DarioGaona We're nearing the end of the Q2 earnings season for the precious metals sector and one of the more recent companies to report its results was First Majestic Silver (NYSE:AG). However, unlike most producers that saw free cash flow swing back to positive territory and enjoyed significantly higher revenue, First Majestic was an anomaly. Not only did revenue actually slide year-over-year due to having to lap production at Jerritt Canyon which has since gone into care and maintenance, but free cas ...

Michael McCraeMichael McCrae is leading Kitco's coverage of the mining sector. McCrae, who has both an MBA and CMA, knows how to build digital media properties. He was co-founder and publisher of MINING.com, an award-winning news site. Before coming to media, McCrae worked in IT and banking. Please reach out: mmccrae@kitco.com or (514) 670-1383. You can also follow him at @michaelmccrae.ShareDisclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc ...

Core Viewpoint - First Majestic Silver Corp. is facing challenges despite strong metal prices, with production issues and costs impacting stock performance [3][5][8] Production Performance - In Q2 2024, First Majestic produced 5.3 million silver equivalent ounces, a 7% increase in silver ounces and a 9% increase in gold ounces from Q1 2024 [4] - Management anticipates further improvements in the second half of the year due to planned higher ore grades and throughput rates [4] Metal Prices - Strong metal prices for gold and silver are driven by economic uncertainty and pending rate cuts, typically benefiting mining stocks [5] - Despite higher metal prices, First Majestic's stock has not seen significant benefits [5] Revenue and Cash Flows - Q2 revenues were $136.2 million, down from $146.7 million a year ago, primarily due to a 15% decrease in payable silver equivalent ounces sold [6] - Average selling price for silver equivalent ounces was $27.81, an 11% increase year-over-year and a 17% increase from the previous quarter [6] - Operating cash flow decreased to $23.8 million from $26.9 million a year ago, with a net loss of $48.3 million or $0.17 per share [6] Cash Balance - At the end of Q2, First Majestic had a cash and restricted cash balance of $269.7 million, with $152.2 million in cash and cash equivalents [7] - Capital expenditures in Q2 totaled $28.3 million, allocated to underground development, exploration, and property, plant, and equipment [7] Investment Outlook - The company remains at a neutral rating due to ongoing losses despite high metal prices, making it a challenging investment proposition [8] - A small increase in the revenue-linked dividend to $0.0046 per share is noted, but the overall investment appeal is limited due to operational losses [8]

