First Majestic Silver Corp.: 2007 Year End Financial Results
April 17, 2008FIRST MAJESTIC SILVER CORP. (FR-T) (the “Company”) is pleased to announce the annual financial results for the Company’s year ended December 31, 2007. The Company’s prior annual audited results were for the six month transitional year ended December 31, 2006, as the Company changed its fiscal year in 2006. The full version of the financial statements can be viewed on the Company’s web site at www.firstmajestic.com or on SEDAR at www.sedar.com. The following are highlights from the year end and fourth quarter. Shareholders or interested parties are encouraged to review the complete financial statements for further details.
|Total Revenue for 2007 -||$42.9 million|
|Total Revenue for 4th Quarter -||$11.6million|
|Mine Earnings (excluding amortization and depletion)||$15.9million|
|Mine Earnings for 4th Quarter (excluding amortization and depletion)||$5.3 million|
|Positive Operating Cash Flow for 2007 (before working capital changes)||$8.6 million|
|Total Equivalent Silver Production for 2007||3,561,171 ounces|
|Total Cash Costs per Silver Ounce for the year||US$7.06|
|Total Mining Costs per Tonne for the year||US$42.96|
|Cash in Treasury, currently||$53 million|
FINANCIAL PERFORMANCE AND HIGHLIGHTS
- Sales revenues for the year were $42.9 million; an annualized increase of 68% compared to $12.8 million for the six month provisional year ended December 31, 2006.
- Mine earnings (excluding amortization and depreciation) for the year amounted to $15.9 million, compared to $1.7 million for the six month transitional year ended December 31, 2006.
- The Company generated cash flow from operating activities (before working capital changes) of $8.6 million for the year, compared to cash used in operations (before working capital changes) of $1.9 million for the six months ended December 31, 2006.
- The Company currently has more than $53 million in its treasury, is generating significant cash flows from operations, and has sufficient capital to support its operating requirements for the foreseeable future provided it does not undertake any major acquisitions.
- Total annual production for 2007 consisted of 3,561,171 ounces of silver equivalents, including 3,170,139 ounces of silver, 2,049 ounces of gold, and 2,924,146 pounds of lead.
- The Company invested $18.9 million in capital expenditures on its mineral properties, a further $11.8 million on additions to plant and equipment, and an additional $4.9 million on acquisitions during 2007.
- Net loss for the year ended December 31, 2007, was $7,230,122 compared to $7,588,195 for the six month provisional year ended December 31, 2006 (the prior audited period), representing a 52% decrease from the annualized prior year’s net loss. The net loss for the year included non-cash stock-based compensation expense of $3,865,689, and a write-down of a mineral property of $1,703,591.
- Sales revenues for the fourth quarter were $11,631,476, a 43% increase compared to $8,138,284 in the final quarter of 2006. Shipments in the final quarter of 2007 included 908,688 equivalent ounces of silver, an increase of 58% over the 574,547 equivalent ounces shipped in the final quarter of 2006.
- Net loss for the quarter ended December 31, 2007, was $1,292,632 representing a 38% decrease from the third quarter’s net loss of $2,070,082.
- Silver production in the fourth quarter ending December 31, 2007, has increased to 1,008,299 equivalent ounces of silver, an increase of 7.2% over the prior quarter’s production of 940,225 equivalent ounces of silver, and increase of 75% over the 574,547 produced in the quarter ending December 31, 2006.
- Direct cash costs per ounce of silver for the year ended December 31, 2007, were US$7.06 per ounce, and for the quarter they were US$7.97 per ounce of silver, with the increase due to increases in energy costs, reagent costs, and increases in equipment maintenance costs. The Company has taken steps which are expected to positively impact cash costs throughout 2008.
As the Company continues to grow, we will focus on expansion of our mills. In 2008, management at First Majestic will focus on executing our business plan by continuing the ongoing improvements at each mine and achieving our production and resource targets.
As a result of the work we completed in 2007, the additions to our management team, and the improvements made at each of our mines, we are targeting production of 5.5 million ounces of silver equivalent for 2008. We are very focused on the success of the company and improvements are expected to include: the completion of the flotation circuit at the San Martin, the replacement of the secondary crusher at the La Encantada, new filter presses at the La Parrilla, and we are currently reviewing expansion plans for our mining operations. We are in the third year of an equipment replacement program where 20 additional pieces of underground equipment are expected to be delivered and be operational this year. These deliveries include scoop-trams, underground trucks and jumbos. We expect this new equipment to provide more efficient underground operations.
First Majestic anticipates that silver, gold, and lead prices will continue to be volatile in 2008 but will continue their upward trends. We expect all three of our producing mines to deliver positive cash flows from production, and mine operating earnings during 2008.
First Majestic is a producing silver company focused in Mexico and is aggressively pursuing its business plan to become a senior silver producer through the development of its existing assets and the pursuit through acquisition of additional assets that contribute to achieving its corporate growth objectives.
FOR FURTHER INFORMATION contact firstname.lastname@example.org, visit our website at www.firstmajestic.com or call our toll free number 1.866.529.2807.
FIRST MAJESTIC SILVER CORP.
Keith Neumeyer, President & CEO