First Majestic Silver Corp. announces update at San Martin Silver Mine in Mexico
FIRST MAJESTIC SILVER CORP. (TSX: FR)(PINK SHEETS: FRMSF)(FRANKFURT: FMV)(WKN: A0LHKJ) ("First Majestic" or the "Company") is pleased to announce an update regarding its activities in Mexico at the San Martin Silver Mine and a new NI 43-101 Reserve/Resource update.
This newly updated technical report with a cut-off date of September 30, 2008 has resulted in a significant increase in overall Reserves and Resources at the San Martin Silver Mine. Total Proven & Probable Reserves have increased by 41.83%, while Total Measured and Indicated Resources declined by 51.55% due to the upgrading of those Resources to Reserves and Total Inferred Resources have increased by 110.94%.
The San Martin Silver Mine is located beside the town of San Martin de Bolanos in the Bolanos River valley, in the northern portion of the State of Jalisco, Mexico. The San Martin operation is 150 kilometres by air or 250 kilometres by paved road north of Guadalajara. The property covers an area in excess of 7,800 hectares of which much remains unexplored.
The San Martin mine and mill has been in operation since 1983 and is a major contributor to the economy of the town of San Martin de Bolanos which has a population of around 3,000 people. The mill for much of 2008 has been operating at 750 tonnes per day. An expansion program launched in June 2008 resulted in the mill capacity reaching 950 tpd in December 2008.
The San Martin drill program from January 1st, 2007 to September 30th, 2008 included 127 drill holes with a total depth of 19,619 metres of core, in addition to about 3,906 metres of underground development for mining, drill sites and access preparations.
During the recently completed exploration program, new mineralized zones were discovered in the Zuloaga (Pinolea and Ballenas levels and Cymoid zone), La Blanca, Rosario-Condesa, La Mancha, Huichola and La Hedionda veins.
The following summary tables were taken from the complete San Martin Silver Mine NI 43-101 Technical Report prepared by Pincock Allen & Holt, Lakewood, Colorado (PAH). Shareholders and interested parties are encouraged to read this positive report which can be viewed on SEDAR (www.sedar.com) and the Company's web site at www.firstmajestic.com.
Total Proven + Probable Mineral Reserves (Mineable Reserves)
(1, 2, 3, 4, 5)
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Grade Metal Contained
------------------- -----------------------
Silver Silver (oz.)
Silver Lead Zinc only including
Category Tonnes g/tonne % (4) % oz. Lead Credit
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Proven Reserves
(Oxides) 527,373 273 4,636,211 4,805,765
Probable Reserves
(Oxides) 243,091 276 2,154,571 2,232,727
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Total Proven and
Probable Reserves 770,464 274 6,790,782 7,038,492
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Total Measured + Indicated Resources (2, 3, 5)
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Grade Metal Contained
------------------- -----------------------
Silver Silver (oz.)
Silver Lead Zinc only including
Category Tonnes g/tonne % (4) % oz. Lead Credit
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Measured Resources
(Oxides) 122,404 233 915,774 955,128
Measured Resources
(Sulfides) 415,771 97 0.87 2.07 1,292,213 1,292,213
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Indicated
Resources
(Oxides) 294,361 288 2,729,201 2,823,840
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Indicated
Resources
(Sulfides) 670,684 116 0.94 1.64 2,498,639 2,498,639
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Total Measured
and Indicated
Resources
(Oxides plus
Sulfides) 1,503,220 154 0.91 1.80 7,435,827 7,569,820
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Proven and
Probable
Reserves Plus
Measured and
Indicated
Resources 2,273,684 195 0.91 1.80 14,226,609 14,608,312
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Total Inferred Resources (2, 3, 5)
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Grade Metal Contained
------------------- -----------------------
Silver Silver (oz.)
Silver Lead Zinc only including
Category Tonnes g/tonne % (4) % oz. Lead Credit
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Total Inferred
Resources
(Oxides plus
Sulfides) 8,200,000 185 1.40 1.60 48,900,000 50,037,365
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(1) Estimated Reserves are exclusive of Resources.
(2) Cut Off estimates as 146 g/tonne Ag for oxides, and 87 g/tonne Ag for
dump recovered; Ageq equals Au/Pb credits equals 10g/tonne Ag
(3) Metal prices at $708/oz-Au, $12.00/oz-Ag, $0.75/lb-Pb, $0.50/lb-Zn.
(4) Mine dilution is included at a minimum mining width of 2.00m.
Estimates do not include mining recovery.
(5) Base metals, Lead and Zinc are not recovered due to low market prices.
Oxidized ore is presently being mined from the Zuloaga vein and from the adjacent La Blanca, Rosario and Cinco Senores Veins. Exploration and development is on-going on these vein structures, on other sub-parallel crossing veins and in a recently identified cymoid structure of the Zuloaga vein at the Ballenas level, in the blocks 5,400 and 5,550, as well as on the Rosario-Condesa vein system. Primary mineralization in sulfides with lead, zinc and copper occurs at the deepest levels, San Juan and San Carlos of the Zuloaga vein, however, these areas are not presently being mined.
