|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
FIRST MAJESTIC SILVER CORP.
|
|
|
|
By:
|
|
|
|
/s/ Connie Lillico
|
|
Connie Lillico
|
|
Corporate Secretary
|
|
|
|
August 13, 2018
|
|
925 West Georgia Street, Suite 1800, Vancouver, B.C., Canada V6C 3L2
Phone: 604.688.3033 | Fax: 604.639.8873| Toll Free: 1.866.529.2807 | Email: info@firstmajestic.com
www.firstmajestic.com
|
|
|
|
Keith Neumeyer
|
|
Raymond Polman, CPA, CA
|
President & CEO
|
|
Chief Financial Officer
|
August 9, 2018
|
|
August 9, 2018
|
CONDENSED INTERIM CONSOLIDATED STATEMENTS OF (LOSS) EARNINGS
|
|
FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2018 and 2017
|
|
Condensed Interim Consolidated Financial Statements - Unaudited
|
(In thousands of US dollars, except share and per share amounts)
|
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
Note
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
|
|
|
|
|
|
|
|
|
|
||||||||
Revenues
|
|
|
$79,687
|
|
|
|
$60,116
|
|
|
|
$138,280
|
|
|
|
$129,222
|
|
|
Mine operating costs
|
|
|
|
|
|
|
|
|
|
||||||||
Cost of sales
|
|
59,285
|
|
|
40,004
|
|
|
98,966
|
|
|
79,666
|
|
|||||
Depletion, depreciation and amortization
|
|
|
22,706
|
|
|
18,707
|
|
|
42,041
|
|
|
38,155
|
|
||||
|
|
|
81,991
|
|
|
58,711
|
|
|
141,007
|
|
|
117,821
|
|
||||
|
|
|
|
|
|
|
|
|
|
||||||||
Mine operating (loss) earnings
|
|
|
(2,304
|
)
|
|
1,405
|
|
|
(2,727
|
)
|
|
11,401
|
|
||||
|
|
|
|
|
|
|
|
|
|
||||||||
General and administrative expenses
|
|
5,201
|
|
|
4,477
|
|
|
10,069
|
|
|
9,020
|
|
|||||
Share-based payments
|
|
|
2,247
|
|
|
2,169
|
|
|
4,763
|
|
|
4,460
|
|
||||
Impairment of non-current assets
|
|
31,660
|
|
|
—
|
|
|
31,660
|
|
|
—
|
|
|||||
Acquisition costs
|
|
4,877
|
|
|
—
|
|
|
4,877
|
|
|
—
|
|
|||||
Foreign exchange loss (gain)
|
|
|
285
|
|
|
(661
|
)
|
|
2,581
|
|
|
(1,075
|
)
|
||||
Operating loss
|
|
|
(46,574
|
)
|
|
(4,580
|
)
|
|
(56,677
|
)
|
|
(1,004
|
)
|
||||
|
|
|
|
|
|
|
|
|
|
||||||||
Investment and other income (loss)
|
|
1,038
|
|
|
(1,100
|
)
|
|
(421
|
)
|
|
(924
|
)
|
|||||
Finance costs
|
|
(3,799
|
)
|
|
(1,016
|
)
|
|
(6,258
|
)
|
|
(2,186
|
)
|
|||||
Loss before income taxes
|
|
|
(49,335
|
)
|
|
(6,696
|
)
|
|
(63,356
|
)
|
|
(4,114
|
)
|
||||
|
|
|
|
|
|
|
|
|
|
||||||||
Income
taxes
|
|
|
|
|
|
|
|
|
|
||||||||
Current income tax expense
|
|
|
1,680
|
|
|
1,663
|
|
|
2,374
|
|
|
2,445
|
|
||||
Deferred income tax recovery
|
|
|
(10,982
|
)
|
|
(9,771
|
)
|
|
(20,105
|
)
|
|
(10,691
|
)
|
||||
|
|
|
(9,302
|
)
|
|
(8,108
|
)
|
|
(17,731
|
)
|
|
(8,246
|
)
|
||||
|
|
|
|
|
|
|
|
|
|
||||||||
Net (loss) earnings for the period
|
|
|
|
($40,033
|
)
|
|
|
$1,412
|
|
|
|
($45,625
|
)
|
|
|
$4,132
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
(Loss) earnings per common share
|
|
|
|
|
|
|
|
|
|
||||||||
Basic
|
|
|
($0.22
|
)
|
|
|
$0.01
|
|
|
|
($0.26
|
)
|
|
|
$0.03
|
|
|
Diluted
|
|
|
($0.22
|
)
|
|
|
$0.01
|
|
|
|
($0.26
|
)
|
|
|
$0.02
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Weighted
average
shares
outstanding
|
|
|
|
|
|
|
|
|
|
||||||||
Basic
|
|
181,126,340
|
|
|
165,117,436
|
|
|
173,515,346
|
|
|
164,967,617
|
|
|||||
Diluted
|
|
181,126,340
|
