First Majestic Announces Financial Results for Q4 2020, FY2020 and Appointment of New Director

FIRST MAJESTIC SILVER CORP. (AG: NYSE; FR: TSX) (the "Company" or "First Majestic") is pleased to announce the consolidated financial results for the Company's fourth quarter and year ended December 31, 2020. The full version of the financial statements and the management discussion and analysis can be viewed on the Company's website at www.firstmajestic.com on SEDAR at www.sedar.com and EDGAR at www.sec.gov. All amounts are in U.S. dollars unless stated otherwise.

2020 HIGHLIGHTS

  • Generated robust revenues of $363.9 million primarily due to strong silver production and higher metal prices in the second half of 2020 which helped to offset reduced revenues in Q2 2020 due to Mexico's national COVID-19 shutdown.
  • Mine operating earnings of $105.1 million primarily due to higher silver and gold prices, as well as shifting a greater portion of production to its larger and lower cost operations.
  • Operating cash flows before working capital and taxes of $107.3 million or $0.50 per share.
  • Net earnings of $23.1 million, or basic earnings per share ("EPS") of $0.11, representing a 157% increase compared to 2019.
  • Adjusted net earnings of $37.4 million, or $0.18 per share, after excluding non-cash or unusual items.
  • Cash costs of $5.09 per payable silver ounce representing a 1% decrease compared to 2019 and slightly above the revised guidance range of $3.95 to $4.59 per ounce primarily due to lower than expected gold by-product credits at Santa Elena and San Dimas in the second half of 2020.
  • All-in sustaining costs ("AISC") of $13.92 per payable silver ounce representing a 10% increase compared to 2019 and slightly above the revised guidance range of $12.29 to $13.45 per ounce.
  • Realized an average silver price of $21.15 per payable silver ounce, representing a 29% increase compared to 2019.
  • Ended 2020 with record cash and cash equivalents of $238.6 million, up from $169.0 million at the end of 2019.

Q4 2020 HIGHLIGHTS

  • Revenues totaled $117.1 million, representing a 21% increase compared to Q4 2019.
  • Mine operating earnings of $43.7 million, representing an 82% increase compared to $23.9 million in Q4 2019.
  • Operating cash flows before working capital and taxes of $48.2 million, or $0.22 per share (non-GAAP).
  • Net earnings of $34.5 million, or EPS of $0.16.
  • Adjusted net earnings $24.2 million, or $0.11 per share, after excluding non-cash or unusual items.
  • Cash costs of $6.53 per payable silver ounce, representing a 75% increase compared to Q4 2019.
  • AISC of $15.92 per payable silver ounce, representing a 30% increase compared to Q4 2019.
  • Realized an average silver price of $24.88 per payable silver ounce, representing a 43% increase compared to Q4 2019.

CEO COMMENTS

"First Majestic finished 2020 with strong silver production and solid financial results despite the early challenges related to the COVID-19 global pandemic," stated Keith Neumeyer, President and CEO of First Majestic. "We generated 87% of our $105.1 million in operating earnings in the second half of 2020 primarily due to higher silver production and an improved metal price environment. This significant increase in profitability helped to lift our cash balance to a record $238.6 million at the end of the year. We also announced our inaugural dividend policy at the end of 2020 which was a major milestone and something I am particularly proud of as this has been a long-term objective of the Company. Looking ahead, we continue to expect higher prices as silver supplies tighten due to increases in investor demand and the longer-term global transition to greener energy and electric vehicle solutions."

2020 ANNUAL AND FOURTH QUARTER HIGHLIGHTS

Change
Change
Key Performance Metrics 2020-Q4 2019-Q4 Q4 vs Q4
2020 2019 '20 vs '19
Operational
Ore Processed / Tonnes Milled 625,332 626,482 0% 2,213,954 2,831,999 (22%)
Silver Ounces Produced 3,452,959 3,348,424 3% 11,598,380 13,241,118 (12%)
Silver Equivalent Ounces Produced 5,477,492 6,233,412 (12%) 20,379,010 25,554,288 (20%)
Cash Costs per Ounce (1) $6.53 $3.73 75% $5.09 $5.16 (1%)
All-in Sustaining Cost per Ounce (1) $15.92 $12.25 30% $13.92 $12.64 10%
Total Production Cost per Tonne (1) $85.68 $78.62 9% $79.59 $75.05 6%
Average Realized Silver Price per Ounce (1) $24.88 $17.46 43% $21.15 $16.40 29%
Financial (in $millions)
Revenues $117.1 $96.5 21% $363.9 $363.9 0%
Mine Operating Earnings (Loss) $43.7 $23.9 82% $105.1 $66.2 59%
Net Earnings (Loss) $34.5 ($39.9 ) NM $23.1 ($40.5 ) 157%
Operating Cash Flows before Movements in Working Capital and Taxes $48.2 $32.9 47% $107.3 $108.9 (1%)
Cash and Cash Equivalents $238.6 $169.0 41% $238.6 $169.0 41%
Working Capital (1) $254.4 $171.1 49% $254.4 $171.1 49%
Shareholders
Earnings (Loss) per Share ("EPS") - Basic $0.16 ($0.19 ) NM $0.11 ($0.20 ) 154%
Adjusted EPS (1) $0.11 $0.00 NM $0.18 $0.04 NM
Cash Flow per Share (1) $0.22 $0.16 36% $0.50 $0.54 (7%)
"NM" - Not meaningful

(1)  The Company reports non-GAAP measures which include cash costs per ounce produced, all-in sustaining cost per ounce, total production cost per tonne, average realized silver price per ounce sold, working capital, adjusted EPS and cash flow per share. These measures are widely used in the mining industry as a benchmark for performance, but do not have a standardized meaning and may differ from methods used by other companies with similar descriptions.