The mine has been developed primarily on the main Zuloaga vein which has been identified over a strike length of three kilometres, and consists of six main levels spanning a vertical interval of approximately 350 metres. The main access levels, San Jose, Santa Maria, Ballenas, Cangrejos, San Pablo, San Juan and San Carlos, are accessible from surface adits and various interconnecting underground ramps totalling over 70 kilometres.
Exploration potential for finding and developing new Resources/Reserves in the San Martin district still remains promising. As a result of this recently completed aggressive exploration program, several targets have been identified for follow up drilling when the Company wishes to commence the next program. Five target zones within the main Zuloaga vein have been identified and six other areas; the Rosario, Escondida, Cangrejos, Ballenas, San Jose and Cymoid zone, have also been identified as primary targets.
Quality Assurance & Quality Control
To evaluate sample quality control, San Martin performs multiple assays, up to three times on some samples, and periodic check analyses on samples. Since 2004, the San Martin mine has sent approximately 10 pulp samples per month to ALS Chemex Laboratories and duplicate samples to SGS Labs in Guadalajara for analysis, which has had good correlations.
Following detailed geological and geotechnical logging, drill core samples are split on-site by diamond saw. One quarter of the core is submitted to the San Martin certified laboratory for sample preparation and analysis, which are assayed for silver by standard fire assay methods and lead by atomic absorption. The other quarter of the core is shipped to the SGS preparation laboratory in Durango, Mexico for drying, crushing, pulverizing and assaying for gold and silver by fire assay and 30 elements ICP package. Systematic assaying of standards and blanks are performed for precision and accuracy; check assays are regularly conducted by SGS or Chemex. The remaining half core is retained on-site for verification and future reference purposes.
Qualified Person
The Company's independent Qualified Persons under National Instrument 43-101 who have reviewed the contents of this news release and who authored the most recent qualifying report are Leonel Lopez, C.P.G., P.G., and Richard Addison P.E., Principal Process Engineer, of Pincock Allen & Holt, who are employees of PAH and are independent of the Company.
First Majestic is a producing silver company focused in Mexico and is aggressively pursuing its business plan to become a senior silver producer through the development of its existing assets and the pursuit through acquisition of additional assets that contribute to achieving its corporate growth objectives.
FIRST MAJESTIC SILVER CORP.
Keith Neumeyer, President & CEO
This press release includes certain "Forward-Looking Statements" within the meaning of section 21E of the United States Securities Exchange Act of 1934, as amended. All statements, other than statements of historical fact, included herein, including without limitation, statements regarding potential mineralization and reserves, exploration results and future plans and objectives of First Majestic Silver Corp. are forward-looking statements that involve various risks and uncertainties. There can be no assurance that such statements will prove to be accurate and actual results and future events could differ materially from those anticipated in such statements.
Cautionary Notes to U.S. Investors Concerning Reserve and Resource Estimates
The definitions of proven and probable reserves used in National Instrument 43-101 - Standards of Disclosure for Mineral Projects ("NI 43-101") differ from the definitions in the United States Securities and Exchange Commission ("SEC") Industry Guide 7. Under SEC Guide 7 standards, a "Final" or "Bankable" feasibility study is required to report reserves, the three year history average price is used in any reserve or cash flow analysis to designate reserves and the primary environmental analysis or report must be filed with the appropriate governmental authority.
In addition, the terms "mineral resource", "measured mineral resource", "indicated mineral resource" and "inferred mineral resource" are defined in and required to be disclosed by NI 43-101; however, these terms are not defined terms under SEC Industry Guide 7 and normally are not permitted to be used in reports and registration statements filed with the SEC. Investors are cautioned not to assume that any part or all of mineral deposits in these categories will ever be converted into reserves. "Inferred mineral resources" have a great amount of uncertainty as to their existence, and great uncertainty as to their economic and legal feasibility. It cannot be assumed that all or any part of an inferred mineral resource will ever be upgraded to a higher category. Under Canadian rules, estimates of inferred mineral resources may not form the basis of feasibility or pre-feasibility studies, except in rare cases.
Contacts:
First Majestic Silver Corp.
Keith Neumeyer
President & CEO
(604) 688-3033 or Toll Free: 1-866-529-2807
(604) 639-8873 (FAX)
Email: info@firstmajestic.com
Website: www.firstmajestic.com
Majestic Silver Corp. concludes there is a significant increase in overall Reserves and Resources at the San Martin Silver Mine.