|
|
167,466,952
|
|
|
173,515,346
|
|
|
167,450,457
|
|
|
|
|
Keith Neumeyer, Director
|
|
Douglas Penrose, Director
|
CONDENSED INTERIM CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME
|
|
FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2018 and 2017
|
|
Condensed Interim Consolidated Financial Statements - Unaudited
|
(In thousands of US dollars)
|
|
Note
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
|
|
|
|
|
|
|
|
|
||||||||
Net (loss) earnings for the period
|
|
|
($40,033
|
)
|
|
|
$1,412
|
|
|
|
($45,625
|
)
|
|
|
$4,132
|
|
|
|
|
|
|
|
|
|
|
||||||||
Other comprehensive loss
|
|
|
|
|
|
|
|
|
||||||||
Items that will not be subsequently reclassified to profit or loss:
|
|
|
|
|
|
|
|
|
||||||||
Unrealized loss on fair value of investments in marketable securities
|
(350
|
)
|
|
(65
|
)
|
|
(698
|
)
|
|
(310
|
)
|
|||||
|
|
|
|
|
|
|
|
|
||||||||
Other comprehensive loss
|
|
(350
|
)
|
|
(65
|
)
|
|
(698
|
)
|
|
(310
|
)
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Total comprehensive (loss) income
|
|
|
($40,383
|
)
|
|
|
$1,347
|
|
|
|
($46,323
|
)
|
|
|
$3,822
|
|
CONDENSED INTERIM CONSOLIDATED STATEMENTS OF CASH FLOWS
|
|
FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2018 and 2017
|
|
Condensed Interim Consolidated Financial Statements - Unaudited
|
(In thousands of US dollars)
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
Note
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Operating
Activities
|
|
|
|
|
|
|
|
|
||||||||
Net (loss) earnings for the period
|
|
|
($40,033
|
)
|
|
|
$1,412
|
|
|
|
($45,625
|
)
|
|
|
$4,132
|
|
Adjustments for:
|
|
|
|
|
|
|
|
|
||||||||
Depletion, depreciation and amortization
|
|
22,876
|
|
|
18,955
|
|
|
42,398
|
|
|
38,652
|
|
||||
Share-based payments
|
|
2,247
|
|
|
2,169
|
|
|
4,763
|
|
|
4,460
|
|
||||
Impairment of non-current assets
|
31,660
|
|
|
—
|
|
|
31,660
|
|
|
—
|
|
|||||
Income tax recovery
|
|
(9,302
|
)
|
|
(8,108
|
)
|
|
(17,731
|
)
|
|
(8,246
|
)
|
||||
Finance costs
|
3,799
|
|
|
1,016
|
|
|
6,258
|
|
|
2,186
|
|
|||||
Acquisition costs
|
4,877
|
|
|
—
|
|
|
4,877
|
|
|
—
|
|
|||||
Other
|
(1,894
|
)
|
|
2,533
|
|
|
3,271
|
|
|
3,411
|
|
|||||
Operating
cash
flows
before
movements
in
working
capital and taxes
|
|
14,230
|
|
|
17,977
|
|
|
29,871
|
|
|
44,595
|
|
||||
Net change in non-cash working capital items
|
(2,514
|
)
|
|
(461
|
)
|
|
(8,023
|
)
|
|
(3,140
|
)
|
|||||
Income taxes paid
|
|
(4,885
|
)
|
|
(17
|
)
|
|
(5,146
|
)
|
|
(5,936
|
)
|
||||
Cash
generated
by
operating
activities
|
|
6,831
|
|
|
17,499
|
|
|
16,702
|
|
|
35,519
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Investing
Activities
|
|
|
|
|
|
|
|
|
||||||||
Expenditures on mining interests
|
|
(17,612
|
)
|
|
(11,528
|
)
|
|
(34,251
|
)
|
|
(23,598
|
)
|
||||
Acquisition of property, plant and equipment
|
|
(8,634
|
)
|
|
(5,784
|
)
|
|
(14,903
|
)
|
|
(10,746
|
)
|
||||
Deposits paid for acquisition of non-current assets
|
|
(1,324
|
)
|
|
(170
|
)
|
|
(2,150
|
)
|
|
(241
|
)
|
||||
Primero acquisition costs, net of cash acquired
|
(1,006
|
)
|
|
—
|
|
|
(1,006
|
)
|
|
—
|
|
|||||
Cash
used
in
investing
activities
|
|
(28,576
|
)
|
|
