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NEWS: First Majestic Announces Friendly Acquisition Of Silvercrest Mines‏

Jul 27, 2015

First Majestic Silver Corp. (“First Majestic”) and SilverCrest Mines Inc. (“SilverCrest”) are pleased to announce that the companies have entered into a definitive agreement (the “Arrangement Agreement”) pursuant to which First Majestic has agreed to acquire all of the issued and outstanding common shares of SilverCrest for consideration of 0.2769 of a common share of First Majestic (the “Exchange Ratio”) plus C$0.0001 in cash per SilverCrest common share. The offer implies a value of C$1.30 per SilverCrest share based on the closing price of First Majestic’s common shares on the Toronto Stock Exchange (“TSX”) on July 24, 2015. The offer represents a premium of approximately 37% to SilverCrest’s 30-day volume-weighted average price (“VWAP”) on the TSX for the period ending July 24, 2015 and a 35% premium to SilverCrest’s previous closing price. The transaction will be implemented by way of a plan of arrangement (the “Arrangement”) under the Business Corporations Act (British Columbia). In addition, shareholders of SilverCrest will receive shares in a newly formed company (“New SilverCrest”) which will hold certain exploration assets currently held by SilverCrest and First Majestic.

BENEFITS TO FIRST MAJESTIC SHAREHOLDERS

  • Enhances First Majestic’s leading position in Mexico, one of the world’s most prolific silver and gold regions
  • Accretive to First Majestic’s net asset value per share, reserves and total resources per share and production per share
  • SilverCrest’s Santa Elena Mine will be First Majestic’s sixth producing silver mine adding further growth potential to First Majestic’s portfolio of Mexican projects
  • Strengthens First Majestic’s balance sheet by adding approximately C$30 million in cash and further enhances the working capital position
  • Provides operational and production synergies with the potential for additional cost cutting
  • Further diversifies production and cash flow across a robust portfolio of producing mines

BENEFITS TO SILVERCREST SHAREHOLDERS

  • Provides SilverCrest shareholders with a highly attractive premium to current market price
  • Opportunity to participate in a leading silver producer through an all-share transaction
  • Gain access to First Majestic’s operational and underground mining expertise
  • Diversifies SilverCrest’s single asset risk profile and provides exposure to First Majestic’s broad portfolio of Mexican assets
  • Increased leverage to silver with First Majestic’s primarily silver resource base
  • Enhances capital markets presence with a pro forma market capitalization in excess of C$700 million based on current share prices including increased analyst coverage, trading liquidity and a broader institutional investor base
  • Provides SilverCrest shareholders with ownership in New SilverCrest, a well-capitalized exploration company created to leverage SilverCrest management’s exploration expertise

Keith Neumeyer, President & CEO of First Majestic, stated: “We believe this transaction provides an excellent opportunity for the shareholders of both First Majestic and SilverCrest. Shareholders stand to gain significant upside in the combined company with production of well over 20 million silver equivalent ounces per year while maintaining one of the lowest production costs and highest purity to silver in the industry.”

J. Scott Drever, CEO of SilverCrest, stated: “We believe the inclusion of SilverCrest’s Santa Elena mine into First Majestic’s portfolio of operating mines provides the combined company greater flexibility in the current difficult metals market and creates a strong platform from which First Majestic can continue its corporate growth to the benefit of both sets of shareholders. SilverCrest shareholders will benefit from First Majestic’s liquidity in the market place, the diversity provided by six mines and Management’s long history of successful operations in Mexico. First Majestic shareholders will benefit from SilverCrest’s strong balance sheet, free cash flow and low cost silver production. ”

TRANSACTION SUMMARY

Under the terms of the Arrangement Agreement, on closing, each SilverCrest shareholder will receive 0.2769 common shares of First Majestic plus C$0.0001 in cash for each SilverCrest common share held. Pursuant to the transaction, First Majestic will issue approximately 32.8 million common shares (assuming no exercise of existing SilverCrest options), valuing SilverCrest’s equity at approximately C$154 million, based on current closing prices. Following the completion of the transaction, the current shareholders of SilverCrest will hold approximately 21% of the issued and outstanding shares of First Majestic. The transaction will be carried out by way of a court-approved plan of arrangement and will require the approval of at least 66 2/3% of the votes cast by the shareholders of SilverCrest, and approval by the “majority of the minority”, being a majority of the votes cast by SilverCrest shareholders other than J. Scott Drever, N. Eric Fier and Barney Magnusson, whose votes will not be included in determining minority approval pursuant to Multilateral Instrument 61-101 – Protection of Minority Security Holders in Special Transactions. The transaction will also require the approval of a simple majority of the shareholders of First Majestic in accordance with the rules of the TSX and the NYSE. The special meetings of shareholders of SilverCrest and First Majestic are expected to take place in late September 2015.

