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First Majestic Silver Corp. Message Board

  • plk599 plk599 Apr 2, 2012 10:01 PM Flag

    AG 1st Q Earnings

    AG earnings should be out by May 10th or thereabouts based on prior year hisorical per SEDAR.

    In short, the 1st Q 3 month silver price @ $32+ was same as 4th Q.
    Therefore, I expect earnings will come in at $0.22-23 per share. This will be below 4th quarter earnings because silver unhedged plus AG spent $111 million on project development in 2011 v. their $136 million estimate for 2012.

    While this is a cautionary statement about 1st Q expectations, the reason for not selling remain:
    (1) An anticpated rise in silver to $40- 50 over the next several months from those I follow (we'll see as contimued money printing, Treasury funding and other stimulas continue).
    (2) Del Toro resource update in May (there are high expectations).

    If (1) does not occur (ie silver to $40 minimum by end July), then AG will remain below $20.

    In hindsight, I now completely agree with their not paying a dividend until 2013... hopefully all in place by then. This will have concluded several years of major expenditures for La Encantada, La Parilla and significant portion of Del Toro in 2012.

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    • I notice that AG's earnings estimates on Yahoo have been rapidly declining but have not gotten down to your level of 22-23 cents...I don't have my models with me currently so can't compare but I suspect we are close. Margins contracted in the December report...and now we have a non producing acquisition which will take 2 cents off earnings at least.

      Your first reason for not selling may also be a reason for not buying, given the added caveat...(1) An anticpated rise in silver to $40- 50 over the next several months from those I follow (we'll see as contimued money printing, Treasury funding and other stimulas continue).."unless of course the fundamental reasons that would fuel a rise may be constrained or negated by the intervention and manipulation of JPMorgan and friends..."

    • Q4 "realized an average revenue per payable ounce of $31.70" according to their filing.

      Why would increase in project development affect earnings, that is capital cost that is spread over life of mine isn't it?

      There could be a bit more production for Q1 from the La Parrilla expansion that could affect earnings if they ship before end of quarter.

      From 40F filing: "Construction of the new 1,000 tonnes per day cyanidation circuit was completed in January 2012 and commercial production of this circuit was effective March 1, 2012. As at March 30 2012, total throughput at the La
      Parrilla operation was 1,800 tonnes per day."

      • 1 Reply to ch848932
      • If you are patient enough to hold through Q2 then the full effects of La Parilla expansion will be seen.

        Then Q4 Del Toro is expected to start producing:
        "Continue with the preparation of the underground infrastructure for preparation of underground mining, which is anticipated to commence in the fourth quarter of 2012. The initial level of production is planned to be 1,000 tonnes per day through flotation by late 2012, to be ramped up to 2,000 tonnes per day (1,000 tonnes per day flotation and 1,000 tonnes per day cyanidation) by the end of 2013, and then reaching full production at 4,000 tonnes per day (2,000 tonnes per day flotation and 2,000 tonnes per day cyanidation) by the second half of 2014."

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