2020 FINANCIAL RESULTS

Full year revenues totaled $363.9 million as higher silver and gold prices were offset by reduced production rates due to Mexico's national COVID-19 suspensions and reduced worker availability. The average realized silver price increased 29% to $21.15 per ounce during the year compared to $16.40 in 2019. However, strong silver production from La Encantada and San Dimas in the second half of 2020 helped to also offset some of the production losses resulting from the COVID-19 shutdowns in the second quarter of 2020. At the end of 2020, approximately 9% of the Company's workforce at its three operating mines remained vulnerable under Mexico's national decree, an improvement from 18% at the end of the second quarter.

Annual mine operating earnings totaled $105.1 million compared to $66.2 million in 2019. The increase in mine operating earnings was primarily driven by higher silver and gold prices, as well as shifting a greater proportion of the Company's production to its larger and lower cost operations.

Cash flows before movements in working capital and taxes during the year was $107.3 million ($0.50 per share) compared to $108.9 million ($0.54 per share) in 2019.

Adjusted EPS (non-GAAP), normalized for non-cash or unusual items such as impairment of non-current assets, share-based payments and deferred income taxes for the year ended December 31, 2020 was $0.18 compared to $0.04 in 2019.

The Company ended 2020 with $238.6 million in cash and cash equivalents compared to $169.0 million at the end of 2019.   In addition, the Company ended the year with working capital of $254.4 million compared to $171.1 million at the end of 2019. The increase in cash and cash equivalents was primarily attributed to $79.7 million generated from its operating activities, $126.1 million raised through prospectus offerings and its "at-the-market distributions" equity financing program, proceeds of $14.0 million from exercise of stock options, net of $127.1 million spent on investing activities primarily relating to mining interests and property, plant, and equipment.

FULL YEAR 2020 OPERATIONAL RESULTS

Annual Production Summary San Dimas Santa Elena La Encantada Consolidated
Ore Processed / Tonnes Milled 713,064 640,276 860,613 2,213,954
Silver Ounces Produced 6,399,667 1,692,761 3,505,953 11,598,380
Gold Ounces Produced 71,598 28,242 241 100,081
Silver Equivalent Ounces Produced 12,670,526 4,181,708 3,526,776 20,379,010
Cash Costs per Ounce* $2.04 $5.81 $10.27 $5.09
All-in Sustaining Cost per Ounce* $8.75 $12.78 $12.43 $13.92
Total Production Cost per Tonne $127.91 $78.44 $40.37 $79.59

*Cash Cost per Ounce and All-in Sustaining Cost per Ounce are calculated on a per payable silver ounce basis.

Total silver production reached 11.6 million ounces achieving the top-end of the Company's guidance of 11.0 to 11.7 million silver.   Strong silver production from La Encantada and San Dimas in the second half of 2020 helped to offset some of the production losses during the Mexican national COVID-19 shutdowns in the second quarter of 2020. Total gold production reached 100,081 ounces slightly below the Company's guidance range of producing between 106,000 to 112,000 ounces. The slight miss was primarily due to lower production rates at Santa Elena and lower gold grades at San Dimas in the second half of 2020. The La Encantada mine achieved its highest annual silver production since 2014 with 3.5 million ounces of silver produced during the year, representing a 14% increase from the prior year, and beating the Company's revised production guidance of 3.1 to 3.3 million silver ounces.

Cash cost per ounce in the year was $5.09, a slight decrease compared to the previous year. The decrease in cash cost was primarily due to cost savings from the suspension of higher cost mines in 2019 and a 12% weaker Mexican Peso, partially offset by lower by-product credits and decrease in production attributed to the COVID-19 suspensions, as well as higher mining contractor costs and COVID-19 related costs.

AISC per ounce in 2020 was $13.92, compared to $12.64 in the previous year. The increase in AISC per ounce was primarily attributed to an increase in fixed overhead costs, such as general and administration expenses and annual workers participation benefits, being divided by 12% less silver ounces produced due to the required COVID-19 suspensions.

The Company's total capital expenditures in 2020 was $125.0 million consisting of $31.7 million for underground development, $43.6 million in exploration and $28.5 million in property, plant and equipment, and $21.2 million in innovation projects. Total investments in 2020, on a mine-by-mine basis, primarily consisted of $43.8 million at San Dimas, $33.7 million at Santa Elena (including $14.6 million for the Ermitaño project), $10.7 million at La Encantada, $2.8 million at La Parrilla, $1.2 million at Del Toro and $0.3 million at San Martin.

Q4 2020 FINANCIAL RESULTS

Revenues generated in the fourth quarter of 2020 totaled $117.1 million, representing a 21% increase compared to the fourth quarter of 2019, primarily due to a 43% increase in average realized silver price compared to the same quarter of the prior year, plus a 13% decrease in silver equivalent ounces sold compared to the same quarter of 2019.

Mine operating earnings were $43.7 million, representing an 82% increase compared the fourth quarter of 2019. The increase in mine operating earnings in the quarter was primarily attributed to higher metals prices.

The Company recorded net earnings of $34.5 million (EPS of $0.16) compared to net loss of $39.9 million (EPS of ($0.19)) in the fourth quarter of 2019. The increase in net earnings was primarily attributed to a $52.4 million after-tax impairment loss taken in the fourth quarter of the prior year.

Cash flows before movements in working capital and income taxes were $48.2 million ($0.22 per share), compared to $32.9 million ($0.16 per share) in the fourth quarter of 2019.

Adjusted net earnings for the fourth quarter was $24.2 million (Adjusted EPS of $0.11) compared to adjusted net earnings of $0.3 million (Adjusted EPS of $0.00) in the fourth quarter of 2019, after excluding non-cash or non-recurring items.

