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First Majestic achieves record silver production

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Global Mining Review,

First Majestic Silver Corp. has announced that total production in 2Q18 from its seven operating silver mines reached a new company record of 5.1 million equivalent oz. of silver. Total production consisted of 2.8 million oz. of silver, 25 449 oz. of gold, 3.9 million lb of lead and 1.4 million pounds of zinc.

The company has increased its 2018 annual silver production to a new range of 12.0 to 13.2 oz., or 20.5 to 22.6 million silver equivalent oz. primarily due to the addition of the San Dimas Silver/Gold mine which was acquired on 10 May 2018. This compares to the previous annual production guidance of 10.6 to 11.8 million oz. of silver, or 15.7 to 17.5 million silver equivalent oz.

“During the quarter, the integration of the newly acquired San Dimas mine into our Mexican portfolio was our primary focus,” said Keith Neumeyer, President & CEO. “The world-class San Dimas operation, which contributed only seven weeks of production in the second quarter, propelled the company to a new quarterly production record of 5.1 million silver equivalent ounces and has become our cornerstone asset and will remain a major focus for the next several quarters as we optimise the operation. Short term, we are focused on reducing underground dilution and implementing mill automation processes, including the installation of high intensity grinding technologies in order to increase efficiencies and reduce production costs. In addition, under the new streaming agreement, we are going back to mine numerous high-grade silver veins that were previously deemed uneconomic by the previous operator. In 2018, all-in sustaining costs at San Dimas are projected to be between CAN$6.99 to CAN$8.19 per ounce, making it our lowest cost and our largest producing mine.”

Neumeyer added: “At La Encantada, the construction of the new roaster is in its final stages. Commissioning and start up procedures are expected to begin in late August before ramping up to commercial production by the end of the year. These are exciting times for the Company, our employees and our stakeholders.”

Total ore processed during the quarter at the company's seven operating silver mines: San Dimas, Santa Elena, La Encantada, La Parrilla, Del Toro, San Martin and La Guitarra, amounted to 851 349 t, representing a 5% increase compared to the previous quarter. The increase in tonnes compared to the prior quarter was primarily due to the addition of the San Dimas production, offset by a 14% decrease in throughput at La Encantada.

Consolidated silver grades in the quarter averaged 127 g/t compared to 111 g/t in the previous quarter. The 14% increase in silver grades was primarily the result of the addition of seven weeks of production from San Dimas.

Consolidated silver recoveries averaged 79%, representing a 6% increase compared to the previous quarter. The company expects further improvements in recoveries with the anticipated installation and commissioning of the microbubble flotation columns at La Parrilla in 3Q18, followed by Del Toro in 1Q19. In addition, delivery and installation of the High Intensity Grinding mills at Santa Elena and San Dimas are planned for October and November, respectively, followed by commissioning over the following quarter. The benefits of this new technology, most notably higher recoveries and lower operating costs, are expected to be realised after completing ramp up to commercial production in the first half of 2019.

The company's underground development in the second quarter consisted of 17 838 m, reflecting a 20% increase compared to 14 914 m completed in the previous quarter. Additional development contractors were brought in during the second quarter at La Encantada and Del Toro to focus on increasing development rates to support production. Development remains focused on opening new production areas, exploring high potential zones and new stope preparation.

During the quarter, up to 29 diamond drill rigs were active across the company’s properties. A total of 298 drill holes were completed for a total of 73 899 m on the seven producing assets as well as the Plomosas Silver Project, representing a 65% increase in drilled metres compared to the previous quarter. Primary exploration activities focused on replacement deposits at the Quebradillas mine and the epithermal vein system at Cerro de Santiago at La Parrilla, exploring extensions of the main Santa Elena vein, vein splays of Santa Elena and at the Ermitaño-West project at Santa Elena, exploring Santa Jessica, Santa Regina and Alexa veins in the Central block and Sinaloa Graben at San Dimas and exploring vein mineralisation at the San Juan mine at the Plomosas Silver Project.

For further details, including production tables and the company’s guidance for the rest of the year, click here.

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