First Majestic Silver Corp.: First Quarter Production Results and Full Commencement of Commercial Production at La Parrilla

Marketwired

VANCOUVER, BRITISH COLUMBIA--(Marketwire -04/16/12)- First Majestic Silver Corp. ("First Majestic" or the "Company") (TSX: FR.TO - News)(NYSE: AG - News)(Frankfurt: FMV.F - News)(WKN: A0LHKJ) is pleased to announce that total production at its three mines in Mexico for the first quarter ending March 31, 2012 reached 2,007,219 equivalent ounces of silver.

The total equivalent silver production for the quarter consisted of 1,826,803 ounces of silver, representing a 7% decrease compared to the prior quarter but an increase of 3% compared to the same quarter in 2011. In addition, 3,176,662 pounds of lead was produced representing a 7% decrease from the previous quarter and an increase of 167% compared to the same quarter in the previous year and 1,320,726 pounds of zinc was produced compared with 152,664 pounds from the previous quarter and none in the same quarter of the previous year. Also, 611 ounces of gold was produced, representing an increase of 39% compared to the previous quarter and an increase of 74% compared to the first quarter of 2011.

The Company is pleased to announce that the new La Parrilla cyanidation circuit has been deemed commercial effective March 1, 2012. Effective March 1, 2012, all revenues and costs will henceforth be treated as normal course operations and recorded in the Company's income statement. The connection of the new power line to the national grid and the construction of the Merrill-Crowe circuit are now completed. The installation of the new tailings filters is expected to be completed during the second quarter.

Keith Neumeyer, President & CEO of First Majestic states, "Our focus in the first quarter paid off with the completion of the new cyanidation circuit at La Parrilla. With two major construction projects underway our operations staff deserve to be commended by achieving close to budget in this quarter. The way is now paved for a great start to 2012."

 

Production Details Table:

---------------------------------------------------------------------------
                                Quarter Ended  Quarter Ended              %
                                     March 31,      March 31,      Variance
Consolidated                             2012           2011     Prior Year
---------------------------------------------------------------------------
Ore processed/tonnes milled           558,183        456,506            22%
---------------------------------------------------------------------------
Total production - ounces of
 silver equivalent                  2,007,219      1,825,366            10%
---------------------------------------------------------------------------
Total commercial production -
 ounces silver equivalent           1,976,763      1,825,366             8%
---------------------------------------------------------------------------
Silver ounces produced              1,826,803      1,769,208             3%
---------------------------------------------------------------------------
Pre-commercial silver ounces
 produced                              28,639              -           100%
---------------------------------------------------------------------------
Silver Grade (g/t)                        177            211          (16)%
---------------------------------------------------------------------------
Silver Recovery (%)                       57%            57%              -
---------------------------------------------------------------------------
Pounds of lead produced             3,176,662      1,187,912           167%
---------------------------------------------------------------------------
Equivalent ounces from lead            92,859         38,340           142%
---------------------------------------------------------------------------
Lead Grade (%)                            1.9            1.7            12%
---------------------------------------------------------------------------
Lead Recovery (%)                         89%            87%             2%
---------------------------------------------------------------------------
Pounds of zinc produced             1,320,726              -           100%
---------------------------------------------------------------------------
Equivalent ounces from zinc            37,273              -           100%
---------------------------------------------------------------------------
Gold ounces produced                      611            351            74%
---------------------------------------------------------------------------
Equivalent ounces from gold            36,168         16,751           116%
---------------------------------------------------------------------------
Equivalent ounces from iron            14,116          1,067          1223%
---------------------------------------------------------------------------

Other Developments:

The total ore processed during the quarter at the Company's three operating silver mines, the La Encantada Silver Mine, the La Parrilla Silver Mine and the San Martin Silver Mine, amounted to 558,183 tonnes milled representing a decrease of 1% over the previous quarter due to fewer operating days. The average head grade in the quarter for the three mines decreased by 12% over the previous quarter to 177 g/t of silver. The combined recoveries of silver increased from 54% to 57% in the quarter.

The Company's underground development, including Robbins raises in the first quarter consisted of 16,088 metres, compared to 12,841 metres completed in the previous quarter. There were 29,194 metres of diamond drilling completed in the quarter compared with 19,916 metres of diamond drilling in the fourth quarter 2011 representing a 47% increase. The expanded exploration program consists of definition drilling to define Reserves and Resources at the Company's three operating mines to assist in mining activities and at the Del Toro Silver Mine which is being prepared for production later in 2012. The Company had 19 diamond drill rigs operating during the first quarter.

