FIRST MAJESTIC SILVER CORP. | |
By: | |
/s/ Connie Lillico | |
Connie Lillico | |
Corporate Secretary | |
July 15, 2020 |
New York - AG | July 15, 2020 |
Toronto – FR | |
Frankfurt – FMV |
• | Total production reached 3.5 million silver equivalent ounces, consisting of 1.8 million ounces of silver and 15,764 ounces of gold. |
• | As of June 30, 2020, the Company held 970,000 ounces of silver in inventory in anticipation of realizing higher selling prices in the second half of 2020. |
• | By quarter end, all operations have returned to near full production rates following the Mexican Government’s decision to allow the Company to restart mining activities on May 23, 2020. |
• | San Dimas received delivery of a new 3,000 tpd High Intensity Grinding (“HIG”) mill with additional mill modernization components during the quarter. |
• | Development activities resumed at Santa Elena’s Ermitaño project in June and successfully intersected the Ermitaño vein. |
• | Civil construction activities resumed in June on the Liquid Natural Gas (“LNG”) plant at Santa Elena. The LNG generators and storage tanks are estimated to be delivered to site in the third quarter. |
• | At the end of the second quarter, 14 exploration drill rigs were active across the Company’s projects consisting of 11 rigs at San Dimas, two rigs at Santa Elena and one rig at La Encantada. The Company anticipates adding seven additional rigs in the third quarter with a primary focus on the regional potential around Santa Elena. |
• | Preventative controls such as the practice of social distancing, the cancellation of any non-essential visits to the mines, comprehensive sanitation measures for the workplace and company transportation, as well as pre-screening for virus symptoms remain in effect. |
Q2 2020 | Q2 2019 | Y/Y Change | Q1 2020 | Q/Q Change | |
Ore processed / tonnes milled | 333,559 | 736,896 | (55%) | 599,142 | (44%) |
Total production - ounces of silver equivalent | 3,505,376 | 6,410,483 | (45%) | 6,195,057 | (43%) |
Total silver ounces produced | 1,834,575 | 3,193,566 | (43%) | 3,151,980 | (42%) |
Gold ounces produced | 15,764 | 33,576 | (53%) | 32,202 | (51%) |
Mine | Ore Processed | Tonnes per Day | Ag Grade (g/t) | Au Grade (g/t) | Ag Recovery % | Au Recovery | Ag Oz Produced | Au Oz Produced | Equivalent Ag Ounces | |
San Dimas | 114,390 | 1,257 | 318 | 3.38 | 94% | 97% | 1,102,931 | 12,042 | 2,395,633 | |
Santa Elena | 89,590 | 985 | 83 | 1.34 | 92% | 95% | 222,100 | 3,677 | 595,651 | |
La Encantada | 129,579 | 1,424 | 158 | 0.01 | 78% | 90% | 509,544 | 45 | 514,092 | |
Total | 333,559 | 3,665 | 193 | 1.52 | 89% | 96% | 1,834,575 | 15,764 | 3,505,376 |
• | During the quarter, San Dimas produced 1,102,931 ounces of silver and 12,042 ounces of gold for a total production of 2,395,633 silver equivalent ounces, reflecting a 35% decrease compared to the prior quarter due to the COVID-19 related shutdown. |
• | The mill processed a total of 114,390 tonnes with average silver and gold grades of 318 g/t and 3.38 g/t, respectively. |
• | Silver and gold recoveries were slightly higher during the quarter averaging 94% and 97%, respectively. |
• | Initial production from the Tayoltita mine began in June and is expected to ramp-up to 300 tpd by the end of 2020. |
• | Mill modernization and optimization programs have resumed at San Dimas, including the mid-May delivery of the 3,000 tpd HIG mill and several components. As a result of the temporary suspension during the quarter, assembly and installation of the new HIG mill is now expected to be completed in the second quarter of 2021. |
• | In mid-June, production was temporarily suspended due to a union work stoppage. Following a two- week standstill period, the Company and union came to a mutually negotiated bonus agreement at the end of June, and at which time production returned to normal operating levels. |
• | A total of 11 drill rigs, consisting of one surface rig and 10 underground rigs, were active at the end of the quarter. Drilling is currently being focused in the Central, Sinaloa and Tayoltita blocks. |
