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First Majestic looks to produce 11.8 to 13.2 million ounces of silver in 2020

Kitco News

Editor's Note: The article was updated to include more information

p>(Kitco News) First Majestic Silver Corp. (TSX: FR.TO) anticipates less silver-equivalent production in 2020 than last year, but output is expected to be around levels from 2018, when there was a big jump to the second-highest level in the company’s history.

The company said it projects 2020 production of between 21.5 million and 24 million silver-equivalent ounces, when including gold by-products. Silver production is expected to be 11.8 million to 13.2 million ounces.

This comes after officials last week announced 2019 production came in at a record 25.6 million silver-equivalent ounces, which First Majestic said was a 15% increase over 2018 and at the top end of its guidance of 24.4 million to 26 million ounces.

Still, next year’s forecast output is in line with 2018 production of 22.2 million silver-equivalent ounces, which was a record at the time. That year, First Majestic was operating seven mines, instead of the three for next year. The 2018 tally was a 37% jump from the prior year.

Officials said the 2020 guidance only assumes production from its three largest mines: San Dimas, Santa Elena and La Encantada. The San Martin and La Parrilla mines are expected to remain suspended, and Del Toro is being wound down with no production planned in 2020, First Majestic said. By suspending the company’s highest-cost lead and zinc mines, management can focus on cost reduction and innovation at its most profitable silver and gold mines, First Majestic continued.

“For 2020, our focus remains on adopting new innovation projects to modernize our processing plants to achieve higher recoveries, improve efficiencies and reduce operating costs,”said Keith Neumeyer, president and chief executive officer.

“We have witnessed significant benefits from high-intensity grinding at our Santa Elena operation in 2019, and we plan to install the same technology at San Dimas in 2020. In addition, we continue to advance underground development activities at the Ermitaño project near Santa Elena to prepare the mine for initial production in early 2021. Our increased investments in underground development and innovation in 2020 is expected to result in significant production growth in 2021 and beyond.”

Officials said they anticipate higher production at  San Dimas (with plans to restart mining operations at past-producing Tayoltita), Santa Elena and La Encantada. San Martin likely will remain closed due to security concerns. While Del Toro will be suspended, First Majestic said a drill program will be expanded in an effort to find new resources for a potential reopening in the future.

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