At the La Encantada Silver Mine:

 

--  The third ball mill which was installed in the fourth quarter and is
    expected to be operational by April 15th, bringing fresh ore throughput
    to 1,500 tpd. The increase in processing ore from the mine relative to
    ore from tailing is expected to assist in improving overall grades and
    recoveries at the processing plant. In addition, metallurgical testing
    is ongoing with the objective of improving recoveries by eliminating or
    reducing the manganese in the ore feed prior to the cyanidation process.
--  There was continued underground development to access the San Francisco
    vein. This area is known for higher silver grades and lower manganese
    content. In addition, the Milagros Breccia pipe, also an area of lower
    manganese, is being developed at the 600 and the 730 Levels in order for
    it to be brought into production in the second quarter of 2012.
--  Three diamond drill rigs are active at La Encantada, two on surface and
    one underground, with the objective of defining Reserves and Resources.
    A new NI 43-101 Technical Report will be released prior to 2012 year
    end.
--  A total of 6,038 metres have been drilled compared to 2,922 metres of
    drilling in the fourth quarter of 2011, showing an increase of 107% over
    the prior quarter. A total of 3,921 metres of underground development
    was completed in the first quarter compared to 3,760 metres of
    development in the fourth quarter 2011, an increase of 4% over the prior
    quarter. In addition, 802 metres of Robbins raises were developed which
    will aid with ventilation and optimization of the operations at the
    mine.

At the La Parrilla Silver Mine:

 

--  The new parallel 1,000 tpd flotation and 1,000 tpd cyanidation circuits
    (2,000 tpd combined), which replaced the old 850 tpd total circuit
    capacity, are now fully operational.
--  The final additional improvement will be the operation of the new
    tailings filters which will re-circulate over 80% of the water through
    the milling process. The tailings filters are in the final stage of
    installation, and are expected to be operational in the second quarter
    of 2012.
--  The new 115,000 Kw power transmission line was completed and connected
    in January; this power supply will provide the mine with a more
    dependable and continuously operational and a lower cost per kilowatt
    power source.
--  At the La Parrilla Silver Mine, there are four diamond drill rigs
    operating, three are on surface and one underground. The total metres
    drilled during the quarter amounted to 5,569 metres compared to 4,648
    metres drilled in the previous quarter. Development completed in the
    quarter was 5,039 metres compared with 3,793 metres developed in the
    previous quarter.
--  At the newly designed run rate of 2,000 tpd, it is anticipated that the
    La Parrilla operation will produce in the range of 3.0 to 3.2 million
    ounces of silver equivalent annually. The mill average throughput in the
    first quarter was 1,681 tpd and the current rate is 1,850 tpd.
--  As part of the expansion program, an intensive underground development
    program and a new ramp system is under construction including a new
    production shaft. Once completed, an underground rail system connecting
    the different operations to the shaft will be constructed. This
    investment will improve logistics, transportation of ore and is expected
    to ultimately reduce cash costs.
--  An aggressive exploration program with diamond drilling, both
    underground and on surface, has indicated the continuation of the
    Rosarios vein both at depth and in the lateral extension connecting the
    San Marcos vein with the Rosarios vein system.
--  The year 2012 will mark the first time that the regional geological
    anomalies within this large 69,460 hectare land package will be drilled.
    Results from this exploration program are expected to be released in
    late 2012 in an updated NI 43-101 Technical Report.

At the San Martin Silver Mine:

 

--  The two new induction furnaces and two new filter presses were installed
    are now fully operational. These mill improvements completed in 2011 are
    having a positive impact on overall production, quality of dore and
    total cash costs. Further improvements are planned for 2012 including
    new leaching tanks and new thickeners, which are in the process of being
    constructed.
--  The early results of the exploration drilling program at the
    Rosarios/Huichola veins have also returned very positive results; a new
    North/South system of veins is in the process of being defined. Five
    drill rigs are currently active within the San Martin property. During
    the quarter, a total of 9,205 metres of diamond drilling was completed
    plus 2,526 metres of development compared with 6,885 metres of drilling
    and 2,426 metres of development in the fourth quarter of 2011.

At the Del Toro Silver Mine:

 

--  Construction and development of the Del Toro Silver Mine is well
    underway and is expected to commence production at 1,000 tpd in the
    fourth quarter of 2012, and is planned to reach 4,000 tpd by mid-2014.
--  As at quarter end, seven drill rigs were active; four on surface and
    three underground. During the quarter, 36 holes were completed for a
    total of 8,382 metres. Drilling continues in order to infill previous
    holes, and test for additional Resources and to upgrade previously
    defined Measured and Indicated Resources.
--  The underground development at the San Juan mine in 2011 was successful
    in reaching ore bodies #1 and #2 via the main ramp. Development
    continues in this ramp to access ore body number #3 at depth. This main
    ramp was developed 186 metres during the quarter, and will be used for
    ore haulage in the first production stage prior to the shaft being
    completed. This main ramp will ultimately act as an access to the three
    main ore bodies which will be developed over the next twelve months
    during the construction of the new mill.
--  Underground development at the Dolores and Perseverancia mines continued
    with 142 metres and 244 metres respectively being completed in the first
    quarter.
--  After the completion of the platform construction at the mill site,
    foundations were poured at the crushing, flotation and thickener areas
    during the quarter, and mechanical installation also began in the
    crushing area. The water treatment plant was completed during the
    quarter and is in the process of being tested. Also, 95% of the required
    equipment for the flotation circuit and 60% of the equipment for the
    cyanidation circuit has been ordered and is in the process of being
    delivered.
--  Underground development is also underway at the Perseverancia mine which
    is proving very successful. A new discovery, San Nicolas, was
    intersected in November 2011 and the Company is now focusing on the
    development of additional NI 43-101 compliant silver ounces. Portions of
    this new discovery will be included in the NI 43-101 Preliminary
    Economic Assessment (PEA) which is expected to be released in May of
    2012.
--  Additional information is in the process of being provided to the
    Mexican government authorities to complete the permitting process for
    the cyanidation circuit and the increase of tonnage at the project.

