http://ampgoldportfolio.com/2012/10/22/mag-silver-update-target-20-75/

MAG Silver Corp.

MAG : TSX : C$11.19
MVG : AMEX
SPECULATIVE BUY ?
Target: C$20.75

COMPANY DESCRIPTION:

MAG Silver is a junior silver exploration and development company focused in Mexico. The company holds a 44% interest in the Juanicipio JV project (56% owned by Fresnillo plc) and a 100% interest in the Cinco de Mayo silver-lead-zinc project, both located in Mexico.

Investment highlights
While the shares of MAG Silver are 9.1% below the 52-week high for the stock, the shares are up 67% year-to-date, and up 41.6% over the past four months. For comparison, the TSX Venture Index has dropped 11% year-to-date, and has rallied 12.5% over the past four months. Due to significant share price appreciation over the last four months, we are removing MAG Silver from the CG Focus List.
Our opinion of MAG Silver remains unchanged. We continue to believe that the Juanicipio project is one of the most attractive silver development projects on the planet. Combined with the Cinco de Mayo project, a robust silver-lead-zinc project, the company possesses interests in two high-grade silver development projects in Mexico. We believe the high quality of MAG’s portfolio of projects makes it a likely acquisition target for a larger cap producer.

Valuation
Our valuation and recommendation remain unchanged. We estimate a peak silver price estimate of NAVPS (5%, US$40/oz Ag) of C$23.05, unchanged. We continue to value the shares of MAG Silver based on a 0.9x multiple to our peak silver price estimate of NAVPS (5%, US$40/oz Ag).