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First Majestic Silver produces 3.5 million silver equivalent ounces in Q2

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(Kitco News) - A temporary shutdowns during the second quarter due to the COVID-19 pandemic had limited impact on silver production, according First Majestic Silver Corp. (NYSE: AG, TSX: FR).

In a press release Wednesday, the senior silver producer said total production in the second quarter of 2020 reached 3.5 million silver equivalent ounces consisting of 1.8 million ounces of silver and 15,764 ounces of gold.

“Despite the temporary shutdown of operations during the quarter, our production results were better than anticipated as a result of implementing an extended and safe ramp down of the San Dimas operation throughout the month of April,” said Keith Neumeyer, president and CEO. “San Dimas produced a total of 2.4 million silver equivalent ounces, or 35% lower than the previous quarter. Total production at the Santa Elena and La Encantada operations were 63% and 45% lower, respectively, compared to the prior quarter as a result of suspending operations in early April.”

In March, as the coronavirus was spreading across the world, the Mexican government along with other Latin-American nations implemented strict lockdown measures and mining companies, not considered essential services, were forced to temporarily halt production. Mexico accounts for 28% of global silver production.

“We began implementing restart procedures in mid-May following the Ministry of Health’s announcement that mining activities were now deemed an essential business throughout Mexico.  As of today, our operations are back to pre-pandemic production rates and our focus for the second half of 2020 is to try and fully recover the lost ounces due to the shutdown,” Neumeyer said.

The company also said that as of June 30 it held 970,000 ounces of silver in inventory in anticipation of realizing higher selling prices in the second half of 2020.

The company's plan to hold on to its silver and wait for higher prices appears to be paying off as silver prices trade at a one-year high above $19 an ounce.

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