At the La Luz Silver Project:

 

--  The permit for the restoration of the old historic buildings at the
    Santa Ana Hacienda has been received and the construction of the
    previously announced Thematic and Cultural Park which will include a
    mining museum has begun. In addition, cleaning of the impressive
    underground workings is underway to rehabilitate this historic mine for
    public access. This new cultural facility and mining museum will form a
    'Sustainable Development Project' which will provide permanent long term
    jobs to the local communities.
--  To date, the Baseline Study and the Geo-hydrologic Study have been
    completed. The Environmental Impact Statement, the Risk Study, and the
    Change of Use of Land Studies are expected to be presented to government
    authorities in the second half of 2012.
--  A metallurgical test is underway to define the final flow sheet diagram
    for a flotation plant which will pave the way for final permitting.
--  The Company continued with the process of obtaining final approval for
    the purchasing of 100 hectares of surface rights that was acquired
    during the third quarter of 2011 in order to secure an area where the
    proposed plant and mine access will be located.

First Majestic is a producing silver company focused in Mexico and is aggressively pursuing its business plan to become a senior silver producer through the development of its existing assets and the pursuit through acquisition of additional assets that contribute to achieving its corporate growth objectives.

FIRST MAJESTIC SILVER CORP.

Keith Neumeyer, President & CEO

Cautionary Note Regarding Forward Looking Statements

This press release contains "forward-looking statements", within the meaning of the United States Private Securities Litigation Reform Act of 1995 and applicable Canadian securities legislation, concerning the business, operations and financial performance and condition of First Majestic Silver Corp. Forward-looking statements include, but are not limited to, statements with respect to the future price of silver and other metals, the estimation of mineral reserves and resources, the realization of mineral reserve estimates, the timing and amount of estimated future production, costs of production, capital expenditures, costs and timing of the development of new deposits, success of exploration activities, permitting time lines, hedging practices, currency exchange rate fluctuations, requirements for additional capital, government regulation of mining operations, environmental risks, unanticipated reclamation expenses, timing and possible outcome of pending litigation, title disputes or claims and limitations on insurance coverage. Generally, these forward-looking statements can be identified by the use of forward-looking terminology such as "plans", "expects" or "does not expect", "is expected", "budget", "scheduled", "estimates", "forecasts", "intends", "anticipates" or "does not anticipate", or "believes", or variations of such words and phrases or state that certain actions, events or results "may", "could", "would", "might" or "will be taken", "occur" or "be achieved".

Forward-looking statements are subject to known and unknown risks, uncertainties and other factors that may cause the actual results, level of activity, performance or achievements of First Majestic Silver Corp. to be materially different from those expressed or implied by such forward-looking statements, including but not limited to: risks related to the integration of acquisitions; risks related to international operations; risks related to joint venture operations; actual results of current exploration activities; actual results of current reclamation activities; conclusions of economic evaluations; changes in project parameters as plans continue to be refined; future prices of metals; possible variations in ore reserves, grade or recovery rates; failure of plant, equipment or processes to operate as anticipated; accidents, labour disputes and other risks of the mining industry; delays in obtaining governmental approvals or financing or in the completion of development or construction activities, as well as those factors discussed in the section entitled "Description of the Business - Risk Factors" in First Majestic Silver Corp.'s Annual Information Form for the year ended December 31, 2011, available on www.sedar.com, and Form 40-F on file with the United States Securities and Exchange Commission in Washington, D.C. Although First Majestic Silver Corp. has attempted to identify important factors that could cause actual results to differ materially from those contained in forward-looking statements, there may be other factors that cause results not to be as anticipated, estimated or intended. There can be no assurance that such statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking statements. First Majestic Silver Corp. does not undertake to update any forward-looking statements that are incorporated by reference herein, except in accordance with applicable securities laws.

Contact:

First Majestic Silver Corp.
Keith Neumeyer
President & CEO
(604) 688-3033 or Toll Free: 1-866-529-2807
(604) 639-8873 (FAX)
info@firstmajestic.com
www.firstmajestic.com

View Comments (0)