First Majestic Silver Corp. (NYSE:AG) (TSX:FR) ("First
Majestic" or the "Company") announces total production in the third
quarter of 2017 from its six operating silver mines reached 4.0
million equivalent ounces of silver. Total production consisted of
2.4 million ounces of silver, 15,414 ounces of gold, 5.2 million
pounds of lead and 0.9 million pounds of zinc.
“Consolidated production in the third quarter
returned to higher levels compared to the prior quarter,” said
Keith Neumeyer, President & CEO. “At La Encantada, improvements
in throughput and silver grades allowed for a 62% increase in
silver production. At Santa Elena and San Martin, total production
at each operation beat guidance due to continued strong grades and
higher recoveries. At La Parrilla, oxide production improved due to
higher grade ore being sourced from the San Marcos mine. Lastly, as
a safety precaution following two major earthquakes that struck
near the La Guitarra mine in September, we temporarily suspended
production for a total of eight days to allow for a full inspection
of the operation. The inspection revealed no significant risks or
damages allowing for the restart of production.”
Production Details Table:
|
Q3 |
Q3 |
Y/Y |
Q2 |
Q/Q |
2017 |
2016 |
Change |
2017 |
Change |
Ore processed/tonnes milled |
730,652 |
838,233 |
-13 |
% |
691,833 |
6 |
% |
Total production - ounces of silver equivalent |
3,986,274 |
4,524,619 |
-12 |
% |
3,888,944 |
3 |
% |
Total silver ounces produced |
2,415,962 |
3,114,627 |
-22 |
% |
2,287,188 |
6 |
% |
Silver grade (g/t) |
131 |
150 |
-12 |
% |
130 |
1 |
% |
Silver recovery (%) |
78 |
77 |
2 |
% |
79 |
-1 |
% |
Gold ounces produced |
15,414 |
14,452 |
7 |
% |
15,186 |
2 |
% |
Pounds of lead produced |
5,171,533 |
8,038,206 |
-36 |
% |
7,625,328 |
-32 |
% |
Pounds of zinc produced |
922,666 |
1,519,143 |
-39 |
% |
860,939 |
7 |
% |
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 730,652
tonnes, representing a 6% increase compared to the previous
quarter. The most significant improvement occurred at the La
Encantada operation which recorded a 43% increase in mill
throughput as production rates returned to normal levels following
the 42 day work stoppage in the prior quarter.
Consolidated silver grades in the quarter
averaged 131 g/t compared to 130 g/t in the previous quarter.
Higher silver grades were mined and processed at La Encantada and
San Martin, however, consolidated silver grades were offset by
lower grades at Del Toro. Silver grades at Santa Elena, La Parrilla
and La Guitarra remained relatively consistent with the prior
quarter.
Consolidated silver recoveries averaged 78%,
relatively consistent with the previous quarter. During the
quarter, the Company began testing microbubble flotation technology
at its Central Lab at La Parrilla. Ore samples from La Guitarra
were shipped to site and tested in a six-inch diameter microbubble
column. Preliminary results show metallurgical recoveries improved
by up to 4% in addition to producing higher concentrate grades. Ore
samples from La Parrilla, Del Toro and San Martin are expected to
start pilot testing in the fourth quarter of 2017. Pending
successful results, the Company will begin installing full scale
microbubble columns at each of the four mines in 2018.
The Company's underground development in the
third quarter consisted of 14,931 metres, reflecting a 1% decrease
compared to 15,121 metres completed in the previous quarter.
Development focused on opening new production areas, exploring high
potential zones and new stope preparation. The most significant
increase in underground development occurred at La Encantada in
areas of the mine known to have higher grades, most notably the San
Javier and 990 areas, and the San Francisco dyke.
During the quarter, a total of 19 diamond drill
rigs were active across the Company’s properties consisting of 16
rigs at the six producing mines and three rigs at the Plomosas
Silver Project. A total of 48,638 metres in 302 drill holes were
completed on the seven properties, representing a 67% increase in
drilled metres in the previous quarter. The most significant
increases in drilled metres was at Santa Elena, La Guitarra, La
Parrilla and La Encantada to catch up with annual program targets.
Additional details are stated in their respective mine sections
below.
