First Majestic Produces 6.6 Million AgEq Oz in Q4 2023 and 26.9 Million AgEq Oz in 2023; Announces 2024 Production and Cost Guidance and Conference Call Details
First Majestic Produces 6.6 Million AgEq Oz in
Q4 2023 and 26.9 Million AgEq Oz in 2023;
Announces 2024 Production and Cost
Guidance and Conference Call Details
Vancouver, British Columbia--(Newsfile Corp. - January 16, 2024) - First Majestic Silver Corp. (NYSE:
AG) (TSX: FR) (FSE: FMV) (the "Company" or "First Majestic") announces that total production in the
fourth quarter of 2023 from the Company's three producing mines in Mexico, namely the San Dimas
Silver/Gold Mine, the Santa Elena Silver/Gold Mine and the La Encantada Silver Mine reached 6.6
million silver equivalent ("AgEq") ounces, consisting of 2.6 million silver ounces and 46,585 gold ounces.
Total production for the full year of 2023 consisted of 26.9 million AgEq ounces, aligned to the
Company's 2023 revised guidance of between 26.2 to 27.8 million AgEq ounces, consisting of 10.3
million silver ounces and 198,921 gold ounces.
Q4 2023 HIGHLIGHTS
Total Production Increased by 6% Q/Q:
Total production reached 6.6 million AgEq ounces in
Q4, representing a 6% increase when compared to 6.3 million AgEq ounces produced in the
previous quarter. The higher production is related to record quarterly production at Santa Elena of
3.0 million AgEq ounces, partially offset by lower silver production at La Encantada due to the
ongoing limited water availability.
Record production at Santa Elena - up 13% Q/Q:
Santa Elena achieved a new quarterly
production record in Q4. Strong metal recoveries and grades from Ermitaño enabled Santa Elena
to produce 3.0 million AgEq ounces in the fourth quarter, representing a 13% increase compared
to the prior quarter.
Safety:
The 2023 consolidated Total Reportable Incident Frequency Rate ("TRIFR") was 1.02 and
the Lost Time Incident Frequency Rate ("LTIFR") was 0.34, an improvement of 16% and 33%
compared to prior year, respectively.
Environmental, Social and Governance ("ESG"):
First Majestic's ESG score with
Sustainalytics has improved from 50.56 in 2022 to 31.0 by the end of 2023, putting the Company
in the top 38% of its industry peers.
16 Active Drill Rigs:
The Company completed a total of 32,881 metres ("m") of drilling across its
mines in Mexico during the fourth quarter. Throughout the quarter, up to sixteen drill rigs were
active consisting of twelve rigs at San Dimas, and four rigs at Santa Elena.
FY 2023 HIGHLIGHTS
Consolidated production in 2023 reached 26.9 million AgEq ounces, aligned to the midpoint of the
2023 revised guidance of between 26.2 to 27.8 million AgEq ounces. The-year-over-year
decrease can be attributable to the temporary suspension of Jerritt Canyon that was announced by
the Company on March 20, 2023.
Silver production reached 10.3 million ounces, compared to revised guidance range of between
10.5 to 11.2 million ounces, primarily due to lower silver production in H2 at La Encantada. Gold
production in 2023 totaled 198,921 ounces aligned to the higher end of the Company's revised
guidance range of between 190,000 to 201,000 ounces.
Santa Elena produced a new annual record of 9.6 million AgEq ounces in 2023, representing a
5% increase compared to 2022. Mine output and grades from Ermitaño remained strong
throughout 2023, and combined with record metallurgical recoveries facilitated by the newly
commissioned dual-circuit plant, this enabled Santa Elena to deliver strong production in 2023.
The Company announced the launch of its 100%-owned and operated minting facility, First Mint,
LLC ("First Mint"), which is currently in the commissioning stage. This facility will expand upon
existing bullion sales through vertically integrating production of investment-grade fine silver bullion.
This will allow First Majestic to sell a substantially greater portion of its silver production directly to
its customers.
Completed the move of the ISO 9001:2015 certified Central Laboratory from Durango to Santa
Elena.
Successfully closed the sales of the La Guitarra Silver Mine and the La Parrilla Silver Mine to
Sierra Madre Gold & Silver Ltd. and Silver Storm Mining Ltd., respectively.
