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JPMorgan spoofing convictions don't 'tell the whole story' - First Majestic Silver's Keith Neumeyer

Kitco News

(Kitco News) - First Majestic Silver CEO Keith Neumeyer was not surprised by last month's conviction of JPMorgan Chase & Co employees for illegally manipulating the precious metal market.

Last week Neumeyer spoke to Kitco at the Gold Forum Americas show in Colorado Springs.

In August, two out of three former JPMorgan Chase & Co employees were convicted by a federal jury in Chicago after being charged with manipulating gold prices for years. The conviction included charges of price manipulation, spoofing and wire fraud.

"I used to work for banks back in the '80s. These trading methods are common, and they're endemic throughout the entire system. You know it doesn't tell the whole story. These trading desks communicate with each other on a regular basis, and it's not just in the silver market. It is throughout all equity markets and all commodity markets," said Neumeyer.

"Call it collusion, call it what you will. It doesn't really matter what name you put on it. They're protecting their book. Their job is to make money for the bank. That's that's what they're hired to do...but this is endemic, as I said."

First Majestic Silver (NYSE: AG) is a miner with operations in the U.S. and Mexico. The company is expecting a 25% production leap in H2 thanks to Santa Elena and Jerritt Canyon operations. The company will eventually settle on annualized production of 45 to 50 million silver equivalent ounces by the end of 2024.

A year ago, Jerritt Canyon was acquired by First Majestic from Sprott Mining for $470 million. The deposit was discovered in 1972; it has been in production since 1981 and has produced over 9.5 million ounces of gold over its 40-year production history. First Majestic has spent money on operations at Jerritt to increase production.


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Neumeyer said Jerritt provides the pieces for future M&A.

"We would love to get a nice, juicy silver mine into our portfolio, but they're just hard to find. I think it is an important step for us in the growth of our business to step into Nevada. [It] is a very exciting jurisdiction to be in. We're building a team around the Jarritt Canyon operation, and we
hope that team's going to be used for future M&A opportunities, as well."

First Majestic has a total of 250,000 meters of drilling planned, what Neumeyer calls a record exploration budget for the company.

Neumeyer said the fall in precious metal prices and the drying up of liquidity is tough on the juniors.

"Being a junior and not cash flowing, it's tough times. I was just talking yesterday with a fellow and you know this is a reminiscent of 2015," said Neumeyer.

Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.