New York – AG
Toronto – FR
Frankfurt – FMV
Mexico – AG
VANCOUVER, Jan. 13,
2015 /CNW/ - First Majestic Silver Corp. ("First Majestic"
or the "Company") is pleased to announce the Company's fourth
quarter and full year 2014 production results, as well as guidance
for 2015.
Total production during 2014 reached a new record
of 15,257,958 equivalent ounces of silver, representing a 19%
increase over 2013. The equivalent silver production for 2014
consisted of 11,748,721 ounces of silver, 12,283 ounces of gold,
39,192,908 pounds of lead and 13,130,378 pounds of zinc.
Total production in the fourth quarter also
reached a new quarterly record of 4,247,527 equivalent ounces of
silver consisting of 3,074,567 ounces of silver, 3,326 ounces of
gold, 11,764,160 pounds of lead and 4,580,260 pounds of
zinc.
Keith Neumeyer,
President & CEO, states, "Our fourth quarter production results
show that our operations are back on track following a brief period
of operational adjustments. We have made difficult but necessary
changes to adapt to the current market environment and our recent
cost cutting is beginning to be realized at the operations. We have
made great strides thus far and I look forward to further cost
improvements and efficiencies throughout 2015."
Production Details Table:
|
|
|
|
|
|
|
Q4
|
Q3
|
Q/Q
|
|
YE
|
YE
|
Y/Y
|
2014
|
2014
|
Change
|
Consolidated
Production Results
|
2014
|
2013
|
Change
|
683,528
|
621,196
|
10%
|
Ore processed/tonnes
milled
|
2,613,411
|
2,741,717
|
-5%
|
4,247,527
|
3,523,536
|
21%
|
Total production -
ounces of silver equivalent
|
15,257,958
|
12,791,527
|
19%
|
3,074,567
|
2,680,439
|
15%
|
Total silver ounces
produced
|
11,748,721
|
10,641,465
|
10%
|
201
|
196
|
2%
|
Silver grade
(g/t)
|
206
|
193
|
7%
|
70
|
68
|
2%
|
Silver recovery
(%)
|
68
|
62
|
9%
|
11,764,160
|
9,703,792
|
21%
|
Pounds of lead
produced
|
39,192,908
|
26,904,093
|
46%
|
4,580,260
|
3,222,877
|
42%
|
Pounds of zinc
produced
|
13,130,378
|
8,509,097
|
54%
|
3,326
|
2,781
|
20%
|
Gold ounces
produced
|
12,283
|
10,040
|
22%
|
-
|
629
|
-100%
|
Tonnes of Iron ore
produced
|
1,332
|
14,633
|
-91%
|
|
|
|
|
|
|
|
Quarterly Operational Review:
The total ore processed during the quarter at the
Company's five operating silver mines: La
Encantada, La Parrilla, Del Toro, San Martin and La
Guitarra, amounted to 683,528 tonnes, reflecting a 3%
decrease compared to the fourth quarter of 2013 and a 10% increase
from the previous quarter. The increase in tonnes compared to the
prior quarter was primarily due to higher throughput rates at Del
Toro as the flotation circuit utilization increased to planned
operating levels following a plant reconfiguration during the third
quarter.
Average silver grades in the quarter for the five
mines increased by 5% to 201 g/t compared to 191 g/t in the fourth
quarter of 2013 and increased 2% compared with the previous
quarter. Combined silver recoveries averaged 70% during the
quarter, up from 64% compared to the same quarter in the prior year
and a slight improvement over the third quarter average of 68%.
The Company's underground development in the
fourth quarter consisted of 11,772 metres, reflecting a 6% decrease
compared to 12,546 metres completed in the previous
quarter.
At quarter end, six diamond drill rigs were
active at the Company's five operations. The Company completed
5,990 metres of diamond drilling in the quarter compared to 18,335
metres in the prior quarter, representing a 67% decrease. The
decrease in metres drilled was primarily due to additional budget
cuts within the exploration program.
