First Majestic Announces 2023 Mineral Reserve and Mineral Resource Estimates
- Proven and Probable Mineral Reserve estimates at the three producing assets decreased in silver and gold ounces. Measured and Indicated Mineral Resource estimates for the four assets remained stable in tonnes but decreased in silver ounces and increased in gold ounces. Exploration drilling added new Mineral Resources and identified additional mineralized areas. Inferred Mineral Resource estimates increased in gold ounces.
- Metal price assumptions for Mineral Reserve and Resource estimates were higher in 2023 compared to 2022. The Company focused on exploration, definition, and expansion of mineral resources, along with mine planning and plant operations optimization.
- The Company's Annual Information Form for 2023 has been filed on SEDAR+ and the Annual Report on Form 40-F with the SEC.
- None.
Insights
The disclosed estimates of Mineral Reserves and Resources are pivotal for understanding the operational longevity and financial sustainability of First Majestic Silver Corp. A 2% decrease in Proven and Probable Mineral Reserves in tonnes, alongside a 9% and 14% decrease in silver and gold ounces respectively, could signal a reduction in future production capacity, potentially impacting the company's revenue streams. Conversely, the increase in Measured and Indicated Resources, especially the 207,000 ounces of gold added at Jerritt Canyon, suggests a positive outlook for long-term resource availability. This mixed picture reflects the dynamic nature of mining operations where ongoing exploration and resource definition play important roles in replacing depleted reserves and sustaining production levels.
Investors should note that the modifications in cut-off grades, driven by updated economic parameters, indicate a recalibration of the company's operational strategy to align with market conditions. The increased metal price assumptions for both silver and gold used in estimating the December 31, 2023, Mineral Reserves and Resources, compared to the previous year, suggest an optimistic outlook on metal prices. This could have implications for the company's profitability, assuming these price levels are realized in the market.
From a financial perspective, the exploration efforts and drilling results of First Majestic are significant. The company's strategic focus on near-mine or brownfield targets, which constitute approximately 85% of their exploration drilling, is indicative of a prudent approach aimed at enhancing the value of existing assets. This exploration strategy can be more cost-effective and carry lower risk compared to greenfield exploration, which is typically more speculative in nature.
The reported production figures, with a record annual production of 9.6 million AgEq ounces, reflect operational efficiency and could be a positive driver for the company's stock performance. However, the decrease in Proven and Probable Mineral Reserves may raise concerns about the company's ability to maintain such production levels in the future. Investors should consider the balance between short-term production success and the implications of reserve depletion on long-term sustainability.
The mining sector is sensitive to changes in commodity prices and First Majestic's updated metal price assumptions are a testament to this. The increase in assumed prices for silver and gold could be interpreted as an optimistic market outlook, which may influence investor sentiment. It is important to monitor how these assumptions compare with actual market trends, as discrepancies could lead to adjustments in future reserve and resource estimations.
Furthermore, the temporary suspension of mining activities at the Jerritt Canyon Gold Mine, with a focus on exploration and optimization, could be viewed as a strategic move to enhance the value of the asset before resuming production. The addition of significant gold ounces to the Inferred Mineral Resources at Jerritt Canyon is promising and may contribute to future production growth. Stakeholders should consider the potential of these resources to offset the reported reserve decreases and contribute to the company's market valuation.
Vancouver, British Columbia--(Newsfile Corp. - April 1, 2024) - First Majestic Silver Corp. (NYSE: AG) (TSX: FR) (FSE: FMV) (the "Company" or "First Majestic") is pleased to announce the 2023 Mineral Reserve and Mineral Resource estimates for its four material mineral properties with an effective date of December 31, 2023. Three material properties are currently in production: the San Dimas Silver/Gold Mine, the Santa Elena Silver/Gold Mine, and the La Encantada Silver Mine. The fourth material property, the Jerritt Canyon Gold Mine, is currently in temporary suspension in respect of mining activities, with the Company currently focused on exploration, definition, and expansion of the mineral resources, and the optimization of mine planning and plant operations.
During 2023, the Company completed a total of 143,454 metres of exploration drilling. Approximately
2023 HIGHLIGHTS (compared to prior Mineral Reserve and Mineral Resource estimates on December 31, 2022)
Proven and Probable ("P&P") Mineral Reserve estimates at the Company's three producing material assets totalled 122.5 million AgEq ounces consisting of 56.1 million ounces of silver and 671,000 ounces of gold, which represents a
2% decrease in tonnes, a9% decrease in silver ounces and a14% decrease in gold ounces.Measured and Indicated ("M&I") Mineral Resource estimates (inclusive of Mineral Reserves) for the four material assets totalled 346.6 million AgEq ounces consisting of 95.9 million ounces of silver and 2.9 million ounces of gold, which represents a
1% increase in tonnes, a6% decrease in silver ounces and a3% increase in gold ounces, respectively. The changes to Mineral Resource estimates reflect mining depletion and updated cut-off grades from new economic parameters including costs, metal recoveries and metal prices. Exploration drilling results added new Mineral Resources and identified additional mineralized areas. Jerritt Canyon added 207,000 ounces of gold to its M&I Mineral Resource estimates.Inferred Mineral Resource estimates for the Company's four material assets totalled 283.8 million AgEq ounces consisting of 65 million ounces of silver and 2.6 million ounces of gold, which represents a
6% increase in tonnes, a12% decrease in silver ounces and a10% increase in gold ounces. Jerritt Canyon added 360,000 ounces of gold to its Inferred Mineral Resource driven by a combination of expansionary drilling results, modelling of additional mineralized areas and a decreased cut-off grade.
