First Majestic Silver Corp. ("First Majestic" or the "Company")
announces total production in the second quarter of 2019 reached
6.4 million silver equivalent ounces, representing a 2% increase
compared to the prior quarter. Total production consisted of 3.2
million ounces of silver, 33,576 ounces of gold, 2.5 million pounds
of lead and 1.4 million pounds of zinc. In the first half of 2019,
total production reached 12.7 million ounces, or approximately 49%
of the Company’s guidance midpoint of producing 24.7 to 27.5
million silver equivalent ounces in 2019.
“Our two primary assets, the San Dimas and Santa
Elena mines, saw strong growth during the quarter producing
approximately 80% of our total metal production,” said Keith
Neumeyer, President and CEO. “San Dimas continues to exceed
guidance due to higher than expected grades and mining rates from
the Jessica and Victoria veins. At Santa Elena, the newly installed
HIG mill is in its final commissioning stage and is expected to
ramp up to reach design capacity of 3,000 tpd in the third quarter.
The HIG mill is anticipated to improve overall metallurgical
recoveries and lower energy costs compared to traditional ball
milling. These two operations will continue to be a major focal
point for future production growth and capital investments.”
“Last but certainly not least, I’m very proud to
announce that in May we received Ermitaño’s DTU permit,” stated
Neumeyer. “This was the final permit required before initiating
development activities at this high-grade gold/silver deposit near
our Santa Elena mill. Underground development activities are now
expected to begin in the fourth quarter of 2019 with initial
production in late 2020. Ermitaño’s high grade resources are
expected to significantly increase Santa Elena’s production profile
and extend mine life for years to come.”
PRODUCTION TABLE
|
Q2 |
Q2 |
Y/Y |
Q1 |
Q/Q |
2019 |
2018 |
Change |
2019 |
Change |
Ore
processed/tonnes milled |
736,896 |
851,349 |
-13% |
812,654 |
-9 |
% |
Total production -
ounces of silver eqv. |
6,410,483 |
5,137,318 |
25% |
6,273,677 |
2 |
% |
Silver ounces
produced |
3,193,566 |
2,756,263 |
16% |
3,331,388 |
-4 |
% |
Gold ounces
produced |
33,576 |
25,449 |
32% |
32,037 |
5 |
% |
Pounds of lead
produced |
2,452,803 |
3,949,410 |
-38% |
2,661,088 |
-8 |
% |
Pounds of zinc produced |
1,398,922 |
1,382,760 |
1% |
1,265,438 |
11 |
% |
QUARTERLY REVIEWTotal ore
processed during the quarter at the Company's mines amounted to
736,896 tonnes, representing a 9% decrease compared to the previous
quarter. The decrease in tonnes processed compared to the prior
quarter was primarily due to lower mine production from sub-level
caving at La Encantada, a decrease in available production stopes
at San Martin and La Parrilla, offset by higher production rates at
San Dimas, Santa Elena and Del Toro.
Consolidated silver grades in the quarter
averaged 159 g/t compared to 153 g/t in the previous quarter. This
4% increase was primarily the result of higher grades at San Dimas,
La Parrilla, San Martin and Del Toro. Consolidated gold grades
averaged 1.48 g/t compared to 1.26 g/t in the prior quarter
representing an 18% increase due to better grades from the Jessica
and Victoria veins at San Dimas.
Consolidated silver and gold recoveries averaged
85% and 96%, respectively, during the quarter. The Company
successfully completed the installation of the high-intensity
grinding (“HIG”) mill at Santa Elena during the quarter. The new
mill has a grinding capacity of 3,000 tpd and is expected to ramp
up to reach design capacity during the third quarter. The Company
expects improvements in metallurgical recoveries and lower
operating costs at Santa Elena in the third quarter following the
adoption of fine grinding technology.
MINE BY MINE PRODUCTION
TABLE
Mine |
Ore
Processed |
Tonnes per
Day |
Silver Oz
Produced |
Gold Oz
Produced |
Pounds of
Lead |
Pounds of
Zinc |
Equivalent Silver
Ounces |
San Dimas |
172,368 |
1,894 |
1,603,016 |
23,082 |
- |
- |
3,641,139 |
Santa Elena |
229,761 |
2,525 |
596,872 |
9,839 |
- |
- |
1,461,345 |
La Encantada |
207,421 |
2,279 |
489,194 |
43 |
- |
- |
492,957 |
San Martin |
39,213 |
431 |
224,056 |
543 |
- |
- |
271,450 |
La Parrilla |
61,546 |
676 |
202,698 |
42 |
1,708,152 |
1,398,922 |
420,712 |
Del Toro |
26,587 |
292 |
77,729 |
28 |
744,651 |
- |
122,879 |
Total |
736,896 |
8,098 |
3,193,566 |
33,576 |
2,452,803 |
1,398,922 |
6,410,483 |
*Certain amounts shown may not add exactly to
the total amount due to rounding differences.*The
following prices were used in the calculation of silver equivalent
ounces: Silver: $14.88 per ounce; Gold: $1,309 per ounce; Lead:
$0.85 per pound; Zinc: $1.25 per pound.