Mine by Mine Quarterly Production Table:
|
|
|
|
|
|
|
|
|
|
Mine
|
Ore
Processed
|
Tonnes
per Day
|
Silver Grade
(g/t)
|
Silver
Recovery %
|
Silver Oz
Produced
|
Gold Oz
Produced
|
Pounds of
Lead
|
Pounds of
Zinc
|
Equivalent
Silver Ounces
|
La
Encantada
|
186,411
|
2,026
|
248
|
53%
|
788,369
|
59
|
-
|
-
|
792,605
|
La
Parrilla
|
175,830
|
1,911
|
142
|
80%
|
646,283
|
244
|
3,855,052
|
4,580,260
|
1,159,177
|
Del
Toro
|
175,552
|
1,908
|
194
|
75%
|
817,754
|
158
|
7,909,108
|
-
|
1,264,751
|
San
Martin
|
96,651
|
1,051
|
249
|
77%
|
592,698
|
1,451
|
-
|
-
|
698,605
|
La
Guitarra
|
49,084
|
534
|
168
|
87%
|
229,463
|
1,414
|
-
|
-
|
332,389
|
Total
|
683,528
|
7,430
|
201
|
70%
|
3,074,567
|
3,326
|
11,764,160
|
4,580,260
|
4,247,527
|
|
|
|
|
|
|
|
|
|
|
The following prices
were used in the calculation of silver equivalent ounces: Silver:
$16.50 per ounce; Gold: $1,202 per ounce; Lead: $0.91 per
pound;
Zinc $1.02 per
pound.
|
At the Del Toro Silver
Mine:
- During the quarter, Del Toro achieved a new quarterly record
production of 1,264,751 silver equivalent ounces representing an
increase of 77% compared to the previous quarter. The plant
processed 175,552 tonnes of ore through flotation with an average
silver grade of 194 g/t. The increase in production was primarily
due to a 31% increase in throughput, a 14% increase in silver
grades and an improvement in silver recoveries from 68% to
75%.
- Lead production reached a new quarterly record of 7,909,108
pounds. Lead grades and recoveries averaged 3.4% and 61%
respectfully in the fourth quarter, an increase of 13% and 29%
compared to the previous quarter due to higher quality sulphide ore
production from the Perseverancia mine.
- Underground development completed in the quarter totaled 2,095
metres compared with 2,479 metres developed in the previous
quarter.
- At quarter end, one underground drill rig was active at Del
Toro. Total exploration metres drilled in the fourth quarter
amounted to 559 metres compared to 5,181 metres drilled in the
previous quarter.
At the La Encantada Silver Mine:
- During the quarter, total production consisted of 792,605
silver ounces representing a 2% decrease in silver production over
the previous quarter primarily due to a 4% decrease in the silver
grade offset by a 10% increase in throughput.
- The installation process for the new 12 x 24 ball mill
foundations began in December and is scheduled to be completed by
the end of February. The new ball mill, crusher, two vibrating
screens and a series of conveyor belts will be installed over the
coming months. The plant expansion is expected to be completed by
the end of June allowing for the ramp up to 3,000 tpd in
July.
- A total of 4,344 metres of underground development were
completed in the fourth quarter compared to 3,537 metres of
development in the previous quarter.
- At quarter end, one underground drill rig was active at
La Encantada. A total of 3,367
metres of exploration and definition drilling was completed in the
fourth quarter compared to 4,496 metres of drilling in the previous
quarter.
At the La Parrilla Silver Mine:
- During the quarter, the flotation circuit processed 94,513
tonnes with an average silver grade of 163 g/t and a 91% recovery
while the cyanidation circuit processed 81,317 tonnes with an
average silver grade of 118 g/t and a 64% recovery.
- Zinc production increased 42% compared to the previous quarter
to 4,580,260 pounds due to higher grade production stopes within
the Vacas mine.
- Due to a reduction in underground mining contractors, the
extraction of underground oxide ore within the San Marcos mine was slowed temporarily during
the quarter. The Company extracted 11,024 tonnes (120 tpd) of oxide
ore from San Marcos and the
remaining 70,293 tonnes (764 tpd) of oxide ore came from the lower
grade Quebradillas open pit and other underground production
areas.
- Underground development completed in the quarter totaled 2,378
metres compared with 2,315 metres developed in the previous
quarter.
- At quarter end, one underground drill rig was active within the
La Parrilla property. A total of 685 metres were drilled in the
fourth quarter compared to 2,409 metres in the previous
quarter.
At the San Martin Silver Mine:
- During the quarter, San Martin
set another quarterly production record of 592,698 silver ounces
and 1,451 ounces of gold representing an increase of 16% and 24%,
respectively, compared to the previous quarter. The increase was
primarily due to a 5% increase in silver grades and a 6% increase
in silver recoveries.
- Underground development completed in the fourth quarter totaled
1,414 metres compared with 2,333 metres of development in the
previous quarter.
- At quarter end, one underground drill rig was active within the
San Martin property. Total metres
drilled in the fourth quarter amounted to 943 metres compared to
2,968 metres of drilling in the previous quarter.
At the La Guitarra Silver Mine:
- During the quarter, total production consisted of 229,463
silver ounces and 1,414 gold ounces. This represents a 40% increase
in silver production over the previous quarter primarily due to a
27% increase in the silver grade as the company has completed the
transition from working in the old La
Guitarra zone to the newly developed El Coloso zone.