Showing posts with label San Martin Silver Mine. Show all posts
Showing posts with label San Martin Silver Mine. Show all posts
Tuesday, January 20, 2009
Wednesday, January 14, 2009
First Majestic Silver Corp.: Production Increases 27% in 4th Quarter
First Majestic Silver Corp. (TSX: FR)(PINK SHEETS: FRMSF)(FRANKFURT: FMV)(WKN: A0LHKJ) ("First Majestic" or the "Company") is pleased to announce that production in the fourth quarter ending December 31, 2008 increased to 1,070,903 equivalent ounces of silver representing a 27% increase over the prior quarter production and an increase of 6% over the same quarter in the prior year.
The equivalent silver production for the quarter consisted of 930,120 ounces of silver, an increase of 29% over the previous quarter and 2,093,987 pounds of lead which represents a 38% increase over the previous quarter. The large increase in lead production was a result of improvements in recoveries of lead and tonnage at the flotation circuit at the La Encantada Silver Mine. Production of gold in the quarter amounted to 403 ounces representing a 25% decrease compared to the prior quarter.
During the quarter, the combined recoveries of silver at the three different mills showed a slight decrease from 67% to 65%. The overall average silver head grade in the quarter improved for the three mines increasing by 6% over the previous quarter to an overall head grade of 207 g/t silver.
The ore processed during the quarter at the Company's three operating silver mines; the La Parrilla Silver Mine, the San Martin Silver Mine and the La Encantada Silver Mine, amounted to 215,646 tonnes representing an increase of 27% over the previous quarter.
Despite the reduction of underground development throughout the Company's three operating silver mines, a total of 5,847 metres of development was completed in the quarter representing a reduction of 34% over the previous quarter. The total development for the year 2008, totalled 27,890 metres. This compares to 20,279 metres of underground developed in the previous calendar year representing an increase of 38%. This development program in 2008 was very important in giving access to new areas within the different mines in order to continue the growth of silver production in the future, and to upgrade current ore resources to reserves.
Reserve and Resource development was a high priority for the Company in 2008. In the quarter, two new NI 43-101 Reports were released. Current global resources now stand at 260,351,425 equivalent ounces of silver. As previously reported, two additional NI 43-101 Reports will soon be released to further increase this number. During most of the year, over 20 drill rigs were operating. During the fourth quarter, a decision was made to reduce the diamond drill program to four drill rigs, which currently remain in operation. A total of 4,193 metres of diamond drilling was completed during the quarter compared to 26,666 in the previous quarter. During the year ending December 31, 2008, a total of 61,440 metres of diamond drilling was completed which compares to 37,176 metres drilled in 2007 representing an increase of 65%.
Keith Neumeyer, President & CEO, stated, "We've witnessed another significant year of growth in production and Resources as a result of our continued focus on mine and mill improvements throughout the past couple of years. Production increased by 18% year over year and Resources have increased by an impressive 55%. These improvements will translate into higher production for 2009 and with the new La Encantada mill coming online later this year, production will get another significant boost. First Majestic is still a young company that is not without challenges as can be expected as a result of our significant growth to date. I'm continually encouraged by our team of professionals who collectively have over 500 years of mining and management experience and who are all extremely committed to building a leader in the silver sector."
As a result of the work completed in 2008, some of the improvements and advances made during the year include:
At the La Parrilla Silver Mine:
- A new CCD thickener and two new leaching tanks to increase capacity and two new filter presses in the filtration area were added which have positively impacted recoveries.
- Expansion of mill capacity from 800 tpd to 850 tpd which was achieved in November 2008.
At the La Encantada Silver Mine:
- The increase in NI 43-101 complaint Reserves and Resources from 66 to 89 million ounces of silver equivalent representing a 34% increase on a year over year basis which included Reserves of 35.5 million ounces of silver equivalent representing an increase of 182% year over year.
- All related permitting for the new 3,500 tpd Cyanidation plant was obtained during the first half of 2008 and construction of the new plant began in July. Planned completion remains the second quarter of 2009.
- Several improvements were made within the current flotation mill which has resulted in overall capacity reaching 1000 tpd in November 2008.
At the San Martin Silver Mine:
- Expansion of the mill began at San Martin in July 2008 and was completed in December resulting in an increase in capacity within the cyanidation circuit to 950 tpd. This throughput has now been reached and is fully operational.
At the Del Toro Silver Mine:
- One of the most impressive and over-looked events of 2008 was marked by the discovery of the third ore body at Del Toro. This large and open, highly mineralized structure is still in the early stages of being defined. The first NI 43-101 compliant Reserves and Resources estimate was published in the fourth quarter far exceeding management's expectations. A total of 57 million ounces of silver equivalent were defined paving the way toward feasibility study and permitting which is planned to be completed by the second quarter of 2009.
