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VANCOUVER, July 14, 2014 /PRNewswire/ - First Majestic
Silver Corp. ("First Majestic" or the "Company") is pleased to
announce that total production at its five operating silver mines
in Mexico for the second quarter
ending June 30, 2014 reached a new
quarterly record of 3,855,224 equivalent ounces of silver,
representing an 18% increase compared to the same quarter in
2013.
Total silver production for the quarter consisted of 3,098,218
ounces of silver, representing an increase of 12% compared to the
same quarter in 2013. In addition, 9,131,149 pounds of lead
and 2,637,967 pounds of zinc were produced, representing an
increase of 54% and a decrease of 9%, respectively, compared to the
same quarter of the previous year. Also produced were 2,801
ounces of gold, representing an increase of 40% compared to the
second quarter of 2013.
Keith Neumeyer, President &
CEO of First Majestic, states, "Higher grades and recoveries in the
second quarter propelled total silver production to over 3 million
ounces, the highest production rate in the Company's history. This
achievement was partially due to a 59% increase in silver
production at San Martin, when
compared to the prior quarter, due to higher milling rates
following the completion of the recent plant expansion and an
increase in silver grades."
Mr. Neumeyer continues, "Our focus in the second half of 2014
will be to continue to seek and implement new technologies and
process automations with the objective to further increase
efficiencies and reduce costs."
Consolidated
Production Results
|
Quarter Ended
June 30,
2014
|
Quarter Ended
June 30,
2013
|
% Change
over
Prior
Year's |
|
|
Quarter
|
Ore processed/tonnes
milled
|
671,024
|
668,398
|
0%
|
Total production -
ounces of silver equivalent
|
3,855,224
|
3,268,117
|
18%
|
Total silver ounces
produced
|
3,098,218
|
2,767,966
|
12%
|
Silver grade
(g/t)
|
212
|
201
|
6%
|
Silver recovery
(%)
|
68
|
64
|
5%
|
Pounds of lead
produced
|
9,131,149
|
5,946,539
|
54%
|
Pounds of zinc
produced
|
2,637,967
|
2,898,093
|
-9%
|
Gold ounces
produced
|
2,801
|
1,995
|
40%
|
Tonnes of Iron ore
produced
|
515
|
5,076
|
-90%
|
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 671,024 tonnes, reflecting no
significant variation year-over-year and represents a 5% increase
over the previous quarter. The increase in tonnes compared to
the prior quarter was primarily due to higher throughput rates at
both Del Toro and San Martin
following each of their respective expansions and offset by a
slight reduction in tonnes at La Parrilla.
Average silver grades in the quarter for the five mines
increased by 6% to 212 g/t compared to 201 g/t in the second
quarter of 2013 and relatively consistent with the previous
quarter. Combined silver recoveries averaged 68% during the
quarter, up from 64% compared to the same quarter in the prior year
and higher than the first quarter average of 66%. These
improvements were primarily the result of higher recoveries at
La Encantada and San Martin.
The Company's underground development in the second quarter
consisted of 12,497 metres, relatively unchanged compared to 12,215
metres completed in the previous quarter.
During the quarter, 14 diamond drill rigs were operating at the
Company's five operations. The Company completed 12,508 metres of
diamond drilling in the quarter compared to 7,190 metres in the
prior quarter, representing a 74% increase. A substantial portion
of the current drilling is focused at La
Encantada to support the preparation and release of an
updated NI 43-101 Technical Report.
The table below represents the operating parameters at each of
the Company's five producing silver mines.
