First Majestic Silver Corp. ("First Majestic" or the "Company")
(TSX: FR | NYSE: AG) announces total production in the first
quarter of 2020 reached 6.2 million silver equivalent ounces
consisting of 3.2 million ounces of silver and 32,202 ounces of
gold. As previously announced on April 6, 2020, the Company has
withdrawn its 2020 production and costs guidance as a result of
Mexico’s Ministry of Health’s Federal Decree to temporarily suspend
all mining operations until April 30, 2020.
FIRST QUARTER HIGHLIGHTS
- Total production reached 6.2
million equivalent ounces of silver, consisting of 3.2 million
ounces of silver and 32,202 ounces of gold, inline with the
previous quarter and 9% above guidance prior to suspension
- Continued strong silver and gold
recoveries at Santa Elena of 94% and 96%, respectively, following
two consecutive quarters of sustained high recoveries following the
installation of the 3,000 tpd high-intensity grinding (“HIG”)
mill
- Achieved consolidated average
silver recoveries of 89%, the highest in the Company’s 17-year
history
- At the Ermitaño project near Santa
Elena, development activities are now approximately 600 metres away
from reaching the first access point of the high-grade Ermitaño
Splay ore body
- Broke ground for the construction
of the future liquid natural gas (“LNG”) power generation facility
at Santa Elena
- During the quarter, the Company
quickly responded to the threat of COVID-19 by implementing several
preventative control measures including social distancing, the
cancellation of any non-essential visits to the mines,
comprehensive sanitation measures for the workplace and company
transportation, and pre-screening for virus symptoms
- To date, First Majestic has not
experienced any incidents related to COVID-19 at its sites or
corporate offices
“Strong production from our three operating
mines reached 6.2 million silver equivalent ounces in the first
quarter, or 9% above our previously suspended guidance,” said Keith
Neumeyer, President and CEO. “Our San Dimas, Santa Elena and La
Encantada mines were all operating above guidance prior to Mexico’s
Federal Decree to suspend all mining activities in response to the
COVID-19 pandemic. While we support the actions being taken, we
continue to engage in discussions with Federal and State
authorities to raise awareness on the importance of silver mining
as an essential business.”
PRODUCTION TABLE
|
Q1 |
Q1 |
Y/Y |
Q4 |
Q/Q |
2020 |
2019 |
Change |
2019 |
Change |
Ore processed/tonnes milled |
599,142 |
812,654 |
-26% |
626,482 |
-4% |
Total production -
ounces of silver eqv. |
6,195,057 |
6,273,677 |
-1% |
6,233,412 |
-1% |
Silver ounces
produced |
3,151,980 |
3,331,388 |
-5% |
3,348,424 |
-6% |
Gold ounces
produced |
32,202 |
32,037 |
+1% |
33,176 |
-3% |
Pounds of lead
produced |
0 |
2,661,088 |
-100% |
914,370 |
-100% |
Pounds of zinc produced |
0 |
1,265,438 |
-100% |
0 |
0% |
QUARTERLY REVIEWTotal ore
processed during the quarter at the Company's three silver mines
amounted to 599,142 tonnes, representing a 4% decrease compared to
the previous quarter. The slight decrease in tonnes processed
compared to the prior quarter was primarily due to lower volumes at
Santa Elena following a seven day planned mill maintenance program
as well as the suspension of milling activities at Del Toro,
partially offset by higher volumes at San Dimas.
Consolidated silver grades remained on budget
averaging 185 g/t compared to 189 g/t in the previous quarter. In
addition, consolidated gold grades in the quarter averaged 1.74 g/t
compared to 1.71 g/t in the prior quarter.
Consolidated silver and gold recoveries averaged
89% and 96% in the first quarter, consistent with the previous
quarter. The Company continues to expect recoveries to remain
strong aided by the installation of a new 3,000 tpd HIG mill at San
Dimas and the ongoing HIG mill optimization program at Santa Elena
aimed at further reducing the feed grind size into the plant. In
addition, the Company began testing low-grade tailings through its
new microbubble flotation research and development facility at La
Parrilla. Preliminary test results have indicated the potential to
significantly increase metallurgical recoveries and produce a
high-grade concentrate with material previously deemed as
uneconomic.
In response to COVID-19, the Company quickly
implemented several control measures to assist in preventing the
spread of a potential virus outbreak. Some of these measures
include social distancing, the cancellation of any non-essential
visits to the mines, comprehensive sanitation measures for the
workplace and company transportation, and pre-screening for virus
symptoms. Additionally, access restrictions to limit travel in and
out of the local communities have been implemented. To date, First
Majestic has not experienced any incidents related to COVID-19 at
its sites or corporate offices. The Company continues to actively
engage with local communities and other stakeholders to reduce the
risk of COVID-19 from entering our host communities. Programs are
being implemented to increase awareness about the virus, promote
good hygiene and responsible social interactions to prevent and/or
contain the spread of the virus within our areas of influence.