(17,482
|
)
|
|
(52,310
|
)
|
|
(34,585
|
)
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Financing
Activities
|
|
|
|
|
|
|
|
|
||||||||
Proceeds from exercise of stock options
|
|
1,203
|
|
|
525
|
|
|
1,886
|
|
|
3,169
|
|
||||
Net proceeds from convertible debentures
|
—
|
|
|
—
|
|
|
151,079
|
|
|
—
|
|
|||||
Net proceeds from debt facilities
|
34,006
|
|
|
—
|
|
|
34,006
|
|
|
—
|
|
|||||
Repayment of debt facilities
|
(16,000
|
)
|
|
—
|
|
|
(16,000
|
)
|
|
—
|
|
|||||
Repayment of Scotia debt facilities
|
(28,890
|
)
|
|
(3,132
|
)
|
|
(32,072
|
)
|
|
(6,363
|
)
|
|||||
Repayment of Primero's debt facilities
|
(106,110
|
)
|
|
—
|
|
|
(106,110
|
)
|
|
—
|
|
|||||
Proceeds from equipment financing obligations
|
—
|
|
|
2,966
|
|
|
—
|
|
|
2,966
|
|
|||||
Repayment of equipment financing obligations
|
(1,246
|
)
|
|
(1,606
|
)
|
|
(1,956
|
)
|
|
(3,667
|
)
|
|||||
Finance costs paid
|
|
(654
|
)
|
|
(558
|
)
|
|
(1,294
|
)
|
|
(1,369
|
)
|
||||
Shares repurchased and cancelled
|
(35
|
)
|
|
—
|
|
|
(1,324
|
)
|
|
—
|
|
|||||
Cash
provided by
(
used in) financing
activities
|
|
(117,726
|
)
|
|
(1,805
|
)
|
|
28,215
|
|
|
(5,264
|
)
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Effect of exchange rate on cash and cash
equivalents held in foreign currencies
|
|
(540
|
)
|
|
1,082
|
|
|
(1,520
|
)
|
|
2,180
|
|
||||
Decrease in cash and cash equivalents
|
|
(139,471
|
)
|
|
(1,788
|
)
|
|
(7,393
|
)
|
|
(4,330
|
)
|
||||
Cash and cash equivalents, beginning of the period
|
|
249,239
|
|
|
127,605
|
|
|
118,141
|
|
|
129,049
|
|
||||
Cash and cash equivalents, end of period
|
|
|
$109,228
|
|
|
|
$126,899
|
|
|
|
$109,228
|
|
|
|
$126,899
|
|
|
|
|
|
|
|
|
|
|
||||||||
Cash
|
|
|
$77,035
|
|
|
|
$87,798
|
|
|
|
$77,035
|
|
|
|
$87,798
|
|
Short-term investments
|
|
32,193
|
|
|
39,101
|
|
|
32,193
|
|
|
39,101
|
|
||||
Cash and cash equivalents, end of period
|
|
|
$109,228
|
|
|
|
$126,899
|
|
|
|
$109,228
|
|
|
|
$126,899
|
|
|
|
|
|
|
|
|
|
|
||||||||
Supplemental
cash
flow
information
|
|
|
|
|
|
|
|
CONDENSED INTERIM CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
|
|
AS AT JUNE 30, 2018 AND DECEMBER 31, 2017
|
|
Condensed Interim Consolidated Financial Statements - Unaudited
|
(In thousands of US dollars)
|
CONDENSED INTERIM CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
|
|
FOR THE SIX MONTHS ENDED JUNE 30, 2018 and 2017
|
|
Condensed Interim Consolidated Financial Statements - Unaudited
|
(In thousands of US dollars, except share and per share amounts)
|
|
Share Capital
|
|
Equity Reserves
|
|
Retained earnings
(Accumulated deficit)
|
|
|||||||||||||||||||||||
|
Shares
|
|
Amount
|
|
Share-based payments
(a)
|
|
Other comprehensive income
(b)
|
|
Equity component of convertible debenture
(c)
|
|
Total equity reserves
|
|
Total equity
|
||||||||||||||||
Balance at December 31, 2016
|
164,461,567
|
|
|
|
$628,565
|
|
|
|
$58,879
|
|
|
|
($2,525
|
)
|
|
|
$—
|
|
|
|
$56,354
|
|
|
|
($63,218
|
)
|
|
$621,701
|
|
Net earnings for the period
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4,132
|
|
4,132
|
|
|||||||
Other comprehensive loss
|
—
|
|
|
—
|
|
|
—
|
|
|
(310
|
)
|
|
—
|
|
|
(310
|
)
|
|
