Canadian silver miner First Majestic has suspended mining activities and is reducing its workforce at its Jerritt Canyon gold mine, in Nevada.
Announcing the suspension of activities, First Majestic explained that mining rates remained below the targeted 3 000 t/d that were required to generate free cash flow. The company cited challenges such as contractor inefficiencies and high costs, inflationary cost pressures, lower-than-expected head grades and multiple extreme weather events affecting northern Nevada for the low mining rates and high costs.
"The decision to temporarily suspend mining activities at Jerritt Canyon, which represented approximately 21% of the company's 2022 revenue, was driven by our goal to produce profitable ounces across the company," stated president and CEO Keith Neumeyer.
"Since the acquisition in 2021, we have invested heavily at Jerritt Canyon and have been successful in executing several key projects. We rehabilitated and reopened the West Generator and Saval II underground mines and have successfully upgraded and modified the roaster and refinery off-gas handling systems to ensure we remain fully compliant with all state and federal air quality standards.
“The team at Jerritt Canyon has helped the company achieve significant milestones and we are thankful for their service,” said Neumeyer.
While mining activities have temporarily stopped, processing of the remaining surface stockpiles will occur for the next couple of months. The company intends to process about 45 000 t of stockpiles through the plant.
Neumeyer said that First Majestic would continue exploring both near-mine and prospective regional greenfield targets to grow Jerritt Canyon's resources, which could significantly enhance the economics for the eventual restart of operations.
The company bought the mine less than two years ago.