FIRST MAJESTIC SILVER CORP. (AG: NYSE; FR: TSX)
(the "Company" or “First Majestic”) is pleased to announce the
unaudited interim consolidated financial results of the Company for
the first quarter ended March 31, 2019. The full version of the
financial statements and the management discussion and analysis can
be viewed on the Company's web site at
www.firstmajestic.com or on SEDAR at www.sedar.com and on
EDGAR at www.sec.gov. All amounts are in U.S. dollars unless
stated otherwise.
FIRST QUARTER 2019 HIGHLIGHTS
- Silver equivalent production of 6.3 million ounces, down 3%
compared to Q4 2018
- Pure silver production of 3.3 million ounces, up 2% compared to
Q4 2018
- Revenues for the quarter was $86.8 million, up 17% compared to
Q4 2018
- Mine operating earnings of $10.3 million, up 214% compared to
Q4 2018
- Cash flow per share was $0.12 per share (non-GAAP)
- Cash costs were $6.34 per payable silver ounce (net of
by-product credits)
- All-in sustaining costs (“AISC”) were $12.91 per payable silver
ounce
- Net earnings of $2.9 million (EPS share of $0.01)
- Realized average silver price of $15.73 per ounce
- Strong balance sheet with $91.5 million in cash and cash
equivalents
“In the first quarter, higher silver production
along with improved silver prices generated increased revenues,
earnings and cash flows compared to the prior quarter,” stated
Keith Neumeyer, President and CEO of First Majestic. “Strong gold
production from our San Dimas and Santa Elena mines helped to
record better than expected consolidated cash costs and AISC per
ounce. Costs are expected to continue to trend lower in the second
half of 2019 due to higher production levels at various operations
including the commercialization of several cost saving projects
which are expected to further increase margins and profitability.
We continue to prudently manage the business in a very challenging
silver price environment by balancing capital investments with
expected cash flows and ensuring we maximize returns on invested
capital.”
OPERATIONAL AND FINANCIAL
HIGHLIGHTS
Key Performance
Metrics |
|
2019-Q1 |
|
2018-Q4 |
Change Q1 vs Q4 |
|
2018-Q1 |
Change Q1 vs Q1 |
Operational |
|
|
|
|
|
|
|
|
Ore Processed / Tonnes Milled |
|
|
812,654 |
|
|
|
850,272 |
|
(4 |
%) |
|
|
809,775 |
|
— |
% |
Silver
Ounces Produced |
|
|
3,331,388 |
|
|
|
3,250,816 |
|
2 |
% |
|
|
2,167,030 |
|
54 |
% |
Silver
Equivalent Ounces Produced |
|
|
6,273,677 |
|
|
|
6,485,761 |
|
(3 |
%) |
|
|
3,879,678 |
|
62 |
% |
Cash
Costs per Ounce (1) |
|
$6.34 |
|
|
$6.06 |
|
5 |
% |
|
$7.83 |
|
(19 |
%) |
All-in
Sustaining Cost per Ounce (1) |
|
$12.91 |
|
|
$12.83 |
|
1 |
% |
|
$16.01 |
|
(19 |
%) |
Total
Production Cost per Tonne (1) |
|
$66.65 |
|
|
$65.31 |
|
2 |
% |
|
$46.88 |
|
42 |
% |
Average Realized Silver Price
per Ounce (1) |
|
$15.73 |
|
|
$14.47 |
|
9 |
% |
|
$16.76 |
|
(6 |
%) |
|
|
|
|
|
|
|
|
|
Financial (in
$millions) |
|
|
|
|
|
|
|
|
Revenues |
|
$86.8 |
|
|
$74.1 |
|
17 |
% |
|
$58.6 |
|
48 |
% |
Mine
Operating Earnings (Loss) |
|
$10.3 |
|
|
($9.0 |
) |
214 |
% |
|
($0.4 |
) |
2,524 |
% |
Net
Earnings (Loss) |
|
$2.9 |
|
|
($164.4 |
) |
102 |
% |
|
($5.6 |
) |
152 |
% |
Operating Cash Flows before Working Capital and Taxes |
|
$23.7 |
|
|
$11.0 |
|
115 |
% |
|
$15.6 |
|
52 |
% |
Cash
and Cash Equivalents |
|
$91.5 |
|
|
$57.0 |
|
61 |
% |
|
$249.2 |
|
(63 |
%) |
Working Capital (1) |
|
$130.9 |
|
|
$108.1 |
|
21 |
% |
|
$235.6 |
|
(44 |
%) |
|
|
|
|
|
|
|
|
|
Shareholders |
|
|
|
|
|
|
|
|
Earnings (Loss) per Share ("EPS") - Basic |
|
$0.01 |
|
|
($0.85 |
) |
102 |
% |
|
($0.03 |
) |
144 |
% |
Adjusted EPS (1) |
|
($0.01 |
) |
|
($0.05 |
) |
70 |
% |
|
($0.06 |
) |
75 |
% |
Cash
Flow per Share (1) |
|
$0.12 |
|
|
$0.06 |
|
113 |
% |
|
$0.09 |
|
28 |
% |
- The Company reports non-GAAP measures which include cash costs
per ounce, all-in sustaining cost per ounce, total production cost
per ounce, total production cost per tonne, average realized silver
price per ounce, working capital, adjusted EPS and cash flow per
share. These measures are widely used in the mining industry as a
benchmark for performance, but do not have a standardized meaning
and may differ from methods used by other companies with similar
descriptions.