Q4 2020 OPERATIONAL RESULTS

Fourth Quarter Production Summary San Dimas Santa Elena La Encantada Consolidated
Ore Processed / Tonnes Milled 208,648 168,276 248,408 625,332
Silver Ounces Produced 1,941,286 418,153 1,093,521 3,452,959
Gold Ounces Produced 19,980 6,294 69 26,343
Silver Equivalent Ounces Produced 3,477,061 901,630 1,098,800 5,477,492
Cash Costs per Ounce* $3.23 $11.69 $10.39 $6.53
All-in Sustaining Cost per Ounce* $10.09 $23.02 $12.37 $15.92
Total Production Cost per Tonne $135.13 $86.32 $43.72 $85.68

*Cash Cost per Ounce and All-in Sustaining Cost per Ounce are calculated on a per payable silver ounce basis.

Total production in the fourth quarter of 2020 reached 5.5 million silver equivalent ounces, consisting of 3.5 million ounces of silver and 26,343 ounces of gold. Quarterly silver and gold production increased 9% and 2%, respectively, compared to the prior quarter.

Cash cost per ounce for the quarter was $6.53 per payable silver ounce, compared to $2.49 per ounce in the previous quarter. The increase in cash cost was primarily due to higher gold by-product credits realized in the third quarter attributed to inventory that rolled over from the second quarter, which contributed an additional $7.4 million or $2.34 per ounce in by-product credits in the previous quarter, a 6% stronger Mexican Peso against the U.S. Dollar compared to the previous quarter, as well as higher COVID-19 related expenses.

AISC per ounce in the fourth quarter was $15.92 per ounce compared to $9.94 per ounce in the previous quarter. The increase in AISC per ounce was primarily attributed to increase in cash cost per ounce, higher sustaining development and capital expenditure activities as the mines ramp up operations after the COVID-19 suspensions.

Capital expenditures in the fourth quarter were $43.7 million, an increase of 24% compared to the prior quarter, primarily consisting of $14.1 million at San Dimas, $13.8 million at Santa Elena (including $6.6 million for the Ermitaño project), $3.6 million at La Encantada, $0.9 million at La Parrilla, $0.4 million at Del Toro and $11.0 million for innovation projects.

ELECTION OF DIRECTOR

The Board of Directors have appointed Mr. Thomas Fudge as a Director of the Company effective February 17, 2021.

Mr. Fudge brings over 42 years of professional mining experience having previously worked with companies including Tahoe Resources, Alexco Resources, Hecla Mining, and Sunshine Precious Metals. Mr. Fudge holds a Bachelor of Science degree in Mining Engineering from Michigan Technological University and has overseen numerous major mining construction projects in the United States, Mexico, Venezuela, Yukon Territory, Guatemala, and Peru.

"On behalf of the Board of Directors, I am pleased to welcome Thomas to the First Majestic team," said Keith Neumeyer, President & CEO. "Thomas's wealth of mining and construction experience will make him a valuable contributor to the Board as we work towards our goal of becoming a 30 million ounce producer."

INAUGURAL DIVIDEND POLICY

As previously announced on December 7, 2020, the Board of Directors had adopted a dividend policy under which the Company intends to pay quarterly dividends of 1% of net revenues commencing after the completion of the first quarter of 2021. The initial quarterly payment for the first quarter of 2021 is expected to be paid in May. In accordance with the rules of the Toronto Stock Exchange the Company will issue a press release at the time each quarterly dividend is declared. This dividend is an eligible dividend for the purposes of the Income Tax Act (Canada).

ABOUT THE COMPANY

First Majestic is a publicly traded mining company focused on silver production in Mexico and is aggressively pursuing the development of its existing mineral property assets. The Company presently owns and operates the San Dimas Silver/Gold Mine, the Santa Elena Silver/Gold Mine and the La Encantada Silver Mine. Production from these mines are projected to be between 12.5 to 13.9 million silver ounces or 20.6 to 22.9 million silver equivalent ounces in 2021.

FOR FURTHER INFORMATION contact info@firstmajestic.com, visit our website at www.firstmajestic.com or call our toll-free number 1.866.529.2807.

FIRST MAJESTIC SILVER CORP.

"signed"

Keith Neumeyer, President & CEO

Cautionary Note Regarding Forward Looking Statements

This press release contains "forward‐looking information" and "forward-looking statements" under applicable Canadian and U.S. securities laws (collectively, "forward‐looking statements"). These statements relate to future events or the Company's future performance, business prospects or opportunities that are based on forecasts of future results, estimates of amounts not yet determinable and assumptions of management made in light of management's experience and perception of historical trends, current conditions and expected future developments. Forward-looking statements include, but are not limited to, statements with respect to: the Company's business strategy; future planning processes; commercial mining operations; cash flow; budgets; capital expenditures; the timing and amount of estimated future production; recovery rates; mine plans and mine life; the future price of silver and other metals; costs; costs and timing of the development of new deposits; capital projects and exploration activities and the possible results thereof; completion of technical reports and the timing of release. Assumptions may prove to be incorrect and actual results may differ materially from those anticipated. Consequently, guidance cannot be guaranteed. As such, investors are cautioned not to place undue reliance upon guidance and forward-looking statements as there can be no assurance that the plans, assumptions or expectations upon which they are placed will occur. All statements other than statements of historical fact may be forward‐looking statements. Statements concerning proven and probable mineral reserves and mineral resource estimates may also be deemed to constitute forward‐looking statements to the extent that they involve estimates of the mineralization that will be encountered as and if the property is developed, and in the case of measured and indicated mineral resources or proven and probable mineral reserves, such statements reflect the conclusion based on certain assumptions that the mineral deposit can be economically exploited. Any statements that express or involve discussions with respect to predictions, expectations, beliefs, plans, projections, objectives or future events or performance (often, but not always, using words or phrases such as "seek", "anticipate", "plan", "continue", "estimate", "expect", "may", "will", "project", "predict", "forecast", "potential", "target", "intend", "could", "might", "should", "believe" and similar expressions) are not statements of historical fact and may be "forward‐looking statements".

