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First Majestic Silver posts net loss of $84M in Q2 due to income tax expense, declares dividend

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(Kitco News) - First Majestic Silver (NYSE: AG; TSX: FR) reported today that in Q2 2022, its total production was 7.7 million silver equivalent ounces, up 20% compared to Q2 2021.

According to the company's statement, revenues generated in the second quarter totaled $159.4 million compared to $154.1 million in the second quarter of 2021.

The increase in revenues was primarily attributed to inclusion of a full quarter of production from Jerritt Canyon and the processing of the Ermitaño ore at the Santa Elena mill, partially offset by weaker metal prices, the company said.

Mine operating earnings totaled $11.6 million compared to $29.4 million in the second quarter of 2021.

The company explained that the decrease in mine operating earnings is primarily attributed to lower metal prices, an increase in cost of sales and depreciation and depletion attributed to the addition of Jerritt Canyon and Ermitaño.

The company also reported net earnings of ($84.1 million) (EPS of ($0.32)) compared to $15.6 million (EPS of $0.06) in the second quarter of 2021.

First Majestic noted that the decrease in net earnings was primarily attributed to a $78.7 million income tax expense compared to an expense of $1.0 million in the second quarter of 2021.

Adjusted net earnings for the quarter was ($5.7) million (adjusted EPS of ($0.02)) compared to $12.7 million (adjusted EPS of $0.05) in the second quarter of 2021.

Importantly, the company announced that its Board of Directors has declared a cash dividend payment in the amount of $0.0061 per common share for the second quarter of 2022.

"Throughout the second quarter, the silver price continued to experience significant volatility, declining approximately 20% from $25 to $20," stated President and CEO Keith Neumeyer. "As a result of this weakness, the company refocused and successfully reduced its 2022 capital investments without impacting its strong growth in projected production."

"In Mexico, our three operations generated healthy profit margins as approximately 80% of our total production came in at a low AISC cost of $15.34 per ounce. In addition, we expect consolidated AISC to continue to trend lower throughout the next two quarters as production ramps up at Santa Elena and Jerritt Canyon, as well as other inflationary cost saving measures are achieved," he added.

First Majestic is a publicly traded mining company focused on silver and gold production in Mexico and the United States. The company presently owns and operates the San Dimas silver/gold mine, the Jerritt Canyon gold mine, the Santa Elena silver/gold mine and the La Encantada silver mine.

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