First Majestic Silver Corp.: Record First Quarter Financial Results
May 16, 2008
MAJESTIC SILVER CORP. (FR-T) (the “Company”) is pleased to announce the
unaudited financial results for the Company’s first quarter ending
March 31, 2008. The full version of the financial statements can be
viewed on the Company’s web site at www.firstmajestic.com
or on SEDAR at
Keith Neumeyer, President and CEO commented: “We’ve had an outstanding
start to 2008. Some challenges still exist and several improvements are
either underway or planned for 2008. However, the momentum underway at
each of the Company’s three producing silver mines is extremely
encouraging. This first quarter marks the best quarter in the Company’s
history and is the first quarter that a bottom line earnings per share
has been achieved.”
Summary of Financial Results
|First Quarter Highlights
||Total Revenue increased by 28% to
||Earnings from mine operations increased to
||Net Income for the quarter
||Operating Cash Flow for the quarter increased to
||Total Equivalent Silver increased by 5% over the prior quarter to
||Total Cash Costs per Silver Ounce for the quarter
||Total Mining Costs per Tonne for the quarter
||Cash in Treasury at March 31, 2008
|- Cash costs and mining costs per tonne are non-GAAP measures.
|- Financial information in this news release is based on Canadian GAAP.
- Sales revenues for the quarter were $12.96 million, an
increase of 28% compared to $10.16 million for the quarter ended
- Mine operating earnings for the quarter amounted to $4.7 million, compared to $0.4 million for the quarter ended March 31, 2007.
- The Company generated operating income of $1.5 million
for the quarter, compared to an operating loss of $1.4 million for the
quarter ended March 31, 2007.
- The Company generated its first quarterly net income for
the quarter ended March 31, 2008, with net income of $1,065,323 ($0.02
per share) compared to a net loss of $3,061,899 ($0.06 per share) for
the quarter ended March 31, 2007. The net income for the year was after
deducting a non-cash stock-based compensation expense of $1,108,216.
- The Company has approximately $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, or any major capital projects.
- Total quarterly production consisted of 1,061,720 ounces
of silver equivalents, including 895,358 ounces of silver, 240 ounces
of gold, and 1,857,897 pounds of lead. Shipments in the quarter totalled
1,019,490 ounces of silver equivalents.
- In the quarter, the Company invested $5,593,433 in
capital expenditures on its mineral properties, and a further $3,694,972
on additions to plant and equipment.
- Direct cash costs per ounce of silver for the quarter
ended March 31, 2008, were $US6.51 per ounce, and averaged $4.38 for La
Parrilla and La Encantada combined. Start-up costs of the new flotation
circuit, and low grades of the sulphide ore feed to the mill in March at
San Martin were responsible for increasing the consolidated cash costs
to $US6.51. It is anticipated that due to changes commenced in the first
quarter at San Martin, that costs will begin to improve at this
operation in the second quarter.
As the Company’s Reserves and Resources continue to grow, the Company
continues to focus on expansion of its mills and mining operations in
order to increase output. Management at First Majestic is focused on
continuing the ongoing improvements at each operation to achieve
production and resource targets for 2008. The Company is targeting 5.3
million of silver equivalent production for 2008, and continued
increases in NI 43-101 compliant silver Resources. The Company’s primary
focus is to build long term sustainable mining operations, and
shareholders can be assured management at First Majestic is very focused
on growth and profitable mining operations.
Improvements made to date in 2008 include; the completion of the
flotation circuit at the San Martin; the replacement of the secondary
crusher at the La Encantada; and, the addition of two new filter presses
at the La Parrilla.
An important part of improving mining efficiencies and costs, 20 pieces
of underground equipment were ordered for delivery in 2008, of which 12
have already been delivered. This new equipment includes scoop-trams,
underground trucks and jumbos.
Other improvements that are either in the planning stage or scheduled
for the remainder of the year, include: mill expansion plans at the La
Encantada anticipated to be launched in the second quarter; extensive
geophysics program at the La Encantada property is scheduled; changes
underway at the San Martin to increase tonnage and reduce the cost per
tonne; expansion of the San Martin mill in the early planning stage; the
Chalchihuites project is undergoing an extensive development program
which includes diamond drilling in order to release a NI 43-101 report
in July; at the Cuitaboca project the exploration and development
program will continue through the year for an anticipated release of a
NI 43-101 report by year end; updated NI 43-101 reports will be released
on each of the La Parrilla, La Encantada and San Martin Silver Mines
during the year.
Reserve and Resource development remains a top priority for the Company.
Presently twenty drill rigs are operating; five rigs at La Parrilla and
three at the Chalchihuites, nine rigs at San Martin and three rigs at
The Company’s plan for 2008 also includes the completion of over 82,000
metres of drilling and over 46,000 metres of underground development.
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
FIRST MAJESTIC SILVER CORP.
Keith Neumeyer, President & CEO
This press release includes certain “Forward-Looking Statements” within
the meaning of section 21E of the United States Securities Exchange Act
of 1934, as amended. All statements, other than statements of historical
fact, included herein, including without limitation, statements
regarding potential mineralization and reserves, exploration results and
future plans and objectives of First Majestic Silver Corp. are
forward-looking statements that involve various risks and uncertainties.
There can be no assurance that such statements will prove to be
accurate and actual results and future events could differ materially
from those anticipated in such statements.