Globe Newswire 14-Jan-2019 7:00 AM
VANCOUVER, British Columbia, Jan. 14, 2019 (GLOBE NEWSWIRE) -- First Majestic Silver Corp. ("First Majestic" or the "Company") is pleased to announce the Company's fourth quarter and full year 2018 production results, as well as production and cost guidance for 2019. The Company's fourth quarter and full year 2018 financial results are scheduled to be released on February 25, 2019.
Total production in 2018 reached 22.2 million equivalent ounces of silver, representing a 37% increase over 2017, and at the upper end of the Company's guidance of 20.5 to 22.6 million silver equivalent ounces. Total production consisted of 11.7 million ounces of silver, 111,084 ounces of gold, 16.1 million pounds of lead and 5.7 million pounds of zinc. Annual silver production was slightly below the Company's guidance of 12.0 to 13.2 million ounces primarily due to lower than expected silver production at La Encantada in 2018. Total production in the fourth quarter of 2018 totaled 6.5 million silver equivalent ounces consisting of 3.3 million ounces of silver, 34,487 ounces of gold, 3.3 million pounds of lead and 1.5 million pounds of zinc.
The Company anticipates 2019 total production (including gold, lead and zinc by-products) will range between 24.7 to 27.5 million silver equivalent ounces including 14.2 to 15.8 million ounces of pure silver. Based on the midpoint of the guidance range the Company expects a 28% increase in silver production and an 18% increase in total production when compared to 2018.
"First Majestic had a record year in 2018 producing 22.2 million silver equivalent ounces following the successful acquisition and integration of the San Dimas Silver/Gold mine," said Keith Neumeyer, President & CEO. "The addition of San Dimas effectively doubled our production profile and total Mexican workforce overnight. Unfortunately, due to falling silver prices in the second half of 2018, we needed to implement various cost cutting measures including placing the La Guitarra mine on care and maintenance, reducing our workforce by approximately 15%, and scaling back capital investments by approximately 20%. These cost cutting measures have been successful and we remain focused on improving margins and will continue to react further if necessary."
"Looking ahead for 2019, we expect to reach another new production record of between 24.5 and 27.5 million silver equivalent ounces along with a much leaner cost profile primarily due to a full year of production from San Dimas, the start-up of the roaster at La Encantada and the installation of high-intensity grinding ("HIG") mills at the Santa Elena and La Encantada operations. The combination of the HIG mill and roaster at La Encantada is extremely encouraging as it has the potential to re-establish the operation as a significant silver producer of 4 to 5 million ounces per year once these mill upgrades are completed."
Production Details Table:
|2018||2017||Change||Consolidated Production Results||2018||2017||Change|
|850,272||736,684||15||%||Ore processed/tonnes milled||3,375,452||2,981,506||13||%|
|6,485,761||4,065,337||60||%||Total production - ounces of silver equivalent||22,243,071||16,207,905||37||%|
|3,250,816||2,337,463||39||%||Silver ounces produced||11,679,452||9,749,591||20||%|
|34,487||17,344||99||%||Gold ounces produced||111,084||62,991||76||%|
|3,294,360||4,271,970||-23||%||Pounds of lead produced||16,135,438||24,522,803||-34||%|
|1,466,812||1,289,031||14||%||Pounds of zinc produced||5,695,657||3,944,232||44||%|
Quarterly Operational Review:
Total ore processed during the quarter at the Company's silver mines amounted to 850,272 tonnes, representing a 2% decrease compared to the previous quarter. The slight decrease in tonnes processed compared to the prior quarter was primarily due to placing the La Guitarra mine on care and maintenance on August 3, 2018.
Consolidated silver grades in the quarter averaged 144 g/t compared to 152 g/t in the previous quarter. This 5% decrease was primarily the result of lower grades at La Parrilla. Consolidated gold grades were relatively unchanged in the quarter averaging 1.31 g/t compared to 1.33 g/t in the prior quarter.
Consolidated silver and gold recoveries averaged 83% and 96% in the fourth quarter of 2018 and consistent with the previous quarter. The Company continues to expect further improvements in recoveries associated with the installation of the microbubble flotation cells and the HIG mills in 2019. The microbubble flotation cells at La Parrilla are expected to be delivered and installed in the first quarter and commissioning to commercial production in the second quarter. In addition, the HIG mill at Santa Elena is expected to be delivered in the first quarter and installed and commissioned in the second quarter of 2019. The Company has also redirected its second HIG mill to La Encantada following very positive metallurgical test results on mineral samples which indicate that grinding ore to sub-50 microns significantly improved silver recoveries even with the presence of high-grade manganese that has historically limited the recovery of silver through the Merrill Crowe process. The La Encantada HIG mill is expected to be installed in the third quarter followed by commissioning in the fourth quarter of 2019.
Mine by Mine Quarterly Production Table:
| Silver Oz
| Gold Oz
| Pounds of
| Pounds of
*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: $14.54 per ounce; Gold: $1,226 per ounce; Lead: $0.89 per pound; Zinc $1.19 per pound.
