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First Majestic Produces 6.4 Million Silver Equivalent Ounces in Second Quarter

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First Majestic Silver Corp. (TSX:FR) announces total production in the second quarter of 2019 reached 6.4 million silver equivalent ounces, representing a 2% increase compared to the prior quarter. Total production consisted of 3.2 million ounces of silver, 33,576 ounces of gold, 2.5 million pounds of lead and 1.4 million pounds of zinc. In the first half of 2019, total production reached 12.7 million ounces, or approximately 49% of the Company’s guidance midpoint of producing 24.7 to 27.5 million silver equivalent ounces in 2019. 

 

“Our two primary assets, the San Dimas and Santa Elena mines, saw strong growth during the quarter producing approximately 80% of our total metal production,” said Keith Neumeyer, President and CEO. “San Dimas continues to exceed guidance due to higher than expected grades and mining rates from the Jessica and Victoria veins. At Santa Elena, the newly installed HIG mill is in its final commissioning stage and is expected to ramp up to reach design capacity of 3,000 tpd in the third quarter. The HIG mill is anticipated to improve overall metallurgical recoveries and lower energy costs compared to traditional ball milling. These two operations will continue to be a major focal point for future production growth and capital investments.”

 

“Last but certainly not least, I’m very proud to announce that in May we received Ermitaño’s DTU permit,” stated Neumeyer. “This was the final permit required before initiating development activities at this high-grade gold/silver deposit near our Santa Elena mill. Underground development activities are now expected to begin in the fourth quarter of 2019 with initial production in late 2020. Ermitaño’s high grade resources are expected to significantly increase Santa Elena’s production profile and extend mine life for years to come.”    

 

PRODUCTION TABLE

 

 

  Q2 Q2 Y/Y Q1 Q/Q
2019 2018 Change 2019 Change
Ore processed/tonnes milled 736,896 851,349 -13% 812,654 -9 %
Total production – ounces of silver eqv. 6,410,483 5,137,318 25% 6,273,677 2 %
Silver ounces produced 3,193,566 2,756,263 16% 3,331,388 -4 %
Gold ounces produced 33,576 25,449 32% 32,037 5 %
Pounds of lead produced 2,452,803 3,949,410 -38% 2,661,088 -8 %
Pounds of zinc produced 1,398,922 1,382,760 1% 1,265,438 11 %

 

QUARTERLY REVIEW

Total ore processed during the quarter at the Company’s mines amounted to 736,896 tonnes, representing a 9% decrease compared to the previous quarter. The decrease in tonnes processed compared to the prior quarter was primarily due to lower mine production from sub-level caving at La Encantada, a decrease in available production stopes at San Martin and La Parrilla, offset by higher production rates at San Dimas, Santa Elena and Del Toro.

 

Consolidated silver grades in the quarter averaged 159 g/t compared to 153 g/t in the previous quarter. This 4% increase was primarily the result of higher grades at San Dimas, La Parrilla, San Martin and Del Toro. Consolidated gold grades averaged 1.48 g/t compared to 1.26 g/t in the prior quarter representing an 18% increase due to better grades from the Jessica and Victoria veins at San Dimas.   

 

Consolidated silver and gold recoveries averaged 85% and 96%, respectively, during the quarter. The Company successfully completed the installation of the high-intensity grinding (“HIG”) mill at Santa Elena during the quarter. The new mill has a grinding capacity of 3,000 tpd and is expected to ramp up to reach design capacity during the third quarter. The Company expects improvements in metallurgical recoveries and lower operating costs at Santa Elena in the third quarter following the adoption of fine grinding technology.

 

MINE BY MINE PRODUCTION TABLE 

 

 

Mine  Ore Processed   Tonnes per Day   Silver Oz Produced   Gold Oz Produced   Pounds of Lead   Pounds of Zinc   Equivalent Silver Ounces 
San Dimas   172,368    1,894   1,603,016    23,082    –    –    3,641,139 
Santa Elena   229,761    2,525   596,872    9,839    –    –    1,461,345 
La Encantada   207,421    2,279   489,194    43    –    –    492,957 
San Martin   39,213    431   224,056    543    –    –    271,450 
La Parrilla   61,546    676   202,698    42    1,708,152    1,398,922    420,712 
Del Toro   26,587    292   77,729    28    744,651    –    122,879 
Total   736,896    8,098   3,193,566    33,576    2,452,803    1,398,922    6,410,483 

 

*Certain amounts shown may not add exactly to the total amount due to rounding differences.

*The following prices were used in the calculation of silver equivalent ounces: Silver: $14.88 per ounce; Gold: $1,309 per ounce; Lead: $0.85 per pound; Zinc: $1.25 per pound.

 

At the San Dimas Silver/Gold Mine:

 

  • During the quarter, San Dimas produced 1,603,016 ounces of silver and 23,082 ounces of gold for a total production of 3,641,139 silver equivalent ounces, reflecting a 15% increase compared to the prior quarter.
  • The mill processed a total of 172,368 tonnes with average silver and gold grades of 312 g/t and 4.32 g/t, respectively. Silver and gold grades improved 9% and 3%, respectively, compared to the prior quarter due to better than expected grades from the Jessica and Victoria veins.    
  • Silver and gold recoveries averaged 93% and 96%, respectively, during the quarter.