Q1 2019 FINANCIAL RESULTS
The Company realized an average silver price of
$15.73 per ounce during the first quarter of 2019, representing a
6% decrease compared with the first quarter of 2018 and a 9%
increase compared to $14.47 in the prior quarter.
Revenues generated in the first quarter totaled
$86.8 million, an increase of 48% compared to $58.6 million in the
first quarter of 2018 primarily due to the acquisition of the San
Dimas mine in the second quarter of 2018, which resulted in a 60%
increase in silver equivalent ounces sold, partially offset by a 6%
decrease in average realized silver price compared to the same
quarter of the prior year.
The Company reported mine operating earnings of
$10.3 million compared to ($0.4) million in the first quarter
of 2018. The increase in mine operating earnings in the quarter was
attributed to the San Dimas and Santa Elena mines, which generated
mine operating earnings of $11.2 million and $5.1 million,
respectively, primarily offset by losses at the Del Toro and La
Parrilla mines due to reduced production levels.
Cash flow from operations before movements in
working capital and income taxes in the quarter was $23.7 million
($0.12 per share) compared to $15.6 million ($0.09 per share)
in the first quarter of 2018.
The Company generated net earnings of $2.9
million (EPS of $0.01) compared to ($5.6) million (EPS of $(0.03))
in the first quarter of 2018. Adjusted net earnings for the quarter
was
($2.9) million (adjusted EPS of $(0.01)),
after excluding non-cash and non-recurring items.
Cash and cash equivalents at March 31, 2019
was $91.5 million, an increase of $34.5 million compared to the
previous quarter, while working capital increased to $130.9
million. The increase in cash and cash equivalents was primarily
attributed to the sale of 5,250,000 common shares of the Company
through its “at-the-market distribution” program at an average
price of US$6.34 per share for gross proceeds of $33.6 million, or
net proceeds of $32.5 million after costs.
OPERATIONAL HIGHLIGHTS
The table below represents the quarterly
operating and cost parameters at each of the Company’s six
producing silver mines.
First Quarter
Production Summary |
San Dimas |
Santa Elena |
La Encantada |
San Martin |
La Parrilla |
Del Toro |
Consolidated |
Ore Processed / Tonnes Milled |
|
163,264 |
|
|
219,941 |
|
|
269,611 |
|
|
62,148 |
|
|
72,551 |
|
|
25,138 |
|
|
812,654 |
|
Silver Ounces Produced |
|
1,404,454 |
|
|
587,195 |
|
|
720,959 |
|
|
331,539 |
|
|
219,485 |
|
|
67,757 |
|
|
3,331,388 |
|
Silver Equivalent Ounces Produced |
|
3,172,270 |
|
|
1,403,364 |
|
|
723,699 |
|
|
421,091 |
|
|
441,095 |
|
|
112,158 |
|
|
6,273,677 |
|
Cash Costs per Ounce |
$0.93 |
|
$2.81 |
|
$12.60 |
|
$11.35 |
|
$16.58 |
|
$27.20 |
|
$6.34 |
|
All-in Sustaining Cost per Ounce |
$5.65 |
|
$6.37 |
|
$13.72 |
|
$15.67 |
|
$25.62 |
|
$35.89 |
|
$12.91 |
|
Total Production Cost per Tonne |
$122.17 |
|
$56.53 |
|
$32.71 |
|
$80.39 |
|
$76.78 |
|
$95.06 |
|
$66.65 |
|
Total production in the first quarter reached
6,273,677 silver equivalents ounces, consisting of 3,331,388
million ounces of silver, 32,037 ounces of gold, 2,661,088 pounds
lead and 1,265,438 pounds of zinc. Compared to the previous
quarter, total production decreased slightly by 3% due to lower
throughput and production at the Del Toro and La Parrilla mines,
partially offset by an increase in production from the La Encantada
mine. Pure silver production increased 2% as a result of higher
grades at the San Dimas and La Encantada mines.
COSTS AND CAPITAL
EXPENDITURES
Cash cost per ounce in the quarter was $6.34, an
increase of 5% or $0.28 per ounce compared to the previous quarter.
The increase in cash cost per ounce was primarily attributed to a
decrease in by-product credits which was partially offset by lower
mining contractor costs corresponding to planned reduction in
throughputs at La Parrilla and Del Toro. Costs are expected to
trend lower in the second half of 2019 due to higher production
levels at various operations.
All-in sustaining cost per ounce in the first
quarter was $12.91, comparable to $12.83 per ounce in the previous
quarter.
Total capital expenditures in the first quarter
were $28.7 million, primarily consisting of $8.2 million at San
Dimas, $4.8 million at Santa Elena, $2.9 million at La Encantada,
$2.4 million at San Martin, $2.8 million at La Parrilla, $1.0
million at Del Toro and $6.6 million for strategic projects which
includes approximately $6.0 million for the purchase of two HIG
mills.
ABOUT FIRST MAJESTIC
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
SPECIAL NOTE REGARDING FORWARD-LOOKING
INFORMATIONThis 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:
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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