Actual results may vary from forward-looking statements. Forward-looking statements are subject to known and unknown risks, uncertainties and other factors that may cause actual results to materially differ from those expressed or implied by such forward-looking statements, including but not limited to: the duration and effects of the coronavirus and COVID-19, and any other pandemics or public health crises on our operations and workforce, and the effects on global economies and society, actual results of exploration activities; conclusions of economic evaluations; changes in project parameters as plans continue to be refined; commodity prices; variations in ore reserves, grade or recovery rates; actual performance of plant, equipment or processes relative to specifications and expectations; accidents; fluctuations in costs; labour relations; availability and performance of contractors; relations with local communities; changes in national or local governments; changes in applicable legislation or application thereof; delays in obtaining approvals or financing or in the completion of development or construction activities; exchange rate fluctuations; requirements for additional capital; government regulation; environmental risks; reclamation expenses; outcomes of pending litigation including appeals of judgments; resolutions of claims and arbitration proceedings; negotiations and regulatory proceedings; limitations on insurance coverage as well as those factors discussed in the section entitled "Description of the Business - Risk Factors" in the Company's most recent Annual Information Form, available on www.sedar.com, and Form 40-F on file with the United States Securities and Exchange Commission in Washington, D.C.  Although First Majestic has attempted to identify important factors that could cause actual results to differ materially from those contained in forward-looking statements, there may be other factors that cause results not to be as anticipated, estimated or intended.

The Company believes that the expectations reflected in these forward‐looking statements are reasonable, but no assurance can be given that these expectations will prove to be correct and such forward‐looking statements included herein should not be unduly relied upon. These statements speak only as of the date hereof. The Company does not intend, and does not assume any obligation, to update these forward-looking statements, except as required by applicable laws.


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MAG Silver Corp. (TSX NYSE American: MAG) ("MAG", or the "Company") announces the Company's consolidated financial results for the year ended December 31, 2023. For details of the audited consolidated financial statements of the Company for the year ended December 31, 2023 ("2023 Financial Statements") and management's discussion and analysis for the year ended December 31, 2023 ("2023 MD&A"), please see the Company's filings on the System for Electronic Document Analysis and Retrieval Plus ("SEDAR+") at ( www.sedarplus.ca ) or on the Electronic Data Gathering, Analysis, and Retrieval ("EDGAR") at ( www.sec.gov ).

All amounts herein are reported in $000s of United States dollars ("US$") unless otherwise specified (C$ refers to Canadian dollars).

KEY HIGHLIGHTS (on a 100% basis unless otherwise noted)

  • MAG reported net income of $48,659 ($0.47 per share) driven by income from Juanicipio (equity accounted) of $65,099 and Adjusted EBITDA 1 of $97,480 for the year ended December 31, 2023.

  • MAG reported net income of $15,694 ($0.15 per share) driven by income from Juanicipio (equity accounted) of $21,069 and Adjusted EBITDA 1 of $29,787 for the three months ended December 31, 2023.

  • A total of 346,766 tonnes of mineralized material at a silver head grade of 467 grams per tonne ("g/t") was processed at Juanicipio during the fourth quarter. Milling performance for 2023 totalled 1,268,757 tonnes at a head grade of 472 g/t.

  • Juanicipio achieved silver production of 4.5 million ounces during the fourth quarter. Silver production for 2023 totalled 16.8 million ounces.

  • Juanicipio continued to capitalize on available milling capacity at the Saucito plant (100% Fresnillo owned) to maintain processing rates during periods of maintenance. Approximately 5% of the material processed during the fourth quarter was processed through the Saucito plant.

  • Juanicipio delivered robust cost performance with cash cost 2 of $3.76 per silver ounce sold and all-in sustaining cost 2 of $9.17 per silver ounce sold in the fourth quarter.
  • Juanicipio generated strong operating cash flow of $84,038 and free cash flow 2 of $61,993 in the fourth quarter. Operating cash flow and free cash flow 2 for 2023 totalled $145,064 and $60,814, respectively.

  • At the end of the year, Juanicipio held cash balances of $42,913, representing an increase of $41,811 over 2022, driven by strong operating cash flows.

  • Juanicipio returned a total of $18,765 in interest and loan principal repayments to MAG during the fourth quarter. Interest and loan principal repayments returned to MAG during 2023 totalled $33,354.

  • MAG concluded a $40,000 senior secured revolving credit facility (the "Credit Facility") with the Bank of Montreal on October 4, 2023.

  • Effective June 20, 2023, MAG was included in the NYSE Arca Gold Miners Index which is tracked by the VanEck Vectors Gold Miners ETF.

CORPORATE

  • In September the Company published its second annual sustainability report underscoring its commitment to transparency with its stakeholders while providing a comprehensive overview of the Company's environmental, social and governance ("ESG") commitments, practices and performance for the 2022 year. The 2022 sustainability report is supported by the MAG Silver 2022 ESG Data Table which discloses MAG's historical ESG performance data.

  • During early 2024, as part of the Company's longer term succession planning, Dr. Lex Lambeck was promoted to the position of Vice President, Exploration. Lex has been the project manager for the Deer Trail Project in Utah since it was acquired by MAG in 2019, led by Dr. Peter Megaw. Lex's leadership was instrumental in the application of the "Hub and Spoke" thesis at Deer Trail as well as the Carissa discovery demonstrating his strong skills in generative exploration in district scale settings which will be invaluable in overseeing the Company's portfolio of exploration properties, including exploration at Juanicipio.

  • Marc Turcotte, with his almost 10 years experience at MAG as Vice President, Corporate Development, was promoted to the position of Chief Development Officer. In this broader executive role, Marc will leverage his proven track record in identifying unique situations to zero-in-on and assess inorganic growth opportunities aligned with the Company's commitment to continued Tier-1 growth and expansion. Marc was the architect of the consolidation of the Deer Trail project in Utah as well as the catalyst behind the acquisition of Gatling Exploration which brought the Larder project into MAG's portfolio of high quality, high impact exploration properties.

