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.