"First Majestic finished 2023 on a strong and positive note, despite the challenges endured earlier in
the year, and I would like to congratulate the team on their hard work and efforts,"
said Keith Neumeyer,
the Company's President & CEO.
"Santa Elena had a stellar year with production reaching a record
9.6 million AgEq ounces while maintaining high safety standards. We are enjoying the dividends from
the investments we made at Santa Elena over the last few years, and we are thrilled with these
achievements. Earlier in the year, we made the difficult decision to temporarily suspend operations at
Jerritt Canyon in Q1 while we focus on developing a new mine plan that is economic and sustainable
for the operation including the investment in never drilled greenfield exploration targets at Jerritt
Canyon. I'm also happy to announce our expanded exploration program for 2024. First Majestic is
blessed with an enormous under-explored large land package surrounding three of the most
important silver mines in Mexico as well as Jerritt Canyon in northern Nevada. We're expecting 2024
to be an exciting year for our exploration team."
Production Details Table:
Q4
Q3
Q/Q
FY
FY
Y/Y
2023
2023
Change
Consolidated Production Results
2023
2022
Change
652,731
670,203
(3%)
Ore processed/tonnes milled
2,901,972
3,468,987
(16%)
6,640,550
6,285,790
6%
Total production - Silver equivalent ounces
26,874,417
31,252,920
(14%)
2,612,416
2,461,868
6%
Silver ounces produced
10,250,755
10,522,051
(3%)
46,585
46,720
0%
Gold ounces produced
198,921
248,394
(20%)
Q4 2023 Mine-by-Mine Production Table:
Mine
Ore
Processed
Tonnes
per Day
Ag Grade
(g/t)
Au Grade
(g/t)
Ag
Recovery
Au
Recovery
Ag Oz
Produced
Au Oz
Produced
AgEq Oz
Produced
San Dimas
215,232
2,339
234
2.77
93%
96%
1,513,791
18,468
3,110,677
Santa Elena
233,601
2,539
106
3.88
73%
96%
582,484
28,056
3,008,449
La Encantada
203,898
2,216
110
0.01
71%
90%
516,141
61
521,424
- Certain amounts shown may not add exactly to the total amount due to rounding differences
.
- The Ag:Au ratio used in the calculation of silver equivalent ounces was 86.5:1
San Dimas Silver/Gold Mine:
San Dimas produced 3,110,677 AgEq ounces during the quarter consisting of 1,513,791 ounces
of silver and 18,468 ounces of gold, representing a 2% decrease and a 3% increase, respectively,
when compared to the prior quarter.
The mill processed a total of 215,232 tonnes of ore with average silver and gold grades of 234 g/t
and 2.77 g/t, respectively.
Silver and gold recoveries during the quarter averaged 93% and 96%, respectively.
The Central Block and Sinaloa Graben areas contributed approximately 78% and 22%,
respectively, of the total production during the quarter.
During the quarter, a total of twelve drill rigs consisting of two surface rigs and ten underground
rigs, completed 24,932 m of drilling on the property.
Santa Elena Silver/Gold Mine:
Santa Elena produced 3,008,449 AgEq ounces, a quarterly production record, consisting of
582,484 ounces of silver and 28,056 ounces of gold, representing a 67% increase in silver ounces
and a 1% decrease in gold ounces when compared to the prior quarter. The increase in silver
equivalent production was driven by higher silver grades and recoveries in the period.
The mill processed a total of 233,601 tonnes of ore, containing average silver and gold head
grades of 106 g/t and 3.88 g/t, respectively.
Consolidated silver and gold recoveries averaged a record 73% and 96%, respectively, during the
quarter. The strong metallurgical recoveries are due to the continuous operational optimization of
the new dual-circuit plant.
During the quarter, four drill rigs consisting of two surface rigs and two underground rigs,
completed 7,949 m of drilling on the property.
La Encantada Silver Mine
:
Throughout H2 2023, La Encantada was impacted by limited water supply to the mill, mainly driven
by severe drought conditions in 2023 which impacted the existing water wells in the area. During
Q3 and Q4 2023, management drilled a total of three exploration and production holes in an effort
to source additional water. To date, these efforts have had limited success. The Company has
identified several new targets that will be drilled in Q1 and Q2 2024 to identify additional water
sources and allow for the mill to process ore tonnes at budgeted rates.