—
|
|
(310
|
)
|
|||||||
Total comprehensive income
|
—
|
|
|
—
|
|
|
—
|
|
|
(310
|
)
|
|
—
|
|
|
(310
|
)
|
|
4,132
|
|
3,822
|
|
|||||||
Share-based payments
|
—
|
|
|
—
|
|
|
4,460
|
|
|
—
|
|
|
—
|
|
|
4,460
|
|
|
—
|
|
4,460
|
|
|||||||
Shares issued for:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Exercise of stock options (Note
21
(b))
|
708,504
|
|
|
4,177
|
|
|
(1,008
|
)
|
|
—
|
|
|
—
|
|
|
(1,008
|
)
|
|
—
|
|
3,169
|
|
|||||||
Balance at June 30, 2017
|
165,170,071
|
|
|
|
$632,742
|
|
|
|
$62,331
|
|
|
|
($2,835
|
)
|
|
|
$—
|
|
|
|
$59,496
|
|
|
|
($59,086
|
)
|
|
$633,152
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Balance at December 31, 2017
|
165,824,164
|
|
|
|
$636,672
|
|
|
|
$65,307
|
|
|
|
($3,004
|
)
|
|
|
$—
|
|
|
|
$62,303
|
|
|
|
($116,490
|
)
|
|
$582,485
|
|
Net loss for the period
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(45,625
|
)
|
(45,625
|
)
|
|||||||
Other comprehensive loss
|
—
|
|
|
—
|
|
|
—
|
|
|
(698
|
)
|
|
—
|
|
|
(698
|
)
|
|
—
|
|
(698
|
)
|
|||||||
Total comprehensive loss
|
—
|
|
|
—
|
|
|
—
|
|
|
(698
|
)
|
|
—
|
|
|
(698
|
)
|
|
(45,625
|
)
|
(46,323
|
)
|
|||||||
Share-based payments
|
—
|
|
|
—
|
|
|
4,763
|
|
|
—
|
|
|
—
|
|
|
4,763
|
|
|
—
|
|
4,763
|
|
|||||||
Equity component of convertible debenture,
net of tax (Note
19
(c))
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
19,164
|
|
|
19,164
|
|
|
—
|
|
19,164
|
|
|||||||
Shares issued for:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Exercise of stock options (Note
21
(b))
|
462,440
|
|
|
2,398
|
|
|
(512
|
)
|
|
—
|
|
|
—
|
|
|
(512
|
)
|
|
—
|
|
1,886
|
|
|||||||
Acquisition of Primero (Note
4
)
|
27,333,184
|
|
|
186,959
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
186,959
|
|
|||||||
Shares repurchased and cancelled (Note
21
(d))
|
(230,000
|
)
|
|
(899
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(390
|
)
|
(1,289
|
)
|
|||||||
Shares repurchased for delisting from Bolsa (Note
21
(e))
|
(4,985
|
)
|
|
(21
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(14
|
)
|
(35
|
)
|
|||||||
Balance at June 30, 2018
|
193,384,803
|
|
|
|
$825,109
|
|
|
|
$69,558
|
|
|
|
($3,702
|
)
|
|
|
$19,164
|
|
|
|
$85,020
|
|
|
|
($162,519
|
)
|
|
$747,610
|
|
(a)
|
Share-based payments reserve records the cumulative amount recognized under IFRS 2 share-based payments in respect of options granted and shares purchase warrants issued but not exercised to acquire shares of the Company.
|
(b)
|
Other comprehensive income reserve principally records the unrealized fair value gains or losses related to fair value through other comprehensive income ("FVTOCI") financial instruments.
|
(c)
|
Equity component of convertible debenture reserve represents the estimated fair value of its conversion option of $26.3 million, net of deferred tax effect of $7.1 million. This amount is not subsequently remeasured and will remain in equity until the conversion option is exercised, in which case, the balance recognized in equity will be transferred to share capital. Where the conversion option remains unexercised at the maturity date of the convertible note, the balance will remain in equity reserves.