At the San Dimas Silver/Gold
Mine:
- During the quarter, San Dimas produced 1,603,016 ounces of
silver and 23,082 ounces of gold for a total production of
3,641,139 silver equivalent ounces, reflecting a 15% increase
compared to the prior quarter.
- The mill processed a total of 172,368 tonnes with average
silver and gold grades of 312 g/t and 4.32 g/t, respectively.
Silver and gold grades improved 9% and 3%, respectively, compared
to the prior quarter due to better than expected grades from the
Jessica and Victoria veins.
- Silver and gold recoveries averaged 93% and 96%, respectively,
during the quarter.
At the Santa Elena Silver/Gold
Mine:
- During the quarter, Santa Elena produced 596,872 ounces of
silver and 9,839 ounces of gold for a total production of 1,461,345
silver equivalent ounces, reflecting a 4% increase compared to the
prior quarter.
- The mill processed a total of 229,761 tonnes, consisting of
142,831 tonnes of underground ore and 86,930 tonnes from the above
ground heap leach pad.
- Silver and gold grades from underground ore averaged 123 g/t
and 1.89 g/t, respectively. Silver and gold grades from the above
ground heap leach pad averaged 38 g/t and 0.64 g/t,
respectively.
- Silver and gold recoveries averaged 89% and 94%, respectively,
during the quarter.
- The Company received a positive Unified Technical Document
("DTU") permit for the Ermitaño project in May. Project design and
conceptual mine planning is currently underway. Development
activities are expected to begin in the fourth quarter of 2019 with
portal excavation for underground access. In addition, the Company
has increased its 2019 exploration budget at Ermitaño to
approximately 32,700 metres, representing an 85% increase from the
original 2019 budget of 17,700 metres, with the goal of increasing
the confidence level and adding new Resources by testing targets at
depth.
- The installation of the new 3,000 tpd HIG mill was successfully
completed in May and has since passed all cold and hot
commissioning tests. The mill is expected to reach full capacity in
the third quarter of 2019.
At the La Encantada Silver
Mine:
- During the quarter, La Encantada
produced 489,194 ounces of silver representing a 32% decrease from
the previous quarter. The decrease in silver production was
primarily due to a 23% decrease in tonnes milled and a 12% decrease
in silver grades.
- Silver grades and recoveries during the quarter averaged 110
g/t and 66%, respectively.
- Production from the San Javier and La Prieta sub-level caving
areas as well as the 660 area produced 67,068 tonnes with an
average silver grade of 111 g/t, or approximately 32% of total
quarterly production.
- Due to ongoing challenges with the roasters material handling
system, the Company has contracted Hatch, an external consulting
and project engineering firm, to recommend design improvements to
resolve the cooling and material handling issues. A final report
with recommendations is expected to be delivered by Hatch in the
third quarter. During this redesign process, production from the
roaster will be suspended until the necessary modifications have
been completed.
At the San Martin Silver
Mine:
- During the quarter, San Martin produced 224,056 ounces of
silver and 543 ounces of gold for a total production of 271,450
silver equivalent ounces, reflecting a 36% decrease compared to the
prior quarter. The decrease in production was primarily attributed
to a 37% decrease in tonnes milled due to limited production stopes
in May and June.
- Silver grades and recoveries averaged 197 g/t and 90%,
respectively, during the quarter. In addition, gold grades and
recoveries averaged 0.46 g/t and 93%, respectively.
- Subsequent to quarter end, the Company temporarily suspended
all mining and processing activities at the San Martin operation
due to a growing insecurity in the area and safety concerns for our
workforce. The Company is working with authorities to secure the
area in anticipation of restarting the operation, although it is
not known when that might occur. Furthermore, the Company does not
expect the suspension at San Martin to have a material impact on
its 2019 annual consolidated guidance.
At the La Parrilla Silver
Mine:
- During the quarter, the flotation circuit processed 61,546
tonnes with an average silver grade of 147 g/t and a 70% recovery
for a total production of 420,712 silver equivalent ounces.
- The lead circuit processed an average lead grade of 2.1% with
recoveries of 59% for total lead production of 1.7 million pounds,
representing a 12% decrease compared to the previous quarter.