Mine by Mine Quarterly Production
Table:
Mine |
OreProcessed |
Tonnesper Day |
Silver Grade(g/t) |
SilverRecovery (%) |
Silver OzProduced |
Gold OzProduced |
Pounds ofLead |
Pounds ofZinc |
EquivalentSilver
Ounces |
Santa Elena |
232,662 |
2,529 |
83 |
90 |
% |
560,054 |
12,422 |
- |
- |
1,503,376 |
La Encantada |
212,092 |
2,305 |
136 |
66 |
% |
609,138 |
15 |
- |
- |
610,307 |
La Parrilla |
132,389 |
1,439 |
132 |
76 |
% |
424,358 |
279 |
1,476,346 |
922,666 |
612,116 |
Del Toro |
60,501 |
658 |
149 |
81 |
% |
233,015 |
86 |
3,695,186 |
- |
472,804 |
San Martin |
69,113 |
751 |
243 |
87 |
% |
471,893 |
1,750 |
- |
- |
604,686 |
La Guitarra |
23,896 |
260 |
187 |
82 |
% |
117,504 |
862 |
- |
- |
182,986 |
Total |
730,652 |
7,942 |
131 |
78 |
% |
2,415,962 |
15,414 |
5,171,533 |
922,666 |
3,986,274 |
*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: $16.84 per ounce;
Gold: $1,279 per ounce; Lead: $1.06 per pound; Zinc: $1.34 per
pound.
At the Santa Elena Silver/Gold
Mine:
- During the quarter, Santa Elena produced 560,054 ounces of
silver and 12,422 ounces of gold for a total production of
1,503,376 silver equivalent ounces reflecting a 7% increase
compared to the prior quarter.
- The mill processed a total of 232,662 tonnes, consisting of
141,435 tonnes of underground ore and 91,227 tonnes from the above
ground heap leach pad.
- Silver and gold grades of underground ore averaged 112 g/t and
2.4 g/t, respectively. Whereas silver and gold grades from the
above ground heap leach pad averaged 39 g/t and 0.7 g/t,
respectively.
- A total of 2,724 metres of underground development was
completed in the third quarter compared to 2,613 metres of
development in the previous quarter.
- A total of 7,406 metres of exploration drilling was completed
in the third quarter, consisting of 6,673 metres of diamond
drilling and 733 metres of rotary drilling. This represents a
significant 184% increase compared to the previous quarter. The
increase was primary related to the start of a new drill program at
the Cumobabi property as well as confirmation drilling of the heap
leach pad.
At the La Encantada Silver
Mine:
- For the quarter, silver production reached 609,138 ounces
representing a 62% increase over the previous quarter. The increase
in silver production was due to a 43% increase in tonnes milled and
a 13% increase in silver grade compared to the prior quarter.
- Silver recoveries averaged 66% during the quarter, consistent
with the prior quarter, primarily due to the processing of ore with
a 1% or less manganese content.
- The roasting project advanced in the third quarter with
approximately 93% of the major components now manufactured. During
the quarter, detailed design for the ore and reagents feeding
systems as well as the roasted ore discharge system and coal
storage were completed. Site preparations, including excavations
and pouring of concrete pads for foundations were approximately 90%
complete at quarter end. The shipment of component modules to site
is expected to start in late October.
- Development and reinforcement for caving in the San Javier area
was completed during the third quarter. Vertical raises are planned
to be completed in the fourth quarter followed by initial
production in the first quarter of 2018. The San Javier area is
known to contain silver grades ranging between 150 to 200
g/t.
- A total of 1,173 metres of underground development were
completed in the third quarter compared to 562 metres of
development in the previous quarter. The 99% increase in
development was primarily related to stope development in San
Francisco dyke, San Javier and 990 areas which are known to contain
higher silver grades.
- A total of 6,793 metres of exploration drilling was completed
in the third quarter compared to 2,899 metres of drilling in the
previous quarter.
At the La Parrilla Silver
Mine:
- During the quarter, the flotation circuit processed 69,200
tonnes (752 tpd) with an average silver grade of 122 g/t and a 79%
recovery while the cyanidation circuit processed 63,189 tonnes (687
tpd) with an average silver grade of 142 g/t and a 73% recovery for
total production of 612,116 silver equivalent ounces.