The Arrangement will also provide for the issuance by First Majestic of an aggregate of approximately 2.9 million replacement stock options (the “Replacement Options”) (assuming no exercise of existing SilverCrest options) to SilverCrest option holders who do not exercise such options prior to the effective time of the Arrangement, at exercise prices adjusted by the Exchange Ratio. All other terms and conditions of the Replacement Options will be the same as the SilverCrest option for which they were exchanged, except that the terms and conditions of the First Majestic stock option plan relating to accelerated expiry of First Majestic options on account of early termination after ceasing to hold office or ceasing to be an employee or consultant will not apply to the Replacement Options.

In connection with the Arrangement, each SilverCrest shareholder will also receive 0.1667 common shares of New SilverCrest for each SilverCrest common share held. As part of the Arrangement, SilverCrest will transfer the Las Chispas, Cruz de Mayo, Angel de Plata, Huasabas and Estacion Llano exploration properties located in northern Mexico, as well as C$5.25 million in cash and certain other assets currently owned by SilverCrest to New SilverCrest. First Majestic will also transfer its Guadalupe exploration property located in Durango, Mexico to New SilverCrest, and First Majestic will own approximately 9.9% of the shares of New SilverCrest following completion of the transaction. SilverCrest’s La Joya project will be retained by First Majestic following closing of the transaction, however First Majestic does not have any immediate plans to advance the La Joya project. N. Eric Fier, SilverCrest’s Chief Operating Officer, will be the CEO and President of New SilverCrest along with other members of SilverCrest’s current board and management team. New SilverCrest intends to make application to list its shares on the TSX Venture Exchange.

In addition to shareholder, court and creditor approvals, the transaction is subject to applicable regulatory approvals and the satisfaction of certain other closing conditions customary in transactions of this nature.

The Arrangement Agreement includes customary provisions, including non-solicitation of alternative transactions, right to match superior proposals and fiduciary-out provisions. In addition, SilverCrest has agreed to pay a termination fee to First Majestic of C$8 million upon the occurrence of certain events.  First Majestic and SilverCrest have each agreed to pay a C$1 million expense reimbursement fee to the other party upon termination of the Arrangement Agreement due to the occurrence of certain other events.

The Board of Directors of SilverCrest has unanimously approved the transaction and will provide a written recommendation that SilverCrest shareholders vote in favour of the transaction which will be included in the Information Circular to be mailed to shareholders in connection with the Arrangement. Each of the directors and senior officers of SilverCrest, who hold in the aggregate approximately 3.9% of the issued and outstanding SilverCrest shares (assuming no exercise of existing SilverCrest stock options) have entered into a voting agreement with First Majestic and have agreed to vote in favour of the transaction at the special meeting of SilverCrest shareholders to be held to consider the Arrangement.

Full details of the Arrangement will be included in a joint Management Information Circular to be filed with the regulatory authorities and mailed to SilverCrest and First Majestic shareholders in accordance with applicable securities laws. SilverCrest and First Majestic expect to mail the joint Management Information Circular in early September 2015.

ADVISORS AND COUNSEL

Cormark Securities Inc. (“Cormark”) acted as exclusive financial advisor and McCullough O’Connor Irwin LLP acted as legal counsel to First Majestic. Cormark has provided an opinion to the First Majestic Board of Directors that, based upon and subject to the assumptions, limitations and qualifications in the opinion, the consideration being offered by First Majestic to SilverCrest pursuant to the transaction is fair, from a financial point of view, to First Majestic.

National Bank Financial Inc. (“National Bank”) acted as exclusive financial advisor and Koffman Kalef LLP acted as legal advisor to SilverCrest. National Bank has provided an opinion to the Board of Directors of SilverCrest that, based upon and subject to the assumptions, limitations, and qualifications in the opinions, the consideration to be received is fair, from a financial point of view, to the shareholders of SilverCrest.

CONFERENCE CALL

First Majestic and SilverCrest will host a joint conference call and webcast on July 27, 2015 at 2:00 pm Eastern time / 11:00 am Pacific time for members of the investment community to discuss the proposed transaction. The call‐in details are as follows:

Toll Free Canada & USA: 1-800-319-4610 FREE
Outside of Canada & USA: 1-604-638-5340
Toll Free Germany: 0800 180 1954
Toll Free UK: 0808 101 2791

 

Click on WEBCAST on the First Majestic homepage as a simultaneous audio webcast of the conference call at www.firstmajestic.com.

The Conference call will be recorded and you can listen to an archive of the conference by calling:

Toll Free Canada & USA: 1-800-319-64131-800-319-6413 FREE
Outside of Canada & USA: 1-604-638-90101-604-638-9010
Pin Code: 3928

An archived webcast of the conference call will also be available at www.firstmajestic.com.

ABOUT FIRST MAJESTIC

First Majestic is a mining company focused on silver production in Mexico and is aggressively pursuing the development of its existing mineral property assets and the pursuit through acquisition of additional mineral assets which contribute to the Company achieving its corporate growth objectives.

For further information, contact info@firstmajestic.com, visit our website at www.firstmajestic.com or contact Todd Anthony, Investor Relations at 1.866.529.2807 FREE.