 

At the Santa Elena Silver/Gold Mine:

 

  • During the quarter, Santa Elena produced 596,872 ounces of silver and 9,839 ounces of gold for a total production of 1,461,345 silver equivalent ounces, reflecting a 4% increase compared to the prior quarter.
  • The mill processed a total of 229,761 tonnes, consisting of 142,831 tonnes of underground ore and 86,930 tonnes from the above ground heap leach pad.
  • Silver and gold grades from underground ore averaged 123 g/t and 1.89 g/t, respectively. Silver and gold grades from the above ground heap leach pad averaged 38 g/t and 0.64 g/t, respectively.
  • Silver and gold recoveries averaged 89% and 94%, respectively, during the quarter.
  • The Company received a positive Unified Technical Document (“DTU”) permit for the Ermitaño project in May. Project design and conceptual mine planning is currently underway. Development activities are expected to begin in the fourth quarter of 2019 with portal excavation for underground access. In addition, the Company has increased its 2019 exploration budget at Ermitaño to approximately 32,700 metres, representing an 85% increase from the original 2019 budget of 17,700 metres, with the goal of increasing the confidence level and adding new Resources by testing targets at depth.  
  • The installation of the new 3,000 tpd HIG mill was successfully completed in May and has since passed all cold and hot commissioning tests. The mill is expected to reach full capacity in the third quarter of 2019.  

 

At the La Encantada Silver Mine:

 

  • During the quarter, La Encantada produced 489,194 ounces of silver representing a 32% decrease from the previous quarter. The decrease in silver production was primarily due to a 23% decrease in tonnes milled and a 12% decrease in silver grades.
  • Silver grades and recoveries during the quarter averaged 110 g/t and 66%, respectively.
  • Production from the San Javier and La Prieta sub-level caving areas as well as the 660 area produced 67,068 tonnes with an average silver grade of 111 g/t, or approximately 32% of total quarterly production.
  • Due to ongoing challenges with the roasters material handling system, the Company has contracted Hatch, an external consulting and project engineering firm, to recommend design improvements to resolve the cooling and material handling issues. A final report with recommendations is expected to be delivered by Hatch in the third quarter. During this redesign process, production from the roaster will be suspended until the necessary modifications have been completed.

 

At the San Martin Silver Mine:

 

  • During the quarter, San Martin produced 224,056 ounces of silver and 543 ounces of gold for a total production of 271,450 silver equivalent ounces, reflecting a 36% decrease compared to the prior quarter. The decrease in production was primarily attributed to a 37% decrease in tonnes milled due to limited production stopes in May and June.
  • Silver grades and recoveries averaged 197 g/t and 90%, respectively, during the quarter. In addition, gold grades and recoveries averaged 0.46 g/t and 93%, respectively.
  • Subsequent to quarter end, the Company temporarily suspended all mining and processing activities at the San Martin operation due to a growing insecurity in the area and safety concerns for our workforce. The Company is working with authorities to secure the area in anticipation of restarting the operation, although it is not known when that might occur. Furthermore, the Company does not expect the suspension at San Martin to have a material impact on its 2019 annual consolidated guidance.

 

At the La Parrilla Silver Mine:

 

  • During the quarter, the flotation circuit processed 61,546 tonnes with an average silver grade of 147 g/t and a 70% recovery for a total production of 420,712 silver equivalent ounces.
  • The lead circuit processed an average lead grade of 2.1% with recoveries of 59% for total lead production of 1.7 million pounds, representing a 12% decrease compared to the previous quarter.
  • The zinc circuit processed an average zinc grade of 2.0% with recoveries of 52% for total zinc production of 1.4 million pounds, representing an 11% increase compared to the previous quarter.
  • The high recovery microbubble project advanced in the second quarter with the installation of the four microcell columns, electrical power distribution system and vibratory screen. At the end of June, approximately 75% of the project had been completed.
  • The Company is reviewing toll milling opportunities from third party suppliers as well as evaluating methods to produce a new bulk concentrate at Del Toro to be shipped to La Parrilla and further processed through the microbubble flotation cells to create separate concentrates of lead and zinc from Del Toro.

 

At the Del Toro Silver Mine:

 

  • During the quarter, Del Toro produced a total of 122,879 silver equivalent ounces reflecting a 10% increase compared to the prior quarter primarily due to a 6% increase in tonnes milled and a 5% increase in silver recoveries.
  • Silver grades and recoveries during the quarter averaged 117 g/t and 78%, respectively.
  • Lead grades and recoveries averaged 1.9% and 68%, respectively, producing a total of 0.7 million pounds of lead representing a 4% increase compared to the previous quarter.

ABOUT First Majestic Silver Corp

 

First Majestic is a publicly traded mining company focused on silver production in Mexico and is aggressively pursuing the development of its existing mineral property assets. The Company presently owns and operates the San Dimas Silver/Gold Mine, the Santa Elena Silver/Gold Mine, the La Encantada Silver Mine, the La Parrilla Silver Mine, the San Martin Silver Mine and the Del Toro Silver Mine. Production from these mines are projected to be between 14.2 to 15.8 million silver ounces or 24.7 to 27.5 million silver equivalent ounces in 2019.

 

Posted July 16, 2019

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