First Majestic Silver Corp. (NYSE:AG) (TSX:FR) ("First Majestic" or
the "Company") announces total production in the second quarter of
2017 from its six operating silver mines reached 3.9 million
equivalent ounces of silver. Total production consisted of 2.3
million ounces of silver, 15,186 ounces of gold, 7.6 million pounds
of lead and 0.9 million pounds of zinc.
“During the quarter, silver production was
impacted by unusual efforts by unionized workers to illegally
disrupt mining activities which caused minor stoppages at La
Parrilla, Santa Elena and a more serious stoppage at our La
Encantada operation,” said Keith Neumeyer, President & CEO.
“Pointing to a specific cause is difficult – whether due to higher
gasoline prices or higher taxes in Mexico – but worker
dissatisfaction among union employees throughout the Mexican mining
industry is at the highest levels witnessed in the Company’s
fifteen year history.”
Mr. Neumeyer continued, “I am, however, pleased
that our actions to clear the three blockades and resume mining
activities were successful. The National Union and Confederation of
Mexican Workers Union were both supportive of the actions taken by
the Company which are expected to lead to improvements in
productivity at each of the operations in the coming quarters. We
anticipate production to be back on track in the third quarter and
will work to recoup lost tonnage over the remainder of 2017. It is
important to note that the construction of the new roaster at La
Encantada was unaffected by the work stoppage and remains on
schedule to be completed in early 2018.”
Production Details Table:
|
Q2 |
Q2 |
Y/Y |
Q1 |
Q/Q |
2017 |
2016 |
Change |
2017 |
Change |
Ore processed/tonnes milled |
691,833 |
798,182 |
-13% |
822,336 |
-16% |
Total production - ounces of silver equivalent |
3,888,944 |
4,681,608 |
-17% |
4,267,350 |
-9% |
Total silver ounces produced |
2,287,188 |
2,844,930 |
-20% |
2,708,978 |
-16% |
Silver grade (g/t) |
130 |
148 |
-12% |
136 |
-5% |
Silver recovery (%) |
79 |
75 |
6% |
75 |
5% |
Gold ounces produced |
15,186 |
16,371 |
-7% |
15,047 |
1% |
Pounds of lead produced |
7,625,328 |
8,825,234 |
-14% |
7,453,972 |
2% |
Pounds of zinc produced |
860,939 |
3,837,301 |
-78% |
871,596 |
-1% |
|
|
|
|
|
|
Quarterly Operational
Review:
Total ore processed during the quarter at the
Company's six operating silver mines: Santa Elena, La Encantada, La
Parrilla, Del Toro, San Martin and La Guitarra, amounted to 691,833
tonnes representing a 16% decrease compared to the previous
quarter. The decrease was primarily due to three illegal blockades
in the quarter which amounted to four days at La Parrilla, two days
at Santa Elena and 42 days at La Encantada.
Silver grades in the quarter averaged 130 g/t
compared to 136 g/t in the previous quarter. Silver grades remain
under budget primarily due to lower than expected grades at Santa
Elena, La Encantada and La Parrilla.
Combined silver recoveries averaged 79%, up 5%
compared to the previous quarter’s average of 75%. The increase in
silver recoveries was primarily due to the lower throughput rates
and lower manganese grades at La Encantada.
The Company's underground development in the
second quarter consisted of 15,121 metres, reflecting an 11%
increase compared to 13,571 metres completed in the previous
quarter. Development focused on opening new production areas,
exploring high potential zones and new stope preparation. As of
June 30, 2017, the Company had completed approximately 38% of the
74,850 metres of underground development budgeted for 2017.
During the quarter, a total of 17 diamond drill
rigs were active across the Company’s properties consisting of 16
rigs at the six producing mines and one rig at the Plomosas Silver
Project. A total of 29,070 metres in 164 drill holes were completed
on the seven properties. As of June 30, 2017, the Company had
completed approximately 32% of the 183,000 metres of exploration
drilling budgeted for 2017. The Company is planning to increase the
rig count to 25 rigs in the second half of 2017 in order to achieve
program targets.
Mine by Mine Quarterly Production
Table:
Mine |
Ore
Processed |
Tonnes per
Day |
Silver Grade
(g/t) |
Silver Recovery
(%) |
Silver Oz
Produced |
Gold Oz
Produced |
Pounds of
Lead |
Pounds of
Zinc |
Equivalent Silver
Ounces |
|
Santa Elena |
232,451 |
2,554 |
83 |
90% |
557,914 |
11,522 |
- |
- |
1,399,940 |
|
La Encantada |
148,039 |
1,627 |
120 |
66% |
374,901 |
9 |
- |
- |
375,563 |
|
La Parrilla |
132,880 |
1,460 |
131 |
76% |
425,060 |
235 |
1,632,165 |
860,939 |
593,852 |
|
Del Toro |
81,843 |
899 |
173 |
80% |
365,323 |
86 |
5,993,164 |
- |
712,714 |
|
San Martin |
67,073 |
737 |
234 |
85% |
425,645 |
2,080 |
- |
- |
577,598 |
|
La Guitarra |
29,547 |
325 |
188 |
77% |
138,345 |
1,254 |
- |
- |
229,276 |
|
Total |
691,833 |
7,603 |
130 |
79% |
2,287,188 |
15,186 |
7,625,328 |
860,939 |
3,888,944 |
|
*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:
$17.21 per ounce; Gold: $1,257 per ounce; Lead: $0.98 per pound;
Zinc: $1.18 per pound.