ABOUT SILVERCREST

SilverCrest is a Canadian precious metals producer headquartered in Vancouver, BC. SilverCrest’s flagship property is the 100%‐owned Santa Elena Mine, located in the State of Sonora, Mexico. The operation comprises a high‐grade, epithermal silver and gold deposit, along with a 3,000 tpd conventional milling facility. Santa Elena is projected to produce in a range of 4.7 to 5.1 million silver equivalent ounces in 2015.

For further information, contact SilverCrest at 1.866.691.1730 FREE or via our website online at www.silvercrestmines.com.

Full release

NEWS: First Majestic Produces 3.9 Million Silver Eqv. Ounces in Q1’15

Apr 13, 2015

First Majestic Silver Corp. (“First Majestic” or the “Company”) is pleased to announce that total production at its five operating silver mines in Mexico for the first quarter ending March 31, 2015 reached 3,905,270 equivalent ounces of silver, representing an 8% increase compared to the same quarter in 2014.

Total silver production for the quarter consisted of 2,776,855 ounces of silver, representing a 4% decrease compared to the same quarter in 2014. In addition, 11,286,880 pounds of lead and 6,349,692 pounds of zinc were produced, representing an increase of 31% and 136%, respectively, compared to the same quarter of the previous year. Also, 2,970 ounces of gold were produced, representing a 12% decrease compared to the first quarter of 2014.

Keith Neumeyer, President & CEO of First Majestic, states, “First quarter production of 3.9 million silver equivalent ounces was in-line with our annual guidance projections even though production was slightly behind our record fourth quarter numbers. Unusually high mill maintenance was required at three of our operations which negatively impacted the quarter. In addition, reduced underground development has restricted the operations. With the irregular maintenance now behind us, we are expecting to see an improvement in production in the second quarter. Also, with the recently announced $30 million financing, we will be increasing development at both the La Encantada and La Guitarra mines in order to improve those operations in time for the second half of the year. We also witnessed the best metallurgical recoveries during the quarter of 74% representing the highest consolidated recovery rate over the past 24 quarters – a testament to our teams focus in this area”.

Consolidated Production Results:

Quarterly Operational Review:

The total ore processed during the quarter at the Company’s five operating silver mines: La Encantada, La Parrilla, Del Toro, San Martin and La Guitarra, amounted to 631,609 tonnes, relatively unchanged compared to the first quarter of the prior year and an 8% decrease from the previous quarter. The decrease in tonnes compared to the prior quarter was primarily due to lower throughput rates at La Encantada, Del Toro and San Martin. Higher than usual mill maintenance was required at each of these mines in the quarter. In addition, due to the persistently low metal prices, management decided to curtail certain underground development projects which impacted throughput levels.

Average silver grades in the quarter for the five mines decreased by 13% to 186 g/t compared to 214 g/t in the first quarter of 2014 and decreased 8% compared with the previous quarter. Combined silver recoveries averaged 74% during the quarter, up from 66% in the same quarter of the prior year and higher than the fourth quarter average of 70%.

The Company’s underground development in the first quarter consisted of 9,828 metres, a 17% decrease compared to 11,772 metres completed in the previous quarter.

During the quarter, 13 diamond drill rigs were operating at the Company’s five operations. The Company completed 5,425 metres of diamond drilling in the quarter compared to 5,990 metres in the prior quarter, representing a 9% increase.

On March 31, 2015, the Company released a new NI 43-101 Technical Report on the La Guitarra Silver Mine following an aggressive two-year exploration program which included an extensive 35,575 metres of diamond drilling over 262 holes along with the examination of over 900 historical drill holes. The Company is now working towards updating the NI 43-101 Technical Report on the La Encantada Silver Mine which it expects to be released in the second half of 2015.

The table below represents the operating parameters at each of the Company’s five producing silver mines.

Mine by Mine Quarterly Production Table:


The following prices were used in the calculation of silver equivalent ounces: Silver: $16.72 per ounce; Gold: $1,219 per ounce; Lead: $0.82 per pound; Zinc $0.94 per pound.

At the Del Toro Silver Mine:

  • For the quarter, Del Toro achieved a new quarterly record production of 1,327,628 silver equivalent ounces representing an increase of 5% compared to the previous quarter. The plant processed 157,934 tonnes of ore through flotation with an average silver grade of 212 g/t. The increase in total production was primarily due to a 22% increase in lead production and a 4% improvement in silver recoveries, however, offset by a 10% decrease in throughput compared to the fourth quarter of 2014.
  • Lead production reached a new quarterly record of 9,657,640 pounds. Lead grades and recoveries averaged 4.2% and 66%, respectively, in the first quarter, an increase of 25% and 9% compared to the previous quarter due to higher quality sulphide ore production from the Perseverancia mine.
  • Underground development completed in the quarter totaled 1,686 metres compared with 2,095 metres developed in the previous quarter.
  • Four drill rigs consisting of three underground and one on surface were active in the first quarter at Del Toro. Total exploration metres drilled in the first quarter amounted to 2,285 metres compared to 559 metres drilled in the previous quarter.

