First Majestic Earns a Record $23.9 Million in First Quarter of 2011
VANCOUVER, BRITISH COLUMBIA -- (Marketwire) -- 05/16/11 -- FIRST MAJESTIC SILVER CORP. (TSX: FR)(NYSE Amex: AG)(FRANKFURT: FMV)(WKN: A0LHKJ) (the 'Company' or 'First Majestic') is pleased to announce the unaudited consolidatedinterim financial results for the Companyfor the firstquarter endingMarch 31, 2011. The full version of the financial statements and the management discussion and analysis can be viewed on the Company's web site at www.firstmajestic.com or on SEDAR at www.sedar.com, and on EDGAR at www.sec.gov.
All financial information is prepared in accordance with IFRS and all dollar amounts from this date forward are expressed in US dollars unless otherwise indicated, and all Cash Costs information is now being presented on a payable ounces basis with no metal deduction added to smelting and refining costs. All prior period information has been restated or reclassified for comparative purposes unless otherwise noted.
2011 FIRST QUARTER HIGHLIGHTS
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Change
from
First First Change Fourth Fourth
Quarter Quarter Year-on- Quarter Quarter
HIGHLIGHTS 2011 2010 Year 2010 2010
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Revenues $55.3 $17.7 Up 211% $40.1 Up 38%
million million million
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Mine Operating Earnings $35.6 $7.2 Up 397% $24.0 Up 49%
million million million
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Net Earnings after Taxes $23.9 $0.4 Up 5300% $13.7 Up 75%
million million million
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Cash Flow Per Share (a $0.34 per $0.07 per Up 407% $0.23 per Up 52%
non-IFRS measure) share share share
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Earnings Per Share - $0.24 per $0.00 per Up 4913% $0.15 per Up 63%
basic share share share
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Silver Ounces Produced 1,769,208 1,409,825 Up 25% 1,757,332 Up 1%
(excluding equivalent oz. Ag oz. Ag oz. Ag
ounces of gold, zinc and
lead)
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Silver Equivalent Ounces 1,825,366 1,619,403 Up 13% 1,827,987 -
Produced eq. oz. eq. oz. eq. oz.
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Payable Silver Ounces 1,751,312 1,112,292 Up 57% 1,738,741 Up 1%
Produced oz. Ag oz. Ag oz. Ag
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Silver Equivalent Ounces 1,762,123 1,298,659 Up 36% 1,690,741 Up 4%
Sold eq. oz. eq. oz. eq. oz.
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Total Cash Costs per $8.26 $7.67 Up 8% $7.78 Up 6%
Ounce
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Average Revenue per $32.60 $16.73 Up 95% $25.06 Up 30%
Payable Equivalent Ounces
Sold
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Cash and Cash Equivalents $85.6 $8.3 Up 934% $41.2 Up 109%
(as at March 31) million million million
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Results of Operations:
-- Generated Revenues of $55.3 million for the first quarter of 2011, an
increase of 211% compared to $17.7 million in the first quarter of 2010
and an increase of 38% or $15.2 million compared to the fourth quarter
of 2010, spurred on by a 95% increase in the average realized price of
silver, combined with a 13% increase in production. Smelting and
refining charges decreased to 4% of gross revenue in 2011 compared to
17% of gross revenue in the first quarter of 2010. Average refining
charges for dore in the first quarter were $0.37 per equivalent silver
ounce whereas smelting charges for concentrates were $5.46 per
equivalent silver ounce.
-- Recognized Mine Operating Earnings of $35.6 million for the first
quarter of 2011 compared to $7.2 million in the first quarter of 2010,
an increase of 397%. The increase was attributed to an increase in
production from 1.3 million ounces of silver equivalent (not including
pre-commercial production) in 2010 to 1.8 million ounces of silver
equivalent in the first quarter of 2011, combined with an increase in
average realized silver sales prices from $16.73 in the first quarter of
2010 to $32.60 in the first quarter of 2011.
-- Earned cash flows from operations of $34.4 million ($0.34 per share) (a
non-IFRS measure) for the first quarter of 2011 compared to $6.3 million
($0.07 per share) for the first quarter of 2010, an increase of 407%.
-- The Company generated net earnings of $23.9 million for the first
quarter of 2011 compared to net earnings of $0.4 million in the first
quarter of 2010 and net earnings of $13.7 million in the fourth quarter
of 2010.
-- The Company generated basic earnings per common share ('EPS') after
current income tax provision (a non-IFRS measure) of $0.29 for the first
quarter of 2011. EPS for the first quarter of 2011 after current and
deferred income taxes was $0.24, compared to EPS of $0.00 for the first
quarter of 2010 and $0.15 for the fourth quarter of 2010.
-- Increased production from 1,619,403 silver equivalent ounces in the
first quarter of 2010 to 1,825,366 silver equivalent ounces in 2011, an
increase of 13%. Production was comparable with the fourth quarter of
2010 with a 1% increase in silver production but a slight decrease of
production of equivalents from lead and gold. The Company continues to
produce 97% of its production as pure silver, making First Majestic the
purest silver producing mining company in the world.
-- Total Cash Costs per ounce (a non-IFRS measure) increased by 6% from
$7.78 in the fourth quarter of 2010 to $8.26 in the first quarter of
2011, due to increased costs of energy, reagents, labour and a 3%
appreciation of the Mexican Peso relative to the US dollar.