- The zinc circuit processed an average zinc grade of 2.0% with
recoveries of 52% for total zinc production of 1.4 million pounds,
representing an 11% increase compared to the previous quarter.
- The high recovery microbubble project advanced in the second
quarter with the installation of the four microcell columns,
electrical power distribution system and vibratory screen. At the
end of June, approximately 75% of the project had been
completed.
- The Company is reviewing toll milling opportunities from third
party suppliers as well as evaluating methods to produce a new bulk
concentrate at Del Toro to be shipped to La Parrilla and further
processed through the microbubble flotation cells to create
separate concentrates of lead and zinc from Del Toro.
At the Del Toro Silver
Mine:
- During the quarter, Del Toro produced a total of 122,879 silver
equivalent ounces reflecting a 10% increase compared to the prior
quarter primarily due to a 6% increase in tonnes milled and a 5%
increase in silver recoveries.
- Silver grades and recoveries during the quarter averaged 117
g/t and 78%, respectively.
- Lead grades and recoveries averaged 1.9% and 68%, respectively,
producing a total of 0.7 million pounds of lead representing a 4%
increase compared to the previous quarter.
APPOINTMENT OF GENERAL COUNSEL AND VP OF
INFORMATION TECHNOLOGY
The Company is pleased to announce the
appointment of Sophie Hsia as General Counsel. Ms. Hsia was most
recently General Counsel and Vice President Risk at Imperial Metals
Corporation. During her tenure at Imperial, she successfully
managed the legal and risk portfolios responding to the subsurface
failure of the perimeter embankment at the Mount Polley mine,
including a significant settlement of Imperial’s lawsuit against
its tailings dam design engineers. Ms. Hsia has a Bachelor of Laws
and a Bachelor of Civil Law from McGill University in Montreal and
a Master of Laws from George Washington University in Washington
D.C. She was called to the Bar in Ontario in 2002, and in
Alberta and British Columbia in 2006 and has previously worked for
leading international law firms in Toronto, Calgary and
Vancouver.
In addition, the Company has recently hired Jose
Figueroa, an information technology professional with over 20 years
of SAP experience, as Vice President of Information Technology to
manage all IT solutions and enterprise applications. Prior to
joining First Majestic, Mr. Figueroa worked at Goldcorp as Director
of IT and was responsible for overseeing a global support team with
over 80 application experts located in Mexico City and Vancouver.
Before joining Goldcorp in 2013, Mr. Figueroa worked in the
technology services industry delivering SAP consulting solutions to
various mining, building materials, paper and cement firms.
Mr. Figueroa graduated from Tecnológico de Monterrey in Monterrey,
Mexico with a bachelor’s degree in Industrial and Systems
Engineering.
CONFERENCE CALL
The Company will be holding a conference call
and webcast today, July 15, 2019 at 8 am PDT (11 am EDT) to
discuss the quarterly results.
To participate in the conference call, please
dial the following:
|
Toll Free
Canada & USA: |
1-800-319-4610 |
|
Outside of Canada & USA: |
1-604-638-5340 |
|
Toll Free Germany: |
0800 180 1954 |
|
Toll Free UK: |
0808 101 2791 |
Participants should dial in 10 minutes prior to
the conference.
Click on WEBCAST on the First Majestic homepage
as a simultaneous audio webcast of the conference call will be
posted at www.firstmajestic.com.
The conference call will be recorded and you can
listen to an archive of the conference by calling:
|
Canada &
USA Toll Free: |
1-800-319-6413 |
|
Outside Canada & USA: |
1-604-638-9010 |
|
Access Code: |
3344 followed by the # sign |
The replay will be available approximately one
hour after the conference and will available for seven days
following the conference. The replay will also be available
on the Company’s website for one month.
UPDATED OUTLOOK AND Q2 EARNINGS
ANNOUNCEMENT
The Company is planning to update its 2019
production and capital budget guidance when it releases its second
quarter 2019 unaudited financial results on Wednesday, August 7,
2019.
ABOUT THE COMPANY
First Majestic is a publicly traded mining
company focused on silver production in Mexico and is aggressively
pursuing the development of its existing mineral property assets.
The Company presently owns and operates the San Dimas Silver/Gold
Mine, the Santa Elena Silver/Gold Mine, the La Encantada Silver
Mine, the La Parrilla Silver Mine, the San Martin Silver Mine and
the Del Toro Silver Mine. Production from these mines are projected
to be between 14.2 to 15.8 million silver ounces or 24.7 to 27.5
million silver equivalent ounces in 2019.
FOR FURTHER INFORMATION contact
info@firstmajestic.com, visit our website at www.firstmajestic.com
or call our toll-free number 1.866.529.2807.