At the La Encantada Silver Mine:

  • For the quarter, total silver production was 544,735 silver ounces representing a 31% decrease over the previous quarter primarily due to a 29% decrease in the silver grade, a 10% decrease in processed ore, offset by a 9% increase in recoveries. The reduction in grade was a result of mining lower grade stopes due to the decrease in the underground development that occurred during the quarter. The Company is planning on accelerating the underground development into the recently discovered Ojuelas ore body and is advancing the block caving system in order to have additional production areas ready for the ramp up to 3,000 tpd in July.
  • The foundations for the new 12′ x 24′ ball mill and fine ore bin were completed early in the quarter. In addition, the installation and integration of the new tertiary crusher area began in January. The total plant expansion to 3,000 tpd is now 60% complete and the expected ramp up to 3,000 tpd remains on track for July.
  • A total of 2,989 metres of underground development were completed in the first quarter compared to 4,344 metres of development in the previous quarter.
  • Three drill rigs were active underground at La Encantada during the quarter. A total of 828 metres of exploration drilling was completed in the first quarter compared to 3,367 metres of drilling in the previous quarter.

At the La Parrilla Silver Mine:

  • During the quarter, the flotation circuit processed 86,965 tonnes with an average silver grade of 165 g/t and an 88% recovery while the cyanidation circuit processed 85,682 tonnes with an average silver grade of 118 g/t and a 66% recovery.
  • Zinc production increased 39% compared to the previous quarter to 6,349,692 pounds due to higher grade production stopes within the Vacas mine.
  • During the quarter, an additional 235 metres were completed at the underground ore haulage level 11. To date, a total of 2.3 kilometres have been completed on the 5.0 kilometre electrical rail system project.
  • Underground development completed in the quarter totaled 2,077 metres compared with 2,378 metres developed in the previous quarter.
  • Three underground drill rigs were active within the La Parrilla property during the quarter. A total of 1,437 metres were drilled in the first quarter compared to 685 metres in the previous quarter.

At the San Martin Silver Mine:

  • During the quarter, San Martin produced a total of 571,937 silver ounces and 1,511 ounces of gold for a total quarterly production of 682,071 silver equivalent ounces. The slight decrease in production compared to the previous quarter was primarily due to a 9% decrease in throughput due to numerous shut downs caused by unseasonal heavy rains in the month of March and the repair of the transmission system of the 9′ X 9′ ball mill.
  • Underground development completed in the first quarter totaled 2,010 metres compared with 1,414 metres of development in the previous quarter.
  • One underground drill rig was active within the San Martin property during the quarter. Total metres drilled in the first quarter amounted to 266 metres compared to 943 metres of drilling in the previous quarter.

At the La Guitarra Silver Mine:

  • During the quarter, total production consisted of 196,920 silver ounces and 961 gold ounces. This represents a 14% decrease in silver production and a 32% decrease in gold production compared to the previous quarter. The decrease in total production was primarily due to an 8% decrease in throughput and a 22% decrease in gold grades.
  • Mine production within the El Coloso area delivered 27,700 tonnes (308 tpd) of ore during the quarter or approximately 60% of total throughput. The Company is working towards achieving 100% of production from the El Coloso area which will include the Nazareno area once an 800 metre drift can be constructed. Construction of this drift is planned to begin in May with completion in approximately six months.
  • A total of 1,066 metres of development were completed in the first quarter compared to 1,541 metres of development in the previous quarter.
  • Two underground drill rigs were active in the first quarter within the La Guitarra property. Total metres drilled in the quarter amounted to 609 metres compared to 436 metres drilled in the previous quarter.

Full release

NEWS: First Majestic Announces New La Guitarra NI 43-101 Technical Report

Mar 31, 2015

FIRST MAJESTIC SILVER CORP. (the “Company” or “First Majestic”) is pleased to provide a new NI 43-101 Technical Report and the initial Mineral Reserve and Resource estimate for the La Guitarra Silver Mine located in the State of Mexico. All amounts are in U.S. dollars unless stated otherwise.

REPORTED HIGHLIGHTS

  • Proven and Probable Reserves totalling 11.8 million ounces of silver equivalent ounces, including 9.4 million ounces of pure silver
  • Measured and Indicated Resources of 15.2 million ounces of silver equivalent ounces, including 11.7 million ounces of pure silver
  • Inferred Resources totalling 6.3 million silver equivalent ounces, including 4.7 million ounces of pure silver
  • Average Reserve silver grade of 223 g/t; and an average gold grade of 1.06 g/t
  • Life of Mine (LOM) of 7.0 years producing an estimated total of 9.3 million ounce of silver and 45 thousand ounces of gold
  • LOM operating cost per tonne estimated at $48.31 per tonne, excluding G&A, sustaining costs and exploration

Keith Neumeyer, CEO and President, states: “since purchasing the La Guitarra mine over two years ago, our geological and technical teams have been working diligently examining over 900 historical drill holes and drilling several additional holes in order to create what is now our new base line Reserve and Resource estimate which now gives us a very good starting point to build on in the coming years. This large property has extremely exciting geological potential and this first Technical Report prepared by our team points to the reason why we first decided to buy this mine in 2012.”