- The lead circuit processed an average lead grade of 1.3% with
recoveries of 73% for total lead production of 1.5 million pounds,
representing a 10% decrease compared to the previous quarter.
- The zinc circuit processed an average zinc grade of 1.2% with
recoveries of 50% for total zinc production of 0.9 million pounds,
representing a 7% increase compared to the previous quarter.
- Underground development completed in the quarter totaled 3,186
metres compared to 3,233 metres developed in the previous
quarter.
- A total of 9,138 metres of exploration drilling was completed
in the third quarter compared to 6,368 metres of drilling in the
previous quarter. During the third quarter, drilling commenced at
the Cerro de Santiago epithermal-style target located east of the
San Marcos mine.
At the Del Toro Silver
Mine:
- During the quarter, Del Toro produced a total of 472,804 silver
equivalent ounces reflecting a 34% decrease compared to the prior
quarter primarily due to a 26% decrease in throughput. The decrease
in throughput was related to delays for land access around the
Dolores mine and a lack of available stopes in the San Juan and
Perseverancia mines.
- Silver grades and recoveries during the quarter averaged 149
g/t and 80%, respectively.
- Lead grades and recoveries averaged 4.0% and 69%, respectively,
producing a total of 3.7 million pounds of lead representing a 38%
decrease compared to the previous quarter.
- Underground development completed in the quarter totaled 2,989
metres compared to 3,222 metres developed in the previous
quarter.
- Total exploration metres drilled in the quarter amounted to
6,673 metres compared to 4,078 metres of drilling in the previous
quarter.
At the San Martin Silver
Mine:
- During the quarter, San Martin produced 471,893 ounces of
silver and 1,750 ounces of gold for a total production of 604,686
silver equivalent ounces, reflecting a 5% increase compared to the
prior quarter. The increase in production was attributed to higher
tonnage, recoveries and silver grades.
- Silver grades and recoveries averaged 243 g/t and 87%,
respectively, during the quarter. In addition, gold grades and
recoveries averaged 0.8 g/t and 93%, respectively.
- Underground development completed in the quarter totaled 2,781
metres compared with 3,224 metres of development in the previous
quarter.
- Total exploration metres drilled in the quarter amounted to
7,763 metres compared to 7,352 metres of drilling in the previous
quarter.
At the La Guitarra Silver
Mine:
- During the quarter, La Guitarra produced 117,504 ounces of
silver and 862 ounces of gold for a total production of 182,986
silver equivalent ounces reflecting a 20% decrease compared to the
prior quarter.
- Silver grades and recoveries averaged 187 g/t and 82%,
respectively, during the quarter. In addition, gold grades and
recoveries averaged 1.4 g/t and 78%, respectively.
- In September, two large earthquakes registering magnitudes of
8.2 and 7.1 struck the southern states of Mexico. The La Guitarra
mine, located in the state of Mexico, was evacuated for a total of
eight days for safety precautions. A full inspection of the
underground mine, tailings dam and mill was immediately implemented
to assess any potential damages. The Company found no evidence of
significant damage to the mine, mill nor its facilities. Following
the safety review, the operation successfully restarted mining
activities on September 24, 2017.
- A total of 1,976 metres of development were completed in the
third quarter compared to 2,093 metres of development in the
previous quarter.
- Total exploration metres drilled in the quarter amounted to
6,345 metres compared to 3,092 metres drilled in the previous
quarter. An additional surface rig was added to aggressively
explore the Nazareno de Ancas area to the west and at depth.
Management Update
The Company is pleased to announce that,
effective November 1, 2017, Todd Anthony will be appointed as
Vice-President, Corporate Development. Mr. Anthony, who previously
held the position of Vice-President of Investor Relations, has over
11 years of experience within the investment community and
financial markets. Prior to joining First Majestic in May 2010, he
served in various capacities at U.S. Global Investors, a boutique
investment management firm with a longstanding history of expertise
in precious metals and natural resources. He graduated with a
bachelor’s degree in business administration from Stephen F. Austin
State University along with an MBA from Texas A&M
University-Kingsville.
Q3 Earnings Announcement
The Company is planning to release its third
quarter 2017 unaudited financial results on Thursday, November 2,
2017.
About the Company
First Majestic is a mining company focused on
growing primary 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 10.0 to 10.6 million ounces of
pure silver or 15.7 to 16.6 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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