First Majestic Silver: Still A Money Loser

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]