  • Tom Peregoodoff was appointed to the Board of Directors of MAG effective January 1, 2024. Mr. Peregoodoff will fill the vacancy to be created by the planned retirement in June 2024 of Dan MacInnis, who does not plan to seek re-election at the Company's 2024 annual general meeting of shareholders. Tom brings with him over 30 years of industry knowledge and leadership and has extensive experience in all aspects and stages of the global mining business, specializing in mineral exploration.

EXPLORATION

  • Juanicipio:
    • Infill drilling at Juanicipio continued in 2023, with one rig on surface and one underground with the goal of upgrading and expanding the Valdecañas Vein System at depth and further defining areas to be mined in the near to mid-term.
    • During 2023, 13,273 metres (three months ended December 31, 2023: nil metres) and 22,015 metres (three months ended December 31, 2023: 6,686 metres), were drilled from surface and underground respectively. Drilling for the year, both surface and underground, was infill in nature and continues to confirm defined mineralization.

  • Deer Trail Project, Utah:
    • Results from the 12,157 metres in surface-based Phase 2 drilling on the Deer Trail Carbonate Replacement Deposit project were reported on January 17, 2023 and August 3, 2023 (see news releases dated January 17, 2023 and August 3, 2023 available under the Company's SEDAR+ profile at www.sedarplus.ca ).
    • On May 29, 2023 MAG started a Phase 3 drilling program focused on up to three porphyry "hub" targets thought to be the source of the manto, skarn and epithermal mineralization and extensive alteration throughout the project area including that at the Deer Trail and Carissa zones. An early onset of winter snowfall impacted the commencement of the third porphyry "hub" target which is expected to be drilled next season and drilling has shifted to offset the Carissa discovery and test other high-potential targets.
    • During 2023, 5,525 metres (three months ended December 31, 2023: 1,609 metres) were drilled at high elevation with final results and interpretation pending.

  • Larder Project, Ontario:
    • On July 12, 2023 drilling resumed at the Larder Project to test additional targets by the end of the year on the Cheminis and Bear areas. During 2023 17,504 metres were drilled at Swansea, Cheminis and Bear.
    • Cheminis Success: The magnetotellurics survey carried out in the summer of 2023 enabled modelling of the south volcanic gold zone at Cheminis and is proving to be applicable elsewhere across the property. Drilling in three successive Cheminis drillholes (GAT-23-019, 020A, and 021B, see Table 1 below) intersected grades of 1.1 to 20.3 g/t gold over core lengths of 0.6 - 11.1 metres demonstrating continuity. This also extended the gold-hosting mine sequence down to 700 metres below surface, more than 370 metres below the deepest workings in this portion of the Cadillac-Larder Break. Incorporating these results into the model should enhance predictability in follow-up drilling.
    • Bear Success: Increased predictability has led to continued success and further definition of the North Bear zone, especially in hole GAT-23-022NA (see Table 1 below) which cut 5.1 metres grading 4.6 g/t gold (including a high-grade zone of 1.4 metre grading 16.2 g/t gold). These intercepts extend gold mineralization to 650 metres below surface, and it remains open in all directions.

Table 1: 2023 Larder Drillholes Highlights

Hole ID From (m) To (m) Length (m) 1 Gold (g/t) Lithology Target/Zone
GAT-23-019 767.00 776.50 9.50 2.1 Mafic Volcanics South Cheminis Mine Sequence Zone
Including 767.40 768.80 1.40 5.1 South Volcanics South Cheminis Mine Sequence Zone
Including 767.80 768.00 0.30 11.0 South Volcanics South Cheminis Mine Sequence Zone
and 945.00 955.00 10.00 1.1 Green Komatiites North Cheminis Zone
Including 946.00 949.50 3.50 2.1 Green Komatiites North Cheminis Zone
GAT-23-020A 605.30 605.90 0.60 9.4 Quartz Vein & South Volcanics South Cheminis Zone
and 672.90 678.80 5.90 3.5 Komatiite-Syenite Contact North Cheminis Zone
Including 676.30 678.80 2.50 6.3 Komatiite-Syenite Contact North Cheminis Zone
Including 678.30 678.80 0.50 20.3 Green Komatiite-Syenite Contact North Cheminis Zone
GAT-23-021B 757.40 768.50 11.10 3.2 Brecciated South Volcanics with Graphite South Cheminis Mine Sequence Zone
Including 766.00 768.00 2.00 10.2 South Volcanics South Cheminis Mine Sequence Zone
GAT-23-022NA 784.60 785.50 0.90 6.0 Green Komatiites North Bear Zone
and 789.50 794.60 5.10 4.6 Green Komatiite with Graphite North Bear Zone
Including 790.30 791.70 1.40 16.2 Quartz Vein with Graphite North Bear Zone
Including 791.20 793.70 0.50 33.8 Quartz Vein with Graphite North Bear Zone
and 939.50 940.20 0.70 5.7 South Volcanics South Bear Zone


JUANICIPIO RESULTS

All results of Juanicipio in this section are on a 100% basis, unless otherwise noted.

Operating Performance

The following table and subsequent discussion provide a summary of the operating performance of Juanicipio for the years ended December 31, 2023 and 2022, unless otherwise noted.

