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 third quarter
ended September 30, 2019. The full version of the financial
statements and the management discussion and analysis can be viewed
on the Company's website 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.
THIRD QUARTER 2019 HIGHLIGHTS (compared to Q3
2018)
- Revenue up 10% to $97.0 million due to increasing silver prices
in the quarter
- Mine operating earnings of $27.8 million, up substantially
compared to ($0.1) million in Q3 2018
- Net earnings of $8.6 million, up 46% compared to Q3 2018
- Cash flow per share was $0.17 per share (non-GAAP) compared to
$0.11 per share in Q3 2018
- Reduced cash costs by 44% to $3.83 per payable silver ounce
compared to $6.85 per ounce in Q3 2018
- Reduced All-in sustaining costs (“AISC”) by 29% to $10.76 per
payable silver ounce compared to $15.12 per ounce in Q3 2018
- Adjusted EPS of $0.06 after excluding non-cash and
non-recurring items
- Realized average silver price of $17.63 per ounce, up 20%
compared to $14.66 in Q3 2018
- Ended the quarter with $118.6 million in cash and cash
equivalents, up $46.2 million compared to Q3 2018
“In the third quarter, our strong production
results along with lower costs and higher metal prices drove a
significant increase in cash generation for the business,” stated
Keith Neumeyer, President and CEO of First Majestic. “We added
$21.4 million to our treasury during the quarter as a result of
continued strong production from our San Dimas and Santa Elena
mines which together produced approximately 81% of the Company’s
total production and generated mine operating earnings of $29.6
million, representing a 108% increase over the previous
quarter. Our AISC of $10.76 per ounce was well below our
annual guidance range of $12.98 to $13.94 per ounce primarily due
to record gold production at Santa Elena and a five-year production
high at La Encantada.”
OPERATIONAL AND FINANCIAL
HIGHLIGHTS
Key Performance
Metrics |
|
2019-Q3 |
|
2019-Q2 |
Change Q3 vs Q2 |
|
2018-Q3 |
Change Q3 vs Q3 |
|
2019-YTD |
Operational |
|
|
|
|
|
|
|
|
|
|
Ore Processed / Tonnes Milled |
|
|
655,967 |
|
|
|
736,896 |
|
(11 |
%) |
|
|
864,056 |
|
(24 |
%) |
|
|
2,205,517 |
|
Silver
Ounces Produced |
|
|
3,367,740 |
|
|
|
3,193,566 |
|
5 |
% |
|
|
3,505,344 |
|
(4 |
%) |
|
|
9,892,695 |
|
Silver
Equivalent Ounces Produced |
|
|
6,636,716 |
|
|
|
6,410,483 |
|
4 |
% |
|
|
6,740,315 |
|
(2 |
%) |
|
|
19,320,876 |
|
Cash
Costs per Ounce (1) |
|
$3.83 |
|
|
$6.84 |
|
(44 |
%) |
|
$6.85 |
|
(44 |
%) |
|
$5.64 |
|
All-in
Sustaining Cost per Ounce (1) |
|
$10.76 |
|
|
$14.76 |
|
(27 |
%) |
|
$15.12 |
|
(29 |
%) |
|
$12.78 |
|
Total
Production Cost per Tonne (1) |
|
$78.87 |
|
|
$77.93 |
|
1 |
% |
|
$68.87 |
|
15 |
% |
|
$74.06 |
|
Average Realized Silver Price
per Ounce (1) |
|
$17.63 |
|
|
$14.80 |
|
19 |
% |
|
$14.66 |
|
20 |
% |
|
$16.04 |
|
|
|
|
|
|
|
|
|
|
|
|
Financial (in
$millions) |
|
|
|
|
|
|
|
|
|
|
Revenues |
|
$97.0 |
|
|
$83.7 |
|
16 |
% |
|
$88.5 |
|
10 |
% |
|
$267.5 |
|
Mine
Operating Earnings (Loss) |
|
$27.8 |
|
|
$4.2 |
|
561 |
% |
|
|
($0.1 |
) |
19,151 |
% |
|
$42.3 |
|
Net
Earnings (Loss) |
|
$8.6 |
|
|
|
($12.0 |
) |
172 |
% |
|
$5.9 |
|
46 |
% |
|
|
($0.5 |
) |
Operating Cash Flows before Movements in Working Capital and
Taxes |
|
$34.6 |
|
|
$17.7 |
|
95 |
% |
|
$20.7 |
|
67 |
% |
|
$76.0 |
|
Cash
and Cash Equivalents |
|
$118.6 |
|
|
$94.5 |
|
26 |
% |
|
$72.4 |
|
64 |
% |
|
$118.6 |
|
Working Capital (1) |
|
$149.2 |
|
|
$129.5 |
|
15 |
% |
|
$127.8 |
|
17 |
% |
|
$149.2 |
|
|
|
|
|
|
|
|
|
|
|
|
Shareholders |
|
|
|
|
|
|
|
|
|
|
Earnings (Loss) per Share ("EPS") - Basic |
|
$0.04 |
|
|
|
($0.06 |
) |
171 |
% |
|
$0.03 |
|
38 |
% |
|
$0.00 |
|
Adjusted EPS (1) |
|
$0.06 |
|
|
|
($0.02 |
) |
392 |
% |
|
|
($0.03 |
) |
278 |
% |
|
$0.03 |
|
Cash
Flow per Share (1) |
|
$0.17 |
|
|
$0.09 |
|
93 |
% |
|
$0.11 |
|
59 |
% |
|
$0.38 |
|
- 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.