The La Guitarra Silver Mine, located in historical Temascaltepec mining district in the State of Mexico, consisting of 43 mining concessions covering 39,714 hectares (98,135 acres). La Guitarra is comprised of two operating mines, La Guitarra and Coloso, and three past producing areas, the Nazareno, Mina de Agua and El Rincón, which are now considered as exploration areas.

The new Mineral Resource and Mineral Reserve estimates for La Guitarra are shown below and are classified in accordance with the CIM Definition Standards for Mineral Resources and Mineral Reserves (May 10, 2014). Please note, First Majestic is reporting Mineral Resources inclusive of Mineral Reserves.

(1) Mineral Reserves have been classified in accordance with the CIM Definition Standards on Mineral Resources and Mineral Reserves, whose definitions are incorporated by reference into NI 43-101.
(2) Cut-off grade considered for sulphides was 200 g/t Ag-Eq and is based on actual and budgeted operating and sustaining costs.
(3) Metallurgical recovery used was 85% for silver and 79% for gold.
(4) Metal payable used was 95% for silver and 95% for gold.
(5) Metal prices considered were $20 USD/oz Ag, $1,200 USD/oz Au.
(6) Silver equivalent grade is estimated as: Ag-Eq = Ag Grade + (Au Grade x Au Recovery x Au Payable x Au Price) / (Ag Recovery x Ag Payable x Ag Price).
(7) Tonnage is expressed in thousands of tonnes, metal content is expressed in thousands of ounces.
(8) Totals may not add up due to rounding.

(1) Mineral Resources have been classified in accordance with the CIM Definition Standards on Mineral Resources and Mineral Reserves, whose definitions are incorporated by reference into NI 43-101.
(2) Cut-off grade considered for sulphides was 180 g/t Ag-Eq and is based on actual and budgeted operating and sustaining costs.
(3) Metallurgical recovery used was 85% for silver and 79% for gold.
(4) Metal payable used was 95% for silver and 95% for gold.
(5) Metal prices considered were $22 USD/oz Ag, $1,350 USD/oz Au.
(6) Silver equivalent grade is estimated as: Ag-Eq = Ag Grade + (Au Grade x Au Recovery x Au Payable x Au Price) / (Ag Recovery x Ag Payable x Ag Price).
(7) Tonnage is expressed in thousands of tonnes, metal content is expressed in thousands of ounces.
(8) Totals may not add up due to rounding.
(9) Measured an Indicated Mineral Resources are reported inclusive or Mineral Reserves.

Since taking control of the property in July 2012, to the effective date of December 31, 2014 used for the Mineral Resources and Mineral Reserve estimates, First Majestic has led an aggressive exploration program at La Guitarra which has included an extensive 35,575 metres of diamond drilling over 262 holes. The Company also commenced a plan to expand the operation from 200 tonnes per day (tpd) to 520 tpd in late 2012. This expansion was completed in May 2013 following the installation of a spare ball mill from the La Parrilla Silver Mine and some spare flotation tanks from the La Encantada Silver Mine.

The LOM plan is based on an annual processing rate of 190,000 tonnes of plant feed, corresponding to approximately 520 tpd. Considering the Mineral Reserves presented above it represents a mine life of 7 years producing an estimated 9.3 million ounces of silver plus 45 thousand ounces of gold.

LIFE OF MINE


In late 2013, the Company started the development of the Coloso mine incurring in expansionary capital expenditures in the areas of mine development, mine infrastructure and a 5 km power line. Sustaining capital expenditures throughout the projected life of mine are assumed to average $4.26 million per year, including maintenance of the processing plant, equipment replacement in the mine, mine development, for tailings facility expansions and infill exploration.

The sustaining capital budget includes an allocation of an estimate of $1.0 million for the development of an 800 metre tunnel to connect the Coloso mine with the Nazareno area, in addition, an estimate of $1.5 million for mine developing and preparation in Nazareno to bring this mine into production as a replacement of the La Guitarra mine production after the depletion of current reserves in this area.

The Company’s Qualified Persons recommend going forward with infill exploration works required for Nazareno and the permitting and exploration works required for Mina de Agua in order to upgrade current resources and generate additional resources. The Company’s Qualified Persons are of the opinion that La Guitarra property has the potential for hosting additional resources laterally at the Guitarra vein, at depth at Coloso and laterally and at depth at, Nazareno, Mina de Agua and El Rincón. Further exploration at Nazareno and Coloso areas may result in a near term increase in the recognized resources from this area.