During the quarter, La Encantada produced 516,141 ounces of silver, representing a 9% decrease
compared to the prior quarter.
The mill processed a total of 203,898 tonnes of ore with an average silver grade and recovery of
110 g/t and 71%, respectively. Stope production from the new Beca Zone has contributed 48,811
tonnes with average silver grades of 121 g/t.
Looking forward to 2024, management has decided to take a conservative approach when it
comes to our guidance on production and costs at La Encantada. Despite the fact management
believes a water source will be discovered, thereby restoring La Encantada to its historical
production numbers and costs, the timing for the discovery of this positive outcome is currently not
known.
2024 PRODUCTION GUIDANCE
The Company expects to achieve total production in 2024 from its three operating mines in Mexico of
between 21.1 to 23.5 million AgEq ounces consisting of 8.6 to 9.6 million ounces of silver and 150,000
to 167,000 ounces of gold. The decrease in forecasted gold production is primarily due to the temporary
suspension of the Jerritt Canyon Gold Mine in Nevada announced in Q1 2023.
A mine-by-mine breakdown of the 2024 production guidance is included in the table below. The
Company reports cost guidance to reflect cash costs and AISC on a per AgEq payable ounce. For
2024, the Company is using an 83:1 silver to gold ratio, consistent with its revised 2023 guidance. Metal
price and foreign currency assumptions for calculating equivalents are silver: $24.00/oz, gold: $2,000/oz,
MXN:USD 18:1.
GUIDANCE FOR 2024
Silver Oz (M)
Gold Oz (k)
Silver Eqv Oz (M)
Cash Cost
AISC
Operation:
($ per AgEq oz)
($ per AgEq oz)
San Dimas, Mexico
5.3 - 5.9
69 - 77
11.1 - 12.3
11.89 - 12.57
15.54 - 16.57
Santa Elena, Mexico
1.1 - 1.2
81 - 90
7.8 - 8.7
13.38 - 14.10
16.25 - 17.26
La Encantada, Mexico
2.2 - 2.4
-
2.2 - 2.4
24.03 - 24.51
28.25 - 30.09
Operations Total:
8.6 - 9.6
150 - 167
21.1 - 23.5
13.69 - 14.46
18.62 - 19.90
Corporate:
($ per AgEq oz)
($ per AgEq oz)
General, Administration & Services
-
-
-
-
0.70 - 0.78
Total:
($ per AgEq oz)
($ per AgEq oz)
Consolidated:
8.6 - 9.6
150 - 167
21.1 - 23.5
13.69 - 14.46
19.32 - 20.68
* Certain amounts shown may not add exactly to the total amount due to rounding differences.
* Cash Costs and AISC are non-GAAP measures and are not standardized financial measures under the Company's financial reporting framework.
The Company calculates cash costs and consolidated AISC in the manner set out in the table below. These measures have been calculated on a
basis consistent with historical periods (see "Non-GAAP Financial Measures" below).
La Encantada's 2024 production guidance has been adjusted lower to reflect a conservative view
regarding the temporary limited water availability at La Encantada. We assume in this guidance that the
water availability will remain an issue for all of 2024. The 2024 budget includes capital consideration to
explore for additional water source in the area. Management is reviewing cost reduction programs at La
Encantada to offset the low production impact on cost and remains optimistic that the water flow to the
mill will return to historic levels within the year.
The Company is projecting its global 2024 AISC to be within a range of $19.32 to $20.68 on a per
consolidated payable AgEq ounce basis. Excluding non-cash items, the Company anticipates its 2024
AISC to be within a range of $18.62 to $19.89 per payable AgEq ounce. An itemized AISC cost table is
provided below:
All-In Sustaining Cost Calculation
FY 2024 ($ /AgEq oz)
Total Cash Costs per Payable Silver Equivalent Ounce
13.69
-
14.46
General and Administrative Costs
1.55
-
1.72
Sustaining Development Costs
1.14
-
1.21
Sustaining Property, Plant and Equipment Costs
0.77
-
0.86
Profit Sharing
0.82
-
0.91
Lease Payments
0.65
-
0.73
Share-based Payments (non-cash)
0.54
-
0.61
Accretion of Reclamation Costs (non-cash)
0.16
-
0.18
All-In Sustaining Costs: (AgEq Oz)
19.32
- 20.68
All-In Sustaining Costs: (AgEq Oz excluding non-cash items)
18.62
- 19.89
1
.
