency Rate (TRIFR)* | 7.8 | 16.2 | 6.8 | 10.9 | - MAG reported a fatal incident at Juanicipio in July 2025; a full investigation was immediately launched, and this incident is not expected to affect 2025 guidance and production outlook[35] - Silver metallurgical recovery during the three and six months ended June 30, 2025 was 94.6% and 95.3%, respectively (three and six months ended June 30, 2024: 92.4% and 90.8%, respectively) reflecting the commencement of commercial pyrite and gravimetric concentrate production during Q2 2024 delivering incremental silver and gold recovery paired with ongoing optimizations in the processing plant[39] Juanicipio Cost Performance (100% basis) | Metric | Q2 2025 ($/oz) | Q2 2024 ($/oz) | H1 2025 ($/oz) | H1 2024 ($/oz) | | :----------------------------- | :------------- | :------------- | :------------- | :------------- | | Cash cost per silver ounce sold | (3.90) | 1.15 | (2.38) | 1.80 | | All-in sustaining cost per silver ounce sold | 0.65 | 4.49 | 1.36 | 5.27 | Exploration Update Juanicipio's exploration expenditures for Q2 and H1 2025 totaled $3.5 million and $4.4 million, respectively, focusing on infill underground drilling and surface drilling of the Cañada Honda and Magdalena structures, with no significant assay results yet Juanicipio Exploration Program Expenditures | Period | Expenditures (US$ thousands) | Underground Drilling (metres) | Surface Drilling (metres) | | :----- | :--------------------------- | :---------------------------- | :------------------------ | | Q2 2025 | 3,543 | 9,494 | 6,174 | | H1 2025 | 4,385 | 16,486 | 7,603 | - Underground drilling was primarily focused on infill drilling areas of the resource expected to be mined in the near to mid-term including Valdecañas, Anticipada, Ramal 1, Ramal 2 and Venadas veins[44] - Surface drilling was focused on further testing the Cañada Honda structure with two drill rigs drilling directional holes and one rig drilling the new Magdalena target, with no significant assay results received[44] Financial Results Juanicipio's sales increased significantly in Q2 and H1 2025 due to higher realized metal prices and lower treatment charges, leading to substantial increases in gross profit and net income, despite negative foreign exchange differences Juanicipio Financial Results (100% basis) | Metric | Q2 2025 (US$ thousands) | Q2 2024 (US$ thousands) | H1 2025 (US$ thousands) | H1 2024 (US$ thousands) | | :----------------------------- | :---------------------- | :---------------------- | :---------------------- | :---------------------- | | Sales | 186,465 | 167,079 | 361,700 | 290,768 | | Gross profit | 128,622 | 104,757 | 249,612 | 169,621 | | Net income (100% basis) | 95,637 | 53,857 | 172,521 | 93,615 | | MAG's 44% equity income | 42,091 | 25,123 | 75,955 | 44,367 | - Sales increased by $19,386 (Q2 2025) and $70,932 (H1 2025) due to 13% and 24% higher realized metal prices, respectively, and lower treatment and refining charges[47][53] - Production costs decreased by $3,416 (Q2 2025) and $6,541 (H1 2025) mainly due to lower mining costs (labor and energy) and higher stockpile inventory build-up[48][53] - Cash operating margin increased from 76% to 80% (Q2 2025) and 74% to 81% (H1 2025), mainly due to positive commodity price movements, lower treatment and refining costs, and reduced operating costs[49][54] Cash Flow Results Juanicipio generated strong cash flow from operating activities in Q2 and H1 2025, driven by higher operating margins, while cash used in investing activities increased due to higher working capital and capital expenditures, and financing activities saw a significant increase in cash used due to dividend payments and loan repayments to shareholders Juanicipio Cash Flow Summary (100% basis) | Metric | Q2 2025 (US$ thousands) | Q2 2024 (US$ thousands) | H1 2025 (US$ thousands) | H1 2024 (US$ thousands) | | :----------------------------- | :---------------------- | :---------------------- | :---------------------- | :---------------------- | | Operating activities | 110,639 | 92,766 | 197,038 | 135,286 | | Investing activities | (17,618) | (3,780) | (26,454) | (18,272) | | Financing activities | (139,904) | (68,121) | (140,028) | (108,012) | | Cash and cash equivalents, end of period | 83,717 | 51,422 | 83,717 | 51,422 | - Cash flow from operating activities increased by $17,873 (Q2 2025) and $61,752 (H1 2025) mainly as a result of higher operating margins driven by 13% and 24% higher realized metal prices, respectively[59][60] - Net cash used in investing activities increased by $13,837 (Q2 2025) and $8,182 (H1 2025), mainly driven by higher working capital requirements, sustaining capital exploration, mine projects expenditures, and expansionary capital expenditures linked to the Juanicipio conveyor project[61][62] - Net cash used in financing activities increased by $71,783 (Q2 2025) and $32,016 (H1 2025) due to $135,000 of dividends and $4,774 of loan and interest repayments to shareholders[63][64] Deer Trail Project This section provides an overview of the Deer Trail Project, including its background, exploration activities, and associated expenditures Background and History MAG holds a 100% earn-in option on the Deer Trail Project in Utah, a 6,500-hectare silver-rich Carbonate Replacement Deposit, having met all minimum obligatory commitments as of June 30, 2025, and continuing to apply advanced exploration techniques - MAG has the right to earn a 100% interest in the Deer Trail Project, which includes approximately 6,500 hectares, with the counterparties retaining a 2% net smelter returns royalty[65] - MAG has met the earn-in criteria, expending $40,655 (target $30,000) in exploration and paying $1,050 (target $2,000) in advanced royalty payments by June 30, 2025[65] - The Company believes that the Deer Trail Project is a silver-rich Carbonate Replacement Deposit related to one or more porphyry intrusive centres[66] Exploration Activities and Results In Q1 2025, six RC holes were completed to assess pre-collaring feasibility, with anomalous silver values noted in one hole, while Q2 2025 saw the initiation of a comprehensive geophysical program (ANT, airborne radiometric/magnetic surveys) and a 9km 2D seismic line to refine drill targets, with geochronological age dates continuing to support the Bingham family mineralization hypothesis - During Q1 2025, six reverse circulation ('RC') holes totalling 1,783 metres were completed at Deer Trail to assess the feasibility of pre-collaring holes, which was successful in reducing costs and increasing speed[68] - Anomalous silver values (six meters of 47 g/t silver) were noted in hole DTRC25-001, which could indicate a shallow bleeder vein[68] - During Q2 2025, MAG initiated a comprehensive geophysical program across the 112 km² project area, comprising an Ambient Noise Tomography ('ANT') survey as well as airborne radiometric and magnetic surveys, designed to enhance subsurface geological mapping and improve the identification of structural features, with a 9km 2D seismic line completed in Gold Gulch to validate, refine and rank drill targets, and new geochronological age dates continuing to confirm that the Deer Trail Property belongs to the Bingham style family of rocks with strong mineralization potential[69][70][71] Exploration and Evaluation Expenditures Total exploration and evaluation expenditures for the Deer Trail Project amounted to $3,937 thousand for the six months ended June 30, 2025, primarily driven by drilling and geotechnical costs Deer Trail Project Exploration and Evaluation Expenditures | Category | H1 2025 (US$ thousands) | FY 2024 (US$ thousands) | | :----------------------------- | :---------------------- | :---------------------- | | Drilling and geotechnical | 3,531 | 8,905 | | Camp and site costs | 163 | 401 | | Land taxes and government fees | 22 | 239 | | Legal, community, consultation | 165 | 357 | | Travel | 56 | 182 | | Total for the period | 3,937 | 10,284 | | Balance, beginning of period | 37,599 | 27,315 | | Total Deer Trail Project cost | 41,536 | 37,599 | Larder Project This section provides an overview of the Larder Project, including its background, exploration activities, and associated expenditures Background and History MAG acquired the 100% owned Larder Project in Ontario through the acquisition of Gatling Exploration Inc. in 2022, and further expanded it by acquiring the contiguous Goldstake Property in March 2024, which hosts numerous gold zones along the Cadillac Larder Break - Through the acquisition of Gatling Exploration Inc. ('Gatling') in 2022, the Company acquired 100% of the Larder Project in Ontario[74] - On March 22, 2024, the Company acquired 100% ownership of the Goldstake Property, contiguous to its Larder Project, for consideration of C$5,000, with the Goldstake Property having shallow documented historical high-grade intercepts of 29.46 g/t gold over 10 metres and 28.65 g/t gold over 3 metres[75] - The Larder Project (inclusive of the Goldstake Property) hosts numerous gold zones along the Cadillac Larder Break ('CLB'), 35km east of Kirkland Lake[76] Exploration Activities and Results In Q2 2025, MAG commenced its Phase 1 drilling program at the Italian Zone (formerly Instant Pond Zone) within the Larder Project, completing 5,243 metres in nine drillholes, validating major structural theories and yielding significant gold intersections, including 21.0 g/t gold over 0.5 metre - During Q2 2025, MAG commenced its field program and Phase 1 drilling program at the Italian Zone (formerly the Instant Pond Zone at the Goldstake Property)[77] - Drilling highlights include testing of newly identified regional structures and collection of new structural data from historic gold zones, with 5,243 metres drilled in nine drillholes[77] - Significant intersections include: 21.0 g/t gold over 0.5 metre (LP-25-001 at 105.9-106.4 metres), 12.4 g/t gold over 0.5 metre (LP-25-004 at 288.5-289 metres) and 16.4 g/t gold over 0.7 metre (LP-25-005 at 36.1-36.8 metres)[77] Exploration and Evaluation Expenditures Total exploration and evaluation expenditures for the Larder Project amounted to $2,644 thousand for the six months ended June 30, 2025, primarily for drilling and geotechnical work Larder Project Exploration and Evaluation Expenditures | Category | H1 2025 (US$ thousands) | FY 2024 (US$ thousands) | | :----------------------------- | :---------------------- | :---------------------- | | Acquisition of exploration property | - | 3,802 | | Drilling and geotechnical | 2,263 | 10,896 | | Camp and site costs | 189 | 1,773 | | Land taxes and government fees | 4 | 40 | | Legal, community, consultation | 148 | 535 | | Travel | 40 | 151 | | Total for the period | 2,644 | 17,197 | | Balance, beginning of period | 42,519 | 25,322 | | Total Larder Project cost | 45,163 | 42,519 | Outlook This section provides the outlook for Juanicipio, Deer Trail, and Larder Projects, detailing production forecasts, cost guidance, capital expenditures, and planned exploration activities Juanicipio Outlook Juanicipio's 2025 outlook forecasts silver production between 14.7-16.7 million ounces, with cash costs ranging from ($1.00) to $1.00 per silver ounce and all-in sustaining costs from $6.00 to $8.00, alongside key investments in tailings dam expansion and underground infrastructure, and significant drilling programs - All material mined at Juanicipio is now