First Majestic Stepping Up Exploration As Reserves Decline
First Majestic Silver Corp. (TSX: FR; NYSE: AG; FRANKFURT: FMV; BVM: AG) reports that reserves declined last year but the company is stepping up exploration spending. As of the end of 2016, proven and probable reserves totaled 116.7 million silver-equivalent ounces, a 14% decrease from the prior estimate. This was primarily due to the production depletion of 14.5 million silver-equivalent ounces despite a modest increase of 3% in the assumed silver and gold prices and higher metal prices for lead and zinc, First Majestic says. In addition, the reduction was the effect of an average increase of 10% in the cut-off grades for most of the mines. Measured and indicated resources totaled 139.6 million silver-equivalent ounces, representing an 11% decrease from 2015, while inferred resources decreased 15% to 233.2 million silver-equivalent ounces. However, Keith Neumeyer, president and chief executive officer, outlined plans to step up exploration efforts. "We began 2016 with a small exploration budget of only $9.9 million designed to primarily assist with our mining activities," he says. "In the second half of 2016, we increased the exploration budget by 71% and returned our focus on growing the ounces in the ground. For 2017, we are investing $27 million to complete over 183,000 meters of diamond drilling across our Mexican assets. This renewed investment is expected to add significant growth to our reserves and resources in the years ahead."