AISC is a non-GAAP measure and is calculated based on the Company's consolidated operating performance. Other mining companies may
calculate AISC differently as a result of differences in underlying accounting principles, the definition of "sustaining costs" and the distinction
between sustaining and expansionary capital costs.
2
.
Consolidated AISC includes general and administrative cost estimates and non-cash costs of $2.25 to $2.51 per AgEq ounce.
3
.
For further details of these measures, including equivalent historical information, please see "Non-GAAP Measures" on pages 36-45 of the
Company's Management's Discussion and Analysis for the third quarter of 2023, available on SEDAR+ at
www.sedarplus.com
and on
EDGAR at
www.sec.gov
.
CAPITAL INVESTMENTS IN 2024
In 2024, the Company plans to invest a total of $125.0 million on capital expenditures consisting of $45.0
million for sustaining activities and $80.0 million for expansionary projects. This represents an 11%
decrease compared to the 2023 revised capital expenditures and is aligned with the Company's future
growth strategy of increasing exploration and development activities at Santa Elena, San Dimas and
Jerritt Canyon.
2024 Capital Guidance ($millions)
Sustaining
Expansionary
Total
Underground Development
27.0
39.0
66.0
Exploration
0.0
35.1
35.1
Property, Plant and Equipment
17.6
4.3
21.9
Corporate Projects
0.4
1.6
2.0
Total
45.0
80.0
125.0
The 2024 annual guidance includes total capital investments of $66.0 million for underground
development; $21.9 million towards property, plant and equipment; $35.1 million in exploration; and $2.0
million towards corporate innovation projects. Management may revise the guidance during the year to
reflect actual and anticipated changes in metal prices or to the business.
The Company plans to complete approximately 30,900m of underground development in 2024
compared to 34,046m completed in 2023. The 2024 development program consists of approximately
17,100m at San Dimas; 10,300m at Santa Elena and 3,500m at La Encantada. At San Dimas, the
Company is planning to concentrate development metres in the Perez, Roberta, Regina and Elia Veins.
At the Santa Elena district, underground development is expected to focus on Ermitaño. At La
Encantada, the Company plans to develop the second levels of both the Ojuelas and Milagros orebodies
for 2024 production.
The Company is planning approximately 188,500m of exploration drilling in 2024; this represents a
significant increase compared to the 143,465m completed in 2023. The 2024 drilling program is
expected to consist of:
At San Dimas, approximately 95,000m of drilling are planned with infill, step-out and exploratory
holes focused on near mine and brownfield targets including major ore controlling structures in the
West, Central and Sinaloa blocks. Exploration efforts represent a balanced approach to adding
Inferred Resources along known veins, converting Inferred to Indicated Resources and identifying
new veins in locations where post mineral cover has deferred work to date.
At Santa Elena, approximately 59,000m of drilling are planned. Greenfield and brownfield drilling
at Santa Elena will focus on several targets within a 5-kilometre radius around the processing plant
where the goal is to find a new mineralized vein. The Company is also planning to return to the Los
Hernandez property, to test updated targets and projections of mineralized structures. Resource
addition and conversion drilling is also to take place.
At Jerritt Canyon, approximately 25,000m of drilling are planned. Exploration work will be focused
on drilling open ends of inferred mineralization with large volume potential as well as testing
projections of ore controlling structures below outcropping Upper Plate (cover rock) where the
presence of large, mineralized volumes is possible and has been poorly tested to date.
Finally, at La Encantada the Company has planned approximately 9,500m to continue searching
for a new mineralized breccia body as well as to extend and de-risk some of the known veins and
vein systems.
Q4 2023 EARNINGS AND DIVIDEND ANNOUNCEMENT
The Company is planning to release its fourth quarter 2023 audited financial results, and to announce the
fourth quarter dividend payment and shareholder record and payable dates for the dividend payment on
February 22, 2024.