Key mine performance data of Juanicipio (100% basis) Year ended
December 31, December 31,
2023 2022
Metres developed (m) 14,864 12,999
Material mined (t) 1,097,289 792,693
Material processed (t) 1,268,757 646,148
Silver head grade (g/t) 472 520
Gold head grade (g/t) 1.27 1.39
Lead head grade (%) 1.14 % 0.90 %
Zinc head grade (%) 2.05 % 1.72 %
Silver payable ounces (koz) 15,318 8,697
Gold payable ounces (koz) 31.73 20.27
Lead payable pounds (klb) 25,862 9,892
Zinc payable pounds (klb) 36,881 14,898

During the year ended December 31, 2023 a total of 1,097,289 tonnes of mineralized material were mined. This represents an increase of 38% over 2022. Increases in mined tonnages at Juanicipio have been driven by the operational ramp up of the milling facility.

During the year ended December 31, 2023 a total of 1,268,757 tonnes of mineralized material were processed through the Juanicipio, Saucito and Fresnillo plants. This represents an increase of 96% over 2022. The increase in milled tonnage has been driven by the Juanicipio mill commissioning and operational ramp up. As reported by the operator, Fresnillo, the Juanicipio processing facility achieved nameplate capacity of 4,000 tpd during September 2023 with silver recovery consistently above 88%. Juanicipio continued to capitalize on available milling capacity at the Saucito plant (100% Fresnillo owned) to maintain processing rates during periods of maintenance. Approximately 5% of the material processed during the fourth quarter of 2023 was processed through the Saucito plant.

The average silver head grade for the mineralized material processed in the year ended December 31, 2023 was 472 g/t (year ended December 31, 2022: 520 g/t).

The following table provides a summary of the total cash costs (1) and all-in-sustaining costs ("AISC") (1) of Juanicipio for the years ended December 31, 2023, and 2022.

Key mine performance data of Juanicipio (100% basis) Year ended
December 31, December 31,
2023 2022
Total operating cash costs (1) 88,080 40,522
Operating cash cost per silver ounce sold ($/oz) (1) 5.75 4.66
Total cash costs (1) 93,025 40,871
Cash cost per silver ounce sold ($/oz) (1) 6.07 4.70
All-in sustaining costs (1) 158,151 83,463
All-in sustaining cost per silver ounce sold ($/oz) (1) 10.32 9.60

(1) Total operating cash costs, operating cash cost per ounce, total cash costs, cash cost per ounce, all-in sustaining costs, and all-in sustaining cost per ounce are non-IFRS measures, please see below ‘ Non-IFRS Measures ' section and section 12 of the 2023 MD&A dated March 18, 2024, available on SEDAR+ at www.sedarplus.ca for a detailed reconciliation of these measures to the 2023 Financial Statements.


Financial Results

The following table presents excerpts of the financial results of Juanicipio for the years ended December 31, 2023 and 2022 (MAG's share of income from its equity accounted investment in Juanicipio).

Year ended
December 31, December 31,
2023 2022
$ $
Sales 442,288 215,736
Cost of sales:
Production cost (171,830 ) (61,985 )
Depreciation and amortization (68,475 ) (20,913 )
Gross profit 201,983 132,838
Consulting and administrative expenses (18,768 ) (8,436 )
Extraordinary mining and other duties (4,945 ) (349 )
Interest expense (18,524 ) (2,298 )
Exchange losses and other (2,937 ) (5,160 )
Net income before tax 156,809 116,595
Income tax expense (27,381 ) (26,348 )
Net income (100% basis) 129,428 90,247
MAG's 44% portion of net income 56,948 39,709
Interest on Juanicipio loans - MAG's 44% 8,150 1,058
MAG's 44% equity income 65,099 40,767

Sales increased by $226,552 during the year ended December 31, 2023, mainly due to 84% higher metal volumes and 5% higher realized metal prices.

Offsetting higher sales was higher depreciation ($47,561) as the Juanicipio mill achieved commercial production and commenced depreciating the processing facility and associated equipment, and higher production cost ($109,845) which was driven by higher sales and operational ramp-up in mining and processing, including $44,027 in inventory movements as commissioning stockpiles were drawn down.

Other expenses increased by $28,932 mainly as a result of higher extraordinary mining and other duties ($4,596) related to higher precious metal revenues from the sale of concentrates, higher consulting and administrative expenses ($10,332) as an operator services agreement became effective upon initiation of commercial production whereby Fresnillo and its affiliates continue to operate the mine, and higher interest incurred on shareholder loans ($16,227) which were completely expensed during 2023, whereas being only partly expensed with the rest capitalized to construction in progress during 2022.

Taxes increased by $1,033 impacted by deferred tax charges associated with fixed assets as well as higher taxable profits generated during the period.

Mineralized Material Processed at Juanicipio, Saucito and Fresnillo Plants (100% basis)

Year Ended December 31, 2023 (1,268,757 tonnes processed) Year Ended
December 31, 2022
Amount

$
Payable Metals Quantity Average Price
$
Amount
$
Silver 15,317,765 ounces 23.66 per oz 362,457 188,722
Gold 31,735 ounces 1,978.07 per oz 62,774 36,958
Lead 11,731 tonnes 0.96 per lb. 24,746 9,380
Zinc 16,729 tonnes 1.15 per lb. 42,496 23,398
Treatment, refining, and other processing costs ( 2 ) (50,185 ) (42,722 )
Sales 442,288 215,736
Production cost (171,830 ) (61,985 )
Depreciation and amortization (1) (68,475 ) (20,913 )
Gross Profit 201,983 132,838

(1) The underground mine was considered readied for its intended use on January 1, 2022, whereas the Juanicipio processing facility started commissioning and ramp-up activities in January 2023, achieving commercial production status on June 1, 2023.
(2) Includes toll milling costs from processing mineralized material at the Saucito and Fresnillo plants.


Sales and treatment charges are recorded on a provisional basis and are adjusted based on final assay and pricing adjustments in accordance with the offtake contracts.

MAG FINANCIAL RESULTS – YEAR ENDED DECEMBER 31, 2023

As at December 31, 2023, MAG had working capital of $67,262 (December 31, 2022: $29,232) including cash of $68,707 (December 31, 2022: $29,955) and no long-term debt. As well, as at December 31, 2023, Juanicipio had working capital of $86,336 including cash of $42,913 (MAG's attributable share is 44%).