being processed through the Juanicipio processing facility, with resulting concentrates treated at market terms under offtake agreements[79] - For 2025, silver production at Juanicipio is forecasted to range between 14.7 million and 16.7 million ounces, yielding between 13.1 million and 14.9 million payable ounces[80] - Cost guidance reflects ongoing optimization efforts and sustaining capital investments with cash cost and all-in sustaining cost forecast to range between ($1.00) to $1.00 and $6.00 to $8.00 per silver ounce sold, respectively[80] - Sustaining capital expenditures for 2025 are estimated between $70,000 and $80,000, with key investments including expansion of the tailings dam and development of underground workshops, electrical and pumping infrastructure, and ventilation systems[80] - Expansionary capital expenditures for 2025 are estimated between $22 million and $28 million and are related to the installation of the underground conveyor system which is expected to be commissioned in late 2026[81] - Underground drilling at Juanicipio has a budget of 33,500 metres for 2025, focusing on infill drilling and exploration holes south of the conveyor ramp and between Valdecañas and Juanicipio Veins, with a total of 17,000 metres of drilling from surface planned for 2025, targeting Cañada Honda, Juanicipio Deep, Mesa Grande and Magdalena[82][83] Deer Trail Outlook The Deer Trail Project's Q2 2025 geophysical surveys (ANT, radiometric, magnetic) are ongoing to refine drill targets, complemented by a surface mapping program, with the exploration focus remaining on systematically targeting high-grade polymetallic CRD/Skarn targets - In Q2 2025, MAG commenced an ANT survey, as well as completed airborne radiometric and magnetic surveys encompassing the entire project, with detailed ANT infill surveys ongoing over the Deer Trail Corridor, Alunite Ridge and Bullion Canyon[85] - MAG has also started a surface mapping program that will continue until snowfall expected in November 2025, with the exploration focus remaining to systematically target high-grade polymetallic CRD/Skarn targets[85] Larder Project Outlook The Larder Project's Q2 2025 drill program at the Italian Zone, based on Q1 geological synthesis, aims to test new regional structures and follow up on early successes, with approximately 25,000 metres of drilling planned over three phases, and a field program underway to develop new targets on the Goldstake Property - Based on the Q1 2025 geological synthesis, in Q2 2025 the Larder team started a drill program at the Italian Zone, which will include testing new regional structures, collecting new structural data in historic gold zones, testing high charge-resistivity IP anomalies, and following up on early success[86] - Approximately 25,000 metres of drilling is planned over a three-phase approach using two rigs[86] - MAG has commenced a field program to complete its coverage across the recently acquired Goldstake Property and develop more targets along the syenite intrusion north towards the Rose zone[87] Summary of Quarterly Information This section provides a summary of MAG Silver's selected quarterly financial data, highlighting trends in net income and income from its equity-accounted investment in Juanicipio Selected Quarterly Financial Data MAG Silver reported increasing net income and income from its equity-accounted investment in Juanicipio over the past eight quarters, with Q2 2025 net income reaching $33.4 million ($0.32 per share), primarily driven by higher realized metal prices and volumes from Juanicipio Selected Quarterly Financial Data (US$ thousands, except per share) | Metric | 2025 Q2 | 2025 Q1 | 2024 Q4 | 2024 Q3 | 2024 Q2 | 2024 Q1 | 2023 Q4 | 2023 Q3 | | :----------------------------- | :------ | :------ | :------ | :------ | :------ | :------ | :------ | :------ | | Income from equity accounted investment in Juanicipio | 42,091 | 33,864 | 22,956 | 25,552 | 25,123 | 19,244 | 21,069 | 13,692 | | Net income | 33,444 | 28,744 | 18,978 | 22,292 | 21,614 | 14,895 | 15,694 | 8,862 | | Net income per share | 0.32 | 0.28 | 0.18 | 0.22 | 0.21 | 0.14 | 0.14 | 0.09 | - In Q1 and Q2 2025, the higher income from equity accounted investment in Juanicipio was mainly due to higher realized metal prices and higher metal volumes[90] - As at December 31, 2024, the Company had fully amortized its Flow-Through Share premium liability and therefore moving forward, no further corresponding income will be recognized[92] Review of Financial Results This section reviews MAG Silver's financial performance for Q2 and H1 2025 compared to the prior year, highlighting changes in net income, equity-accounted investment income, and expenses Three Months Ended June 30, 2025 vs. June 30, 2024 Net income for Q2 2025 increased to $33.4 million from $21.6 million in Q2 2024, primarily driven by a significant increase in income from the equity-accounted investment in Juanicipio, despite higher general and administrative expenses and general exploration and business development costs related to the Pan American transaction MAG Silver Financial Results (Q2 YoY) | Metric | Q2 2025 (US$ thousands) | Q2 2024 (US$ thousands) | Change (US$ thousands) | | :----------------------------- | :---------------------- | :---------------------- | :--------------------- | | Income from equity accounted investment in Juanicipio | 42,091 | 25,123 | +16,968 | | General and administrative expenses | (4,838) | (3,622) | -1,216 | | General exploration and business development | (3,563) | (95) | -3,468 | | Operating Income | 33,690 | 21,406 | +12,284 | | Net income | 33,444 | 21,614 | +11,830 | - General and administrative expenses increased due to