Total production during 2008 reached 4,244,756 ounces of silver equivalent representing an increase of 18% compared to the previous year's 3,584,265 ounces silver equivalent. Even though management is pleased with the substantial increase in silver production compared to 2007, production for the year was lower than originally estimated. The heavy rainy season which affected the third quarter had a negative impact on the tonnage feed through the mills at each operation. Also, at the San Martin, maintaining optimal head grade continued to be the primary challenge which required management to try different alternatives to give the development program time to prepare and access new areas within the mine. Given the expansions that were completed in 2008 and the new construction underway at the La Encantada, management is estimating production to be 6,000,000 ounces of silver for 2009.
First Majestic is a producing silver company focused in Mexico and is aggressively pursuing its business plan to become a senior silver producer through the development of its existing assets and the pursuit through acquisition of additional assets that contribute to achieving its significant corporate growth objectives.
FIRST MAJESTIC SILVER CORP.
Keith Neumeyer, President & CEO
This press release includes certain "Forward-Looking Statements" within the meaning of section 21E of the United States Securities Exchange Act of 1934, as amended. All statements, other than statements of historical fact, included herein, including without limitation, statements regarding potential mineralization and reserves, exploration results and future plans and objectives of First Majestic Silver Corp. are forward-looking statements that involve various risks and uncertainties. There can be no assurance that such statements will prove to be accurate and actual results and future events could differ materially from those anticipated in such statements.
Contacts:
First Majestic Silver Corp.
Keith Neumeyer
President & CEO
(604) 688-3033 or Toll Free: 1-866-529-2807
(604) 639-8873 (FAX)
Email: info@firstmajestic.com
Website: www.firstmajestic.com
The equivalent silver production for the quarter consisted of 930,120 ounces of silver, an increase of 29% over the previous quarter and 2,093,987 pounds of lead which represents a 38% increase over the previous quarter. The large increase in lead production was a result of improvements in recoveries of lead and tonnage at the flotation circuit at the La Encantada Silver Mine. Production of gold in the quarter amounted to 403 ounces representing a 25% decrease compared to the prior quarter.
During the quarter, the combined recoveries of silver at the three different mills showed a slight decrease from 67% to 65%. The overall average silver head grade in the quarter improved for the three mines increasing by 6% over the previous quarter to an overall head grade of 207 g/t silver.
The ore processed during the quarter at the Company's three operating silver mines; the La Parrilla Silver Mine, the San Martin Silver Mine and the La Encantada Silver Mine, amounted to 215,646 tonnes representing an increase of 27% over the previous quarter.
Despite the reduction of underground development throughout the Company's three operating silver mines, a total of 5,847 metres of development was completed in the quarter representing a reduction of 34% over the previous quarter. The total development for the year 2008, totalled 27,890 metres. This compares to 20,279 metres of underground developed in the previous calendar year representing an increase of 38%. This development program in 2008 was very important in giving access to new areas within the different mines in order to continue the growth of silver production in the future, and to upgrade current ore resources to reserves.
Reserve and Resource development was a high priority for the Company in 2008. In the quarter, two new NI 43-101 Reports were released. Current global resources now stand at 260,351,425 equivalent ounces of silver. As previously reported, two additional NI 43-101 Reports will soon be released to further increase this number. During most of the year, over 20 drill rigs were operating. During the fourth quarter, a decision was made to reduce the diamond drill program to four drill rigs, which currently remain in operation. A total of 4,193 metres of diamond drilling was completed during the quarter compared to 26,666 in the previous quarter. During the year ending December 31, 2008, a total of 61,440 metres of diamond drilling was completed which compares to 37,176 metres drilled in 2007 representing an increase of 65%.
Keith Neumeyer, President & CEO, stated, "We've witnessed another significant year of growth in production and Resources as a result of our continued focus on mine and mill improvements throughout the past couple of years. Production increased by 18% year over year and Resources have increased by an impressive 55%. These improvements will translate into higher production for 2009 and with the new La Encantada mill coming online later this year, production will get another significant boost. First Majestic is still a young company that is not without challenges as can be expected as a result of our significant growth to date. I'm continually encouraged by our team of professionals who collectively have over 500 years of mining and management experience and who are all extremely committed to building a leader in the silver sector."
As a result of the work completed in 2008, some of the improvements and advances made during the year include:
At the La Parrilla Silver Mine:
- A new CCD thickener and two new leaching tanks to increase capacity and two new filter presses in the filtration area were added which have positively impacted recoveries.
- Expansion of mill capacity from 800 tpd to 850 tpd which was achieved in November 2008.
At the La Encantada Silver Mine:
- The increase in NI 43-101 complaint Reserves and Resources from 66 to 89 million ounces of silver equivalent representing a 34% increase on a year over year basis which included Reserves of 35.5 million ounces of silver equivalent representing an increase of 182% year over year.
- All related permitting for the new 3,500 tpd Cyanidation plant was obtained during the first half of 2008 and construction of the new plant began in July. Planned completion remains the second quarter of 2009.
- Several improvements were made within the current flotation mill which has resulted in overall capacity reaching 1000 tpd in November 2008.