The Company's net income for the year ended December 31, 2023 amounted to $48,659 (December 31, 2022: $17,644) or $0.47/share (December 31, 2022: $0.18/share). MAG recorded its 44% income from equity accounted investment in Juanicipio of $65,099 (December 31, 2022: $40,767) which included MAG's 44% share of net income from operations as well as loan interest earned on loans advanced to Juanicipio (see above for MAG's share of income from its equity accounted investment in Juanicipio).

December 31, December 31,
2023 2022
$ $
Income from equity accounted investment in Juanicipio 65,099 40,767
General and administrative expenses (13,594 ) (12,352 )
General exploration and business development (736 ) (193 )
Exploration and evaluation assets written down - (10,471 )
Operating Income 50,769 17,751
Interest income 2,594 630
Other income 1,017 -
Foreign exchange loss (144 ) (366 )
Income before income tax 54,236 18,015
Deferred income tax expense (5,577 ) (371 )
Net income 48,659 17,644

NON-IFRS MEASURES

The following table provides a reconciliation of operating cash cost and cash cost per silver ounce of Juanicipio to production cost of Juanicipio on a 100% basis (the nearest IFRS measure) as presented in the notes to the 2023 Financial Statements.

Year ended December 31,
(in thousands of US$, except per ounce amounts) 2023 2022
Production cost as reported 171,830 61,985
Depreciation on inventory movements (3,919 ) 5,551
Adjusted production cost 167,911 67,536
Treatment, refining, and other processing costs 50,185 42,722
By-product revenues (2) (130,016 ) (69,736 )
Total operating cash costs (1) 88,080 40,522
Extraordinary mining and other duties 4,945 349
Total cash costs (1) 93,025 40,871
Silver ounces sold 15,317,765 8,697,372
Operating cash cost per silver ounce sold ($/ounce) 5.75 4.66
Cash cost per silver ounce sold ($/ounce) 6.07 4.70

(1) As Q3 2023 represented the first full quarter of commercial production, information presented for total operating cash costs and total cash costs together with their associated per unit values are not directly comparable.
(2) By-product revenues relates to the sale of other metals contained in the lead and zinc concentrates produced and delivered, namely gold, lead, and zinc.


The following table provides a reconciliation of AISC of Juanicipio to production cost and various operating expenses of Juanicipio on a 100% basis (the nearest IFRS measure), as presented in the notes to the 2023 Financial Statements.

Year ended December 31,
(in thousands of US$, except per ounce amounts) 2023 2022
Total cash costs 93,025 40,871
General and administrative expenses 18,768 8,436
Exploration 7,575 7,824
Sustaining capital expenditures 37,728 25,268
Sustaining lease payments 856 854
Interest on lease liabilities (48 ) (23 )
Accretion on closure and reclamation costs 247 232
All-in sustaining costs (1) 158,151 83,463
Silver ounces sold 15,317,765 8,697,372
All-in sustaining cost per silver ounce sold ($/ounce) 10.32 9.60
Average realized price per silver ounce sold ($/ounce) 23.66 21.70
All-in sustaining margin ($/ounce) 13.34 12.10
All-in sustaining margin 204,306 105,259

(1) As Q3 2023 represented the first full quarter of commercial production, information presented for all-in sustaining costs and all-in sustaining margin together with their associated per unit values are not directly comparable.


For the year ended December 31, 2023 the Company incurred corporate general and administrative expenses of $13,242 (year ended December 31, 2022: $12,216), which exclude depreciation expense.

The Company's attributable silver ounces sold for the year ended December 31, 2023 were 6,739,817 (year ended December 31, 2022: 3,826,844), resulting in additional AISC for the Company of $1.96/oz (year ended December 31, 2022: $3.19/oz), in addition to Juanicipio's AISC presented in the above table.

The following table provides a reconciliation of Earnings before interest, tax, depreciation and amortization ("EBITDA") and Adjusted EBITDA attributable to the Company based on its economic interest in Juanicipio to net income (the nearest IFRS measure) of the Company per the 2023 Financial Statements. All adjustments are shown net of estimated income tax.

Year ended December 31,
(in thousands of US$) 2023 2022
Net income after tax 48,659 17,644
Add back (deduct):
Taxes 5,577 371
Depreciation and depletion 352 136
Finance costs (income and expenses) (3,467 ) (264 )
EBITDA (1) 51,121 17,887
Add back (deduct):
Adjustment for non-cash share-based compensation 2,894 3,250
Exploration property write-down - 10,471
Share of net earnings related to Juanicipio (65,099 ) (40,767 )
MAG attributable interest in Junicipio Adjusted EBITDA 108,564 65,403
Adjusted EBITDA (1) 97,480 56,244

(1) As Q3 2023 represents the first full quarter of commercial production, information presented for EBITDA and Adjusted EBITDA is not directly comparable.


The following table provides a reconciliation of free cash flow of Juanicipio to its cash flow from operating activities on a 100% basis (the nearest IFRS measure), as presented in the notes to the 2023 Financial Statements.

Year ended December 31,
(in thousands of US$) 2023 2022
Cash flow from operating activities 145,064 129,261
Less:
Cash flow used in investing activities (83,393 ) (155,758 )
Sustaining lease payments (856 ) (854 )
Juanicipio free cash flow (1) 60,814 (27,351 )

(1) As Q3 2023 represents the first full quarter of commercial production, comparative information presented for free cash flow of Juanicipio is not directly comparable.