higher compensation and consulting fees (impacted by personnel and special committee fees associated with the Transaction with Pan American, higher consultant fees, and timing/allocation of personnel fees) and increased share-based compensation expense[95][96] - General exploration and business development increased to $3,563 during the three months ended June 30, 2025 (June 30, 2024: $95) due to costs incurred in connection to the Transaction with Pan American[97] - Other income decreased to $nil during the three months ended June 30, 2025 (June 30, 2024: $650) due to the Company fully amortizing its Flow-Through Share premium liability as of December 31, 2024[98] Six Months Ended June 30, 2025 vs. June 30, 2024 Net income for H1 2025 increased to $62.2 million from $36.5 million in H1 2024, driven by a substantial increase in income from the equity-accounted investment in Juanicipio, alongside higher general and administrative expenses and general exploration and business development costs related to the Pan American transaction MAG Silver Financial Results (H1 YoY) | Metric | H1 2025 (US$ thousands) | H1 2024 (US$ thousands) | Change (US$ thousands) | | :----------------------------- | :---------------------- | :---------------------- | :--------------------- | | Income from equity accounted investment in Juanicipio | 75,955 | 44,367 | +31,588 | | General and administrative expenses | (9,802) | (7,523) | -2,279 | | General exploration and business development | (3,596) | (452) | -3,144 | | Operating Income | 62,557 | 36,392 | +26,165 | | Net income | 62,188 | 36,509 | +25,679 | - General and administrative expenses increased due to higher compensation and consulting fees (impacted by severance and personnel incentives, Pan American transaction fees, higher consultant fees, and timing/allocation of personnel fees) and increased share-based compensation expense[100] - General exploration and business development increased to $3,596 during the six months ended June 30, 2025 (June 30, 2024: $452) due to costs incurred in connection to the Transaction with Pan American[101] - Other income decreased to $nil during the six months ended June 30, 2025 (June 30, 2024: $1,187) due to the Company fully amortizing its Flow-Through Share premium liability as of December 31, 2024[102] Financial Position This section summarizes MAG Silver's financial position as of June 30, 2025, detailing changes in assets, liabilities, and equity, and specifically outlining the company's investment in Juanicipio Summary of Financial Position As of June 30, 2025, MAG's total assets increased to $642.0 million from $611.1 million at December 31, 2024, driven by an increase in cash and the equity-accounted investment in Juanicipio, offset by an increase in total liabilities and equity MAG Silver Financial Position | Metric | June 30, 2025 (US$ thousands) | December 31, 2024 (US$ thousands) | Change (US$ thousands) | | :----------------------------- | :---------------------- | :------------------------ | :--------------------- | | Cash | 171,834 | 162,347 | +9,487 | | Total current assets | 174,082 | 163,732 | +10,350 | | Investment in Juanicipio | 378,247 | 364,014 | +14,233 | | Exploration and evaluation assets | 86,699 | 80,118 | +6,581 | | Total assets | 641,966 | 611,072 | +30,894 | | Total liabilities | 23,474 | 19,739 | +3,735 | | Total equity | 618,492 | 591,333 | +27,159 | - Cash totalled $171,834 as at June 30, 2025 compared to $162,347 as at December 31, 2024, with the increase primarily attributable to a $59,400 dividend payment from Juanicipio and $2,100 of Juanicipio loan and interest repayments, offset by $39,316 in dividend payments to shareholders, and $7,248 in exploration and evaluation expenditures[104] - The equity accounted investment in Juanicipio increased from $364,014 at December 31, 2024, to $378,247 at June 30, 2025, mainly driven by MAG's share of earnings from Juanicipio of $75,955, offset by a dividend payment of $59,400, and $2,053 in loan repayments[105] - Exploration and evaluation assets as at June 30, 2025 increased to $86,699 (December 31, 2024: $80,118) reflecting exploration expenditures incurred on the Deer Trail Project ($3,937) and the Larder Project ($2,644) during the six months ended June 30, 2025[106] Company's Investment in Juanicipio MAG's investment in Juanicipio increased to $378.2 million as of June 30, 2025, from $364.0 million at December 31, 2024, reflecting MAG's share of earnings offset by significant dividend receipts and loan repayments from Juanicipio MAG Silver's Investment in Juanicipio | Metric | June 30, 2025 (US$ thousands) | December 31, 2024 (US$ thousands) | | :----------------------------- | :---------------------- | :------------------------ | | Balance, beginning of period | 364,014 | 394,622 | | Loan repayments from Juanicipio | (2,053) | (92,361) | | Dividends received from Juanicipio | (59,400) | (26,400) | | Income from equity accounted Investment in Juanicipio | 75,955 | 92,875 | | Balance, end of period | 378,247 | 364,014 | Cash Flows This section summarizes MAG Silver's cash flow activities for Q2 and H1 2025, detailing the increase in cash driven by investing activities, partially offset by operating and financing activities Summary of Cash Flow Activities MAG Silver's cash increased by $15.4 million in Q2 2025 and $9.5 million in H1 2025, driven by significant cash from investing activities (primarily Juanicipio dividends and loan repayments), partially offset by cash used in operating activities and financing activities (dividend payments to shareholders) MAG Silver Cash Flow Summary | Metric | Q2 2025 (US$ thousands) | Q2 2024 (US$ thousands) | H1 2025 (US$ thousands) | H1 