At the Santa Elena Silver/Gold
Mine:
- During the quarter, Santa Elena produced 557,914 ounces of
silver and 11,522 ounces of gold for a total production of
1,399,940 silver equivalent ounces reflecting a 2% increase
compared to the prior quarter.
- The mill processed a total of 232,451 tonnes, consisting of
134,699 tonnes of underground ore and 97,752 tonnes from the above
ground heap leach pad.
- Silver and gold grades of underground ore averaged 115 g/t and
2.3 g/t, respectively. Whereas silver and gold grades from the
above ground heap leach pad averaged 40 g/t and 0.7 g/t,
respectively.
- In April, the Company successfully completed the connection of
the San Salvador ramp to the Main Vein along level 575 and began
utilizing the additional mine access point to reduce trucking
bottlenecks and improve mine planning logistics. In addition, the
new ramp is expected to support future exploration activities
around the Tortuga vein.
- A total of 2,613 metres of underground development was
completed in the second quarter compared to 2,855 metres of
development in the previous quarter.
- A total of 2,608 metres of exploration drilling was completed
in the second quarter compared to 3,730 metres of drilling in the
previous quarter.
At the La Encantada Silver
Mine:
- Production during the quarter was impacted by a 42 day work
stoppage as a result of an illegal blockade (previously announced
on May 24, 2017) by a rogue group of unionized workers who
disagreed with the bonus that the Company and the National Union
had previously agreed to offer the miners in lieu of profit
sharing. The blockade was successfully cleared on May 25, 2017
following a favourable agreement with the National Union. The
operation restarted mining activities on June 27, 2017 and milling
activities on July 1, 2017 following a technical suspension period
for administration and retraining of personnel.
- As a result of the work stoppage, silver production for the
quarter was 374,901 ounces representing a 47% decrease over the
previous quarter while tonnes milled decreased 44% over the same
period.
- Silver recoveries averaged 66% during the quarter, up from 60%
in the prior quarter, primarily due to the processing of ore with a
1% or less manganese content.
- The manufacturing of the roasting project advanced in the
second quarter with approximately 83% of the major components now
completed. Preliminary compression drilling tests were completed in
June and foundations for the roaster are expected to be poured in
August. The Company will begin shipping completed part modules to
the mine site in the third quarter.
- A total of 562 metres of underground development were completed
in the second quarter compared to 587 metres of development in the
previous quarter.
- A total of 2,899 metres were drilled in the second quarter
compared to 2,805 metres of drilling in the previous quarter.
At the La Parrilla Silver
Mine:
- During the quarter, the flotation circuit processed 74,748
tonnes (821 tpd) with an average silver grade of 123 g/t and a 79%
recovery while the cyanidation circuit processed 58,132 tonnes (639
tpd) with an average silver grade of 140 g/t and a 73% recovery for
total production of 593,852 silver equivalent ounces.
- The lead circuit processed an average lead grade of 1.4% with
recoveries of 73% for total lead production of 1.6 million pounds,
representing an 11% decrease compared to the previous quarter.
- The zinc circuit processed an average zinc grade of 1.1% with
recoveries of 48% for total zinc production of 0.9 million pounds,
representing a 1% decrease compared to the previous quarter.
- The Company’s central lab at La Parrilla completed and passed
its second surveillance audit following its ISO 9001:2008
certification in May 2015. The audit determined the facility was
fully compliant with the management system quality standards for
sample preparation, geochemical and assay services. The lab is
expected to undergo certification testing for the ISO9001:2015
standard in 2018.
- Underground development completed in the quarter totaled 3,233
metres compared to 2,827 metres developed in the previous
quarter.
- A total of 6,368 metres were drilled in the second quarter
compared to 4,867 metres of drilling in the previous quarter.
At the Del Toro Silver
Mine:
- During the quarter, Del Toro produced a total of 712,714 silver
equivalent ounces reflecting a 4% increase compared to the prior
quarter.
- Silver grades and recoveries during the quarter averaged 173
g/t and 80%, respectively.
- Lead grades and recoveries averaged 4.8% and 70%, respectively,
producing a total of 6.0 million pounds of lead representing a 7%
increase compared to the previous quarter.
- Underground development completed in the quarter totaled 3,222
metres compared to 2,710 metres developed in the previous
quarter.
- Total exploration metres drilled in the quarter amounted to
4,078 metres compared to 3,589 metres of drilling in the previous
quarter.