At the San Dimas Silver/Gold Mine:
At the Santa Elena Silver/Gold Mine:
At the La Encantada Silver Mine:
At the San Martin Silver Mine:
At the La Parrilla Silver Mine:
At the Del Toro Silver Mine:
2019 Production Outlook and Cost Guidance:
The Company anticipates 2019 silver production will range between 14.2 to 15.8 million ounces with total production (including gold, lead and zinc by-products) between 24.7 to 27.5 million silver equivalent ounces. Based on the midpoint of the guidance range the Company expects a 28% increase in silver production and an 18% increase in total production when compared to 2018. The increases are primarily due to having a full year of production from San Dimas, the start-up of the new roasting circuit at La Encantada offset by lower production at Del Toro and La Parrilla.
A mine-by-mine breakdown of the 2019 production guidance is included in the table below. Cash cost and all-in sustaining cost per ounce ("AISC") guidance is shown per payable silver ounce. Metal price and foreign currency assumptions for calculating equivalents are: silver: $15.00/oz, gold: $1,250/oz, lead: $1.00/lb, zinc: $1.10/lb, MXN:USD 19:1.
|Mine||Silver Oz (M)||Silver Eqv Oz (M)||Cash Costs ($)||AISC ($)|
|San Dimas||5.5 - 6.1||11.9 - 13.2||0.89 - 1.81||7.58 – 9.27|
|Santa Elena||2.3 - 2.6||5.2 - 5.8||5.33 - 6.59||8.99 – 10.66|
|La Encantada||3.2 - 3.6||3.2 - 3.6||12.41 - 13.22||13.87 – 14.85|
|San Martin||1.9 - 2.1||2.2 - 2.4||9.81 - 10.60||12.39 – 13.47|
|La Parrilla||0.9 - 1.0||1.6 - 1.8||9.97 - 11.14||14.76 – 16.49|
|Del Toro||0.4||0.6 - 0.7||17.43 - 19.51||23.87 – 26.69|
|Totals:||14.2 - 15.8||24.7 - 27.5||$6.39 - $7.37||$12.55 - $14.23|
*Certain amounts shown may not add exactly to the total amount due to rounding differences.
*Consolidated AISC includes Corporate General & Administrative cost estimates and non-cash costs of $1.84 to $2.05 per payable silver ounce.
The Company is projecting its 2019 AISC, as defined by the World Gold Council, to be within a range of $12.55 to $14.23 on a per consolidated payable silver ounce basis. Excluding non-cash items, the Company anticipates its 2019 AISC to be within a range of $11.97 to $13.59 per payable silver ounce. An itemized AISC cost table is provided below:
|All-In Sustaining Cost Calculation (1)||FY 2019
($ /Ag oz)
|Total Cash Costs per Payable Silver Ounce (2)||6.39 – 7.37|
|General and Administrative Costs||1.26 – 1.40|
|Sustaining Development Costs||2.41 – 2.69|
|Sustaining Property, Plant and Equipment Costs||1.39 – 1.55|
|Sustaining Exploration Costs||0.06 – 0.07|
|Profit sharing||0.46 – 0.51|
|Share-based Payments (non-cash)||0.48 – 0.54|
|Accretion of Reclamation Costs (non-cash)||0.09 – 0.11|
|All-In Sustaining Costs: (WGC definition)||$12.55 – $14.23|
|All-In Sustaining Costs: (WGC excluding non-cash items)||$11.97 – $13.59|
In 2019, the Company plans to invest a total of $137.4 million on capital expenditures consisting of $61.1 million for sustaining investments and $76.3 million for expansionary projects. This represents a 20% increase compared to the revised 2018 capital budget and is aligned with the Company's future growth strategy of developing additional mine production levels at each of the Company's operations, investments in high-intensity grinding mills and microbubble flotation cells, in addition to the exploration work at the Ermitaño West project in order to advance the project towards a production decision.
The 2019 annual budget includes total capital investments of $64.5 million to be spent on underground development, $23.8 million towards property, plant and equipment, $26.2 million in exploration and $22.9 million towards corporate automation and efficiency projects. Management may revise the guidance and budget during the year to reflect actual and anticipated changes in metal prices or to the business.
The Company is planning to complete a total of 64,610 metres of underground development in 2019, representing a 5% decrease compared to 68,307 metres completed in 2018. In addition, the Company is planning to complete a total of 188,000 metres of exploration drilling in 2019, representing a 12% decrease compared to 211,697 metres completed in 2018.
The 2019 drilling program will consist of approximately 11,600 metres of sustaining diamond drilling intended to support the conversion of Resources to Reserves at the six operating mines; approximately 168,000 metres of expansionary diamond drilling intended to increase confidence and add new Measured & Indicated or Inferred Resources with a focus on the Santa Elena Main Vein, the Ermitaño West project near Santa Elena and the Central Block at San Dimas; and drill approximately 8,400 metres intended to test greenfield targets at Santa Elena and Del Toro.
Mr. Ramon Mendoza Reyes, Vice President Technical Services for First Majestic, is a "Qualified Person" as such term is defined under National Instrument 43-101, and has reviewed and approved the technical information disclosed in this news release.
The Company will be holding a conference call and webcast today, Monday, January 14, 2019 at 10 am PT (1 pm ET).
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:||2864 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 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.
FIRST MAJESTIC SILVER CORP.
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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