First Majestic (AG) Announces the Opening of a Minting Facility
First Majestic Silver AG has launched its 100% owned and operated minting facility, First Mint, LLC in Nevada through which it can sell its silver production directly to its shareholders and bullion customers. By minting its own silver, AG will also be able to cut down unit production costs and expedite delivery time to customers.
Currently, First Majestic Silver is the only mining company offering its own production in the form of silver bullion for sale through its online bullion store. In 2022, First Majestic sold a record 444,576 ounces of silver bullion through this platform. Sales were 27% higher than the previous year and represented around 4.2% of the company’s silver production.
The total proceeds generated from the bullion sales were $11.6 million, at an average silver price of $26.20 per ounce. However, as per the company, revenues from these sales were lower than expected due to the limited supply from its minting partners.
This move to open its own mint will ensure that the company’s bullion store will have adequate supply to fulfill customers' demand. It will have the capacity of minting more than three million ounces of silver per year.
It will operate some of the most innovative processing equipment in the precious metals industry. This includes an environmentally friendly flameless tunnel, which runs on significantly less electricity and with fewer emissions compared with traditional minting processes. The high-efficiency equipment will help First Majestic to convert its own silver into an array of finished bullion products.
The company expects the new mint to begin production of silver bullion products from the fourth quarter of 2023. The mint will seek ISO 9001:2015 certification thereafter. With this certification, the company will ensure the weight, purity, and content of its bullion products. With time, First Majestic intends to sell 100% of the silver it produces directly to the market.
For 2023, First Majestic expects to sell approximately 400,000 ounces of silver through the mint and in 2024, the figure is expected to go up to 700,000 ounces. With its own mint, the company will be successful in eliminating the middleman by vertically integrating the minting process and controlling the supply chain. This will help the company to capitalize on the strong investment demand for physical silver.
Price Performance
Shares of the First Majestic have lost 27.1% in the past year against the industry's 1.4% growth.
Image Source: Zacks Investment Research
Zacks Rank & Stocks to Consider
First Majestic currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks from the basic materials space are Carpenter Technology Corporation CRS, Hawkins, Inc. HWKN and Alamos Gold Inc. AGI. CRS and HWKN each sport a Zacks Rank# 1 (Strong Buy) at present, while Alamos Gold carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The earnings estimate for Carpenter Technology’s current year is pegged at $3.48 per share, indicating year-over-year growth of 205%. CRS beat the Zacks Consensus Estimate in all the last four quarters, with the average earnings surprise being 10%. The company’s shares have rallied 71% in the past year.
Hawkins has an average trailing four-quarter earnings surprise of 25.5%. The Zacks Consensus Estimate for HWKN’s fiscal 2024 earnings is pegged at $3.40 per share. The consensus estimate for 2024 earnings has moved 38% north in the past 60 days. Its shares have gained 47% in the last year.
The Zacks Consensus Estimate for AGI's current-year earnings has been revised 13.2% upward over the past 60 days. The Zacks Consensus Estimate for current fiscal year earnings for Alamos Gold is currently pegged at 43 cents per share, implying year-over-year growth of 53.6%. AGI shares have gained around 59% in a year.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Carpenter Technology Corporation (CRS) : Free Stock Analysis Report
Alamos Gold Inc. (AGI) : Free Stock Analysis Report
First Majestic Silver Corp. (AG) : Free Stock Analysis Report
Hawkins, Inc. (HWKN) : Free Stock Analysis Report