At the San Martin Silver Mine:
- Expansion of the mill began at San Martin in July 2008 and was completed in December resulting in an increase in capacity within the cyanidation circuit to 950 tpd. This throughput has now been reached and is fully operational.
At the Del Toro Silver Mine:
- One of the most impressive and over-looked events of 2008 was marked by the discovery of the third ore body at Del Toro. This large and open, highly mineralized structure is still in the early stages of being defined. The first NI 43-101 compliant Reserves and Resources estimate was published in the fourth quarter far exceeding management's expectations. A total of 57 million ounces of silver equivalent were defined paving the way toward feasibility study and permitting which is planned to be completed by the second quarter of 2009.
Total production during 2008 reached 4,244,756 ounces of silver equivalent representing an increase of 18% compared to the previous year's 3,584,265 ounces silver equivalent. Even though management is pleased with the substantial increase in silver production compared to 2007, production for the year was lower than originally estimated. The heavy rainy season which affected the third quarter had a negative impact on the tonnage feed through the mills at each operation. Also, at the San Martin, maintaining optimal head grade continued to be the primary challenge which required management to try different alternatives to give the development program time to prepare and access new areas within the mine. Given the expansions that were completed in 2008 and the new construction underway at the La Encantada, management is estimating production to be 6,000,000 ounces of silver for 2009.
First Majestic is a producing silver company focused in Mexico and is aggressively pursuing its business plan to become a senior silver producer through the development of its existing assets and the pursuit through acquisition of additional assets that contribute to achieving its significant corporate growth objectives.
FIRST MAJESTIC SILVER CORP.
Keith Neumeyer, President & CEO
This press release includes certain "Forward-Looking Statements" within the meaning of section 21E of the United States Securities Exchange Act of 1934, as amended. All statements, other than statements of historical fact, included herein, including without limitation, statements regarding potential mineralization and reserves, exploration results and future plans and objectives of First Majestic Silver Corp. are forward-looking statements that involve various risks and uncertainties. There can be no assurance that such statements will prove to be accurate and actual results and future events could differ materially from those anticipated in such statements.
Contacts:
First Majestic Silver Corp.
Keith Neumeyer
President & CEO
(604) 688-3033 or Toll Free: 1-866-529-2807
(604) 639-8873 (FAX)
Email: info@firstmajestic.com
Website: www.firstmajestic.com
Friday, November 14, 2008
First Majestic Silver Corp.: Third Quarter Financial Results
VANCOUVER, BRITISH COLUMBIA, Nov 14, 2008 (MARKET WIRE via COMTEX) -- FIRST MAJESTIC SILVER CORP. (FR-T) (CA:FR) (PINK SHEETS: FRMSF)(FRANKFURT: FMV)(WKN: A0LHKJ) (the "Company") is pleased to announce the unaudited financial results for the Company's third quarter ending September 30, 2008. The full version of the financial statements can be viewed on the Company's web site at www.firstmajestic.com or on SEDAR at www.sedar.com.
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3rd Quarter Highlights
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Gross Revenue $13.9 million
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Net Revenue $10.8 million
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Mine Operating Earnings $1.7 million
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Net Loss after taxes $0.4 million
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Cash Cost per ounce US$7.65
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Silver Equivalent Production 840,918 oz. Ag eq.
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Silver Equivalent Oz. Sold 850,461 oz. Ag eq.
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FINANCIAL HIGHLIGHTS
- Sales revenues for the quarter (after smelting charge deductions) were $10.8 million; an increase of 5% compared to $10.3 million for the quarter ended September 30, 2007. Gross revenues for the quarter, prior to smelting charges were $13.9 million.
- Mine operating earnings for the quarter amounted to $1.7 million, compared to $1.5 million for the quarter ended September 30, 2007. Mine operating earnings for the nine months ended September 30, 2008, amounted to $8.6 million, compared to $3.8 million for the nine months ended September 30, 2007.
- The Company generated an operating loss of $0.8 million for the quarter, compared to an operating loss of $1 million for the quarter ended September 30, 2007. Mine operating earnings for the nine months ended September 30, 2008, amounted to a gain of $59,861, compared to a loss of $4.0 million for the nine months ended September 30, 2007.
- The Company generated a net loss after taxes of $0.4 million for the quarter ended September 30, 2008, compared to a net loss after taxes of $2.1 million for the quarter ended September 30, 2007.
- The Company generated a net income after taxes of $0.4 million for the nine months ended September 30, 2008, compared to a net loss after taxes of $5.9 million for the nine months ended September 30, 2007.
- The net loss after taxes of $0.4 million for this quarter ended September 30, 2008, was after deducting non-cash stock based compensation expense of $1 million (2007 - $0.7 million). The net income after taxes of $0.4 million for the nine months ended September 30, 2008, was after deducting non-cash stock-based compensation expense of $2.8 million (2007 - $2.4 million).