|
The accompanying notes are an integral part of the condensed interim consolidated financial statements
|
|
|
First Majestic Silver Corp. 2018 Second Quarter Report
|
Page
5
|
NOTES TO CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
|
|
Condensed Interim Consolidated Financial Statements - Unaudited
|
(Tabular amounts are expressed in thousands of US dollars)
|
•
|
IFRS 9 uses a single approach to determine whether a financial asset is classified and measured at amortized cost or fair value. The classification and measurement of financial assets is based on the Company's business models for managing its financial assets and whether the contractual cash flows represent solely payments for principal and interest. Most of the requirements in IAS 39 for classification and measurement of financial liabilities were carried forward in IFRS 9. The change did not impact the carrying amounts of any of our financial assets on transition date. Upon adoption of IFRS 9, the Company designated its marketable securities previously designated as available-for-sale ("AFS") as financial assets at fair value through other comprehensive income ("FVTOCI"), where they will be recorded initially at fair value. Subsequent changes in fair value will be recognized in other comprehensive income only and will not be transferred into earnings (loss) upon disposition. This did not impact the Company’s financial statements as at the date of adoption.
|
The accompanying notes are an integral part of the condensed interim consolidated financial statements
|
|
First Majestic Silver Corp. 2018 Second Quarter Report
|
Page
6
|
NOTES TO CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
|
|
Condensed Interim Consolidated Financial Statements - Unaudited
|
(Tabular amounts are expressed in thousands of US dollars)
|
•
|
The adoption of the new "expected credit loss" impairment model under IFRS 9, as opposed to an incurred credit loss model under IAS 39, had a negligible impact on the carrying amounts of our financial assets on the transition date given the Company transacts exclusively with large international financial institutions and other organizations with strong credit ratings and the negligible historical level of customer default.
|
•
|
The new general hedge accounting requirements retain the three types of hedge accounting mechanisms previously available under IAS 39. Under IFRS 9 however, greater flexibility has been introduced to the types of transactions eligible for hedge accounting, specifically broadening the types of instruments that qualify for hedging instruments and the types of risk components of non-financial items that are eligible for hedge accounting. In addition, the effectiveness test has been replaced with the principle of an "economic relationship" and retrospective assessment of hedge effectiveness is no longer required. Enhanced disclosure requirements about an entity's risk management activities have also been introduced. The Company did not have any hedges in place as at December 31, 2017 and has not designated any of its financial instruments as hedges upon adoption of IFRS 9.
|
The accompanying notes are an integral part of the condensed interim consolidated financial statements
|
|
First Majestic Silver Corp. 2018 Second Quarter Report
|
Page
7
|
NOTES TO CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
|
|
Condensed Interim Consolidated Financial Statements - Unaudited
|
(Tabular amounts are expressed in thousands of US dollars)
|
1.
|
The identifiable assets acquired and liabilities assumed;
|
2.
|
The consideration transferred in exchange for an interest in the acquiree;
|
3.
|
The resulting goodwill.
|
The accompanying notes are an integral part of the condensed interim consolidated financial statements
|
|
First Majestic Silver Corp. 2018 Second Quarter Report
|
Page
8
|
NOTES TO CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
|
|
Condensed Interim Consolidated Financial Statements - Unaudited
|
(Tabular amounts are expressed in thousands of US dollars)
|
•
|
The requirement of consent by WPM to a change in control for Primero;
|
•
|
WPM was a guarantor of certain of Primero's debt facilities and also guarantees through the previous stream agreement which would have resulted in WPM having a significant interest in the residual assets of Primero in the event of a bankruptcy or default; and
|
•
|
The plan of arrangement for the acquisition of Primero was contemplated together and neither transactions would have been economical without considering the other.
|
The accompanying notes are an integral part of the condensed interim consolidated financial statements
|
|
First Majestic Silver Corp. 2018 Second Quarter Report
|
Page
9
|
NOTES TO CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
|
|
Condensed Interim Consolidated Financial Statements - Unaudited
|
(Tabular amounts are expressed in thousands of US dollars)
|
The accompanying notes are an integral part of the condensed interim consolidated financial statements
|
|
First Majestic Silver Corp. 2018 Second Quarter Report
|
Page
10
|
NOTES TO CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
|
|
Condensed Interim Consolidated Financial Statements - Unaudited
|
(Tabular amounts are expressed in thousands of US dollars)
|
The accompanying notes are an integral part of the condensed interim consolidated financial statements
|
|
First Majestic Silver Corp. 2018 Second Quarter Report
|
Page
11
|
NOTES TO CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
|
|
Condensed Interim Consolidated Financial Statements - Unaudited
|
(Tabular amounts are expressed in thousands of US dollars)
|
•
|
engages in business activities from which it may earn revenues and incur expenses;
|
•
|
whose operating results are reviewed regularly by the entity’s chief operating decision maker; and
|
•
|
for which discrete financial information is available.