- Mine production within the El Coloso area delivered 24,578
tonnes (267 tpd) during the quarter or 50% of total production. The
Company anticipates full mine production to reach 500 tpd from El
Coloso in early 2015.
- A total of 1,541 metres of development were completed in the
fourth quarter compared to 1,882 metres of development in the
previous quarter.
- At quarter end, two underground drill rigs were active within
the La Guitarra property. Total
metres drilled in the quarter amounted to 436 metres compared to
3,281 metres drilled in the previous quarter.
2015 Production Outlook and Cost
Guidance:
For 2015, the Company anticipates 2015 silver
production will range between 11.8 to 13.2 million ounces (15.3 to
17.1 million silver equivalent ounces). A majority of the projected
increase will be achieved following the upgrade and expansion of
the crushing and grinding area at La
Encantada in the first half of 2015 to allow the processing
of ore to be increased to 3,000 tpd in combination with an increase
in underground mine extraction linked to the addition of bulk
mining methods.
A mine-by-mine breakdown of the 2015 production
guidance is included in the table below (in millions):
Mine
|
2014 Ag
Oz
|
2014 Ag Eq.
Oz
|
2015E Ag
Oz
|
2015E Ag Eq.
Oz
|
La
Encantada
|
3.7
|
3.7
|
4.0 – 4.5
|
4.0 – 4.5
|
La
Parrilla
|
2.9
|
4.7
|
2.6 – 2.9
|
4.3 – 4.8
|
Del Toro
|
2.7
|
3.7
|
2.6 – 2.9
|
3.7 – 4.2
|
San Martin
|
1.8
|
2.1
|
1.8 – 2.0
|
2.1 – 2.3
|
La
Guitarra
|
0.6
|
1.1
|
0.8 – 0.9
|
1.2 – 1.3
|
Totals:
|
11.7
|
15.3
|
11.8 -
13.2
|
15.3 –
17.1
|
*
|
Metal price
assumptions for calculating equivalents are: silver: $17.00/oz,
gold: $1,200/oz,
lead: $0.95 /lb, zinc: $1.02 /lb.
|
The Company is projecting its 2015 All-In
Sustaining Cost per Ounce ("AISC"), as defined by the World Gold
Council, to be within a range of $13.96 to
$15.48 per payable silver ounce. Excluding non-cash items,
the Company anticipates its 2015 AISC to be within a range of
$13.50 to $14.96 per payable silver
ounce. An itemized AISC cost table is provided below:
|
|
All-In Sustaining
Cost Calculation (1)
|
FY
2015
($ /Ag
oz)
|
Total Cash Costs per
Payable Silver Ounce
|
8.17 –
9.09
|
General and
Administrative Costs
|
1.55 –
1.73
|
Workers'
Participation
|
0.16 –
0.10
|
Royalties and 0.5%
Mining Environmental Fee
|
0.12 –
0.13
|
Sustaining
Development Costs
|
1.51 –
1.69
|
Sustaining Plant,
Property and Equipment Costs
|
1.71 –
1.91
|
Sustaining
Exploration Costs
|
0.28 –
0.31
|
Share-based Payments
(non-cash)
|
0.38 –
0.43
|
Accretion of
Reclamation Costs (non-cash)
|
0.08 –
0.09
|
All-In Sustaining
Costs: (WGC definition)
|
13.96 –
15.48
|
All-In Sustaining
Costs: (WGC excluding non-cash items)
|
13.50 –
14.96
|
|
|
|
|
1.
|
AISC is a non-GAAP
measure and is calculated based on guidance provided by the World
Gold Council ("WGC") in June 2013. AISC is used as a comprehensive
measure for the Company's consolidated operating performance. WGC
is a not a regulatory industry organization and does not have the
authority to develop accounting standards for disclosure
requirements. 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.
|
In 2015, the Company plans to invest a total of
$75.6 million on capital expenditures
consisting of $44.7 million for
sustaining requirements and $30.9
million for expansionary projects. This total represents a
significant reduction in capital expenditures compared to the prior
year.
The 2015 annual budget includes a total of
$29.1 million to be spent towards
property, plant and equipment, $37.1
million towards total development, $8.1 million in total exploration and
$1.3 million towards corporate
projects. Management has the option to make adjustments to the
projected 2015 budget should metal prices continue to remain weak
in 2015.
First Majestic is a mining company focused on
silver production in México and is aggressively pursuing the
development of its existing mineral property assets and the pursuit
through acquisition of additional mineral assets which contribute
to the Company achieving its corporate growth objectives.
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, 2013, 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.
SOURCE First Majestic Silver Corp.