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First Majestic sees lower 2017 output as it prepares for growth in 2018 and beyond

18th January 2017

By: Henry Lazenby

Creamer Media Deputy Editor: North America

     

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VANCOUVER (miningweekly.com) – Precious metals producer First Majestic Silver expects to produce about 6% less gold this year than in 2016, as it prepares for significant production growth in 2018 and beyond, the company said Tuesday.

During 2016, the Vancouver-headquartered miner produced a new record of 18.7-million silver-equivalent ounces (SEOs), representing a 16% increase over 2015, and meeting the upper end of the 16.8-million- to 18.7-million-ounce guidance range. Output comprised 11.9-million ounces of silver, 62 436 oz of gold, 33.2-million pounds of lead and 10.6-million pounds of zinc.

Fourth-quarter output totalled 4.4-million SEOs, comprising 2.8-million ounces of silver, 14 743 oz of gold, 7.7-million pounds of lead and 1.2-million pounds of zinc.

The Mexico-focused company reported a year-end cash balance of $129-million.

During the fourth quarter ended December, First Majestic completed 14 918 m of development, a 17% increase over the prior quarter, and 36 400 m of diamond drilling. The company plans on releasing an updated National Instrument 43-101-compliant technical report for San Martin, Del Toro and La Parrilla before July.

First Majestic expects to produce between 16.6-million and 18.5-million SEOs in 2017, the mid-point of which is 6% below production in 2016.

All-in sustaining costs are expected to come in at between $11.96/oz and $12.88/oz of silver.

Capital expenditure (capex) this year is budgeted at $124-million, with La Encantada expected to consume $24.3-million of capital with the installation of the roaster this year. La Guitarra will have a capex budget of $20.6-million, with significant mine development planned for the forthcoming expansion, while exploration spending at Plomosas is expected to lead to a new preliminary economic assessment in 2018.

Management noted that part of the capital in the spending plan is discretionary and can be reduced if silver prices drop.

Edited by Creamer Media Reporter

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