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First Majestic Silver reports net loss in 2022, notes ‘lower than expected' production at Jerritt Canyon

Kitco News

(Kitco News) - First Majestic Silver (NYSE: AG; TSX: FR) today reported record production of 31.3 million silver equivalent ounces in 2022, consisting of 10.5 million silver ounces and 248,394 gold ounces, or a 16% increase compared to 2021.

The company said it generated record annual revenues totaling $624.2 million in 2022, or 7% higher compared to 2021, primarily due to the first full year of production from the Ermitaño mine at Santa Elena.

However, First Majestic noted that its 2022 mine operating earnings declined year-over-year and totaled $16.8 million compared to $101.4 million in 2021.

“The decrease in mine operating earnings was driven by lower than expected production at Jerritt Canyon resulting in higher production costs per ounce, the decrease in the average realized silver price during the year as well as an increase in depreciation and depletion,” it said in a news release.

The company also saw an increase in the cost of sales resulting from supply chain challenges, inflationary cost pressures and a slightly stronger Mexican Peso.

Cash flows before movements in working capital and taxes during the year were $109.4 million compared to $176.8 million in the prior year, representing a 38% decrease.

The company reported 2022 net earnings of ($114.3) million (EPS of ($0.43)) compared to ($4.9) million (EPS of ($0.02)) in 2021. Adjusted net earnings for the year were ($55.4) million, or ($0.21) per share, compared to $6.0 million, or $0.02 per share in 2021.

The company said it ended the year with cash and cash equivalents of $151.4 million, excluding $125.2 million held in restricted cash, adding it also ended the year with strong working capital of $202.9 million.

First Majestic also announced that its Board of Directors has declared a cash dividend payment in the amount of $0.0054 per common share for the fourth quarter of 2022.

In 2023, the company expects to increase production to a new company record of between 33.2 to 37.1 million silver equivalent ounces, consisting of 10.0 to 11.1 million ounces of silver and 277,000 to 310,000 ounces of gold, with an all-in sustaining cost guidance of between $18.47 to $19.72 per silver equivalent ounce.

In 2023, First Majestic is expecting significant improvements at Jerritt Canyon where gold production is projected to nearly double along with lower all-in sustaining costs when compared to 2022.

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 Santa Elena silver/gold mine, the La Encantada silver mine, and the Jerritt Canyon gold mine.

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