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
|
Tonnes
of
Iron
|
Equivalent
Silver
Ounces
|
La
Encantada
|
183,177
|
2,013
|
306
|
60%
|
1,073,636
|
24
|
-
|
-
|
515
|
1,079,122
|
La
Parrilla
|
171,617
|
1,886
|
164
|
79%
|
716,045
|
239
|
6,003,245
|
2,496,990
|
-
|
1,142,433
|
Del
Toro
|
174,645
|
1,919
|
197
|
66%
|
730,580
|
164
|
3,127,904
|
140,977
|
-
|
899,710
|
San
Martin
|
96,278
|
1,058
|
196
|
74%
|
449,045
|
939
|
-
|
-
|
-
|
510,697
|
La
Guitarra
|
45,307
|
498
|
110
|
81%
|
128,912
|
1,435
|
-
|
-
|
-
|
223,262
|
Total
|
671,024
|
7,374
|
212
|
68%
|
3,098,218
|
2,801
|
9,131,149
|
2,637,967
|
515
|
3,855,224
|
The following prices were used in the calculation of silver
equivalent ounces: Silver: $19.62 per
ounce; Gold: $1,289 per ounce; Lead:
$0.95 per pound; Zinc $0.94 per pound and Iron $149 per tonne.
At the La Encantada Silver Mine:
- Silver recoveries averaged 60% during the quarter, the single
best quarter in the past five years of operation, primarily due to
lower manganese grades and the elimination of old tailings fed to
the mill.
- A total of 3,095 metres of underground development were
completed in the second quarter compared to 2,842 metres of
development in the previous quarter. Underground mining continues
from the Azul y Oro vein and the
"990" and "990-2" chimneys along with some additional production
from the Buenos Aires extension
and the Regalo Vein and Breccia.
- Four drill rigs were active underground at La Encantada during the quarter. A total
of 5,551 metres of exploration and definition drilling was
completed in the second quarter compared to 5,923 metres of
drilling in the previous quarter.
At the La Parrilla Silver Mine:
- During the quarter, the flotation circuit processed 93,951
tonnes having an average silver grade of 206 g/t and an 87%
recovery while the cyanidation circuit processed 77,666 tonnes
having an average silver grade of 114 g/t and a 61% recovery.
- Mine development within San
Marcos continues to advance in preparation of increasing
underground oxide production levels. During the quarter, 454 metres
were developed along the oxidized San
Marcos vein with an average silver grade of 175 g/t and
average width of 2.8 metres. Higher rates of underground extraction
of oxide ore are expected to commence in the fourth quarter and
will replace the lower grade oxide ore from the Quebradillas open
pit. As a result of the transition from open pit to underground
mining, the Company is projecting an increase in oxide silver
grades along with higher expected recoveries in the cyanidation
circuit.
- Recent underground development along ore haulage level 11, now
over 1,390 metres in length, has intersected numerous previously
unknown mineralized ore veins between the San Marcos and Rosario mines. These new vein discoveries are
currently being scheduled for further exploration and exploitation
over the upcoming quarters.
- During the quarter, sulphide ore production from the Vacas mine
averaged 447 tpd with average grades of 251 g/t silver, 4.5% of
lead and 5.4% of zinc.
- Underground development completed in the quarter totaled 2,033
metres compared with 2,255 metres developed in the previous
quarter.
- Two underground drill rigs were active within the La Parrilla
property during the quarter. A total of 2,247 metres were drilled
in the second quarter compared to 448 metres in the previous
quarter.
At the Del Toro Silver
Mine:
- During the quarter, Del Toro processed 174,645 tonnes of ore
with an average silver grade of 197 g/t. Average metallurgical
recoveries for silver were 66% for a total production of 730,580
silver ounces representing an increase of 13% compared to the
previous quarter and a new quarterly record.
- The flotation circuit continued to operate at higher levels
than previously planned, having processed 121,752 tonnes during the
quarter with an average silver grade of 213 g/t and a 67% recovery.
The cyanidation circuit processed 52,893 tonnes with an average
silver grade of 162 g/t and a 64% recovery of silver.
- Due to the large transition ore area within the San Juan ore body which contains high lead
content, it has been determined that the most economical method of
production is to process this transition ore through flotation
rather than cyanidation. Until sufficient oxide ores are developed,
all ores from San Juan,
Perseverancia, San Nicolas and
other areas will be processed through flotation.