MINE BY MINE PRODUCTION
TABLE
Mine |
Ore Processed |
Tonnes per Day |
Ag Grade (g/t) |
Au Grade (g/t) |
Ag Recovery |
Au Recovery |
Ag Oz Produced |
Au Oz Produced |
Equivalent Ag Ounces |
San Dimas |
200,109 |
2,199 |
280 |
3.44 |
93% |
96% |
1,677,376 |
21,308 |
3,672,169 |
Santa Elena |
177,834 |
1,954 |
102 |
1.97 |
94% |
96% |
550,133 |
10,842 |
1,593,400 |
La Encantada |
221,200 |
2,431 |
165 |
0.01 |
79% |
90% |
924,472 |
52 |
929,487 |
Total |
599,142 |
6,584 |
185 |
1.74 |
89% |
96% |
3,151,980 |
32,202 |
6,195,057 |
*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: $16.90 per ounce, Gold: $1,583 per ounce.
At the San Dimas Silver/Gold
Mine:
- During the quarter, San Dimas
produced 1,677,376 ounces of silver and 21,308 ounces of gold for a
total production of 3,672,169 silver equivalent ounces,
representing a 4% increase compared to the prior quarter primarily
due to a 10% increase in tonnes milled offset by slightly lower
silver and gold grades.
- The mill processed a total of
200,109 tonnes with average silver and gold grades of 280 g/t and
3.44 g/t, respectively. During the quarter, the Company focused on
developing the upper Jessica area to prepare future production
blocks. As a result, a portion of production was alternatively
sourced from several areas outside of the high-grade Jessica and
Victoria veins. This development in ore generated higher dilution
but produced more tonnes with lower grades.
- Silver and gold recoveries were
consistent during the quarter averaging 93% and 96%,
respectively.
- Rehabilitation efforts of the
railcar haulage track continued inside the Tayoltita mine to
prepare for the restart of production. The Company expects to
complete the track and begin limited production from development
and pillar recovery in the third quarter before ramping up to 300
tpd by the end of 2020. The Tayoltita mine was the original mining
area at San Dimas and known to contain higher silver
grades.
- Several major pieces of equipment
for the mill modernization program at San Dimas were ordered and
began to be fabricated during the quarter. These items include the
autogenous mill, a filter press for tailings handling and a
thickener to process ultra-fine particles. The Company continues to
expect the new 3,000 tpd HIG mill to be delivered to site in the
second quarter of 2020, pending any potential logistical challenges
created by the COVID-19 pandemic.
At the Santa Elena Silver/Gold
Mine:
- During the quarter, Santa Elena
produced 550,133 ounces of silver and 10,842 ounces of gold for a
total production of 1,593,400 silver equivalent ounces, consistent
compared to the prior quarter.
- The mill processed a total of
177,834 tonnes, consisting of 125,529 tonnes (approximately 71% of
production) of underground ore and 52,305 tonnes (approximately 29%
of production) from the above ground heap leach pad. Compared to
the prior quarter, tonnes milled decreased 10% primarily due a
planned mill maintenance program which required seven days in
February to complete. In addition, a temporary reduction in haulage
activities in January and February slightly impacted the
transportation of underground ore.
- Silver and gold grades from
underground ore averaged 130 g/t and 2.48 g/t, respectively. Silver
and gold grades from the above ground heap leach pad averaged 36
g/t and 0.73 g/t, respectively.
- Silver and gold recoveries averaged
94% and 96%, respectively, during the quarter.
- Initial ground clearing was
completed during the quarter to prepare the future LNG power
generation facility. Concrete foundations are expected to be poured
once the temporary work suspension is lifted at the end of April.
The conversion from diesel to LNG power generation is expected to
significantly reduce the production of carbon emissions while
decreasing energy costs by approximately 40%.
- During the quarter, the Company
completed 448 metres of development at the Ermitaño project
consisting of 386 metres along the main ramp and 62 metres for
mucking and loading stations. The first access point which
intersects the main high-grade ore body (Ermitaño Splay) is
approximately 600 metres away from current development and is
expected to be reached by the end of the third quarter. Earthwork
activities for temporary energy generation, air compression and
water supplies were also completed during the quarter. Looking
ahead, the Company is expected to complete a trade-off study for
the materials handling systems in the second quarter.
At the La Encantada Silver
Mine:
- During the quarter, La Encantada
produced 924,472 ounces of silver, representing a 6% decrease from
the previous quarter yet remained 15% above previous guidance. The
decrease in silver production was primarily due to a slight
decrease in silver grades compared to the prior quarter.
- Silver recoveries averaged 79%,
consistent with the prior quarter.
- Silver grades averaged 165 g/t
during the quarter, representing a 6% decrease compared to the
prior quarter and 8% above the previous 2020 guidance.
- During the quarter, ramp
development continued to access the Milagros breccia to prepare the
mine for initial sub-level caving production in the fourth quarter
of 2020.
Q1 EARNINGS ANNOUNCEMENT
The Company is planning to release its first
quarter 2020 unaudited financial results on Thursday, May 14,
2020.
ABOUT THE COMPANY
First Majestic is a 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 and the La Encantada Silver Mine.
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: 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: the
duration and effects of the coronavirus and COVID-19, and any other
pandemics on our operations and workforce, and the effects on
global economies and society; 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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