21:03:08 EDT Thu 28 Mar 2024
Enter Symbol
or Name
USA
CA



First Majestic Silver Corp
Symbol FR
Shares Issued 99,277,792
Close 2011-02-28 C$ 14.86
Market Cap C$ 1,475,267,989
Recent Sedar Documents

First Majestic Silver earns $36.1-million in 2010

2011-02-28 18:22 ET - News Release

Mr. Keith Neumeyer reports

FIRST MAJESTIC SILVER CORP.: 2010 AUDITED FINANCIAL RESULTS SHOW RECORD EARNINGS & CASH FLOWS; A BREAKOUT YEAR FOR FIRST MAJESTIC

First Majestic Silver Corp. has provided the audited consolidated financial results for the company for the year ending and fourth quarter ending Dec. 31, 2010. The full version of the financial statements and the management discussion and analysis can be viewed on the company's website on SEDAR and on EDGAR.

2010 highlights

  • Cash flow per share (non-GAAP (generally accepted accounting principles)) of 62 cents per share representing a 676-per-cent increase from 2009;
  • Earnings per share (basic) amounted to 39 cents representing a 410-per-cent increase over 2009;
  • Total cash cost was $7.94 (U.S.) per ounce, down 6 per cent compared with 2009;
  • Gross revenue of $132.2-million showing an 85-per-cent increase from 2009;
  • Net revenue of $120.8-million showing a 103-per-cent increase from 2009;
  • Mine operating earnings of $61.2-million showing an increase of 231 per cent from 2009;
  • Net income after taxes amounted to $36.1-million, a 472-per-cent increase from 2009;
  • Silver-only production increases by 72 per cent to 6.53 million ounces compared with 3.8 million ounces silver in 2009;
  • 2011 guidance of 7.5 million ounces of silver or 8.0 million ounces of silver equivalent production;
  • Fully unhedged to silver prices.

2010 ANNUAL AND FOURTH QUARTER HIGHLIGHTS

                              HIGHLIGHTS

                                  Change from                   Change from
                Fourth quarter fourth quarter       Full year     full year
HIGHLIGHTS                2010           2009            2010          2009

Gross revenue    $42.4-million         Up 98%  $132.2-million        Up 85%
Net revenue      $40.1-million        Up 118%  $120.8-million       Up 103%
Mine operating                                                             
earnings         $23.9-million        Up 195%   $61.2-million       Up 231%
Net income                                                                 
after taxes      $13.9-million        Up 459%   $36.1-million       Up 472%
Cash flow per                                                              
share (a non-                                                              
GAAP measure)  $0.23 per share        Up 292% $0.62 per share       Up 676%
Earnings per                                                               
share -- basic $0.15 per share        Up 392% $0.39 per share       Up 410%
Silver ounces                                                              
produced                                                                   
(excluding                                                                 
equivalent                                                                 
ounces of gold,                                
zinc and lead)    1,757,332 oz         Up 59%   6,529,325 oz         Up 72%
Silver                                                                     
equivalent                                  
production      1,827,987 eq. oz.      Up 46%   7,024,056 eq. oz.    Up 62%
Silver                                                                     
equivalent                                     
ounces sold     1,690,741 eq. oz.      Up 48%   6,482,637 eq. oz.    Up 53%
Total cash                                                                 
costs per ounce      $8.16 (U.S.)     Down 5%      $7.94 (U.S.)     Down 6%
Direct cash                                                                
costs per ounce      $6.50 (U.S.)      Up 14%      $5.85 (U.S.)       Up 4%
Average revenue                                                            
per ounce sold      $24.74 (U.S.)      Up 40%     $19.79 (U.S.)      Up 34%
Cash and cash                                                              
equivalents (as                                                            
at Dec. 31)      $40.9-million        Up 595%   $40.9-million       Up 595%

