"[In 7 weeks] San Dimas propelled the company to a new … record"

First Majestic reports record production, nearly doubles guidance

Staff reporter
San Dimas acquisition a highlight for First Majestic

San Dimas acquisition a highlight for First Majestic

In the 52 days from May 10, San Dimas added close to 1.7 million ounces silver-equivalent to the company's 5.1Moz for the June quarter.

"The world-class San Dimas operation, which contributed only seven weeks of production in the second quarter, propelled the company to a new quarterly production record of 5.1 million silver-equivalent ounces and has become our cornerstone asset and will remain a major focus for the next several quarters as we optimise the operation," president and CEO Keith Neumeyer said.

First Majestic has upped its 2018 outlook from 10.6-11.8Moz AgEq to 20.5-22.6Moz AgEq, despite announcing plans to close one of its seven mines in Mexico.

It said it had made the "difficult decision" to place its smallest operation, La Guitarra, on care and maintenance from August 1 as the reallocation of capital and resources to projects with better economic and internal rates of return was taking priority.

The company said San Dimas' all-in sustaining costs for 2018 were forecast at US$6.99-$8.19/oz, making it the company's lowest cost and largest producing mine.

It is planning San Dimas optimisations including reducing underground dilution, installing high-intensity grinding technologies and implementing mill automation processes.

"In addition, under the new streaming agreement, we are going back to mine numerous high-grade silver veins that were previously deemed uneconomic by the previous operator," Neumeyer said.

First Majestic has struck a new streaming agreement with Wheaton Precious Metals, terminating the previous silver-only stream at San Dimas and establishing a stream on 25% of gold-equivalent production for $600/oz.

It had agreed to acquire the embattled Primero in January in an equity deal worth about $320 million.

First Majestic shares have ranged between C$6.24-$11.09 over the past year and closed down 3.6% yesterday to $9.75.

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