PRECIOUS METALS

Magna's Mexican flagship slows in second quarter of commercial production

Production from Canadian miner Magna Gold’s flagship San Francisco mine in Sonora, Mexico, fell in its second quarter of full-scale, steady state, commercial production. Total 2021 volumes hit the lower-end of guidance – while production this year is expected to climb.

Nathan Richardson
 Magna's San Francisco mine in Mexico

Magna's San Francisco mine in Mexico

The mine - which Magna acquired in May 2020 - reached commercial production on June 1 last year. In the December quarter, gold production stood at 15,499 ounces, which is down from 19,102oz in the September quarter, Magna said on January 26. 

Full-year production was 56,099oz. 

"When we began the year, a very aggressive production target of 55,000-65,000oz was set - aggressive considering we were in the process of re-establishing production and ramping up San Francisco," Magna's president and CEO, Arturo Bonillas, said. 

Preliminary cash costs for the fourth quarter and 2021 were US$1,123/0z and $1,299/oz, respectively. Gold sold during the quarter was 16,305oz at an average realised price of $1,780/oz. 

For 2022, Magna provided production guidance of 65,000-75,000oz of gold at cash costs of $1,250-$1,350/oz. 

"2022 will be a transformative year for Magna as we look to generate meaningful cash flow, increase production at our operation and continue our aggressive growth plans through both organic and M&A driven initiatives," Bonillas said. 

Magna also noted that it was on schedule to release the maiden resource estimate at its Margarita silver project in Chihuahua, Mexico, and release a preliminary economic assessment by the end of the current quarter. 

"Results so far have been extremely encouraging and we look to share those results with the investment community once a more complete set of results is received by the company," Magna said. 

On January 26, Magna closed on the TSX at C$0.73/share, which was down from C$0.77/share in the previous session. The stock's 52-week high/low was C$1.15/C$0.71. 

The company's market capitalisation was C$65.74 million.

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