2024 (US$ thousands) | | :----------------------------- | :---------------------- | :---------------------- | :---------------------- | :---------------------- | | Operating activities | (3,938) | (2,220) | (6,624) | (4,905) | | Investing activities | 58,261 | 23,190 | 54,224 | 31,843 | | Financing activities | (38,632) | 1,546 | (37,851) | 1,502 | | Increase in cash during the period | 15,433 | 22,654 | 9,487 | 28,630 | | Cash, end of period | 171,834 | 97,337 | 171,834 | 97,337 | - During the three months ended June 30, 2025, MAG used $3,938 in cash for operations (three months ended June 30, 2024: $2,220) primarily for the payment of corporate office and business development expenses, with the increase in cash used largely driven by spend related to the Transaction with Pan American, as well as changes in working capital items[110] - During the three months ended June 30, 2025, cash from investing activities amounted to $58,261 (three months June 30, 2024: $23,190), with the increase mainly driven by a $59,400 dividend payment and $2,100 of loan and interest repayments from Juanicipio[112] - During the three months ended June 30, 2025, cash used in financing activities amounted to $38,632 (three months ended June 30, 2024: cash from $1,546), with the increase mainly driven by the dividend payments to shareholders of the Company, amounting to $39,316[114] Non-IFRS Measures This section introduces and reconciles non-IFRS performance measures, including cash cost per ounce, all-in sustaining cost per ounce, sustaining capital expenditures, EBITDA, Adjusted EBITDA, and free cash flow, used by management to assess operating and financial performance Introduction to Non-IFRS Measures The company uses non-IFRS performance measures like Adjusted EBITDA, cash cost per ounce, all-in sustaining cost per ounce, and free cash flow to assess operating and financial performance, noting these measures are not standardized and may not be comparable to other issuers - The Company has included certain non-IFRS performance measures throughout this MD&A, which are employed by management to assess the Company's operating and financial performance and to assist in business decision-making[116] - These non-IFRS performance measures do not have any standardized meaning and therefore may not be comparable to similar measures presented by other issuers[116] - Juanicipio does not calculate this information for use by both shareholders (Fresnillo 56%, and MAG 44%), rather it is calculated by the Company solely for the Company's own disclosure purposes and may differ from the non-IFRS measures calculated and presented by Fresnillo[117] Cash Cost Per Ounce Juanicipio's cash cost per silver ounce sold was negative $3.90 in Q2 2025 and negative $2.38 in H1 2025, a significant decrease from the prior year, primarily due to higher by-product revenues and lower production/treatment costs - The Company has included the non-IFRS performance measure cash cost per ounce on a by-product basis, which is a common performance measure in the gold and silver mining industry but does not have any standardized meaning, with the Company following the recommendations of the Gold Institute Production Cost Standard[118] Reconciliation of Juanicipio Cash Cost Per Silver Ounce Sold (100% basis) | Metric | Q2 2025 (US$ thousands) | Q2 2024 (US$ thousands) | H1 2025 (US$ thousands) | H1 2024 (US$ thousands) | | :----------------------------- | :---------------------- | :---------------------- | :---------------------- | :---------------------- | | Production cost as reported | 36,450 | 39,866 | 70,112 | 76,653 | | By-product revenues | (62,272) | (46,608) | (112,426) | (85,351) | | Total cash costs | (14,938) | 4,911 | (18,579) | 14,884 | | Cash cost per silver ounce sold ($/ounce) | (3.90) | 1.15 | (2.38) | 1.80 | | Cash cost per equivalent silver ounce sold ($/ounce) | 8.38 | 8.86 | 8.43 | 8.78 | - The decrease in cash cost per silver ounce sold during the three and six months ended June 30, 2025 is predominantly attributable to higher by-product revenues, as a result of 81% and 60% higher gold revenues, respectively, offset by lower silver ounces sold, and was also impacted by 9% and 9% lower production cost, and 18% and 15% lower treatment and refining costs[42] All-in Sustaining Cost Per Ounce Juanicipio's all-in sustaining cost per silver ounce sold significantly decreased to $0.65 in Q2 2025 and $1.36 in H1 2025, driven by lower cash costs, G&A expenses, and efficient capital allocation, resulting in strong all-in sustaining margins - The Company has adopted the reporting of 'all-in sustaining cost per silver ounce', which is a non-IFRS performance measure, to provide additional insight into the costs of producing silver by capturing all expenditures required for discovery, development, and sustaining production[122] Reconciliation of Juanicipio All-in Sustaining Costs (100% basis) | Metric | Q2 2025 (US$ thousands) | Q2 2024 (US$ thousands) | H1 2025 (US$ thousands) | H1 2024 (US$ thousands) | | :----------------------------- | :---------------------- | :---------------------- | :---------------------- | :---------------------- | | Total cash costs | (14,938) | 4,911 | (18,579) | 14,884 | | General and administrative expenses | 3,252 | 4,283 | 6,255 | 8,472 | | Exploration | 3,453 | 2,235 | 4,385 | 3,603 | | Sustaining capital expenditures | 10,489 | 7,329 | 18,113 | 15,927 | | All-in sustaining costs | 2,470 | 19,161 | 10,591 | 43,554 | | All-in sustaining cost per silver ounce sold ($/ounce) | 0.65 | 4.49 | 1.36 | 5.27 | | All-in sustaining margin ($/ounce) | 33.58 | 25.68 | 32.55 | 21.79 | - The decrease in all-in sustaining cost per ounce sold and all-in