Furthermore, the Mina de Agua and El Rincón areas are highly prospective given the history of production from these areas. In the 18th century, the Mina de Agua mine and surrounding areas were one of México’s largest silver producers, generating approximately 10% of the country’s total mineral wealth. The Company’s Qualified Persons recommend the development of a 2 km tunnel from Mina de Agua to El Rincón plus a comprehensive exploration program to develop the resources and potentially increase the delineation of resources and reserves in these areas.

In addition, a series of conceptual studies have been conducted to investigate the potential of increasing the throughput capacity of the current La Guitarra processing plant to 1,000 tpd. Preliminary estimates indicate a potential reduction of the operating costs driven by the economy of scale, mainly in the processing and general and administration areas; however, the economics of the mine capacity expansion and the plant expansion have not been completed. An increase in the annual throughput could reasonably be expected to increase the total costs but to reduce unit operating costs. The Company’s Qualified Persons recommend continuing the conceptual studies and progressing to an internal pre-feasibility level study to assess the economic viability of this expansion.

Mineral Resources for the Coloso area have been estimated by Amec Foster Wheeler Americas Ltd. under the supervision of Greg Kulla, P.Geo. Mineral Resources for La Guitarra, Nazareno and Mina de Agua areas have been estimated by First Majestic. Mineral Reserves for La Guitarra, Coloso and Nazareno areas have been estimated by First Majestic under the supervision of Jesus M. Velador Beltran, PhD Geology. Mineral Reserves for La Guitarra, Coloso and Nazareno areas have been estimated by First Majestic under the supervision of Ramon Mendoza Reyes, P.Eng. Mr. Ramon Mendoza Reyes, Vice President Technical Services for First Majestic, is a “qualified person” as such term is defined under National Instrument 43-101, and has reviewed and approved the technical information disclosed in this news release.

First Majestic is a mining company focused on silver production in México and is aggressively pursuing the development of its existing mineral property assets and the pursuit through acquisition of additional mineral assets which contribute to the Company achieving its corporate growth objectives.

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

Full release

Keith Neumeyer – First Mining Finance (FF.V)

Mar 5, 2015

Keith is interviewed by Dominic Frisby about his new venture, First Mining Finance which in a few weeks will start trading under the ticker symbol ‘FF’ on the Venture exchange.

First Mining is currently doing their IPO and Gecko Research has offered our subscribers to take part of that IPO. If someone is interested to participate, drop us a line and we’ll send you the paperwork.

 

 

NEWS: First Majestic Announces Financial Results for Q4 and Year End 2014

Feb 23, 2015

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, 2014. 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.

Q4 HIGHLIGHTS

  • Silver equivalent production of 4.2 million ounces, representing a 24% increase compared Q4 2013.
  • Silver production of 3.1 million ounces, representing a 12% increase compared to Q4 2013.
  • All-in Sustaining costs of $14.43 per payable silver ounce, representing a significant 27% reduction compared to the prior quarter.
  • Revenues after smelting and refining costs amounted to $72.5 million, representing a 23% increase compared to Q4 2013.
  • Adjusted net earnings (non-GAAP) normalized for non-cash items was $4.2 million or $0.04 per share.
  • Cash flow from operations of $21.1 million or $0.18 per share (non-GAAP).
  • Non-cash impairment charge of $102.0 million related to certain non-current assets at specific mines resulting in a net loss of $64.6 million in Q4 2014.

2014 HIGHLIGHTS

  • Silver equivalent production of 15.3 million ounces, representing a 19% increase compared to 2013.
  • Silver production of 11.7 million ounces, representing a 10% increase compared to 2013.
  • All-in Sustaining costs of $17.71 per payable silver ounce and expected to trend substantially lower for 2015.
  • Revenues were $245.5 million representing a 2% decrease compared to 2013 despite a 19% decline in average realized silver price.
  • Adjusted net earnings were $7.9 million or $0.07 per share for the year.
  • Cash flow from operations of $74.4 million or $0.63 per share.
  • General and Administrative costs of $19.4 million, representing a 22% decrease compared to 2013.
  • Ended the year with cash and cash equivalents of $40.3 million, down from $54.8 million in 2013.

“In 2014, First Majestic delivered another year of record production totaling 15.3 million silver equivalent ounces representing a 19% increase from 2013,” said Keith Neumeyer, President and CEO of First Majestic. “Our Q4 financial results demonstrate that our cost savings plan launched in 2013 is having a positive impact on operating cash flows as well as significantly reducing our all-in sustaining costs. The mines have shown tremendous operational improvements over the past year. In particular, Del Toro has become a shining star in our portfolio following the successful reconfiguration of the mill in the second and third quarter and the connection to the National power grid in late September 2014. San Martin is breaking production records following its recent expansion as mining grades and plant recoveries have exceeded expectations. For 2015, our focus will be to continue to attack costs at every level of the business by leaving no stone unturned and deliver to our shareholders another solid year of operational improvements.”