2023 PRODUCTION TABLE
| Units | SAN | SANTA ELENA | LA ENCANTADA | JERRITT CANYON | TOTAL | |
| Ore Processed | Tonnes | 875,345 | 882,592 | 966,392 | 177,643 | 2,901,972 |
| Material from Reserves Mined and Processed | Tonnes | 764,444 | 882,592 | 152,259 | -- | 1,799,295 |
| Material Mined from Areas Not in Reserves | Tonnes | 110,900 | -- | 814,134 | 177,643 | 1,102,677 |
| Silver Produced | Ounces | 6,355,308 | 1,176,591 | 2,718,856 | -- | 10,250,755 |
| Gold Produced | Ounces | 76,964 | 100,535 | 321 | 21,101 | 198,921 |
| Silver-Equivalent Produced from Gold | Ounces | 6,434,612 | 8,395,201 | 26,766 | 1,767,083 | 16,623,662 |
| Silver-Equivalent Produced | Ounces | 12,789,920 | 9,571,792 | 2,745,622 | 1,767,083 | 26,874,417 |
- Silver‐equivalent ounces are estimated considering metal price assumptions, metallurgical recovery for the corresponding mineral type/mineral process and the metal payable of the corresponding contract of each mine. Details as to the method of calculation can be found in the applicable tables in each mine section of the Company's Annual Information Form dated April 1, 2024 (the "AIF").
Metal price assumptions used to estimate the December 31, 2023 Mineral Reserves were
Metal price assumptions used to estimate the December 31, 2023 Mineral Resources were
MINERAL RESERVE AND MINERAL RESOURCE ESTIMATES
As of December 31, 2023, P&P Mineral Reserve estimates at the Company's three producing material assets totalled 56.2 million ounces of silver and 671,000 ounces of gold, which represents a total of 122.5 million AgEq ounces.
Santa Elena's P&P Mineral Reserve estimates remained relatively unchanged despite record production of 9.6 million AgEq ounces from Ermitaño. At La Encantada, P&P Mineral Reserves estimates increased mainly due to mine design updates in the Milagros ore body. At San Dimas, P&P Mineral Reserve estimates decreased due to a combination of depletion, cost driven increase of cut-off grade and the exclusion of low tonnage pillars.
Proven and Probable Mineral Reserve Estimates with an Effective Date of December 31, 2023
| Mine | Mineral | Tonnage | Grades | Metal Content | |||||
| Category | Type | k tonnes | Ag (g/t) | Au (g/t) | Ag-Eq (g/t) | Ag (k Oz) | Au (k Oz) | Ag-Eq (k Oz) | |
| SAN DIMAS | |||||||||
| Proven (UG) | Sulphides | 1,972 | 265 | 3.47 | 556 | 16,780 | 220 | 35,270 | |
| Probable (UG) | Sulphides | 1,663 | 254 | 2.69 | 480 | 13,580 | 144 | 25,640 | |
| Total Proven and Probable (UG) | Sulphides | 3,635 | 260 | 3.11 | 521 | 30,360 | 364 | 60,910 | |
| SANTA ELENA | |||||||||
| Proven (UG - Ermitano) | Sulphides | 590 | 78 | 3.87 | 548 | 1,473 | 73 | 10,386 | |
| Proven (UG - Santa Elena) | Sulphides | 164 | 140 | 1.54 | 267 | 735 | 8 | 1,408 | |
| Probable (UG - Ermitano) | Sulphides | 2,086 | 65 | 2.87 | 414 | 4,367 | 193 | 27,774 | |
| Probable (UG - Santa Elena) | Sulphides | 679 | 167 | 1.30 | 275 | 3,636 | 28 | 5,996 | |
| Probable (Pad) | Oxides | 325 | 25 | 0.39 | 65 | 266 | 4 | 677 | |
| Total Proven and Probable (UG+Pad) | Oxides + Sulphides | 3,843 | 85 | 2.48 | 374 | 10,478 | 307 | 46,241 | |
| LA ENCANTADA | |||||||||
| Probable (UG) | Oxides | 3,675 | 130 | - | 130 | 15,321 | - | 15,321 | |
| Total Probable (UG) | Oxides | 3,675 | 130 | - | 130 | 15,321 | - | 15,321 | |
| Consolidated FMS | |||||||||
| Proven (UG) | All mineral types | 2,726 | 217 | 3.44 | 537 | 18,988 | 302 | 47,064 | |
| Probable (UG) | All mineral types | 8,428 | 137 | 1.36 | 278 | 37,171 | 369 | 75,409 | |
| Total Proven and Probable | All mineral types | 11,153 | 157 | 1.87 | 342 | 56,159 | 671 | 122,472 | |
- Mineral Reserves have been classified in accordance with the Canadian Institute of Mining, Metallurgy and Petroleum ("CIM") Definition Standards on Mineral Resources and Mineral Reserves, whose definitions are incorporated by reference into NI 43-101.