sustaining cost per equivalent silver ounce sold was primarily due to the decrease in cash cost per silver ounce sold and cash cost per equivalent silver ounce sold, additionally, these costs during the three and six months ended June 30, 2025 were impacted by $1,031 and $2,216 lower general and administrative expenses, and $4,160 and $2,666 higher sustaining capital expenditures[43] - For the three and six months ended June 30, 2025, the Company's attributable all-in sustaining cost for the Company was $2.76/oz and $2.75/oz respectively (three and six months ended June 30, 2024: $1.85/oz and $1.99/oz respectively) and $1.87/oz and $1.93/oz respectively (three and six months ended June 30, 2024: $1.36/oz and $1.44/oz respectively), in addition to Juanicipio's all-in-sustaining costs[129] Sustaining Capital Expenditures Reconciliation Juanicipio's total sustaining capital expenditures (including exploration) were $13.9 million in Q2 2025 and $22.5 million in H1 2025, reconciled from cash flow used in investing activities Reconciliation of Juanicipio Sustaining Capital Expenditures (100% basis) | Metric | Q2 2025 (US$ thousands) | Q2 2024 (US$ thousands) | H1 2025 (US$ thousands) | H1 2024 (US$ thousands) | | :----------------------------- | :---------------------- | :---------------------- | :---------------------- | :---------------------- | | Cash used in investing activities - Juanicipio | 17,618 | 3,780 | 26,454 | 18,272 | | Total sustaining capital expenditures (including exploration) | 13,942 | 9,564 | 22,498 | 19,530 | | Total sustaining capital expenditures | 10,489 | 7,329 | 18,113 | 15,927 | EBITDA and Adjusted EBITDA MAG Silver reported Adjusted EBITDA of $56.4 million in Q2 2025 and $112.2 million in H1 2025, with its attributable interest in Juanicipio's Adjusted EBITDA being $63.2 million and $122.7 million, respectively, reflecting strong operational performance - Earnings before interest, tax, depreciation and amortization ('EBITDA') provides an indication of the Company's continuing capacity to generate income from operations before considering the Company's financing decisions and costs of amortizing capital assets[132] Reconciliation of MAG Silver EBITDA and Adjusted EBITDA | Metric | Q2 2025 (US$ thousands) | Q2 2024 (US$ thousands) | H1 2025 (US$ thousands) | H1 2024 (US$ thousands) | | :----------------------------- | :---------------------- | :---------------------- | :---------------------- | :---------------------- | | Net income after tax | 33,444 | 21,614 | 62,188 | 36,509 | | EBITDA | 33,873 | 21,555 | 62,918 | 36,686 | | MAG attributable interest in Junicipio Adjusted EBITDA | 63,221 | 52,868 | 122,689 | 88,670 | | Adjusted EBITDA | 56,442 | 50,353 | 112,192 | 83,008 | Reconciliation of Juanicipio EBITDA and Adjusted EBITDA (100% basis) | Metric | Q2 2025 (US$ thousands) | Q2 2024 (US$ thousands) | H1 2025 (US$ thousands) | H1 2024 (US$ thousands) | | :----------------------------- | :---------------------- | :---------------------- | :---------------------- | :---------------------- | | Juanicipio net income after tax | 95,637 | 53,857 | 172,521 | 93,615 | | Juanicipio EBITDA | 143,316 | 120,157 | 278,470 | 201,478 | | Juanicipio adjusted EBITDA | 143,684 | 120,156 | 278,838 | 201,524 | Free Cash Flow Juanicipio generated strong free cash flow of $92.9 million in Q2 2025 and $170.3 million in H1 2025, calculated by adjusting operating cash flow for investing activities and sustaining lease payments - The Company uses the financial measure free cash flow to supplement information in the Q2 2025 Financial Statements, believing this information evaluates Juanicipio's performance with respect to its operating cash flow capacity to meet non-discretionary outflows of cash[137] Reconciliation of Juanicipio Free Cash Flow (100% basis) | Metric | Q2 2025 (US$ thousands) | Q2 2024 (US$ thousands) | H1 2025 (US$ thousands) | H1 2024 (US$ thousands) | | :----------------------------- | :---------------------- | :---------------------- | :---------------------- | :---------------------- | | Cash flow from operating activities | 110,639 | 92,766 | 197,038 | 135,286 | | Cash flow used in investing activities | (17,618) | (3,780) | (26,454) | (18,272) | | Sustaining lease payments | (130) | (349) | (255) | (557) | | Juanicipio free cash flow | 92,891 | 88,637 | 170,329 | 116,457 | Liquidity and Capital Resources This section details MAG Silver's liquidity and capital resources, including working capital, cash position, dividend policy, shelf prospectus, and credit facility Working Capital and Cash Position As of June 30, 2025, MAG had working capital of $170.1 million and cash of $171.8 million, with no long-term debt, while Juanicipio also maintained strong working capital and cash balances Working Capital and Cash Position | Metric | June 30, 2025 (US$ thousands) | December 31, 2024 (US$ thousands) | | :----------------------------- | :---------------------- | :------------------------ | | MAG Working Capital | 170,149 | 160,113 | | MAG Cash | 171,834 | 162,347 | | Juanicipio Working Capital | 107,696 | 105,499 | | Juanicipio Cash | 83,717 | 53,193 | - As at June 30, 2025, MAG had working capital of $170,149 (December 31, 2024: $160,113) including cash of $171,834 (December 31, 2024: $162,347) and no long-term debt[140] - Future liquidity may depend upon the Company's ability to repatriate capital from Juanicipio, arrange debt or additional equity financing[140] Dividends MAG declared and paid a second dividend of $0.20 per share in May 2025 and a third dividend of $0.144 per share in August 2025, continuing its policy of a fixed quarterly dividend augmented by a cash flow-linked component based on Juanicipio's