VANCOUVER - First Majestic Silver Corp. (NYSE: NYSE:AG) (TSX: AG) (FSE: FMV), known as First Majestic, reported a 7% increase in silver production and a 9% rise in gold output in the second quarter of 2024 from its three operating mines in Mexico. The production totals 5.3 million silver equivalent ounces, including 2.1 million ounces of silver and over 39,339 ounces of gold.
The Santa Elena Silver/Gold Mine led the charge with a 13% increase in silver equivalent production compared to the first quarter of the year, reaching 2.6 million ounces. This performance positions the mine to surpass the company's initial annual production expectations.
At the La Encantada Silver Mine, a 28% surge in silver production was attributed to the successful identification of a new water source in the previous quarter, which has resolved past water supply issues and is anticipated to help the mine return to its target processing rate of 3,000 tonnes per day by the third quarter.
The San Dimas Silver/Gold Mine, however, experienced a slight downturn in production due to ongoing labor negotiations affecting ore processing. Management remains hopeful for a resolution and anticipates a production increase upon reaching an agreement.
First Majestic's commitment to sustainability was highlighted by the release of its third Sustainability Report and the commencement of a project at San Dimas to transition from diesel to liquefied natural gas for backup power generation, aiming to reduce carbon emissions.
Safety performance at the mines remained strong, with both the Total Reportable Incident Frequency Rate and Lost Time Incident Frequency Rate below the company's target indicators.
The company has revised its 2024 guidance, maintaining a consolidated production forecast of 21.4 to 22.6 million silver equivalent ounces, despite slight adjustments in silver and gold production estimates. The updated forecast reflects improved metal price assumptions, increased production at Santa Elena, and anticipated higher output at La Encantada in the second half of the year.
This news is based on a press release statement from First Majestic Silver Corp.
In other recent news, First Majestic Silver Corp. has reported significant findings of silver and gold mineralization at its San Dimas Silver/Gold Mine in Mexico. The exploration program, aimed at testing new mineral targets and converting resources to reserves, has yielded positive results, particularly within the central and western parts of the property. Notable veins include Perez, Sinaloa-Elia, Santa Regina, and Santa Teresa, with high-grade intercepts showing promising quantities of gold and silver.
In addition to these developments, BMO Capital Markets has increased its price target for First Majestic from Cdn$8.50 to Cdn$10.00. This adjustment follows the company's first-quarter earnings report, which revealed a slight miss on estimates with a reported loss of Cdn$0.06 per share. However, the company's revenue and cost of sales were in line with estimates set by BMO Capital.
First Majestic's all-in sustaining costs for the first quarter were reported at $21.53 per ounce of silver equivalent, a rise from $18.50 per ounce in the previous quarter. Despite this, the company plans to increase production in the latter half of the year to meet its annual guidance targets.
These are the recent developments for First Majestic Silver Corp.
InvestingPro Insights
In light of First Majestic Silver Corp.'s (NYSE: AG) latest production report, InvestingPro data and tips provide additional context for investors evaluating the company's performance and outlook. With a market capitalization of $1.9 billion and a significant 40.41% price increase over the past six months, First Majestic has shown considerable share price appreciation, reflecting investor optimism and possibly the production successes highlighted in the recent announcement.
Despite the positive production figures, analysts remain cautious, as indicated by an InvestingPro Tip that analysts do not expect the company to be profitable this year. This aligns with a reported P/E ratio of -39.05 and an adjusted P/E ratio for the last twelve months as of Q1 2024 at -63.88, suggesting that the company's earnings do not currently support its valuation. However, First Majestic's liquid assets do exceed its short-term obligations, which could provide some financial stability as the company navigates the challenges ahead.
Moreover, First Majestic operates with a moderate level of debt, which may afford the company some flexibility in managing its finances during this period of growth and investment in sustainability projects. As investors look forward to the company's financial results due on August 1, 2024, they can explore 5 additional InvestingPro Tips to gain further insights into the company's financial health and strategic positioning. For those interested in a deeper analysis, using the coupon code PRONEWS24 can provide up to 10% off a yearly Pro and a yearly or biyearly Pro+ subscription.
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