  • Generated gross revenue of $132.2-million for the year ended 2010 compared with $71.5-million in 2009, an increase of $60.6-million or 85 per cent;
  • Generated gross revenue of $42.4-million for the fourth quarter of 2010 compared with $21.4-million in the fourth quarter of 2009, an increase of $20.9-million or 98 per cent;
  • Generated net revenue (excluding smelting and refining changes) of $120.8-million for 2010, an increase of 103 per cent compared with $59.5-million for 2009. Smelting and refining charges and metal deductions decreased to 9 per cent of gross revenue in 2010 compared with 17 per cent of gross revenue in 2009. Average smelting charges for dore in 2010 were 43 U.S. cents per equivalent silver ounce whereas for concentrates they were $3.58 (U.S.) per equivalent silver ounce;
  • Generated net revenue (excluding smelting and refining changes) of $40.1-million for the fourth quarter of 2010 compared with $18.4-million for the fourth quarter of 2009, an increase of $21.7-million or 118 per cent;
  • Recognized mine operating earnings of $61.2-million for 2010 compared with $18.5-million for 2009, an increase of 231 per cent. The increase was attributed to an increase in sales volume from 4.2 million ounces of silver equivalent in 2009 to 7.0 million ounces of silver equivalent in 2010, combined with an increase in sales revenue per ounce from $16.89 ($14.79 (U.S.)) in 2009 to $20.39 ($19.79 (U.S.)) in 2010;
  • Recognized mine operating earnings of $23.9-million for the fourth quarter of 2010 compared with $8.1-million for the fourth quarter of 2009, an increase of $15.8-million or 195 per cent;
  • Earned cash flows from operations of $58.4-million or 62 cents per share (a non-GAAP measure) for 2010 compared with $6.7-million or eight cents per share for 2009, an increase of 771 per cent;
  • Generated net income of $36.1-million for 2010 compared with net income of $6.3-million, for 2009;
  • Generated basic earnings per common share (EPS) after current tax provision (a non-GAAP measure) of 50 cents for 2010. EPS for 2010 after current and future taxes was 39 cents, compared with EPS of eight cents for 2009;
  • New La Encantada plant was not in commercial production until April 1, 2010, under Canadian GAAP, revenues and production costs are offset against the carrying value of the assets rather than being recorded as income up to the date the plant achieves commercial production. If the revenues and expenses of the new plant were recorded as income rather than capital, then earnings would have been adjusted upward in 2010 for the $2.3-million of capitalized net profits resulting in 42 cents per share basic EPS, or 53 cents excluding the future income tax provision (non-GAAP measures);
  • Net income after taxes of $13.9-million for the fourth quarter of 2010 compared with $2.5-million for the fourth quarter of 2009, an increase of $11.4-million or 459 per cent;
  • Increased production from 4,337,103 silver equivalent ounces in 2009 to 7,024,056 silver equivalent ounces in 2010, an increase of 62 per cent;
  • Increased production from 1,249,568 silver equivalent ounces in the fourth quarter of 2009 to 1,827,987 silver equivalent ounces in the fourth quarter of 2010, an increase of 46 per cent;
  • Direct cash costs per ounce of silver (a non-GAAP measure) for 2010 increased $5.85 (U.S.) per ounce of silver, compared with $5.61 (U.S.) per ounce of silver for 2009 due to an appreciation of the Mexican peso relative to the U.S. dollar and inflationary pressures;
  • Direct cash costs per ounce of silver for the fourth quarter of 2010 increased $6.50 (U.S.) per ounce of silver, compared with $5.69 (U.S.) per ounce of silver for the fourth quarter of 2009 due to a 6-per-cent appreciation in the value of the Mexican peso relative to the U.S. dollar and other increased costs due to inflationary pressures;
  • Total cash costs per ounce (a non-GAAP measure) reduced by 6 per cent to $7.94 (U.S.) in 2010 from $8.49 (U.S.) in 2009 due to a reduction in smelting and refining costs associated with higher dore production at the La Encantada mine;
  • Total cash costs per ounce for the fourth quarter of 2010 reduced by 5 per cent to $8.16 (U.S.) compared with $8.61 (U.S.) in the fourth quarter of 2009;
  • Cash and cash equivalents compared with 2009 increased $35.1-million to $40.9-million and improved working capital by $43.3-million to $48.1-million;
  • Repaid all of the company's debt facilities with cash flows from mining operations to reduce interest expense;
  • New cyanidation process plant at the La Encantada silver mine achieved commercial production effective April 1, 2010, and reached full production capacity of 3,750 tonnes per day (tpd) by the end of the year. With the expansion of the La Encantada, production at the mine increased from 1.44 million ounces of silver equivalent in 2009 to 4.0 million ounces of silver equivalent in 2010.