Financial Performance - Revenues for Q2 2024 were $136.166 million, a decrease of 7.4% compared to $146.692 million in Q2 2023[8] - Mine operating earnings for Q2 2024 were $15.462 million, significantly improved from $1.138 million in Q2 2023[8] - Net loss for Q2 2024 was $48.251 million, compared to a net loss of $17.534 million in Q2 2023, reflecting a 175.5% increase in losses year-over-year[11] - Total comprehensive loss for Q2 2024 was $39.208 million, compared to a loss of $34.910 million in Q2 2023[11] - Cash generated from operating activities in Q2 2024 was $16.844 million, down from $20.379 million in Q2 2023[12] - Cash and cash equivalents at the end of Q2 2024 were $152.173 million, compared to $160.235 million at the end of Q2 2023[12] - The company reported a basic loss per share of $0.17 for Q2 2024, compared to $0.06 for Q2 2023[8] - Total mine operating costs for Q2 2024 were $120.704 million, down from $145.554 million in Q2 2023[8] - The company incurred finance costs of $7.335 million in Q2 2024, slightly up from $7.326 million in Q2 2023[12] - The company reported a net loss of $61,814 thousand for the six months ended June 30, 2024[16] - For the three months ended June 30, 2024, the consolidated revenue was $136.2 million, a decrease from $146.7 million in the same period of 2023, representing a decline of approximately 7.5%[44] - For the six months ended June 30, 2024, the consolidated revenue was $242.2 million, down from $303.6 million in the same period of 2023, reflecting a decrease of approximately 20.3%[48] Assets and Liabilities - Total assets increased to $1,987,039 thousand as of June 30, 2024, compared to $1,976,355 thousand at December 31, 2023, reflecting a growth of 0.54%[14] - Current assets rose to $341,903 thousand, up from $309,057 thousand, marking an increase of 10.6%[14] - Total liabilities decreased to $613,026 thousand from $618,235 thousand, a reduction of 0.35%[14] - Share capital increased to $1,952,580 thousand as of June 30, 2024, compared to $1,879,971 thousand at the end of 2023, representing a growth of 3.87%[16] - The accumulated deficit widened to $(674,149) thousand from $(609,876) thousand, indicating a decrease in retained earnings[16] - Equity reserves increased to $95,582 thousand from $88,025 thousand, reflecting a growth of 8.8%[16] - As of June 30, 2024, total property, plant, and equipment amounted to $980,267 thousand, an increase from $973,472 thousand at December 31, 2023[107] - Total debt facilities increased to $224.58 million as of June 30, 2024, up from $219.81 million at the end of 2023, representing a growth of approximately 2.1%[129] Operational Performance - The operating loss for the San Dimas mine in Q2 2024 was $2.5 million, a significant decrease from an operating profit of $8.9 million in Q2 2023[44] - The Santa Elena mine reported an operating profit of $26.3 million in Q2 2024, up from $7.4 million in Q2 2023, indicating a year-over-year increase of approximately 254%[44] - The Jerritt Canyon mine incurred an operating loss of $2.6 million in the first half of 2024, compared to a loss of $49.3 million in the same period of 2023, showing improvement in operational efficiency[48] - The company owns three producing mines in Mexico and has placed the Jerritt Canyon Gold Mine in Nevada on temporary suspension for optimization efforts[20] Shareholder Information - The company issued 10,600,000 shares for prospectus offerings, raising $71,154 thousand during the period[16] - The Company sold 10,600,000 common shares under the 2024 ATM program at an average price of $6.89 per share, generating gross proceeds of $73,000,000 and net proceeds of $71,154,000 during the six months ended June 30, 2024[155] - The total share-based payments expense related to stock options was $2,700,000 for the six months ended June 30, 2024, compared to $6,900,000 for the year ended December 31, 2023[159] - A total of 1,127,330 Restricted Share Units (RSUs) were awarded during the six months ended June 30, 2024, with a total expense of $400,000[162] Risk Management - The company is exposed to foreign exchange risk primarily related to Canadian dollars and Mexican pesos, which could impact net earnings[197] - A 10% change in the Canadian dollar could result in an effect of $718 on net earnings, while a similar change in the Mexican peso could impact net earnings by $11,150[198] - The company does not use long-term derivative instruments to hedge its commodity price risk for silver or gold[199] - A 10% change in silver prices could affect net earnings by $2,121, while gold prices could impact net earnings by $570, totaling $2,691[200] - The company manages liquidity risk by monitoring cash flows and matching the maturity profile of financial assets and liabilities[194] Compliance and Governance - The company has applied amendments to IFRS standards effective January 1, 2024, which did not have a material impact on the financial statements[30] - The company is currently evaluating the impact of IFRS 18 on its consolidated financial statements, which is effective for annual reporting periods beginning on or after January 1, 2027[40] - The company was in compliance with all of its debt covenants as of June 30, 2024[186]

Core Viewpoint - First Majestic Silver Corp. reported its unaudited financial results for Q2 2024, highlighting production increases but a decrease in revenues compared to the previous year due to various operational challenges and inventory levels [1][2][8]. Production and Operational Highlights - The company produced 5.3 million silver equivalent ounces, comprising 2,104,181 silver ounces and 39,339 gold ounces, marking a 7% and 9% increase respectively compared to Q1 2024 [2][13]. - The ore processed totaled 674,570 tonnes, a 15% increase from Q1 2024 but an 8% decrease from Q2 2023 [6][12]. - Cash costs were reported at $15.29 per AgEq ounce, a 2% improvement year-over-year, while all-in sustaining costs (AISC) were $21.64 per AgEq ounce, reflecting a slight increase of 1% [4][15]. Financial Performance - Quarterly revenues amounted to $136.2 million, down 7% from $146.7 million in Q2 2023, primarily due to a 15% decrease in payable AgEq ounces sold [2][8]. - Mine operating earnings improved significantly to $15.5 million from $1.1 million in Q2 2023, attributed to better performance at Santa Elena and reduced losses at Jerritt Canyon [3][9]. - The net loss for the quarter was $48.3 million, with an adjusted net loss of $20.4 million, compared to a net loss of $17.5 million in Q2 2023 [9][10]. Cash and Dividend Information - As of June 30, 2024, the company had a cash and restricted cash balance of $269.7 million, including $152.2 million in cash and cash equivalents [10]. - A cash dividend of $0.0046 per common share was declared for Q2 2024, payable on or about August 30, 2024 [16][17]. Future Outlook - Management anticipates further production improvements in H2 2024 due to planned higher ore grades and throughput rates [2][14]. - The company is also ramping up activities at First Mint, expecting to increase minting throughput by over 50% and introduce new products in the second half of 2024 [5].

