First Majestic Announces Financial Results for Q4 and Year End 2012
VANCOUVER, BRITISH COLUMBIA -- (Marketwire) -- 02/26/13 -- FIRST MAJESTIC SILVER CORP. (TSX: FR)(NYSE: AG)(FRANKFURT: FMV) (the "Company" or "First Majestic") is pleased to announce the audited consolidated financial results for the Company's fourth quarter and year ending December 31, 2012. 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, on SEDAR at www.sedar.com and EDGAR at www.sec.gov.
2012 HIGHLIGHTS
-- Cash Flow of $1.35 per share (non-GAAP)
-- Adjusted Earnings per Share (non-GAAP) of $0.26 for the fourth quarter
and $1.05 for the full year
-- Basic Earnings per Share amounted to $0.80 for the full year
-- Total Cash Cost of $9.08 per ounce for the year
-- Revenues after smelting and refining amounted to $247.2 million for 2012
-- Mine Operating Earnings for the year of $142.0 million
-- Net Earnings After Taxes amounted to $88.9 million for the year
-- Silver only production increased to 8.26 million ounces compared to 7.22
million ounces in 2011 or 9.11 equivalent ounces for 2012 compared to
7.56 equivalent ounces for 2011
-- With 91% of revenues resulting from the sale of pure silver in 2012,
First Majestic remains one of the purest silver producers in the world
-- 2013 guidance ranging from 12.3 to 13.0 million ounces of silver
equivalent production or 11.1 to 11.7 million ounces of pure silver
-- The current cash balance for the Company was approximately $103.2
million in cash and cash equivalents in treasury. The Orko break-fee of
$11.6 million was received on February 20, 2013.
2012 ANNUAL AND FOURTH QUARTER HIGHLIGHTS
Fourth Fourth
Quarter Quarter Annual Annual
2012 2011 Change 2012 2011 Change
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Operating
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Silver
Equivalent
Ounces
Produced 2,562,926 2,101,528 22% 9,110,452 7,562,494 20%
Silver Ounces
Produced
(excluding
equivalent
ounces from
by-products) 2,311,146 1,957,657 18% 8,260,434 7,216,109 14%
Payable Silver
Ounces
Produced(1) 2,209,144 1,926,055 15% 7,990,492 7,094,359 13%
Total Cash
Costs per
Ounce(2) $9.26 $8.01 16% $9.08 $8.24 10%
Total
Production
Cost per
Tonne(2) $28.24 $27.48 3% $28.62 $28.50 0%
Average
Realized
Silver Price
Per Ounce
($/eq.
oz.)(2) $32.42 $31.70 2% $31.10 $35.38 -12%
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Financial
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Revenues ($
millions) $71.0 $60.8 17% $247.2 $245.5 1%
Mine Operating
Earnings ($
millions) $39.5 $38.4 3% $142.0 $163.3 -13%
Net Earnings
($ millions) $22.4 $21.3 5% $88.9 $103.6 -14%
Operating Cash
Flows Before
Movements in
Working
Capital and
Income Taxes
($ millions) $43.2 $36.9 17% $146.8 $160.2 -8%
Cash and Cash
Equivalents
($ millions) $111.6 $91.2 22% $111.6 $91.2 22%
Working
Capital ($
millions) $115.7 $109.7 5% $115.7 $109.7 5%
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Shareholders
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Earnings Per
Share ("EPS")
- Basic $0.19 $0.20 -5% $0.80 $1.00 -20%
Cash Flow Per
Share(2) $0.37 $0.35 6% $1.35 $1.56 -14%
Weighted
Average
Shares
Outstanding
for the
Periods 116,442,639 105,203,712 11% 110,775,284 103,276,935 7%
(1) Payable Silver Ounces Produced is equivalent to Silver Ounces Produced
less metal deductions from smelters and refineries.
(2) The Company reports non-GAAP measures which include Total Cash Costs per
Ounce, Total Production Cost per Tonne, Average Realized Silver Price per
Ounce 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.
-- Generated Revenues of $247.2 million for 2012, an increase of 1%
compared to $245.5 million for 2011. Smelting and refining charges
increased by $10.1M compared in 2012 related to increased concentrate
output from the new La Guitarra Silver Mine and the expanded La Parrilla
flotation circuit. Total revenues in 2012 arising from the sale of
silver amounted to 91% of total revenues maintaining First Majestic as
the purest silver producer in the world.