|
Three Months Ended June 30, 2018 and 2017
|
|
|
Revenue
|
|
Cost of sales
|
|
Depletion, depreciation, and amortization
|
|
Mine operating earnings (loss)
|
|
Capital expenditures
|
||||||||||
Mexico
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
San Dimas
|
2018
|
|
|
$27,989
|
|
|
|
$18,609
|
|
|
|
$4,248
|
|
|
|
$5,132
|
|
|
|
$4,038
|
|
|
2017
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Santa Elena
|
2018
|
|
21,211
|
|
|
12,903
|
|
|
3,063
|
|
|
5,245
|
|
|
4,423
|
|
|||||
|
2017
|
|
21,848
|
|
|
13,166
|
|
|
3,820
|
|
|
4,862
|
|
|
3,417
|
|
|||||
La Encantada
|
2018
|
|
5,436
|
|
|
7,703
|
|
|
3,195
|
|
|
(5,462
|
)
|
|
4,878
|
|
|||||
|
2017
|
|
6,596
|
|
|
7,006
|
|
|
2,433
|
|
|
(2,843
|
)
|
|
2,773
|
|
|||||
La Parrilla
|
2018
|
|
8,425
|
|
|
6,524
|
|
|
6,097
|
|
|
(4,196
|
)
|
|
3,250
|
|
|||||
|
2017
|
|
8,788
|
|
|
6,737
|
|
|
4,815
|
|
|
(2,764
|
)
|
|
3,272
|
|
|||||
Del Toro
|
2018
|
|
4,526
|
|
|
4,815
|
|
|
2,089
|
|
|
(2,378
|
)
|
|
3,169
|
|
|||||
|
2017
|
|
9,266
|
|
|
4,855
|
|
|
4,097
|
|
|
314
|
|
|
1,672
|
|
|||||
San Martin
|
2018
|
|
8,505
|
|
|
5,518
|
|
|
2,151
|
|
|
836
|
|
|
2,168
|
|
|||||
|
2017
|
|
10,081
|
|
|
5,144
|
|
|
1,600
|
|
|
3,337
|
|
|
2,514
|
|
|||||
La Guitarra
|
2018
|
|
3,624
|
|
|
3,145
|
|
|
2,299
|
|
|
(1,820
|
)
|
|
2,236
|
|
|||||
|
2017
|
|
3,497
|
|
|
2,982
|
|
|
1,593
|
|
|
(1,078
|
)
|
|
1,433
|
|
|||||
Others
|
2018
|
|
(29
|
)
|
|
68
|
|
|
(436
|
)
|
|
339
|
|
|
2,449
|
|
|||||
|
2017
|
|
40
|
|
|
114
|
|
|
349
|
|
|
(423
|
)
|
|
1,235
|
|
|||||
Consolidated
|
2018
|
|
|
$79,687
|
|
|
|
$59,285
|
|
|
|
$22,706
|
|
|
|
($2,304
|
)
|
|
|
$26,611
|
|
|
2017
|
|
|
$60,116
|
|
|
|
$40,004
|
|
|
|
$18,707
|
|
|
|
$1,405
|
|
|
|
$16,316
|
|
The accompanying notes are an integral part of the condensed interim consolidated financial statements
|
|
First Majestic Silver Corp. 2018 Second Quarter Report
|
Page
12
|
NOTES TO CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
|
|
Condensed Interim Consolidated Financial Statements - Unaudited
|
(Tabular amounts are expressed in thousands of US dollars)
|
Six Months Ended June 30, 2018 and 2017
|
|
|
Revenue
|
|
Cost of sales
|
|
Depletion, depreciation, and amortization
|
|
Mine operating earnings (loss)
|
|
Capital expenditures
|
||||||||||
Mexico
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
San Dimas
|
2018
|
|
|
$27,989
|
|
|
|
$18,609
|
|
|
|
$4,248
|
|
|
|
$5,132
|
|
|
|
$4,038
|
|
|
2017
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Santa Elena
|
2018
|
|
44,941
|
|
|
25,485
|
|
|
5,903
|
|
|
13,553
|
|
|
9,265
|
|
|||||
|
2017
|
|
44,794
|
|
|
26,439
|
|
|
8,035
|
|
|
10,320
|
|
|
9,430
|
|
|||||
La Encantada
|
2018
|
|
13,033
|
|
|
15,330
|
|
|
6,703
|
|
|
(9,000
|
)
|
|
8,335
|
|
|||||
|
2017
|
|
19,279
|
|
|
14,937
|
|
|
6,099
|
|
|
(1,757
|
)
|
|
5,206
|
|
|||||
La Parrilla
|
2018
|
|
16,621
|
|
|
12,979
|
|
|
12,317
|
|
|
(8,675
|
)