2011 production outlook

The company would like to provide the following forward-looking estimates regarding its production outlook for 2011. Production in 2011 is expected to increase by 13 per cent from 2010 levels as the 3,750 tpd La Encantada mill experiences a full year of commercial production and the expansion currently under way at La Parrilla is anticipated to begin to ramp up in the third quarter from 850 tpd to 1,600 tpd by year-end.

Estimated production on a mine-by-mine basis for 2011, and associated anticipated operating costs, are included in the table. These figures are based on existing installed capacity at the company's operations in the La Encantada and the San Martin mines, and increasing capacities at the La Parrilla mine for the second half of 2011. Pricing assumptions for equivalent silver production from gold, lead and zinc are provided along with the table.

Anticipated                                                                
operating                                                                  
parameters       La Encantada    La Parrilla     San Martin   2011 outlook 

Total tonnes                                                               
processed           1,144,125        346,032        252,450      1,742,607 
Ag ounces from                                                             
production          4,414,133      1,947,047      1,153,887      7,515,067 
Ag equivalent                                                              
ounces (Au, Pb,                                                            
Zn)                         -        332,200         81,533        413,733 
Total                                                                      
equivalent                                                                 
ounces                                                                     
production(i)       4,414,133      2,279,247      1,235,420      7,928,800 
Ag grade (g/t)                                                             
flotation                   -            246              -            246 
Ag recovery %                                                              
flotation                   -            80%              -            80% 
Ag grade (g/t)                                                             
cyanidation               200            193            178            196 
Ag recovery %                                                              
cyanidation               60%            70%            80%            64% 
Lead                                                                       
concentrate                                                                
(tonnes)                    -          7,815              -          7,815 
Zinc                                                                       
concentrate                                                                
(tonnes)                    -          1,922              -          1,922 
Total cash                                                                 
costs                   $6.64          $7.44          $8.47          $7.09 
Direct mining                                                              
cost per
silver                                                            
ounce                   $6.09          $7.05          $8.63          $6.73 
Direct mining                                                              
cost per                                                                   
equivalent                                                                 
silver ounce            $6.09          $6.02          $8.06          $6.38 
Direct mining                                                              
cost per
tonne                  $23.51         $39.66         $39.46         $29.03 

(i) Assumptions:                                                            
Operating days            339            331            330  

Price of silver $22.00 per ounce, gold $1,300 per ounce, lead $1 per pound, 
zinc $1 per pound.

In summary

First Majestic has experienced a breakout year in 2010 due to the overlapping effect of a 72-per-cent increase in silver production and a 34-per-cent increase in average silver prices compared with 2009. Further silver price increases and an anticipated production increase in 2011 bode well for continued earnings growth and robust cash flows for fiscal 2011.

"This past year has clearly been a watershed year for First Majestic, and we're continuing to push aggressively forward in expanding our silver production into 2011 and beyond. I would like to extend my personal thanks and appreciation to all of our employees, managers, and our board of directors for everyone's support in working together in achieving such a fantastic year. We are proud of our growth and our ability to continue growing each and every year since founding this company. We will continue to focus on an aggressive growth strategy combined with minimizing costs as we move First Majestic toward becoming a senior silver producer," commented Keith Neumeyer, president and chief executive officer of First Majestic.

We seek Safe Harbor.

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