First Majestic Reports Lower Revenues on Back of Suspension of Silver Sales

First Majestic Silver Corp. (TSX:FR,NYSE:AG) announced its unaudited interim consolidated financial results for the third quarter of 2014, commenting that because it has temporarily suspended the sale of 934,000 ounces of silver, its revenues came to just $40.8 million. That’s down 39 percent from the previous quarter.

Other highlights include:

• Net earnings after taxes amounted to a loss of $10.5 million or earnings per share of ($0.09).
• Adjusted earnings per share (a non-GAAP measure) of ($0.04), after excluding non-cash and non-recurring items.
• Cash flow per share (a non-GAAP measure) of $0.08, representing a 53% decrease from the prior quarter.
• Mine operating loss amounted to $1.8 million primarily due to a 39% decrease in revenue and 36% decrease in cost of sales primarily attributed to the suspended silver sales.
• Total cash cost, net of by-product credits, was $10.41 per ounce, up 8% from the prior quarter primarily due to a 13% decrease in silver production during the quarter.
• All-in sustaining cost (‘AISC’) was $19.89 per payable silver ounce, up 9% from the prior quarter.
• Average realized silver price per ounce was $19.10, a decrease of 3% compared to the prior quarter.
• Cash and cash equivalents of $34.7 million held at the end of the quarter plus the silver held in inventory.
• Subsequent to quarter end, the Company sold all 934,000 ounces of silver that it held over from the third quarter for an average price of $17.29 per ounce increasing the cash balance by $16.1 million.

Keith Neumeyer, the company’s president and CEO, commented:

[T]he Company’s primary focus remains to be cost cutting. Unfortunately, due to the lower production in the third quarter, severance payouts and temporary lower throughput at two of our mines, our costs were modestly higher in the quarter. This trend is anticipated to reverse in the fourth quarter which will benefit from a reduced workforce and lower energy and chemical costs. Due to the fact that the silver price is dropping more quickly than costs, diligence is required to remain focused on bringing all cost structures down to 2006 levels. I’m confident that the changes currently underway in our business will allow us to produce profitable ounces in this lower metal price environment.

Click here to read the full First Majestic Silver Corp. (TSX:FR,NYSE:AG) press release.