-- Cash and cash equivalents increased to $85.6 million compared to $41.2
million as at December 31, 2010 and improved working capital to $84.9
million from $46.1 million as at December 31, 2010. The current cash
balance as at May 13, 2011 was approximately $97.1 million, giving the
Company a very solid financial base to work from to continue to expand
the La Parrilla operation and to build out the new Del Toro operation;
both currently under construction.
IN SUMMARY
First Majestic has experienced a new record for quarterly earnings for the first quarter of 2011 due to a 30% increase in average realized silver prices over the prior quarter and a 95% increase from the same quarter of 2010.Silver production in the first quarter remained steady at the same levels as the fourth quarter of 2010, which is up 25% over the first quarter of 2010.
'In this past quarter, the Company benefited from the strong surge in silver prices while maintainingits production levels comparable to the previous quarter,even with two major construction projects underway. The expansion of the La Parrilla operation is proceeding well and on track while land clearing and mine development at Del Toro is advancing nicely. We are continuing to focus on our capital projects to expand production in the second half of 2011 and to plan for further growth into 2012 and beyond. Weakness in the US dollar is translating into a higher Mexican Peso and thus a higher US denominated cash costs. As well, some core inflation in the prices of materials and energy used in the processing of silver is occurring. The production outlook remains unchanged as does the cash cost outlook, but we will revisit our cost estimates after the second quarter to determine if our cash cost outlook can remain constant for 2011. We are attempting to counter cost increases with an aggressive growth strategy to yield higher throughputs and economies of scale, as we continue to focus on building our production levels in the short and long term,' commented Keith Neumeyer, President and CEO of First Majestic.
First Majestic is a producing silver company focused on silver production in Mexico and is aggressively pursuing its business plan of becoming a senior silver producer through the development of its existing mineral property assets and the pursuit through acquisition of additional mineral assets which contribute to the Company achieving its aggressive corporate growth objectives.
FIRST MAJESTIC SILVER CORP.
Keith Neumeyer, President & CEO
SPECIAL NOTE REGARDING FORWARD-LOOKING INFORMATION
This news release includes certain 'Forward-Looking Statements' within the meaning of the United States Private Securities Litigation Reform Act of 1995 and applicable Canadian securities laws. When used in this news release, the words 'anticipate', 'believe', 'estimate', 'expect', 'target', 'plan', 'forecast', 'may', 'schedule' and similar words or expressions, identify forward-looking statements or information. These forward-looking statements or information relate to, among other things: the price of silver and other metals; the accuracy of mineral reserve and resource estimates and estimates of future production and costs of production at our properties; estimated production rates for silver and other payable metals produced by us, the estimated cost of development of our development projects; the effects of laws, regulations and government policies on our operations, including, without limitation, the laws in Mexico which currently have significant restrictions related to mining; obtaining or maintaining necessary permits, licences and approvals from government authorities; and continued access to necessary infrastructure, including, without limitation, access to power, land, water and roads to carry on activities as planned.
These statements reflect the Company's current views with respect to future events and are necessarily based upon a number of assumptions and estimates that, while considered reasonable by the Company, are inherently subject to significant business, economic, competitive, political and social uncertainties and contingencies. Many factors, both known and unknown, could cause actual results, performance or achievements to be materially different from the results, performance or achievements that are or may be expressed or implied by such forward-looking statements or information and the Company has made assumptions and estimates based on or related to many of these factors. Such factors include, without limitation: fluctuations in the spot and forward price of silver, gold, base metals or certain other commodities (such as natural gas, fuel oil and electricity); fluctuations in the currency markets (such as the Canadian dollar and Mexican peso versus the U.S. dollar); changes in national and local government, legislation, taxation, controls, regulations and political or economic developments in Canada, Mexico; operating or technical difficulties in connection with mining or development activities; risks and hazards associated with the business of mineral exploration, development and mining (including environmental hazards, industrial accidents, unusual or unexpected formations, pressures, cave-ins and flooding); risks relating to the credit worthiness or financial condition of suppliers, refiners and other parties with whom the Company does business; inability to obtain adequate insurance to cover risks and hazards; and the presence of laws and regulations that may impose restrictions on mining, including those currently enacted in Mexico; employee relations; relationships with and claims by local communities and indigenous populations; availability and increasing costs associated with mining inputs and labour; the speculative nature of mineral exploration and development, including the risks of obtaining necessary licenses, permits and approvals from government authorities; diminishing quantities or grades of mineral reserves as properties are mined; the Company's title to properties; and the factors identified under the caption 'Risk Factors' in the Company's Annual Information Form, under the caption 'Risks Relating to First Majestic's Business'.
Investors are cautioned against attributing undue certainty to forward-looking statements or information. Although the Company has attempted to identify important factors that could cause actual results to differ materially, there may be other factors that cause results not to be anticipated, estimated or intended. The Company does not intend, and does not assume any obligation, to update these forward-looking statements or information to reflect changes in assumptions or changes in circumstances or any other events affecting such statements or information, other than as required by applicable law.
Contacts:
First Majestic Silver Corp.
Keith Neumeyer
President & CEO
Toll Free: 1.866.529.2807 or (604) 688-3033
(604) 639-8873 (FAX)
info@firstmajestic.com
www.firstmajestic.com