2014 ANNUAL AND FOURTH QUARTER HIGHLIGHTS

  1. The Company reports non-GAAP measures which include cash costs per ounce, all-in sustaining cost per ounce, total production cost per ounce, total production cost per tonne, average realized silver price per ounce, 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.
  2. The Company reports additional GAAP measures which include mine operating earnings and operating cash flows before movements in working capital and income taxes. These additional financial measures are intended to provide additional information and do not have a standardized meaning prescribed by IFRS.


FINANCIAL RESULTS

The Company generated revenues of $72.5 million in the fourth quarter of 2014, an increase of $13.5 million or 23% compared to $59.0 million in the fourth quarter of 2013. The increase in revenue was primarily due to the sale of approximately 934,000 ounces of silver that were previously held as inventory at the end of the third quarter. Revenues for the full year 2014 were $245.5 million, a decrease of $5.8 million compared to 2013, as record production in 2014 resulted in a 21% increase in payable equivalent silver ounces sold but offset by a 19% decrease in average realized silver price per ounce compared to 2013.

Mine operating earnings were $5.8 million in the fourth quarter of 2014 compared to $14.3 million in the fourth quarter of 2013. The Company recognized mine operating earnings of $30.2 million in 2014, a decrease of 67% compared to $92.3 million in 2013. The decrease in mine operating earnings was primarily attributed to a 19% decline in average realized silver price per ounce during the year, higher production cost during the ramp up of the Del Toro mine, and $17.1 million increase in depletion, depreciation and amortization expense primarily due to 123% increase in production from the new Del Toro mine.

Net loss after taxes for the fourth quarter and year end 2014 was $64.6 million and $61.4 million respectively, compared to net loss after taxes of $81.2 million and $38.2 million in the comparative periods of 2013. Net loss in the current period was attributed to non-cash impairment charges totalling $102.0 million consisting of $58.7 million at La Guitarra, $21.7 million at San Martin and $21.6 million at Del Toro, before taxation effects.

In the fourth quarter, operating cash flows before movements in working capital and income taxes were $21.1 million ($0.18 per share), compared to $20.4 million ($0.17 per share) in the fourth quarter of 2013. The increase in cash flow per share was primarily attributed to higher production, offset by a decrease in mine operating earnings which were affected by a 21% decline in average realized silver prices compared to the prior quarter. For the full year 2014, operating cash flows decreased 46% from $137.3 million ($1.17 per share) in 2013 to $74.4 million ($0.63 per share) in 2014 primarily due to lower margins as a result of a 19% decrease in average annual realized silver prices.

The Company ended 2014 with a healthy $40.3 million in cash and cash equivalents compared to $54.8 million at the end of 2013. The Company is currently in open discussions with various financial partners to reduce or extend payments on certain current liabilities in order to strengthen the working capital position. Based on the Company’s current operating plan, the Company believes it has sufficient financial resources, combined with cash flows from operations, to meet its ongoing requirements.

OPERATIONAL RESULTS

The Company achieved another quarterly production record totaling 3,074,567 ounces of silver and 4,247,527 of silver equivalent ounces. This compares to 2,746,598 ounces of silver and 3,421,161 of silver equivalent ounces in the fourth quarter of 2013, representing an increase of 12% and 24%, respectively. The increase in production was primarily attributed to the ramp up of the Del Toro mine and the mill expansion at San Martin; offset by a decrease in production at La Encantada due to less tonnage milled relating to the processing of only fresh mined ore versus a blend with old tailings.

Annual production in 2014 reached a record of 15,257,958 of silver equivalent ounces, in line with the Company’s previous guidance of 14.8 million to 15.6 million ounces of silver equivalents. On a year over year basis, annual production increased 19% compared to 12,791,527 silver equivalent ounces produced in 2013. Silver production also increased 10% to 11,748,721 ounces compared to 10,641,465 ounces of silver in 2013. Higher production for the year was primarily attributed to the ramp up of the Del Toro Silver Mine, which increased silver equivalent production by 90% compared to the prior year. In addition, the San Martin Silver Mine, which completed the expansion of its plant milling capacity in 2014, increased its silver equivalent ounces by 55% compared to the prior year.

Del Toro, the Company’s newest silver mine, achieved record quarterly production of 817,754 silver ounces and 1,264,751 silver equivalent ounces, an increase of 65% and 77%, respectively, compared to the previous quarter. The mine had a challenging year as it encountered numerous operational issues during ramp up such as metallurgical issues with transitional ores, a delay in connecting the new power line, and higher production costs due to lower than expected production. With the decision to process all ore through the flotation plant to improve economics, cost cutting measures and successful completion of the power line at the end of September, Del Toro is back on track and is estimated to produce 3.7 to 4.2 million equivalent silver ounces including 2.6 to 2.9 million silver ounces in 2015 at a cash cost per ounce of $9.39 to $9.96 per ounce.

At San Martin, the Company completed its mill expansion in 2014 and achieved milling throughput of 1,051 tpd during the fourth quarter of 2014. As a result of improvements in throughput, head grade and recoveries, San Martin achieved a record production of 2,118,261 equivalent ounces in 2014, a 55% increase from the 1,370,890 equivalent ounces in the prior year.