performance - In March 2025, MAG declared an inaugural fixed dividend of $0.02 per share and an additional cash flow linked dividend of $0.16 per share for a total dividend of $0.18 per share, with a total dividend of $18,623 paid on April 21, 2025[141] - On May 8, 2025 MAG declared its second dividend, with a fixed component of $0.02 per share and an additional cash flow linked component of $0.18 per share, for a total dividend of $0.20 per share, with a total dividend of $20,693 paid on May 28, 2025[142] - On August 8, 2025 MAG declared its third dividend, with a fixed component of $0.02 per share and an additional cash flow linked component of $0.124 per share for a total dividend of $0.144 per share payable on September 1, 2025[143] - On an ongoing basis, the Company intends to declare and pay a fixed quarterly dividend of $0.02 per share, augmented by a cash flow linked dividend targeted at approximately 30% of cash flows from Juanicipio received by MAG when silver prices are above $20 per ounce[144] Shelf Prospectus and Credit Facility MAG filed a final short form base shelf prospectus in May 2024, allowing it to offer up to $250 million in securities, and maintains a $40 million senior secured revolving credit facility (with an accordion feature up to $75 million) but has not drawn any funds as of June 30, 2025, and remains in compliance with all covenants - On May 31, 2024, MAG filed a final short form base shelf prospectus allowing the Company to offer up to $250,000 of Common Shares, preferred shares, debt securities, subscription receipts, units and warrants or any combination thereof during the 25-month period that the Final Shelf Prospectus remains effective[147] - In October 2023, the Company entered into a $40,000 senior secured revolving credit facility with the Bank of Montreal, with a provision for an accordion feature whereby the facility may be increased to $75,000[148] - As of June 30, 2025, the Company has not drawn down any funds from its Credit Facility and is in compliance with all applicable covenants[149] Contractual Obligations This section outlines MAG Silver's contractual obligations, including financing and consulting commitments, and additional contractual commitments for Juanicipio Summary of Contractual Obligations MAG and its subsidiaries have total contractual obligations of $433 thousand as of June 30, 2025, primarily for financing and consulting commitments, while Juanicipio has additional contractual commitments totaling $14.1 million for project development and operations MAG Silver Contractual Obligations (as at June 30, 2025) | Category | Total (US$ thousands) | Less than 1 year (US$ thousands) | 1-3 Years (US$ thousands) | 3-5 Years (US$ thousands) | More than 5 years (US$ thousands) | | :----------------------------- | :-------------------- | :------------------------------- | :------------------------ | :------------------------ | :-------------------------------- | | Financing and consulting contractual commitments | 433 | 321 | 112 | - | - | | Total Obligations and Commitments | 433 | 321 | 112 | - | - | - According to the operator, Fresnillo, as at June 30, 2025, contractual commitments including project development and for continuing operations and purchase orders issued for project capital, sustaining capital, and continuing operations total $14,144 (December 31, 2024: $21,776) with respect to Juanicipio, both on a 100% basis[151] - The Company also has discretionary commitments for property option payments and exploration expenditures, with no obligation to make any of those payments or to conduct any work on its optioned properties[152] Share Capital Information This section provides details on MAG Silver's outstanding securities, including common shares, stock options, and various share units, as of August 8, 2025 Outstanding Securities As of August 8, 2025, MAG Silver had 103.7 million common shares outstanding, with a fully diluted count of 105.9 million, including stock options, performance share units, restricted share units, and deferred share units MAG Silver Outstanding Securities (as at August 8, 2025) | Security Type | Number of shares | Exercise Price (C$) or Conversion Ratio | Remaining Life | | :----------------------------- | :--------------- | :-------------------------------------- | :------------- | | Common shares | 103,663,293 | n/a | n/a | | Stock options | 1,082,060 | C$14.64 – C$23.53 | 0.69 to 4.99 years | | Performance Share Units ("PSUs") | 429,589 | 1:1 | 0.69 to 4.99 years | | Restricted Share Units("RSUs") | 217,388 | 1:1 | 0.81 to 4.99 years | | Deferred Share Units ("DSUs") | 516,380 | 1:1 | n/a | | Fully Diluted | 105,908,710 | | | - Includes 119,579 PSU grants where vesting is subject to a market price performance factor, each measured over a three-year performance period which will result in a PSU vesting range from 7,722 PSUs to 231,436 PSUs[154] - Deferred Share Units are to be share settled, or cash settled at $20.54 per share unit pursuant to the Transaction with Pan American[155] Other Items This section addresses other important items, specifically the company's cybersecurity measures and oversight Cyber Security MAG Silver has robust cybersecurity programs and strategies in place to mitigate risks, focusing on asset protection, incident response, third-party risk reduction, and ongoing awareness, with no material breaches in the last three years and oversight from management and the Audit Committee - The Company's operations depend, in part, on the efficient operation and management of the Company's information technology and operational systems in a secure manner that minimizes cyber risks[156] - The Company has programs and