- Direct cash costs per ounce of silver were negatively impacted in the current quarter by an extremely wet and stormy rainy season in Mexico, with a cost per ounce of US$7.65 overall compared to US$4.84 in Q2 of 2008, and US$6.73 for the quarter ended September 30, 2007.
- Total quarterly production consisted of 840,918 ounces of silver equivalents, including 719,399 ounces of silver, 536 ounces of gold, and 1,518,271 pounds of lead. The Company sold 850,461 ounces of silver equivalent in the quarter, and 2,574,637 ounces of silver equivalent for the nine months ended September 30, 2008, resulting in a decrease of 7% and an increase of 6% respectively over the 911,916 ounces of silver equivalent sold in the quarter ended September 30, 2007, and 2,427,935 ounces of silver equivalent sold for the nine months ended September 30, 2007.
- In the quarter, the Company invested $10.2 million in capital expenditures on its mineral properties, and a further $7.5 million on additions to plant and equipment. For the nine months ended September 30, 2008, the Company invested $25.4 million in capital expenditures on its mineral properties, and $16 million on additions to plant and equipment.
OPERATIONAL HIGHLIGHTS
The Company continues to focus its efforts on production growth, Reserve and Resource growth and reducing costs in order to improve profitability. Mill expansions at the La Parrilla Silver Mine and San Martin Silver Mine which commenced earlier in the year are close to completion. The Company's largest expansion program which is taking place at the La Encantada Silver Mine is continuing and is expected to be completed by April 2009. Over the past three years, management remained focused on continuing to increase NI 43-101 compliant silver Resources. As at the latest NI 43-101 Reports, the Company has defined a global Resource of 241 million ounces of Silver equivalents. Twenty two drill rigs were active on the Company's four core projects during the third quarter. Due to market conditions, this program has now been reduced to four drill rigs. The Company anticipates that newly updated Resource estimates, with a cut off date of September 30th, will be published prior to year end on each of the Company's three operating silver mines.
La Parrilla Silver Mine
As part of the ongoing improvements at the La Parrilla during the quarter the two new leaching tanks and one additional thickener tank continued to be constructed. Recoveries and capacity are expected to improve once these new tanks come online in the fourth quarter of 2008. At the mine, preparation of the lower levels of the Rosarios area and the addition of a long hole drilling machine is now enabling an increase in production and improved grades from the sulphides areas.
San Martin Silver Mine
At San Martin, the primary focus during the quarter was to continue the expansion of the mill by adding additional leaching tanks and thickeners as well as reinforcing older tanks and completing a new overflow spill containment system. A rock slide that occurred during the quarter resulting from extremely heavy rains that blocked three of the four entrances to the mine was cleared successfully and the operation is now back to full production. The new portable screen which was installed in the second quarter is operating full time to take advantage of some of the oxide ore backfill and dumps left behind from previous years of operation. This is allowing the Company to produce primarily DorA-A?1/2 bars rather than concentrates which are presently more economic in the present environment of low lead and zinc prices.
La Encantada Silver Mine
Construction of the new 3500 tpd cyanidation mill is the primary focus at the La Encantada and is proceeding well. In addition, management decided to construct a temporary cyanidation circuit at the main flotation mill in order to treat the lead concentrates which have historically been produced at this operation. The completion of this circuit will allow the Company to treat the concentrates and avoid the addition costs associated with shipping concentrates to Penoles. Once this new circuit is completed, the silver precipitates produced from the concentrates will be shipped to the La Parrilla mill for the production of DorA-A?1/2 bars. Tests have proven that the lead concentrates treated with cyanide have a 95% recovery of contained silver and will substantially reduce the smelting costs associated with selling concentrates.
In Summary
Equally important to increasing silver production is further reducing costs and expenses where possible. The 2008 operating year thus far represents a year of high costs as a result of the Company's pursuit of aggressive growth based on the expansion of its operations and Resources. In addition, the Company has been negatively impacted this year by higher PeA-A?1/2oles smelter charges, especially on its lead and zinc concentrates. Management is pleased by the many cost cutting measures underway, and it is believed that further improvements in profitability can be achieved and additional improvements are expected going forward as the Company takes additional measures to reduce costs.
Finally, in this turbulent financial and commodity environment, First Majestic has been reacting by cutting costs where ever possible. Due to the mill improvements ongoing this year, mill throughput at each operation has now reached full capacity which is resulting in a more efficient use of equipment and machinery. The Company is continuing to analyze various options to reduce its operating costs and to squeeze out the most optimum margins possible. One example which is proving to add substantial value is management decided to mint 99.9% pure silver into coins, ingots and bars which are actively marketed on the Company's web site. Interest levels for these products are extremely high and are beginning to represent substantial revenues for the Company. These products tend to sell at substantial premiums to COMEX spot prices. It is anticipated that these sales of refined silver products will represent approximately 10% of the Company's silver production by February 2009. The Company is also exploring other ways of selling its silver outside of the normal avenues of commercial sales.
