First Majestic Silver, with three producing projects in Mexico, produced 5.5-million silver-equivalent ounces (SEOs) in the fourth quarter of 2020, representing a 5% increase over the prior quarter.
Silver production reached 3.5-million ounces, representing a 9% increase over the prior quarter and the company’s second-highest quarterly silver production.
Gold production reached 26 343 oz, representing a 2% increase from the prior quarter.
The company’s San Dimas project produced 1.9-million ounces of silver and 19 980 oz of gold in the fourth quarter, representing an increase of 16% and 9%, respectively, from the prior quarter and the highest quarterly silver production since acquiring the mine in May 2018.
The La Encantada project produced 1.1-million ounces of silver in the fourth quarter, representing a 12% increase from the prior quarter and the highest quarterly production since the second quarter of 2013.
In terms of exploration work, at the end of the fourth quarter, 25 exploration drill rigs were active across First Majestic’s mines and projects. This included 12 rigs at San Dimas, seven at Santa Elena, four at La Encantada and two at La Parrilla.
FULL-YEAR PERFORMANCE
For the full-year, First Majestic produced 11.6-million ounces of silver and achieved the top-end of its revised guidance range of producing between 11-million and 11.7-million ounces of silver.
As such, the company ended the year with a record cash and cash equivalents balance of $238.6-million.
Strong silver production from La Encantada and San Dimas in the second half of the year helped to offset some of the production losses resulting from the national Covid-19 shutdowns which occurred in the second quarter of that year.
Further, gold production for the full-year reached 100 081 oz, which was slightly below the company’s guidance of between 106 000 oz and 112 000 oz. The slight miss in meeting guidance was primarily the result of lower production rates at Santa Elena and lower gold grades at San Dimas in the second half of the year.
La Encantada produced 3.5-million silver ounces, representing a 14% increase from the prior year and beating First Majestic’s revised production guidance of between 3.1-million and 3.3-million ounces.
This was also the mine's highest yearly silver production since 2014.
First Majestic also managed to achieve record consolidated average silver recoveries of 88%, the highest in the company’s 18-year history, owing to its continued success with fine grinding technologies and mill modifications.
La Encantada achieved average silver recoveries of 78%, marking its highest yearly recovery rate in the company’s history.
Meanwhile, First Majestic also reports that it completed 2 292 m of underground development at the Ermitaño project near Santa Elena in advance of production ramp-up scheduled for early 2022.
In addition, the company also undertook construction of a liquid natural gas facility at Santa Elena, which was about 90% complete by year-end and remains on schedule to begin commissioning in February, with initial power delivery expected in the second quarter of this year.
In terms of exploration, First Majestic completed 156 244 m worth of exploration drilling in 2020.
2021 GUIDANCE
The company expects production for this year to range between 12.5-million and 13.9-million ounces of silver, and 100 000 oz to 112 000 oz of gold, for total production (with gold credits converted to silver ounces) of between 20.6-million and 22.9-million SEOs.
President and CEO Keith Neumeyer says First Majestic posted another strong year in 2020 despite the many challenges brought on by the Covid-19 pandemic and Mexico’s two-month national shutdown.
“In 2021, we expect an increase of up to 20% in consolidated silver production across the three operating mines.
"In addition, our investment in underground development at the Ermitaño project near Santa Elena will kick into high gear in order to prepare the area for production ramp-up in early 2022."
"Along with a few other projects currently being advanced, we now have a clear path to achieving our goal of producing 30-million silver-equivalent ounces by 2023,” he notes.