- The Mineral Reserve statement provided in the table above has an effective date of December 31, 2023, except for the Santa Elena Leach Pad estimate, which has an effective date of March 11, 2024.
- The Mineral Reserve estimates were prepared under the supervision of, or were reviewed by, Brian Boutilier, P.Eng., Internal QP for First Majestic, who is a Qualified Person under NI 43-101.
- The Mineral Reserves were estimated from the M&I portions of the Mineral Resource estimates. Inferred Mineral Resources were not considered to be converted into Mineral Reserve estimates.
- AgEq is estimated considering metal price assumptions, metallurgical recovery for the corresponding mineral type/mineral process and the metal payable of the selling contract.
(a) The AgEq grade formula used was:
AgEq Grade = Ag Grade + Au Grade * (Au Recovery * Au Payable * Au Price) / (Ag Recovery * Ag Payable * Ag Price).
(b) Metal prices considered for Mineral Reserve estimates were
(c) Other key assumptions and parameters include: metallurgical recoveries; metal payable terms; direct mining costs, processing costs, indirect and G&A costs and sustaining costs. These parameters are different for each mine and mining method assumed and are presented in each mine section of the AIF.
- A two-step constraining approach has been implemented to estimate Mineral Reserves for each mining method in use: A General Cut-Off Grade ("GC") was used to delimit new mining areas that will require development of access, infrastructure and all sustaining costs. A second Incremental Cut-Off Grade ("IC") was considered to include adjacent mineralized material which recoverable value pays for all associated costs, including but not limited to the variable cost of mining and processing, indirect costs, treatment, administration costs and plant sustaining costs but excludes the access development assumed to be covered by the block above the GC grade.
- The cut-off grades, metallurgical recoveries, payable terms and modifying factors used to convert Mineral Reserves from Mineral Resources are different for all mines and are presented in each mine section in the AIF.
- Modifying factors for conversion of resources to reserves include consideration for planned dilution which is based on spatial and geotechnical aspects of the designed stopes and economic zones, additional dilution consideration due to unplanned events, materials handling and other operating aspects, and mining recovery factors. Mineable shapes were used as geometric constraints.
- Tonnage is expressed in thousands of tonnes; metal content is expressed in thousands of ounces. Metal prices and costs are expressed in USD.
- Numbers have been rounded as required by reporting guidelines. Totals may not sum due to rounding.
- The technical reports from which the above-mentioned information is derived are cited under the heading "Technical Reports for Material Properties" in the AIF.
M&I Mineral Resource estimates for the four material assets totalled 346.6 million AgEq ounces consisting of 95.9 million ounces of silver and 2.9 million ounces of gold. The M&I tonnes increased by
Inferred Mineral Resource estimates for the Company's four material properties totalled 283.8 million AgEq ounces consisting of 65 million ounces of silver and 2.6 million ounces of gold. Successful exploration drilling at Jerritt Canyon outlined new Inferred Resource estimates, additional mineralized areas were modeled, and a reduction of the gold cut-off grade all contributed to an increase in Inferred Resources totalling 360,000 ounces of gold.
Measured and Indicated Mineral Resource Estimates with an Effective Date of December 31, 2023
| Mine / Project | Mineral | Tonnage | Grades | Metal Content | |||||
| Category / Area | Type | k tonnes | Ag (g/t) | Au (g/t) | Ag-Eq (g/t) | Ag (k Oz) | Au (k Oz) | Ag-Eq (k Oz) | |
| MATERIAL PROPERTIES | |||||||||
| SAN DIMAS | |||||||||
| Measured (UG) | Sulphides | 2,124 | 449 | 5.92 | 942 | 30,640 | 404 | 64,340 | |
| Indicated (UG) | Sulphides | 1,821 | 353 | 3.80 | 671 | 20,680 | 223 | 39,260 | |
| Total Measured and Indicated (UG) | Sulphides | 3,945 | 405 | 4.94 | 817 | 51,320 | 627 | 103,600 | |
| SANTA ELENA |
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FAQ
What are the changes in Proven and Probable Mineral Reserve estimates at the three producing assets?
Proven and Probable Mineral Reserve estimates at the three producing assets decreased in silver and gold ounces.
What were the changes in Measured and Indicated Mineral Resource estimates for the four assets?
Measured and Indicated Mineral Resource estimates for the four assets remained stable in tonnes but decreased in silver ounces and increased in gold ounces.
What was the focus of the Company during 2023?
The Company focused on exploration, definition, and expansion of mineral resources, along with mine planning and plant operations optimization.
Where were the Annual Information Form for 2023 and the Annual Report filed?
The Annual Information Form for 2023 has been filed on SEDAR+ and the Annual Report on Form 40-F with the SEC.
FIRST MAJESTIC SILVER CORP
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