First Majestic Silver Corp. has decided to temporarily suspend mining operations at its La Parrilla silver mine in Mexico towards the end of the year.
President and CEO Keith Neumeyer said this is being done in an effort to improve the mine's margins and profitability, which has suffered due to low silver and lead prices. It plans to revitalize an exploration program to build enough reserves and resources near the mine to potentially justify a restart by early 2021.
The company lowered its annual silver equivalent production guidance to between 24.4 million ounces and 26.0 Moz from the 24.7 Moz to 27.5 Moz previously forecast. Silver production for 2019 is expected to lie between 12.8 Moz and 13.5 Moz, compared to 14.2 Moz to 15.8 Moz previously anticipated due to the temporary suspension of production from the roaster at La Encantada which has suffered from challenges and is being re-engineered.
All-in sustaining costs per ounce for the full year are now expected between US$12.98 and US$13.94 from the previously guided US$12.55 to US$14.23.
These changes incorporate increased recoveries at the Santa Elena gold mine in Mexico, higher production at the San Dimas gold mine in Mexico, lower production at the La Encantada and San Martin silver mines in Mexico, and the suspension at La Parrilla.
The company narrowed its net loss for the second quarter to US$12 million from US$40 million a year ago.
Total revenue for the quarter rose 5% year over year to US$83.7 million primarily due to an increase in silver equivalent ounces, which was partially offset by a decrease in silver prices.