CONFERENCE CALL DETAILS
The Company will host a conference call and webcast on
Tuesday, January 16, 2024, at 8:00 a.m.
(PT) / 11:00 a.m. (ET)
to provide investors and analysts with a business update and to discuss its
production results and 2024 guidance.
To participate in the conference call, please use the following dial-in numbers:
Canada & USA Toll-Free:
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 at least 10 minutes prior to the call start to ensure placement into the
conference on time.
A live webcast of the conference call will be accessible at the following link:
https://services.choruscall.ca/links/fm2023q4.html
A webcast archive will be available approximately one hour after the end of the event and will be
accessible for three months through the same link as the live event.
A recording of the conference call will be available for telephone replay approximately one hour after the
end of the event by calling:
Canada & USA Toll-Free:
1-800-319-6413
Outside of Canada & USA:
+1-604-638-9010
Access Code:
0637 followed by the # sign
The telephone replay will be available for seven days following the end of the event.
ABOUT THE COMPANY
First Majestic is a publicly traded mining company focused on silver and gold production in Mexico and
the United States. The Company presently owns and operates the San Dimas Silver/Gold Mine, the
Santa Elena Silver/Gold Mine and the La Encantada Silver Mine as well as a portfolio of development
and exploration assets, including the Jerritt Canyon Gold project located in northeastern Nevada, U.S.A.
First Majestic is proud to offer a portion of its silver production for sale to the public. Bars, ingots, coins
and medallions are available for purchase online at its Bullion Store at some of the lowest premiums
available.
In Q1 2024, First Majestic will also commence bullion production from its 100%-owned and
operated minting facility, First Mint, LLC, to manufacture its very own exceptional silver bullion products
catering to the growing demand for physical silver.
For further information, contact
, 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
Non-GAAP Financial Measures
This news release includes reference to certain financial measures which are not standardized
measures under the Company's financial reporting framework. These measures include cash costs per
silver equivalent ounce and all-in sustaining cost (or "AISC") per silver equivalent ounce. The Company
believes that these measures, together with measures determined in accordance with IFRS, provide
investors with an improved ability to evaluate the underlying performance of the Company. These
measures are widely used in the mining industry as a benchmark for performance but do not have any
standardized meaning prescribed under IFRS, and therefore they may not be comparable to similar
measures disclosed by other companies. The data is intended to provide additional information and
should not be considered in isolation or as a substitute for measures of performance prepared in
accordance with IFRS. For a complete description of how the Company calculates such measures and a
reconciliation of certain measures to GAAP terms please see "Non-GAAP Measures" in the Company's
most recent management discussion and analysis filed on SEDAR+ at
www.sedarplus.ca
and EDGAR
at
www.sec.gov
and which is incorporated by reference herein.
Cautionary Note Regarding Forward Looking Statements
This news 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 in this news
release include, but are not limited to, statements with respect to: the assumptions used by the Company
for its 2024 production guidance; timing for the release of the Company's 2023 audited financial results;
timing for the announcement of the Company's fourth quarter dividend payment and the shareholder
record and payable dates in connection with such dividend payment; the identification of new water
sources at the La Encantada Silver Mine; the Company's business strategy; future planning processes;
commercial mining operations; budgets; the timing and amount of estimated future production, AISC and
cash costs; costs and timing of development at the Company's projects; the impact of cost reduction
programs; capital projects and exploration activities for 2024 and the possible results thereof; the launch
of the Company's 100%-owned and operated minting facility and production of bullion from the mint; and
increased bullion sales. 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:
the duration and effects of the coronavirus and COVID-19, and any other pandemics on our operations
and workforce, and the effects on global economies and society; general economic conditions including
inflation risks; 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 for the year ended December 31, 2022 filed with the Canadian securities regulatory
authorities under the Company's SEDAR+ profile at www.sedarplus.ca, and in the Company's Annual
Report on Form 40-F for the year ended December 31, 2022 filed with the United States Securities and
Exchange Commission on EDGAR at www.sec.gov/edgar. 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.
To view the source version of this press release, please visit
https://www.newsfilecorp.com/release/194341