- The construction of the larger 115kV power line is expected to
be completed by the end of the July with initial electrical testing
to begin in August. Once completed, the Del Toro operation will be
fully connected to the Mexican power grid allowing for further
power cost reductions anticipated to be achieved in September.
- Underground development completed in the quarter totaled 2,972
metres compared with 2,322 metres developed in the previous
quarter. Drift development along the Lupita vein at level 10
continues to show economic mineralization with average grades of
288 g/t silver, 6.0% lead and 2.5% zinc.
- During the quarter, two underground drill rigs were active at
Del Toro. Total exploration metres drilled in the second
quarter amounted to 1,108 metres compared to 297 metres drilled in
the previous quarter.
At the San Martin Silver Mine:
- During the quarter, San Martin
set a new quarterly production record of 449,045 silver ounces
representing a 59% increase compared to the previous quarter. The
increase in silver production is a result of the successful plant
expansion which allowed for a 23% increase in tonnes, a 21%
increase in silver grades and a 7% increase in recoveries when
compared to the previous quarter.
- Underground development completed in the second quarter totaled
2,599 metres compared with 3,219 metres of development in the
previous quarter.
- Two underground drill rigs were active within the San Martin property during the quarter. Total
metres drilled in the second quarter amounted to 1,377 metres
compared to 276 metres of drilling in the previous quarter.
At the La Guitarra Silver Mine:
- During the quarter, total production consisted of 128,912
silver ounces and 1,435 gold ounces. This represents a 13% increase
in silver production over the previous quarter primarily due to a
16% increase in the silver grade.
- Continued improvements in dilution and grade control as well as
the advances in laboratory procedures have supported the increase
of silver grade during the quarter.
- Mine development at the Joya Larga structure within the El
Coloso area has now reached 737 metres along the vein. A crosscut
to access the Jessica vein is now 47 metres in length and requires
an additional 120 metres to be developed in order to gain access to
this higher silver grade area.
- A total of 1,798 metres of development were completed in the
second quarter compared to 1,577 metres of development in the
previous quarter.
- Four drill rigs consisting of three underground and one on
surface were active in the second quarter within the La Guitarra property. Total metres
drilled in the quarter amounted to 2,225 metres compared to 246
metres drilled in the previous quarter.
Other Developments:
On July 1, 2014, First Majestic
spun-out its wholly owned subsidiary Minera
Terra Plata, S.A. de C.V. ("Terra Plata"), to Sundance
Minerals Ltd., a private exploration company focused on precious
metal and base metal projects in Mexico and the
United States, pursuant to which Sundance agreed to sell 100% of its shares to
Albion Petroleum Ltd. (TSXV: ABP.H), a capital pool company listed
on the TSX Venture Exchange. Terra Plata owns a 100% interest in a
number of grass roots exploration projects which include the
Peñasco Quemado Project, the La Frazada Project and the Los Lobos
Project, properties that First Majestic acquired through its
acquisition of Silvermex in July of 2012.
After Sundance's completion of
the Terra Plata acquisition, Albion Petroleum Ltd. (TSXV: ABP.H),
agreed to acquire Sundance by the
issuance of common shares to Sundance shareholders by way of a plan of
arrangement under the Business Corporations Act of British Columbia and to continue once listed
on the TSXV under the name of First Mining Finance Corp. ("First
Mining"). Subject to satisfaction or waiver of the conditions by
the parties involved, the proposed transaction is expected to
complete on or about September 15,
2014. Additional details on the plan of arrangement are
expected to be released in September.
Following the completion of the proposed transaction, it is
anticipated that First Majestic will distribute all shares of First
Mining which it receives to its shareholders by way of dividend in
kind, and that First Mining will use its reasonable commercial
efforts to qualify the distribution of such shares to US
residents.
Also during the quarter, the Company repurchased 40,000 of its
common shares on the Toronto Stock Exchange at an average purchase
price of CDN$9.96 per share under its
Normal Course Issuer Bid.
First Majestic is a mining company focused on silver production
in Mexico 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.