Management is confident that these steps that have been taken and others under examination will ultimately generating more income and greater value for shareholders.
First Majestic is a producing silver company focused in MA-A?1/2xico and is aggressively pursuing its business plan to become a senior silver producer through the development of its existing assets and the pursuit through acquisition of additional assets that contribute to achieving its corporate growth objectives.
FIRST MAJESTIC SILVER CORP.
Keith Neumeyer, President & CEO
This press release includes certain "Forward-Looking Statements" within the meaning of section 21E of the United States Securities Exchange Act of 1934, as amended. All statements, other than statements of historical fact, included herein, including without limitation, statements regarding potential mineralization and reserves, exploration results and future plans and objectives of First Majestic Silver Corp. are forward-looking statements that involve various risks and uncertainties. There can be no assurance that such statements will prove to be accurate and actual results and future events could differ materially from those anticipated in such statements.
Contacts:
First Majestic Silver Corp.
Keith Neumeyer
President & CEO
(604) 688-3033 or Toll Free: 1-866-529-2807
(604) 639-8873 (FAX)
Email: info@firstmajestic.com
Website: www.firstmajestic.com
SOURCE: First Majestic Silver Corp.
mailto:info@firstmajestic.com
http://www.firstmajestic.com
Copyright 2008 Market Wire, All rights reserved
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3rd Quarter Highlights
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Gross Revenue $13.9 million
------------------------------------------------------
Net Revenue $10.8 million
------------------------------------------------------
Mine Operating Earnings $1.7 million
------------------------------------------------------
Net Loss after taxes $0.4 million
------------------------------------------------------
Cash Cost per ounce US$7.65
------------------------------------------------------
Silver Equivalent Production 840,918 oz. Ag eq.
------------------------------------------------------
Silver Equivalent Oz. Sold 850,461 oz. Ag eq.
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FINANCIAL HIGHLIGHTS
- Sales revenues for the quarter (after smelting charge deductions) were $10.8 million; an increase of 5% compared to $10.3 million for the quarter ended September 30, 2007. Gross revenues for the quarter, prior to smelting charges were $13.9 million.
- Mine operating earnings for the quarter amounted to $1.7 million, compared to $1.5 million for the quarter ended September 30, 2007. Mine operating earnings for the nine months ended September 30, 2008, amounted to $8.6 million, compared to $3.8 million for the nine months ended September 30, 2007.
- The Company generated an operating loss of $0.8 million for the quarter, compared to an operating loss of $1 million for the quarter ended September 30, 2007. Mine operating earnings for the nine months ended September 30, 2008, amounted to a gain of $59,861, compared to a loss of $4.0 million for the nine months ended September 30, 2007.
- The Company generated a net loss after taxes of $0.4 million for the quarter ended September 30, 2008, compared to a net loss after taxes of $2.1 million for the quarter ended September 30, 2007.
- The Company generated a net income after taxes of $0.4 million for the nine months ended September 30, 2008, compared to a net loss after taxes of $5.9 million for the nine months ended September 30, 2007.
- The net loss after taxes of $0.4 million for this quarter ended September 30, 2008, was after deducting non-cash stock based compensation expense of $1 million (2007 - $0.7 million). The net income after taxes of $0.4 million for the nine months ended September 30, 2008, was after deducting non-cash stock-based compensation expense of $2.8 million (2007 - $2.4 million).
- Direct cash costs per ounce of silver were negatively impacted in the current quarter by an extremely wet and stormy rainy season in Mexico, with a cost per ounce of US$7.65 overall compared to US$4.84 in Q2 of 2008, and US$6.73 for the quarter ended September 30, 2007.
- Total quarterly production consisted of 840,918 ounces of silver equivalents, including 719,399 ounces of silver, 536 ounces of gold, and 1,518,271 pounds of lead. The Company sold 850,461 ounces of silver equivalent in the quarter, and 2,574,637 ounces of silver equivalent for the nine months ended September 30, 2008, resulting in a decrease of 7% and an increase of 6% respectively over the 911,916 ounces of silver equivalent sold in the quarter ended September 30, 2007, and 2,427,935 ounces of silver equivalent sold for the nine months ended September 30, 2007.
- In the quarter, the Company invested $10.2 million in capital expenditures on its mineral properties, and a further $7.5 million on additions to plant and equipment. For the nine months ended September 30, 2008, the Company invested $25.4 million in capital expenditures on its mineral properties, and $16 million on additions to plant and equipment.