Q3 2019 FINANCIAL RESULTS
The Company realized an average silver price of
$17.63 per ounce during the third quarter of 2019, representing a
20% increase compared to $14.66 in the third quarter of 2018 and a
19% increase compared to $14.80 in the prior quarter.
Revenues generated in the third quarter totaled
$97.0 million, an increase of 10% compared to $88.5 million in the
third quarter of 2018 primarily due an increase of 10% compared to
$88.5 million in the third quarter of 2018 primarily due to a 20%
increase in average realized silver price compared to the same
quarter of the prior year, partially offset by a 10% decrease in
silver equivalent ounces sold at market prices.
The Company reported mine operating earnings of
$27.8 million, its highest level since the first quarter of 2013
when the average realized silver price per ounce was $29.63. This
compares to a mine operating loss of $0.1 million in the third
quarter of 2018. The increase in mine operating earnings in the
quarter was attributed to a combination of higher metal prices,
record production from Santa Elena, the highest production at La
Encantada since 2014, as well as cost savings upon temporary
suspension of activities at the La Parrilla and San Martin mines
which were operating at losses in the same quarter of the prior
year.
Cash flow from operations before movements in
working capital and income taxes in the quarter was $34.6 million
($0.17 per share) compared to $20.7 million ($0.11 per share)
in the third quarter of 2018.
The Company generated net earnings of $8.6
million (EPS of $0.04) compared to net earnings of $5.9 million
(EPS of $0.03) in the third quarter of 2018. Adjusted net earnings
for the quarter was $11.9 million (Adjusted
EPS of $0.06) compared to a net loss of $6.4 million
(Adjusted EPS of ($(0.03)) in the third quarter of 2018, after
excluding non-cash and non-recurring items.
Cash and cash equivalents at September 30,
2019 was $118.6 million, an increase of $24.1 million compared to
the previous quarter, while working capital was $149.2 million
compared to $129.5 million in the previous quarter.
OPERATIONAL HIGHLIGHTS
The table below represents the quarterly
operating and cost parameters at each of the Company’s five
producing silver mines during the quarter.
Third Quarter
Production Summary |
San Dimas |
Santa Elena |
La Encantada |
La Parrilla |
Del Toro |
Consolidated |
Ore Processed / Tonnes Milled |
|
173,679 |
|
|
229,094 |
|
|
191,926 |
|
|
33,439 |
|
|
27,829 |
|
|
655,967 |
|
Silver Ounces Produced |
|
1,639,481 |
|
|
632,216 |
|
|
885,627 |
|
|
135,420 |
|
|
74,997 |
|
|
3,367,740 |
|
Silver Equivalent Ounces Produced |
|
3,502,102 |
|
|
1,859,170 |
|
|
891,205 |
|
|
258,683 |
|
|
125,557 |
|
|
6,636,716 |
|
Cash Costs per Ounce |
$2.28 |
|
|
($7.24 |
) |
$10.72 |
|
$16.27 |
|
$29.83 |
|
$3.83 |
|
All-in Sustaining Cost per Ounce |
$7.30 |
|
|
($5.17 |
) |
$12.67 |
|
$28.81 |
|
$39.77 |
|
$10.76 |
|
Total Production Cost per Tonne |
$135.71 |
|
$57.78 |
|
$47.86 |
|
$89.40 |
|
$98.98 |
|
$78.87 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total production in the third quarter was
6,636,716 silver equivalents ounces, representing a 2% decrease
compared to the prior quarter. Total production consisted of 3.4
million ounces of silver, 35,791 ounces of gold, 1.9 million pounds
lead and 1.0 million pounds of zinc. By the end of the third
quarter, total production in 2019 has reached 19.3 million silver
equivalent ounces, or approximately 77% of the Company’s guidance
midpoint of producing 24.4 to 26.0 million ounces.
COSTS AND CAPITAL
EXPENDITURES
Cash cost per ounce for the quarter was $3.83
per payable ounce of silver, representing a significant 44%
decrease compared to the previous quarter and beating cost
guidance. The decrease in consolidated cash cost was primarily
attributed to an increase in by-product credits due to a 44%
increase in gold production at Santa Elena, a 13% increase in gold
prices over the previous quarter, and a reduction of $5.9 million
in operating costs due to temporary suspension of activities at the
higher cost La Parrilla and San Martin mines.
All-in sustaining cost per ounce in the third
quarter decreased 27% to $10.76 compared to $14.76 per ounce in the
previous quarter. The lower AISC was primarily attributed to
decrease in cash costs as well as reduced sustaining capital
expenditures due to temporarily suspended operational activities at
the San Martin and La Parrilla mines.
Total capital expenditures in the third quarter
were $28.6 million, primarily consisting of $11.0 million at San
Dimas, $5.8 million at Santa Elena, $3.5 million at La Encantada,
$2.7 million at La Parrilla, $1.2 million at Del Toro,
$0.3 million at San Martin and $4.2 million for strategic
projects.
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 12.8 to 13.5 million silver ounces or 24.4 to 26.0
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: 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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