|
|
6,380
|
|
|||||
|
2017
|
|
18,633
|
|
|
12,893
|
|
|
9,877
|
|
|
(4,137
|
)
|
|
6,142
|
|
|||||
Del Toro
|
2018
|
|
10,032
|
|
|
9,636
|
|
|
4,374
|
|
|
(3,978
|
)
|
|
5,568
|
|
|||||
|
2017
|
|
18,370
|
|
|
9,424
|
|
|
7,383
|
|
|
1,563
|
|
|
3,446
|
|
|||||
San Martin
|
2018
|
|
18,142
|
|
|
10,849
|
|
|
4,313
|
|
|
2,980
|
|
|
4,266
|
|
|||||
|
2017
|
|
19,361
|
|
|
9,872
|
|
|
3,339
|
|
|
6,150
|
|
|
4,684
|
|
|||||
La Guitarra
|
2018
|
|
7,586
|
|
|
6,076
|
|
|
4,405
|
|
|
(2,895
|
)
|
|
4,419
|
|
|||||
|
2017
|
|
8,521
|
|
|
5,862
|
|
|
2,936
|
|
|
(277
|
)
|
|
4,395
|
|
|||||
Others
|
2018
|
|
(64
|
)
|
|
2
|
|
|
(222
|
)
|
|
156
|
|
|
4,446
|
|
|||||
|
2017
|
|
264
|
|
|
239
|
|
|
486
|
|
|
(461
|
)
|
|
2,093
|
|
|||||
Consolidated
|
2018
|
|
|
$138,280
|
|
|
|
$98,966
|
|
|
|
$42,041
|
|
|
|
($2,727
|
)
|
|
|
$46,717
|
|
|
2017
|
|
|
$129,222
|
|
|
|
$79,666
|
|
|
|
$38,155
|
|
|
|
$11,401
|
|
|
|
$35,396
|
|
At June 30, 2018 and December 31, 2017
|
|
Mining Interests
|
|
Property, plant and equipment
|
|
Total
mining assets
|
|
Total
assets
|
|
Total liabilities
|
|||||||||||||||
|
Producing
|
|
Exploration
|
|
|
|
|
||||||||||||||||||
Mexico
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
San Dimas
|
2018
|
|
|
$178,872
|
|
|
|
$840
|
|
|
|
$121,959
|
|
|
|
$301,671
|
|
|
|
$362,303
|
|
|
|
$61,607
|
|
|
2017
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Santa Elena
|
2018
|
|
32,835
|
|
|
9,274
|
|
|
42,770
|
|
|
84,879
|
|
|
113,613
|
|
|
19,017
|
|
||||||
|
2017
|
|
28,732
|
|
|
7,777
|
|
|
44,786
|
|
|
81,295
|
|
|
123,413
|
|
|
19,399
|
|
||||||
La Encantada
|
2018
|
|
35,684
|
|
|
4,546
|
|
|
43,376
|
|
|
83,606
|
|
|
100,165
|
|
|
13,644
|
|
||||||
|
2017
|
|
33,063
|
|
|
5,221
|
|
|
43,929
|
|
|
82,213
|
|
|
96,626
|
|
|
13,254
|
|
||||||
La Parrilla
|
2018
|
|
88,279
|
|
|
15,833
|
|
|
40,494
|
|
|
144,606
|
|
|
165,094
|
|
|
34,078
|
|
||||||
|
2017
|
|
93,207
|
|
|
13,982
|
|
|
43,507
|
|
|
150,696
|
|
|
171,695
|
|
|
40,387
|
|
||||||
Del Toro
|
2018
|
|
37,870
|
|
|
11,671
|
|
|
22,921
|
|
|
72,462
|
|
|
99,201
|
|
|
7,977
|
|
||||||
|
2017
|
|
37,481
|
|
|
10,117
|
|
|
23,622
|
|
|
71,220
|
|
|
99,402
|
|
|
10,120
|
|
||||||
San Martin
|
2018
|
|
50,505
|
|
|
11,207
|
|
|
18,263
|
|
|
79,975
|
|
|
90,432
|
|
|
24,350
|
|
||||||
|
2017
|
|
50,638
|
|
|
9,599
|
|
|
19,752
|
|
|
79,989
|
|
|
92,819
|
|
|
26,617
|
|
||||||
La Guitarra
|
2018
|
|
21,079
|
|
|
5,571
|
|
|
2,810
|
|
|
29,460
|
|
|
76,430
|
|
|
17,969
|
|
||||||
|
2017
|
|
44,097
|
|
|
10,385
|
|
|
6,461
|
|
|
60,943
|
|
|
73,117
|
|
|
15,052
|
|
||||||
Others
|
2018
|
|
—
|
|
|
32,246
|
|
|
11,211
|
|
|
43,457
|
|
|
124,208
|
|
|
205,194
|
|
||||||
|
2017
|
|
—
|
|
|
29,847
|
|
|
9,995
|
|
|
39,842
|
|
|
124,369
|
|
|
74,127
|
|
||||||
Consolidated
|
2018
|
|
|
$445,124
|
|
|
|
$91,188
|
|
|
|
$303,804
|
|
|
|
$840,116
|
|
|
|
$1,131,446
|
|
|
|
$383,836
|
|
|
2017
|
|
|
$287,218