-- Generated Revenues of $71.0 million for the fourth quarter of 2012
compared to $60.8 million for the fourth quarter of 2011, an increase of
$10.2 million or 17%.
-- Mine Operating Earnings decreased by $21.3 million or 13% to $142.0
million for 2012, compared to $163.3 million for the same period in the
prior year. The decrease was primarily attributed to a 12% decline in
average realized silver price per ounce during the year. In addition,
depletion, depreciation and amortization expense increased by $10.0
million compared to 2011 due to a 25% increase in tonnage milled and
additional depreciation and amortization from the La Parrilla plant
expansion and the addition of the La Guitarra mine.
-- Operating Cash Flows generated before movements in Working Capital and
Income Taxes of $146.8 million or $1.35 per share (a non-GAAP measure)
for 2012 compared to $160.2 million or $1.56 per share for 2011. The
decrease in cash flow is consistent with decrease in mine operating
earnings, which were affected by a decline in silver prices compared to
2011.
-- The Company generated Net Earnings after taxes of $88.9 million for 2012
compared to $103.6 million for 2011.
-- Net Earnings after taxes was $22.4 million for the fourth quarter of
2012 compared to $21.3 million for the fourth quarter of 2011, an
increase of $1.1 million or 5%.
-- The Company generated Basic Earnings Per Share ("EPS") of $0.80 for
2012. Adjusted EPS (a non-GAAP measure) normalized for non-cash or non-
recurring items was $1.05 for the year.
-- Basic Earnings per Share for the fourth quarter of 2012 was $0.19,
compared to $0.20 for the fourth quarter of 2011, the slight decrease
was primarily due to an 11% increase in weighted average shares
outstanding during the period. Adjusted EPS (a non-GAAP measure) after
normalizing for non-cash or non-recurring items was $0.26.
-- Total Cash Costs per Ounce of silver (a non-GAAP measure) for 2012
increased to $9.08 per ounce of silver, compared to $8.24 per ounce of
silver for 2011, an increase of 10% primarily attributed to increase in
concentrate production from the new La Guitarra mine and expansion of
the La Parrilla flotation circuit, which have higher smelting and
refining charges.
-- Total Cash Costs per Ounce of silver (a non-GAAP measure) for the fourth
quarter of 2012 increased to $9.26 per ounce of silver, compared to
$8.01 per ounce of silver for the fourth quarter of 2011, an increase of
16%. The increase is primarily due to higher cost of consumables
including cyanide, energy and petroleum products. Cyanide and diesel
costs increased 17% and 9% quarter over quarter.
-- During the year, Cash and cash equivalents increased by $20.4 million to
$111.6 million and improved working capital by $6.0 million to $115.7
million as of December 31, 2012.
2013 PRODUCTION OUTLOOK
Production in 2013 is expected to increase from 2012 levels with the following upcoming developments:
-- At Del Toro, production from the 1,000 tpd flotation circuit commenced
in January 2013 and construction of the 1,000 tpd cyanidation circuit
expected to commence production in the third quarter of 2013.
-- At La Guitarra, a new ball mill and flotation cells will increase
capacity from 350 tpd to 500 tpd during March 2013.
-- At San Martin, the cyanidation plant is being expanded which will
increase capacity from 950 tpd to 1,300 tpd in the second quarter of
2013.
Estimated production range on a mine-by-mine basis for 2013, associated expected operating costs and price assumptions are included in the following table. These figures are based on existing installed capacity at the Company's five operating mines along with the planned expansions: the addition of the 1,000 tpd cyanidation circuit at the Del Toro mine for the second half of 2013 and the expansion of La Guitarra from 350 tpd to 500 tpd by March 2013. Actual results may vary based on production throughputs, grades, recoveries, changes in economic conditions and operating circumstances.
