First Majestic swings to significant Q4 loss as Mexican tax reforms hit
TORONTO (miningweekly.com) – Despite officially reaching the status of ‘senior’ silver producer, Mexico-focused miner First Majestic had swung to a significant fourth-quarter loss of $81.2-million, or $0.69 a share, after being impacted on by the country’s tax reforms enacted at the start of the year.
For the three months ended December 31, the Vancouver-based company reported a noncash goodwill impairment charge of $28.8-million, after it used a silver price of $22.30/oz and discount rates of 9% to 11% for reserve assessment, and a deferred tax accounting adjustment of $38.8-million as a result of the recently enacted Mexican tax reforms.
Adjusted earnings amounted to $6.3-million, or $0.05 a share, below analyst expectations of $0.11 a share.
Silver-equivalent output rose 33% year-on-year to 3.4-million ounces, and full-year output rose 40% over 2012 to 12.8-million ounces.
Silver output totalled 2.7-million ounces in the fourth quarter, representing a 19% increase over the same period in 2012, and for the full year rose 29% to 10.6-million ounces, exceeding the production threshold to become a senior producer of ten-million ounces of pure silver.
Quarterly revenues fell 17% to $59-million, reflecting the 36% drop in the average realised price for silver to $20.61/oz.
The total cash cost per payable silver ounce in the quarter rose 4% to $9.66.
In 2013, First Majestic produced 10.64-million ounces of silver, or 12.79-million silver-equivalent ounces (SEO). This year, the company is guiding to produce 12.7-million to 13.35-million ounces of silver, or 14.85-million to 15.6-million SEO.
The company expected total cash costs of between $8.67/oz to 9.12/oz this year, and all-in costs of $15.87/oz to $16.69/oz net of by-product credits.
So far this week, First Majestic’s NYSE-listed stock traded 10.67% lower, on Thursday changing hands at $10.88 apiece, 3.2% lower from the opening price.
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