FIRST MAJESTIC SILVER CORP. (AG: NYSE; FR: TSX) (the “Company” or “First Majestic”) is pleased to announce the audited consolidated financial results for the Company for the year ending and fourth quarter ending December 31, 2010. 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.
- Cash Flow per share (non-GAAP) of $0.62 per share representing a 676% increase from 2009
- Earnings per share (basic) amounted to $0.39 representing a 410% over 2009
- Total Cash Cost were US$7.94 per ounce, down 6% compared to 2009
- Gross Revenue of $132.2 million showing an 85% increase from 2009
- Net Revenue of $120.8 million showing a 103% increase from 2009
- Mine Operating Earnings of $61.2 million showing an increase of 231% from 2009
- Net Income after Taxes amounted to $36.1 million, a 472% increase from 2009
- Silver only production increases by 72% to 6.53 million ounces compared to 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 un-hedged to silver prices
- Generated Gross Revenue of $132.2 million for the year ended 2010 compared to $71.5 million in 2009, an increase of $60.6 million or 85%.
- Generated Gross Revenue of $42.4 million for the fourth quarter of 2010 compared to $21.4 million in the fourth quarter of 2009, an increase of $20.9 million or 98%.
- Generated Net Revenue (excluding smelting & refining changes) of $120.8 million for 2010, an increase of 103% compared to $59.5 million for 2009. Smelting and refining charges and metal deductions decreased to 9% of gross revenue in 2010 compared to 17% of gross revenue in 2009. Average smelting charges for doré in 2010 were US$0.43 per equivalent silver ounce whereas for concentrates they were US$3.58 per equivalent silver ounce.
- Generated Net Revenue (excluding smelting & refining changes) of $40.1 million for the fourth quarter of 2010 compared to $18.4 million for the fourth quarter of 2009, an increase of $21.7 million or 118%.
- Recognized Mine Operating Earnings of $61.2 million for 2010 compared to $18.5 million for 2009, an increase of 231%. 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 (US$14.79) in 2009 to $20.39 (US$19.79) in 2010.
- Recognized Mine Operating Earnings of $23.9 million for the fourth quarter of 2010 compared to $8.1 million for the fourth quarter of 2009, an increase of $15.8 million or 195%.
- Earned cash flows from operations of $58.4 million or $0.62 per share (a non-GAAP measure) for 2010 compared to $6.7 million or $0.08 per share for 2009, an increase of 771%.
- The Company generated net income of $36.1 million for 2010 compared to net income of $6.3 million, for 2009.
- The Company generated basic earnings per common share (“EPS”) after current tax provision (a non-GAAP measure) of $0.50 for 2010. EPS for 2010 after current and future taxes was $0.39, compared to EPS of $0.08 for 2009.
- As the 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 upwards in 2010 for the $2.3 million of capitalized net profits resulting in $0.42 per share basic EPS, or $0.53 excluding the future income tax provision (non-GAAP measures).
- Net income after taxes was $13.9 million for the fourth quarter of 2010 compared to $2.5 million for the fourth quarter of 2009, an increase of $11.4 million or 459%.
- Increased production from 4,337,103 silver equivalent ounces in 2009 to 7,024,056 silver equivalent ounces in 2010, an increase of 62%.
- 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%.
- Direct Cash Costs per ounce of silver (a non-GAAP measure) for 2010 increased to US$5.85 per ounce of silver, compared to US$5.61 per ounce of silver for 2009 due to an appreciation of the Mexican Peso relative to the US dollar and inflationary pressures.
- Direct Cash Costs per ounce of silver for the fourth quarter of 2010 increased to US$6.50 per ounce of silver, compared to US$5.69 per ounce of silver for the fourth quarter of 2009 due to a 6% appreciation in the value of the Mexican Peso relative to the US dollar and other increased costs due to inflationary pressures.
- Total Cash Costs per ounce (a non-GAAP measure) was reduced by 6% to US$7.94 in 2010 from US$8.49 in 2009 due to a reduction in smelting and refining costs associated with higher doré production at the La Encantada mine.
- Total Cash Costs per ounce for the fourth quarter of 2010 was reduced by 5% to US$8.16 compared to US$8.61 in the fourth quarter of 2009.
- Cash and cash equivalents compared to 2009 increased by $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.
- The 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.
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% from 2010 levels as the 3,750 tpd La Encantada mill experiences a full year of commercial production and the expansion currently underway 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 following 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 below 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*||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|
|Price of Silver $22.00/oz., Gold $1,300/oz., Lead $1.00/Lb., Zinc $1.00/Lb.|
First Majestic has experienced a breakout year in 2010 due to the overlapping effect of a 72% increase in silver production and a 34% increase in average silver prices compared to 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 CEO of First Majestic.
First Majestic is a producing silver company focused on silver production in México 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.
FOR FURTHER INFORMATION contact [email protected], 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