strategies in place that are designed to mitigate the risk of cyber-attacks and to allow the Company to recover from cyber security incidents as rapidly as possible should one occur, and has not experienced any material information security breach in the last three years, nor has it experienced any known material losses relating to cyber-attacks or other data/information security since its inception[157] - The Company has policies and programs in place to manage cyber risks, focusing on protecting assets, improving detection/response, reducing third-party risks, ongoing awareness, and embedding security by design[158] - The Audit Committee, comprised entirely of independent directors, has been tasked with assisting the Board in fulfilling its oversight responsibilities with regard to information security and cyber risks, receiving quarterly reports from management[159] Trend Information This section discusses market and geopolitical trends affecting the company, as well as capital and exploration trends, including funding challenges and regulatory risks Market and Geopolitical Trends The company faces volatility in silver, gold, zinc, and lead prices, and is exposed to risks from negative geopolitical events, trade tariffs, and inflation, which could adversely affect its operations and market value - As both the price and market for silver are volatile and difficult to predict, a significant decrease in the silver price and to a lesser extent gold, zinc and lead prices, could have a material adverse impact on the Company's operations and market value[161] - Negative geopolitical events, including the ongoing Russian invasion of Ukraine and the ongoing conflicts in the Middle East, may cause increased economic volatility and adversely affect the Company[162] - The imposition of trade tariffs, particularly by the U.S., or other trade restrictions could have significant repercussions for Canadian and Mexican businesses, and the broader economy, with increased costs of goods and services potentially contributing to inflation[163] Capital and Exploration Trends MAG's business is capital-intensive, requiring significant funding for property acquisition, exploration, and development, with access to capital in public markets often challenging, and community resistance or changes in mining laws, particularly in Mexico, posing risks to project advancement and property access - The nature of MAG's business is demanding of capital for property acquisition costs, exploration commitments, development and holding costs, with access to capital to fund exploration and development companies at times challenging in public markets, which could limit the Company's ability to meet its objectives[164] - Obtaining exploration permits in all the jurisdictions in which the Company operates often encounters First Nations and other forms of community resistance, and surface rights in Mexico are often owned by local communities or 'ejidos', with a trend of increasing ejido challenges to existing surface right usage agreements[165] - On May 8, 2023, amendments to the Mexican Federal Mining Law were published, pertaining to granting of future mining permits, transfer of permits, shortening concession life, granting of future water permits, mine reclamation, profit-sharing requirements, and management of mine waste, with numerous legal challenges to the legality and constitutionality of several aspects of these changes having been filed[166][169] Risks and Uncertainties This section outlines the investment and operational risks faced by MAG Silver, including the speculative nature of its securities, compliance with credit facility covenants, access to financing, and various financial instrument-related risks Investment and Operational Risks MAG's securities are highly speculative, and investors should consider risks detailed in regulatory filings, as the company faces risks related to compliance with credit facility covenants, access to financing for future development, potential impacts of trade tariffs, and various financial instrument-related risks including market, credit, liquidity, currency, and interest rate risks - The Company's securities should be considered a highly speculative investment and investors are directed to carefully consider all of the information disclosed in the Company's Canadian and U.S. regulatory filings prior to making an investment in the Company, including the risk factors discussed under the heading 'Risk Factors' in the Company's most recent Annual Information Form[170] - The Credit Facility includes certain customary restrictive covenants, and future exploration work and development of the properties in which the Company has an interest may depend upon the Company's ability to repatriate capital from its interest in the Juanicipio Mine, obtain financing through joint venturing of projects, raise additional debt or equity finance, maintain the Credit Facility or raise financing though other means[171] - The Company is exposed to a variety of financial instrument-related risks in the normal course of operations, including market risk, credit risk, liquidity risk, currency risk and interest rate risk[173] Off-Balance Sheet Arrangements This section confirms that MAG Silver Corp. has no off-balance sheet arrangements No Off-Balance Sheet Arrangements MAG Silver Corp. has no off-balance sheet arrangements - MAG has no off-balance sheet arrangements[174] Related Party Transactions This section details MAG Silver's related party transactions, including administrative and exploration services received and compensation of key management personnel [Services and Compensation](index=42&type=section&id=20.1%20Services%20and%20Com