Anticipated Operating
Parameters La Encantada La Parrilla San Martin
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Total tonnes processed
('000s) 1,366 - 1,442 624 - 658 361 - 381
Operating days 330 330 330
Silver ounces from
production ('000s) 4,084 - 4,311 2,735 - 2,887 1,375 - 1,451
Gold ounces from production - 126 - 133 1,479 - 1,562
Pounds of lead from
production ('000s) - 12,136 - 12,810 -
Pounds of zinc from
production ('000s) - 9,307 - 9,825 -
Silver equivalent ounces
from production ('000s) 4,084 - 4,311 3,267 - 3,452 1,453 - 1,534
Average silver grade (g/t) 177 174 148
Average recoveries (%) 53% 78% 80%
Cash cost per ounce $8.94 - $9.41 $8.06 - $8.68 $9.17 - $9.63
Production cost per ounce $8.28 - $8.73 $10.08 - $10.64 $12.08 - $12.63
Production cost per tonne $24.62 - $25.98 $42.79 - $45.16 $45.87 - $48.42
Anticipated Operating
Parameters La Guitarra Del Toro Total
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Total tonnes processed
('000s) 142 - 150 447 - 472 2,941 - 3,104
Operating days 330 330
Silver ounces from
production ('000s) 857 - 904 2,052 - 2,166 11,102 - 11,719
Gold ounces from production 4,672 - 4,932 580 - 612 6,857, - 7,239
Pounds of lead from
production ('000s) - 5,630 - 5,942 17,766 - 18,752
Pounds of zinc from
production ('000s) - 9,280 - 9,795 18,587 - 19,620
Silver equivalent ounces
from production ('000s) 1,053 - 1,111 2,443 - 2,578 12,300 - 12,986
Average silver grade (g/t) 220 177 175
Average recoveries (%) 85% 81% 67%
Cash cost per ounce $9.87 - $11.35 $7.02 - $7.52 $8.56 - $9.15
Production cost per ounce $13.09 - $14.58 $8.91 - $9.40 $9.47 - $10.04
Production cost per tonne $59.02 - $65.76 $39.40 - $41.59 $34.99 - $37.11
Anticipated cash flow from operations, before changes in
working capital, finance costs and income taxes: ($
millions) $214.9 - $233.9
Metal average price assumptions for calculating equivalents:
Silver $32.00/oz, Gold $1,700/oz, Lead $0.90/lb, Zinc $0.85/lb
IN SUMMARY
First Majestic has experienced another year of strong growth resulting in a 20% increase in total silver equivalent ounces produced. During 2012, the Company continued to pursue an aggressive growth plan by re-investing $175.1 million in the development and exploration of its mineral properties, construction of new processing plants, and acquisitions of new mining equipment. During 2012, a total of $60.4 million was spent for Del Toro's Phase 1 construction and an additional $11.2 million was advanced towards Phase 2 and 3 of the Del Toro expansion plans.
Capital growth requirements budgeted for 2013 total $192.2 million which includes $56.1 million earmarked for Phase 2 and 3 of the Del Toro capital project including development costs, $3.8 million for the expansion of La Guitarra to 500 tpd, $14.0 million for the expansion of San Martin to 1,300 tpd, $7.6 million to continue the construction of La Parrilla's underground haulage system and shaft, $86.2 million in global development and $24.5 million in global exploration. A large portion of these budgeted capital costs are discretionary and can be adjusted should the price of silver remain at low levels.
At Del Toro, the 1,000 tpd flotation circuit has been operating since January of 2013 with some days reaching as high as 70% of capacity. It is expected that 1,000 tpd will be achieved in early March and commercial production by April 1, 2013. The second phase of construction consisting of the cyanidation circuit is in process. The leaching tanks are 50% complete, the 12 x 14 ball mill is expected to arrive on site shortly, and the counter current washing tanks are 75% completed. In addition, one of the four large tailings filter systems to recirculate water back through the process is on-site and is currently being assembled.
Keith Neumeyer, President & CEO, stated, "2012 was another ambitious year for First Majestic, as we continued to invest in our infrastructure to prepare for another growth spurt in the next two years. The construction of Phase 1 of the Del Toro plant began in April 2011 and was virtually complete by the end of 2012. La Parrilla's processing plant was doubled in capacity to 2,000 tpd by March of 2012, and we achieved the acquisition and integration of La Guitarra mine in the second half of the year. We are now excited to see a further 40 percent increase in our production growth to approximately 13 million silver equivalent ounces in 2013. Recognition is due to our dedicated management team and staff who continue to do an outstanding job and should be congratulated for their outstanding efforts in 2012. The year marked the ninth consecutive year that First Majestic has achieved record production of silver and management is looking forward to its 10th year of growth in 2013."
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
(604) 688-3033 or Toll Free: 1-866-529-2807
(604) 639-8873 (FAX)
info@firstmajestic.com
www.firstmajestic.com