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Overview of First Majestic Silver Corp
First Majestic Silver Corp is a publicly traded mining company specializing in the extraction and production of silver and gold, with a strong operational focus in Mexico and strategic exploration assets in the United States. As a significant participant in the precious metals mining sector, the company leverages both traditional and innovative mining techniques to extract high-quality mineral resources. Incorporating advanced mineral exploration methodologies, efficient mining operations, and a state-of-the-art minting process, First Majestic stands out for its comprehensive approach to bullion production and value creation.
Core Operations and Mining Expertise
The company’s primary business revolves around the development, exploration, and production of mineral properties. First Majestic owns and operates multiple underground mines in Mexico, notably the San Dimas Silver/Gold Mine, the Santa Elena Silver/Gold Mine, and the La Encantada Silver Mine. At its core, the company focuses on the extraction of silver as its principal metal, supported by significant quantities of gold produced as a secondary metal. These operations are underpinned by rigorous exploration programs designed to expand resource bases and convert inferred mineral resources to indicated and proven reserves. With robust drilling operations and continuous resource evaluation, First Majestic demonstrates its commitment to maximizing resource recovery while sustaining operational excellence.
Vertical Integration and Bullion Production
In an effort to capture enhanced value from its mined silver, First Majestic has achieved vertical integration through the establishment of its minting facility, First Mint, LLC. This facility is an exemplar of modern bullion manufacturing, incorporating innovative production lines that reduce energy consumption and lower gas emissions relative to traditional processes. The mint has successfully commissioned its operations and, through the production of high-quality silver bullion products such as bars, ingots, coins, and medallions, offers an additional revenue stream that bridges the gap between mining and direct consumer sales. The incorporation of quality control measures like ISO certification underscores the company’s commitment to maintaining strict standards in the manufacturing of investment-grade bullion.
Exploration and Resource Development
Exploration forms a cornerstone of First Majestic’s strategy. The company pursues an aggressive drilling campaign at both brownfield and greenfield targets to identify new mineralized zones and extend existing resource models. Detailed exploration programs have been carried out at properties such as San Dimas, where drilling campaigns have successfully intercepted significant silver and gold mineralization in multiple vein systems. These programs are executed under stringent QA/QC standards and are aimed at converting inferred resources into higher confidence categories, thereby de‐risking future mining operations. The company’s commitment to exploration and development not only enhances its mineral reserve portfolio but also positions it strategically in terms of future development potential without relying on speculative assessments of its output.
First Majestic Silver Corp. has received regulatory approval for a 12-month extension of its share repurchase program, allowing the company to buy back up to 10 million common shares, representing about 4.5% of its outstanding shares. The program aims to enhance shareholder value by increasing equity interests, especially when shares may not reflect the company's underlying value. The repurchase will occur through the Toronto Stock Exchange, with a daily limit on purchases. The previous repurchase program did not result in any share buybacks.
First Majestic Silver Corp. is acquiring Jerritt Canyon Canada Ltd. from Sprott Mining Inc. for $470 million in shares and 5 million share purchase warrants. This acquisition enhances First Majestic's operational platform in Nevada, an attractive mining jurisdiction, and strengthens its portfolio with expected pro forma production of 30-33 million silver equivalent ounces. The transaction includes a $30 million private placement from Eric Sprott, post-acquisition, owning approximately 13.1% of First Majestic's common shares.
First Majestic Silver Corp. (AG) has issued a detailed response to recent misleading Mexican media reports about its ongoing tax dispute with the Mexican government. The company asserts that it is compliant with tax regulations in both Canada and Mexico. Notably, First Majestic filed a NAFTA Request for Arbitration to resolve differences regarding the tax assessments, which total approximately US$260 million. The dispute arose from tax assessments on PEM based on market prices instead of actual revenue, contradicting the previously agreed Advance Pricing Agreement with Mexican tax authorities.
First Majestic Silver Corp. (AG) announced its three operating mines in Mexico have received the 2021 Socially Responsible Business Distinction Award. This award recognizes the company’s commitment to sustainability, corporate ethics, and good governance practices. The San Dimas mine has received the award for the tenth consecutive year, while the Santa Elena mine for the seventh. The La Encantada mine achieved this recognition for the first time. The company aims to produce between 12.5 to 13.9 million silver ounces in 2021, reinforcing its position as a leader in Corporate Social Responsibility.
First Majestic Silver Corp. (AG) has filed for arbitration with the International Centre for Settlement of Investment Disputes (ICSID) against the Government of Mexico, citing breaches of the Advance Pricing Agreement affecting its subsidiary, Primero Empresa Minera S.A. de C.V. (PEM). Despite efforts for negotiation, the government refused engagement. The company is seeking a neutral tribunal to resolve the dispute under NAFTA's provisions. First Majestic operates multiple silver and gold mines in Mexico, targeting production of 12.5 to 13.9 million silver ounces in 2021.
First Majestic Silver Corp. (AG) announced its consolidated financial results for Q4 and the year ended December 31, 2020. The company generated revenues of $363.9 million, boosted by robust silver production and higher metal prices, particularly in the second half of the year. Q4 revenues reached $117.1 million, an increase of 21% from Q4 2019, with a net earnings of $34.5 million (EPS of $0.16). Cash costs per ounce rose to $6.53, while AISC increased to $15.92. End-of-year cash and equivalents were $238.6 million, marking a significant 41% increase from 2019.
First Majestic Silver Corp. reported a total production of 5.2 million silver equivalent ounces in Q3 2020, comprising 3.2 million ounces of silver and 25,771 ounces of gold, reflecting increases of 72% and 63% respectively from the previous quarter. The company aims to fully recover lost production due to COVID-19 by year-end. The balance of cash and cash equivalents stood at $232.4 million. Significant production growth was noted at La Encantada and San Dimas, while exploration efforts are set to expand with a targeted total of 163,000 metres for the year.
First Majestic Silver Corp. (AG) announced the acquisition of 5,146,401 common shares of Silver Dollar Resources Inc., increasing its ownership to approximately 16.4%. This acquisition, valued at CDN$9,160,594, follows an option agreement from August 2020. Future share acquisition opportunities exist, based on market conditions. The press release emphasizes First Majestic's focus on silver production in Mexico, with expected silver output between 11.0 to 11.7 million ounces in 2020.
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