TORONTO (miningweekly.com) – Mexico-focused silver producer First Majestic on Tuesday reported that net income for the fourth quarter ended December 31 rose by 5% to $22.4-million or 19c a share, compared with $21.3-million or 20c a share for the same quarter of 2011, as a result of increased silver production and higher prices.

The slight decrease in earnings per share was mainly owing to an 11% increase in the weighted average shares outstanding during the period. Adjusted earnings per share were 26c, just below analysts’ average expectation of 27c a share for the period.

First Majestic reported a 22% rise in silver-equivalent production at 2.56-million ounces, compared with 2.1-million ounces in the same quarter a year earlier. The average realised silver-equivalent price for the quarter also rose by 2% from $31.70/oz in 2011, to $32.42/oz in the fourth quarter of 2012.

However, the total cash costs per ounce of silver for the period increased to $9.26, a 16% increase when compared with $8.01/oz for the fourth quarter of 2011. First Majestic said the increase was mainly owing to the higher cost of consumables such as cyanide, energy and petroleum products.

Rival precious metals producer Coeur d’Alene Mines, the largest US-based silver miner, last week outbid First Majestic to buy Canada’s Orko Silver for about C$384-million, nearly two months after Orko agreed to be sold to First Majestic.


Orko said it had determined that Coeur’s stock-and-cash offer of C$2.70 was better than First Majestic’s C$2.72-a-share offer when it made it on December 16, and which was now valued at C$2.16 as First Majestic’s shares have fallen.

First Majestic expects to produce between 12.3-million ounces and 13-million ounces of silver equivalent or between 11.1-million ounces to 11.7-million ounces of silver during this year from its five operating mines in Mexico.

First Majestic expects to spend $192.2-million on capital growth projects during the year.

The company’s TSX-listed stock traded 3% lower at C$17.24 apiece on Tuesday morning.