• | During the quarter, Santa Elena produced 222,100 ounces of silver and 3,677 ounces of gold for a total production of 595,651 silver equivalent ounces, or approximately 63% below the previous quarter. |
• | The mill processed a total of 89,590 tonnes, consisting of 58,223 tonnes of underground ore and 31,366 tonnes from the above ground heap leach pad. |
• | Silver and gold grades from underground ore averaged 109 g/t and 1.70 g/t, respectively, while silver and gold grades from the above ground heap leach pad averaged 32 g/t and 0.62 g/t, respectively. |
• | Silver and gold recoveries averaged 92% and 95%, respectively, during the quarter. |
• | To help minimize health risks and accommodate Santa Elena workers that travel from outside communities, the Company established a temporary camp at Santa Elena. In addition, a second temporary camp was constructed near Ermitaño to assist with housing of the development contractors and construction workers. |
• | Development and construction activities resumed at the Ermitaño project in June and successfully intersected the Ermitaño vein. At the end of the quarter, a total of 468 metres of underground development have been completed and approximately 480 metres of main ramp and 80 metres of lateral development remain to be developed in order to access the high-grade portion of the Ermitaño ore body. |
• | The LNG power generation plant resumed civil construction activities in June. Delivery of the LNG generators and storage tanks are expected to be onsite in the third quarter of 2020. As a result of the temporary suspension, the LNG plant is now estimated to be completed and commissioned in the first quarter of 2021. |
• | Due to the temporary suspension of activities in the quarter, the Ermitaño pre-feasibility study is now expected to be completed in the first half of 2021. In addition, initial production from Ermitaño has been extended to mid-2021. |
• | During the quarter, La Encantada processed 129,579 tonnes of ore and produced 509,544 ounces of silver, or approximately 45% below the previous quarter. |
• | Silver grades and recoveries during the quarter averaged 158 g/t and 78%, respectively. |
• | Silver recoveries continue to exceed historical rates primarily due to optimal blending of stockpiles and maintaining an efficient pumping level on the precipitate tanks. |
1. | Deferred a total of approximately 340,000 tonnes of ore production, consisting of 1.6 million ounces of silver and 15,000 ounces of gold, due to the temporary shutdown in the second quarter of 2020 |
2. | As of June 30, 2020, the Company held 970,000 ounces of silver in inventory in anticipation of realizing higher selling prices in the second half of 2020 |
3. | Increased the gold price assumption to $1,700 per ounce (up from $1,450), reflecting a 100:1 silver to gold ratio |
4. | Increased the MXN:USD ratio assumption to 21:1 (up from 19:1) |
5. | Effective April 1, 2020, the silver to gold fixed exchange ratio related to the San Dimas streaming agreement with Wheaton Precious Metals was adjusted to 90:1 (from 70:1) due to the silver to gold ratio averaging above 90:1 for the previous six months. This ratio adjustment is expected to have a positive effect on revenues by approximately $3.0 million for the remainder of 2020, subject to achieving the mid-point of the new production guidance and realizing silver and gold prices per ounce of $17.00 and $1,700, respectively. |
Mine | Silver Oz (M) | Gold Oz (k) | Silver Eqv Oz (M) | Cash Costs ($) | AISC ($) |
San Dimas | 3.3 - 3.6 | 42 - 47 | 7.5 - 8.3 | (0.95) - 0.23 | 4.72 - 6.55 |
Santa Elena | 1.1 - 1.2 | 16 - 18 | 2.7 - 3.0 | 2.53 - 3.72 | 6.75 - 8.43 |
La Encantada | 1.7 - 1.8 | 0 | 1.7 - 1.8 | 10.86 - 11.56 | 12.82 - 13.75 |
Totals: | 6.1 - 6.6 | 58 - 65 | 11.9 - 13.1 | $2.93 - $3.99 | $10.57 - $12.49 |
Mine | Silver Oz (M) | Gold Oz (k) | Silver Eqv Oz (M) | Cash Costs ($) | AISC ($) |
San Dimas | 6.0 - 6.4 | 75 - 80 | 13.5 - 14.4 | 0.75 - 1.49 | 7.09 - 8.22 |
Santa Elena | 1.9 - 2.0 | 31 - 33 | 4.8 - 5.2 | 3.60 - 4.38 | 8.33 - 9.43 |
La Encantada | 3.1 - 3.3 | — | 3.1 - 3.3 | 10.42 - 10.77 | 12.59 - 13.07 |
Totals: | 11.0 - 11.7 | 106 - 113 | 21.4 - 22.9 | $3.95 - $4.59 | $12.29 - $13.45 |
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