FIRST MAJESTIC SILVER CORP."signed"Keith
Neumeyer, President & CEO
Cautionary Note Regarding Forward Looking
Statements
This press release contains “forward‐looking
information” and "forward-looking statements” under applicable
Canadian and U.S. securities laws (collectively, “forward‐looking
statements”). These statements relate to future events or the
Company's future performance, business prospects or opportunities
that are based on forecasts of future results, estimates of amounts
not yet determinable and assumptions of management made in light of
management's experience and perception of historical trends,
current conditions and expected future developments.
Forward-looking statements include, but are not limited to,
statements with respect to: expectations that the HIG mill at the
Santa Elena mine will ramp up to reach design capacity of 3,000 tpd
in the third quarter, and that overall metallurgical recoveries and
lower energy costs will improve in the third quarter of 2019
following the adoption of fine grinding technology; expectations
that development activities will commence in the fourth quarter of
2019 with portal excavation for underground access and that
Ermitaño’s high grade feed should significantly increase Santa
Elena’s production profile and extend mine life for years to come;
expectations that the Company will receive a formal recommendation
report from Hatch in the third quarter of 2019 regarding potential
design improvements to resolve the cooling and material handling
issues encountered with the La Encantada roasters material handling
system; expectations that the temporary suspension of the San
Martin mine will not have a material impact on its 2019 annual
consolidated guidance; ongoing evaluation of methods to produce a
new bulk concentrate at Del Toro to be shipped to La Parrilla and
further processed through the microbubble flotation cells to create
separate concentrates of lead and zinc from Del Toro; the Company’s
business strategy; future planning processes; commercial mining
operations; cash flow; budgets; the timing and amount of estimated
future production; recovery rates; mine plans and mine life; the
future price of silver and other metals; costs of production; costs
and timing of the development of new deposits; capital projects and
exploration activities and the possible results
thereof. Assumptions may prove to be incorrect and actual
results may differ materially from those anticipated. Consequently,
guidance cannot be guaranteed. As such, investors are cautioned not
to place undue reliance upon guidance and forward-looking
statements as there can be no assurance that the plans, assumptions
or expectations upon which they are placed will occur. All
statements other than statements of historical fact may be
forward‐looking statements. Statements concerning proven and
probable mineral reserves and mineral resource estimates may also
be deemed to constitute forward‐looking statements to the extent
that they involve estimates of the mineralization that will be
encountered as and if the property is developed, and in the case of
measured and indicated mineral resources or proven and probable
mineral reserves, such statements reflect the conclusion based on
certain assumptions that the mineral deposit can be economically
exploited. Any statements that express or involve discussions with
respect to predictions, expectations, beliefs, plans, projections,
objectives or future events or performance (often, but not always,
using words or phrases such as “seek”, “anticipate”, “plan”,
“continue”, “estimate”, “expect”, “may”, “will”, “project”,
“predict”, “forecast”, “potential”, “target”, “intend”, “could”,
“might”, “should”, “believe” and similar expressions) are not
statements of historical fact and may be “forward‐looking
statements”.
Actual results may vary from forward-looking
statements. Forward-looking statements are subject to known and
unknown risks, uncertainties and other factors that may cause
actual results to materially differ from those expressed or implied
by such forward-looking statements, including but not limited to:
risks related to the integration of acquisitions; actual results of
exploration activities; conclusions of economic evaluations;
changes in project parameters as plans continue to be refined;
commodity prices; variations in ore reserves, grade or recovery
rates; actual performance of plant, equipment or processes relative
to specifications and expectations; accidents; labour relations;
relations with local communities; changes in national or local
governments; changes in applicable legislation or application
thereof; delays in obtaining approvals or financing or in the
completion of development or construction activities; exchange rate
fluctuations; requirements for additional capital; government
regulation; environmental risks; reclamation expenses; outcomes of
pending litigation; limitations on insurance coverage as well as
those factors discussed in the section entitled "Description of the
Business - Risk Factors" in the Company's most recent Annual
Information Form, available on www.sedar.com, and Form 40-F on file
with the United States Securities and Exchange Commission in
Washington, D.C. Although First Majestic has attempted
to identify important factors that could cause actual results to
differ materially from those contained in forward-looking
statements, there may be other factors that cause results not to be
as anticipated, estimated or intended.
The Company believes that the expectations
reflected in these forward‐looking statements are reasonable, but
no assurance can be given that these expectations will prove to be
correct and such forward‐looking statements included herein should
not be unduly relied upon. These statements speak only as of the
date hereof. The Company does not intend, and does not assume any
obligation, to update these forward-looking statements, except as
required by applicable laws.
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