Qualified Persons:
All scientific or technical information in this press release including assay results referred to, and mineral resource estimates, if applicable, is based upon information prepared by or under the supervision of, or has been approved by Dr. Peter Megaw, Ph.D., CPG, MAG's Chief Exploration Officer and Gary Methven, P.Eng., Vice President, Technical Services; both are "Qualified Persons" for purposes of National Instrument 43-101, Standards of Disclosure for Mineral Projects .

About MAG Silver Corp.

MAG Silver Corp. is a growth-oriented Canadian exploration company focused on advancing high-grade, district scale precious metals projects in the Americas. MAG is emerging as a top-tier primary silver mining company through its (44%) joint venture interest in the 4,000 tonnes per day Juanicipio Mine, operated by Fresnillo plc (56%). The mine is located in the Fresnillo Silver Trend in Mexico, the world's premier silver mining camp, where in addition to underground mine production and processing of high-grade mineralised material, an expanded exploration program is in place targeting multiple highly prospective targets. MAG is also executing multi-phase exploration programs at the 100% earn-in Deer Trail Project in Utah and the 100% owned Larder Project, located in the historically prolific Abitibi region of Canada.

Neither the Toronto Stock Exchange nor the NYSE American has reviewed or accepted responsibility for the accuracy or adequacy of this press release, which has been prepared by management.

Certain information contained in this release, including any information relating to MAG's future oriented financial information, are "forward-looking information" and "forward-looking statements" within the meaning of applicable Canadian and United States securities legislation (collectively herein referred as "forward-looking statements"), including the "safe harbour" provisions of provincial securities legislation, the U.S. Private Securities Litigation Reform Act of 1995, Section 21E of the U.S. Securities Exchange Act of 1934, as amended and Section 27A of the U.S. Securities Act. Such forward-looking statements include, but are not limited to:

  • statements that address achieving the nameplate 4,000 tpd milling rate at Juanicipio;
  • statements that address our expectations regarding exploration and drilling;
  • statements regarding production expectations and nameplate;
  • statements regarding the additional information from future drill programs;
  • estimated future exploration and development operations and corresponding expenditures and other expenses for specific operations;
  • the expected capital, sustaining capital and working capital requirements at Juanicipio, including the potential for additional cash calls;
  • expected upside from additional exploration;
  • expected results from Deer Trail Project Phase 3 drilling;
  • expected results from the Larder Project at the Cheminis zone;
  • expected capital requirements and sources of funding; and
  • other future events or developments.

When used in this release, any statements that express or involve discussions with respect to predictions, beliefs, plans, projections, objectives, assumptions or future events of performance (often but not always using words or phrases such as "anticipate", "believe", "estimate", "expect", "intend", "plan", "strategy", "goals", "objectives", "project", "potential" or variations thereof or stating that certain actions, events, or results "may", "could", "would", "might" or "will" be taken, occur or be achieved, or the negative of any of these terms and similar expressions), as they relate to the Company or management, are intended to identify forward-looking statements. Such statements reflect the Company's current views with respect to future events and are subject to certain known and unknown risks, uncertainties and assumptions.

Forward-looking statements are necessarily based upon estimates and assumptions, which are inherently subject to significant business, economic and competitive uncertainties and contingencies, many of which are beyond the Company's control and many of which, regarding future business decisions, are subject to change. Assumptions underlying the Company's expectations regarding forward-looking statements contained in this release include, among others: MAG's ability to carry on its various exploration and development activities including project development timelines, the timely receipt of required approvals and permits, the price of the minerals produced, the costs of operating, exploration and development expenditures, the impact on operations of the Mexican tax and legal regimes, MAG's ability to obtain adequate financing, outbreaks or threat of an outbreak of a virus or other contagions or epidemic disease will be adequately responded to locally, nationally, regionally and internationally.

Although MAG believes the expectations expressed in such forward-looking statements are based on reasonable assumptions, such statements are not guarantees of future performance and actual results or developments may differ materially from those in the forward-looking statements. These forward-looking statements involve known and unknown risks, uncertainties and many factors could cause actual results, performance or achievements to be materially different from any future results, performance or achievements that may be expressed or implied by such forward-looking statements including amongst others: commodities prices; changes in expected mineral production performance; unexpected increases in capital costs or cost overruns; exploitation and exploration results; continued availability of capital and financing; general economic, market or business conditions; risks relating to the Company's business operations; risks relating to the financing of the Company's business operations; risks related to the Company's ability to comply with restrictive covenants and maintain financial covenants pursuant to the terms of the Credit Facility; the expected use of the Credit Facility; risks relating to the development of Juanicipio and the minority interest investment in the same; risks relating to the Company's property titles; risks related to receipt of required regulatory approvals; pandemic risks; supply chain constraints and general costs escalation in the current inflationary environment heightened by the invasion of Ukraine by Russia and the events relating to the Israel-Hamas war; risks relating to the Company's financial and other instruments; operational risk; environmental risk; political risk; currency risk; market risk; capital cost inflation risk; risk relating to construction delays; the risk that data is incomplete or inaccurate; the risks relating to the limitations and assumptions within drilling, engineering and socio-economic studies relied upon in preparing economic assessments and estimates, including the 2017 PEA; as well as those risks more particularly described under the heading "Risk Factors" in the Company's Annual Information Form dated March 27, 2023 available under the Company's profile on SEDAR+ at www.sedarplus.ca .

Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those described herein. This list is not exhaustive of the factors that may affect any of the Company's forward-looking statements. The Company's forward-looking statements are based on the beliefs, expectations and opinions of management on the date the statements are made and, other than as required by applicable securities laws, the Company does not assume any obligation to update forward-looking statements if circumstances or management's beliefs, expectations or opinions should change. For the reasons set forth above, investors should not attribute undue certainty to or place undue reliance on forward-looking statements.

Please Note: Investors are urged to consider closely the disclosures in MAG's annual and quarterly reports and other public filings, accessible through the Internet at www.sedarplus.ca and www.sec.gov .

LEI: 254900LGL904N7F3EL14

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