The Vancouver-based miner that operates six precious metals mines in Mexico, said Wednesday headline earnings fell US3c into the red during the third quarter, compared with nil in the comparable period a year earlier. Analysts were on average looking for adjusted earnings of 1c a share.
Net earnings were $5.9 million, or 3c per share, compared to a loss of $1.3 million in the same period last year.
The increase was mainly attributable to a $15.5 million increase in deferred income-tax recovery driven by foreign exchange, and partially offset by a decrease in operating earnings as a result of the lower silver price and higher general and administrative expenses for the integration of Primero Mining and higher financing costs associated with the convertible debentures issued in the first quarter.
Revenue in the period rose 43% to $88.5 million, which the company said was mainly owing to a 69% increase in silver-equivalent ounces sold.
"During the third quarter, we delivered record silver production, resulting in higher revenues and cash flows compared to the previous quarter even when we experienced a nine-year low in average quarterly silver prices," said CEO Keith Neumeyer.
The company attributed the production increase to a full quarter of output from the San Dimas mine, as well as increases in consolidated silver and gold grades. Total quarterly production increased to a new record 6.7Moz of silver equivalent. Total production comprised a record 3.5Moz of silver, 35,260oz gold, 4.4 million pounds of lead and 1.2Mlbs zinc, the miner said.
The company reported an average silver price of $14.66/oz. All-in sustaining costs were $15.12/oz.
"Consolidated cash costs and AISC decreased nicely to $6.85 and $15.12, respectively, due to improved economies of scale and higher production from San Dimas," Neumeyer added.
"Cost-cutting efforts remain a focus of the company by reducing capital investments at our smaller mines, innovation projects, layoffs and overall curtailment of spending."
First Majestic's equity (TSX:FR) has lost 17% over the past 12 months and traded 3.61% lower Wednesday at C$7.21. This gave the company a market value of $1.4 billion.