- The Company is planning to release an updated NI 43-101
Technical Report in the third quarter.
At the San Martin Silver
Mine:
- During the quarter, San Martin produced 425,645 ounces of
silver and a record 2,080 ounces of gold for a total production of
577,598 silver equivalent ounces, reflecting an 11% increase
compared to the prior quarter.
- Silver grades and recoveries averaged 234 g/t and 85%,
respectively, during the quarter. In addition, gold grades and
recoveries averaged 1.0 g/t and 94%, respectively.
- The dry stack filter presses were successfully installed during
the quarter, with only minor electrical and piping work remaining
to be completed before the system can be tested. The filter
presses, which are designed to recover and re-use tailings solution
and to save on water consumption, are expected to undergo testing
at the end of July 2017.
- Underground development completed in the quarter totaled 3,224
metres compared with 2,127 metres of development in the previous
quarter.
- Total exploration metres drilled in the quarter amounted to
7,352 metres compared to 4,136 metres of drilling in the previous
quarter.
At the La Guitarra Silver
Mine:
- During the quarter, La Guitarra produced 138,345 ounces of
silver and 1,254 ounces of gold for a total production of 229,276
silver equivalent ounces.
- Silver grades and recoveries averaged 188 g/t and 77%,
respectively, during the quarter. In addition, gold grades and
recoveries averaged 1.8 g/t and 74%, respectively.
- A total of 2,093 metres of development were completed in the
second quarter compared to 2,279 metres of development in the
previous quarter.
- Total exploration metres drilled in the quarter amounted to
3,092 metres compared to 7,416 metres drilled in the previous
quarter.
Q2 Earnings Announcement and Conference
Call
The Company is planning to release its second
quarter 2017 unaudited financial results on Thursday, August 3,
2017.
Furthermore, the Company will be holding a
conference call and webcast on Friday, August 4, 2017 at 10 am
PDT (1 pm EDT).
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: |
1572 followed by the # sign |
|
|
The replay will be available approximately one
hour after the conference and will available for 7 days following
the conference. The replay will also be available on the
Company’s website for one month.
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 six producing silver mines; the La
Parrilla Silver Mine, the San Martin Silver Mine, the La Encantada
Silver Mine, the La Guitarra Silver Mine, Del Toro Silver Mine and
the Santa Elena Silver/Gold Mine. Production from these six mines
is projected to be between 11.1 to 12.4 million ounces of pure
silver or 16.6 to 18.5 million ounces of silver equivalents in
2017.
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
statements", within the meaning of the United States Private
Securities Litigation Reform Act of 1995 and applicable Canadian
securities legislation, concerning the business, operations and
financial performance and condition of First Majestic Silver
Corp. Forward-looking statements include, but are not limited
to, statements with respect to the future price of silver and other
metals, the estimation of mineral reserves and resources, the
realization of mineral reserve estimates, the timing and amount of
estimated future production, costs of production, capital
expenditures, costs and timing of the development of new deposits,
success of exploration activities, permitting time lines, hedging
practices, currency exchange rate fluctuations, requirements for
additional capital, government regulation of mining operations,
environmental risks, unanticipated reclamation expenses, timing and
possible outcome of pending litigation, title disputes or claims
and limitations on insurance coverage. Generally, these
forward-looking statements can be identified by the use of
forward-looking terminology such as "plans", "expects" or "does not
expect", "is expected", "budget", "scheduled", "estimates",
"forecasts", "intends", "anticipates" or "does not anticipate", or
"believes", or variations of such words and phrases or state that
certain actions, events or results "may", "could", "would", "might"
or "will be taken", "occur" or "be achieved". Forward-looking
statements are subject to known and unknown risks, uncertainties
and other factors that may cause the actual results, level of
activity, performance or achievements of First Majestic Silver
Corp. to be materially different from those expressed or
implied by such forward-looking statements, including but not
limited to: risks related to the integration of acquisitions; risks
related to international operations; risks related to joint venture
operations; actual results of current exploration activities;
actual results of current reclamation activities; conclusions of
economic evaluations; changes in project parameters as plans
continue to be refined; future prices of metals; possible
variations in ore reserves, grade or recovery rates; failure of
plant, equipment or processes to operate as anticipated; accidents,
labour disputes and other risks of the mining industry; delays in
obtaining governmental approvals or financing or in the completion
of development or construction activities, as well as those factors
discussed in the section entitled "Description of the Business -
Risk Factors" in First Majestic Silver Corp.'s Annual
Information Form for the year ended December 31, 2016, 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 Silver Corp. 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. There can be no
assurance that such statements will prove to be accurate, as actual
results and future events could differ materially from those
anticipated in such statements. Accordingly, readers should
not place undue reliance on forward-looking
statements. First Majestic Silver Corp. does not
undertake to update any forward-looking statements that are
incorporated by reference herein, except in accordance with
applicable securities laws.
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