Vancouver, British Columbia--(Newsfile Corp. - July 30, 2024) - First Majestic Silver Corp. (NYSE: AG) (TSX: AG) (FSE: FMV) (the "Company" or "First Majestic") is pleased to announce the discovery of a significant new, vein-hosted gold and silver mineralized system at its Santa Elena property in Sonora, Mexico. This new high-grade discovery, the Navidad vein system ("Navidad"), was made at depth adjacent to the Company's 100%-owned and currently producing Ermitaño mine."We are very excited about the new hi ...

Company Performance - First Majestic Silver Corp. reported total production of 5.3 million silver equivalent ounces in Q2 2024, comprising 2.1 million silver ounces and 39,339 gold ounces [1] - Silver production increased by 7% sequentially, while gold production rose by 9%, leading to a 2% overall increase in silver equivalent ounces from the previous quarter [1] - The Santa Elena gold mine produced 2.6 million AgEq ounces, with silver and gold production increasing by 6% and 25% respectively compared to Q1 2024 [1] - La Encantada mine saw a significant production increase of 28%, producing 5.85 million silver ounces [1] Production Challenges - San Dimas mine generated 2.1 million AgEq ounces, with silver and gold production declining by 2% and 11% respectively due to reduced fresh ore processed amid ongoing labor negotiations [2] 2024 Guidance - The company updated its 2024 outlook, projecting silver prices at $28.00 per ounce and gold prices at $2,300 per ounce for the second half of 2024 [3] - Expected silver production is revised to 8.9-9.5 million ounces, while gold production is estimated to be between 150,000 and 158,000 ounces [3] Price Performance - First Majestic shares have decreased by 9.4% over the past year, contrasting with the industry's growth of 38.5% [4] Peer Comparisons - Fortuna Mining Corp. reported a 4% increase in gold equivalent production to 116,570 ounces in Q2 2024, with a notable year-over-year increase in gold production [6] - Endeavour Silver Corp. experienced a 5% year-over-year decline in silver equivalent production, while gold production increased by 7% [6] - Hecla Mining reported a 16% year-over-year improvement in silver production, producing 4.5 million ounces in Q2 2024 [7]

Core Viewpoint - First Majestic Silver Corp. reported a total production of 5.3 million silver equivalent ounces in Q2 2024, with an increase in both silver and gold production compared to Q1 2024. The company also updated its production and cost guidance for the remainder of 2024, reflecting improved metal prices and operational efficiencies [2][3][15]. Production Highlights - Total production in Q2 2024 included 2.1 million silver ounces and 39,339 gold ounces, marking a 7% increase in silver and a 9% increase in gold production compared to Q1 2024 [3][4]. - The silver equivalent production for the quarter was 5.3 million ounces, a 2% increase from Q1 2024, with the silver to gold ratio decreasing to 81:1 from 88:1 due to higher silver prices [3][4]. - La Encantada Silver Mine saw a 28% increase in silver production due to improved water sourcing, while Santa Elena produced 2.6 million AgEq ounces, a 13% increase from Q1 2024 [3][4][14]. Financial Guidance - The company updated its full-year 2024 guidance, projecting silver production between 8.9 to 9.5 million ounces and gold production between 150,000 to 158,000 ounces. This reflects a slight increase in silver production and a decrease in gold production compared to previous guidance [15][19]. - The revised cash costs are expected to be between $14.25 to $14.68 per ounce, with an all-in sustaining cost (AISC) projected between $20.36 to $21.12 per payable AgEq ounce [19][21]. Operational Developments - The company is transitioning to liquefied natural gas (LNG) at the San Dimas mine to enhance power reliability and reduce carbon emissions, while maintaining cost-efficient hydroelectric power as the primary energy source [4]. - A total of 47,447 meters of drilling was completed across its mines in Q2 2024, a 31% increase from the previous quarter, with up to 22 active drill rigs [6][11]. Sustainability Efforts - First Majestic has improved its ESG ratings, achieving performance in the top 40% of the industry in both Environmental and Social categories, reflecting initiatives in carbon footprint reduction and community involvement [5][6]. Upcoming Events - The company plans to release its Q2 2024 financial results and announce the second quarter dividend payment on August 1, 2024 [26].

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