Why MAG Silver Stock Rocketed 16% on Monday

Shares of Canadian junior silver miner MAG Silver (NYSEMKT: MAG) rose 16% in the first half hour of trading on April 27. Although the company's mining efforts in Mexico have been disrupted by COVID-19 containment efforts (news that was announced about a week ago), the company just got a 60 million-Canadian-dollar cash infusion from a major shareholder. That's a very big deal for this tiny precious metals miner.

MAG Silver isn't actually much of a miner at this point. That's not meant as a slight, just to highlight the fact that it is still building its first mine, the Juanicipio Project in Mexico. It's a joint venture with Fresnillo plc, which operates the project. MAG Silver owns a 44% stake in Juanicipio. As noted, progress on the mine has slowed due to social distancing restrictions in that country. That's not great, since it will delay completion of the project, but it doesn't actually impact revenues, since the mine isn't producing any silver. In fact, MAG Silver's income statement hasn't had any income for the last two years, just expenses.

Image source: Getty Images.

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Source Fool.com