COSTS AND CAPITAL EXPENDITURES

Consolidated cash costs per ounce in the fourth quarter were $8.51 compared to $9.66 in the fourth quarter of 2013. The decrease in cash cost per ounce compared to the prior year was primarily attributed to economies of scale from higher production at the Del Toro and San Martin mines. For the full year, cash costs increased slightly to $9.58 per ounce compared to $9.35 per ounce in 2013, or 5% higher than annual guidance. The increase in cash costs was primarily due to higher production costs at La Encantada due to the increased extraction rate of high-grade underground mine ore versus the mining costs associated with reprocessing low-grade old tailings in the prior year. Also, additional diesel and generator rental costs were incurred in the first nine months of the year at Del Toro due to delays in the connection of the 115 kV power line and higher than expected smelting and refining costs due to penalty costs for impurities as the mill refined its metallurgical process.

All-in Sustaining costs (AISC) for the fourth quarter and full year 2014 were $14.43 and $17.71 per ounce, respectively. Quarter over quarter, consolidated AISC decreased to $14.43 per payable silver ounce, representing a significant 27% reduction compared to $19.89 per ounce in the third quarter of 2014. This major improvement is a result of economies of scale attributed to production improvements from Del Toro, San Martin and La Guitarra mines. In addition, the Company has started to see cost savings materialized from the new power line at Del Toro and ongoing re-negotiation with suppliers and contractors plus continued lay-offs.

The following table is an AISC summary of the quarter over quarter improvement by mine and full year 2014:

Del Toro has shown significant improvements compared to the previous quarter. During the fourth quarter, Del Toro’s AISC was reduced significantly to $10.16 per ounce, representing a dramatic decrease of 60% compared to the prior quarter, as the mine realized consistent and efficient energy fully sourced from the new 115 kV power line. This has resulted in lower costs, higher production and improved economics with the decommissioning of portable diesel power generation units. In addition, the use of new reagents and implementation of the new regrinding circuit has dramatically improved metallurgical recoveries for both silver and lead.

Capital expenditures in the fourth quarter were $24.4 million, primarily consisting of $9.8 million at La Encantada, $7.1 million at Del Toro, $2.9 million at La Parrilla, $2.9 million at La Guitarra and $1.1 million at San Martin. Compared to the previous quarter, capital expenditures decreased 18% due to cost cutting measures.

Throughout 2014, the Company’s total capital expenditures were $113.5 million which consisted of mine development, exploration, construction and expansion projects and acquisitions of new mining equipment. As previously announced, the Company plans to invest a total of $75.6 million in 2015 on sustaining and expansionary capital. The 2015 annual budget implies an estimated 33% reduction in total capital expenditures following the completion of numerous capital intensive growth projects in 2014.

2015 GUIDANCE

In 2015, First Majestic aims to maintain its status as one of silver industry’s purest and highest margin producers. The focus of the Company will be on operational efficiency and cash flow generation to ensure profitability in a low silver price environment. Based on the fourth quarter results and managements improved outlook, the Company is projecting its 2015 AISC to be within a range of $13.96 to $15.48 per ounce, or $13.50 to $14.96 per ounce after excluding non-cash items such as share-based payments and accretion of reclamation costs. Annual silver production is expected to increase to a new record range of 11.8 million to 13.2 million ounces (or 15.3 million to 17.1 million silver equivalent ounces), due to the following:

  • Del Toro is expected to reach 3.7 to 4.2 million silver equivalent ounces with improvements to optimize throughput and metallurgical recoveries, compared to 3.7 million silver equivalent ounces in 2014;
  • An upgrade and expansion of the crushing and grinding area at La Encantada is expected to increase operations to 3,000 tpd and production to 4.0 to 4.5 million silver equivalent ounces; and
  • At La Guitarra, the underground development of the El Coloso area is expected to result in higher silver grades to be extracted and processed in 2015.

The following is a summary of the Company’s 2015 outlook by producing mines:

*Metal average price assumptions for calculating equivalents: Silver $17.00/oz, Gold $1,200/oz, Lead $0.95/lb, Zinc $1.02/lb

CONFERENCE CALL AND WEBCAST

A conference call and webcast will be held Wednesday, February 25, 2015 at 11:00 a.m. PST (2:00 p.m. EST) to review and discuss the financial results. To participate in the conference call, please dial the following:

Toll Free Canada & USA: 1-800-319-4610
Outside of Canada & USA: 1-604-638-5340
Toll Free Germany: 0800 180 1954
Toll Free UK: 0808 101 2791

Participants should dial in 10 minutes prior to the conference.

Click on WEBCAST on the First Majestic homepage as a simultaneous audio webcast of the conference call will be posted at www.firstmajestic.com.

First Majestic is a mining company focused on silver production in México and is aggressively pursuing the development of its existing mineral property assets and the pursuit through acquisition of additional mineral assets which contribute to the Company achieving its corporate growth objectives.

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