OPERATIONAL HIGHLIGHTS
The Company continues to focus its efforts on production growth, Reserve and Resource growth and reducing costs in order to improve profitability. Mill expansions at the La Parrilla Silver Mine and San Martin Silver Mine which commenced earlier in the year are close to completion. The Company's largest expansion program which is taking place at the La Encantada Silver Mine is continuing and is expected to be completed by April 2009. Over the past three years, management remained focused on continuing to increase NI 43-101 compliant silver Resources. As at the latest NI 43-101 Reports, the Company has defined a global Resource of 241 million ounces of Silver equivalents. Twenty two drill rigs were active on the Company's four core projects during the third quarter. Due to market conditions, this program has now been reduced to four drill rigs. The Company anticipates that newly updated Resource estimates, with a cut off date of September 30th, will be published prior to year end on each of the Company's three operating silver mines.
La Parrilla Silver Mine
As part of the ongoing improvements at the La Parrilla during the quarter the two new leaching tanks and one additional thickener tank continued to be constructed. Recoveries and capacity are expected to improve once these new tanks come online in the fourth quarter of 2008. At the mine, preparation of the lower levels of the Rosarios area and the addition of a long hole drilling machine is now enabling an increase in production and improved grades from the sulphides areas.
San Martin Silver Mine
At San Martin, the primary focus during the quarter was to continue the expansion of the mill by adding additional leaching tanks and thickeners as well as reinforcing older tanks and completing a new overflow spill containment system. A rock slide that occurred during the quarter resulting from extremely heavy rains that blocked three of the four entrances to the mine was cleared successfully and the operation is now back to full production. The new portable screen which was installed in the second quarter is operating full time to take advantage of some of the oxide ore backfill and dumps left behind from previous years of operation. This is allowing the Company to produce primarily DorA-A?1/2 bars rather than concentrates which are presently more economic in the present environment of low lead and zinc prices.
La Encantada Silver Mine
Construction of the new 3500 tpd cyanidation mill is the primary focus at the La Encantada and is proceeding well. In addition, management decided to construct a temporary cyanidation circuit at the main flotation mill in order to treat the lead concentrates which have historically been produced at this operation. The completion of this circuit will allow the Company to treat the concentrates and avoid the addition costs associated with shipping concentrates to Penoles. Once this new circuit is completed, the silver precipitates produced from the concentrates will be shipped to the La Parrilla mill for the production of DorA-A?1/2 bars. Tests have proven that the lead concentrates treated with cyanide have a 95% recovery of contained silver and will substantially reduce the smelting costs associated with selling concentrates.
In Summary
Equally important to increasing silver production is further reducing costs and expenses where possible. The 2008 operating year thus far represents a year of high costs as a result of the Company's pursuit of aggressive growth based on the expansion of its operations and Resources. In addition, the Company has been negatively impacted this year by higher PeA-A?1/2oles smelter charges, especially on its lead and zinc concentrates. Management is pleased by the many cost cutting measures underway, and it is believed that further improvements in profitability can be achieved and additional improvements are expected going forward as the Company takes additional measures to reduce costs.
Finally, in this turbulent financial and commodity environment, First Majestic has been reacting by cutting costs where ever possible. Due to the mill improvements ongoing this year, mill throughput at each operation has now reached full capacity which is resulting in a more efficient use of equipment and machinery. The Company is continuing to analyze various options to reduce its operating costs and to squeeze out the most optimum margins possible. One example which is proving to add substantial value is management decided to mint 99.9% pure silver into coins, ingots and bars which are actively marketed on the Company's web site. Interest levels for these products are extremely high and are beginning to represent substantial revenues for the Company. These products tend to sell at substantial premiums to COMEX spot prices. It is anticipated that these sales of refined silver products will represent approximately 10% of the Company's silver production by February 2009. The Company is also exploring other ways of selling its silver outside of the normal avenues of commercial sales.
Management is confident that these steps that have been taken and others under examination will ultimately generating more income and greater value for shareholders.
First Majestic is a producing silver company focused in MA-A?1/2xico and is aggressively pursuing its business plan to become a senior silver producer through the development of its existing assets and the pursuit through acquisition of additional assets that contribute to achieving its corporate growth objectives.
FIRST MAJESTIC SILVER CORP.
Keith Neumeyer, President & CEO
This press release includes certain "Forward-Looking Statements" within the meaning of section 21E of the United States Securities Exchange Act of 1934, as amended. All statements, other than statements of historical fact, included herein, including without limitation, statements regarding potential mineralization and reserves, exploration results and future plans and objectives of First Majestic Silver Corp. are forward-looking statements that involve various risks and uncertainties. There can be no assurance that such statements will prove to be accurate and actual results and future events could differ materially from those anticipated in such statements.
Contacts:
First Majestic Silver Corp.
Keith Neumeyer
President & CEO
(604) 688-3033 or Toll Free: 1-866-529-2807
(604) 639-8873 (FAX)
Email: info@firstmajestic.com
Website: www.firstmajestic.com
SOURCE: First Majestic Silver Corp.
mailto:info@firstmajestic.com
http://www.firstmajestic.com
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