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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