|
|
|
|
$86,928
|
|
|
|
$192,052
|
|
|
|
$566,198
|
|
|
|
$781,441
|
|
|
|
$198,956
|
|
The accompanying notes are an integral part of the condensed interim consolidated financial statements
|
|
First Majestic Silver Corp. 2018 Second Quarter Report
|
Page
13
|
NOTES TO CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
|
|
Condensed Interim Consolidated Financial Statements - Unaudited
|
(Tabular amounts are expressed in thousands of US dollars)
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||||||||||
Gross revenue by material form:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Doré
|
|
$65,913
|
|
81
|
%
|
|
|
$42,527
|
|
67
|
%
|
|
|
$109,777
|
|
77
|
%
|
|
|
$91,526
|
|
67
|
%
|
Concentrate
|
15,823
|
|
19
|
%
|
|
20,809
|
|
33
|
%
|
|
33,212
|
|
23
|
%
|
|
44,669
|
|
33
|
%
|
||||
Gross revenue
|
|
$81,736
|
|
100
|
%
|
|
|
$63,336
|
|
100
|
%
|
|
|
$142,989
|
|
100
|
%
|
|
|
$136,195
|
|
100
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Gross
revenue
from
payable
metals:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Silver
(1)
|
|
$47,086
|
|
58
|
%
|
|
|
$40,023
|
|
63
|
%
|
|
|
$83,193
|
|
58
|
%
|
|
|
$88,976
|
|
65
|
%
|
Gold
|
28,863
|
|
35
|
%
|
|
15,695
|
|
25
|
%
|
|
47,553
|
|
33
|
%
|
|
31,552
|
|
23
|
%
|
||||
Lead
|
4,096
|
|
5
|
%
|
|
6,799
|
|
11
|
%
|
|
8,533
|
|
6
|
%
|
|
13,925
|
|
10
|
%
|
||||
Zinc
|
1,691
|
|
2
|
%
|
|
819
|
|
1
|
%
|
|
3,710
|
|
3
|
%
|
|
1,742
|
|
1
|
%
|
||||
Gross revenue
|
81,736
|
|
100
|
%
|
|
63,336
|
|
100
|
%
|
|
142,989
|
|
100
|
%
|
|
136,195
|
|
100
|
%
|
||||
Less: smelting and refining costs
|
(2,049
|
)
|
|
|
(3,220
|
)
|
|
|
(4,709
|
)
|
|
|
(6,973
|
)
|
|
||||||||
Revenues
|
|
$79,687
|
|
|
|
|
$60,116
|
|
|
|
|
$138,280
|
|
|
|
|
$129,222
|
|
|
The accompanying notes are an integral part of the condensed interim consolidated financial statements
|
|
First Majestic Silver Corp. 2018 Second Quarter Report
|
Page
14
|
NOTES TO CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
|
|
Condensed Interim Consolidated Financial Statements - Unaudited
|
(Tabular amounts are expressed in thousands of US dollars)
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Consumables and materials
|
|
$13,214
|
|
|
|
$8,403
|
|
|
|
$21,526
|
|
|
|
$17,164
|
|
Labour costs
|
25,411
|
|
|
16,846
|
|
|
43,194
|
|
|
32,726
|
|
||||
Energy
|
8,913
|
|
|
7,101
|
|
|
17,066
|
|
|
14,923
|
|
||||
Other costs
|
4,424
|
|
|
3,297
|
|
|
8,138
|
|
|
7,612
|
|
||||
Production costs
|
|
$51,962
|
|
|
|
$35,647
|
|
|
|
$89,924
|
|
|
|
$72,425
|
|
Transportation and other selling costs
|
900
|
|
|
795
|
|
|
1,802
|
|
|
1,595
|
|
||||
Workers participation costs
|
711
|
|
|
1,026
|
|
|
1,052
|
|
|
1,547
|
|
||||
Environmental duties and royalties
|
340
|
|
|
249
|
|
|
595
|
|
|
551
|
|
||||
Inventory changes
|
5,372
|
|
|
889
|
|
|
5,593
|
|
|
2,150
|
|
||||
Standby costs during stoppage at the La Encantada mine
|
—
|
|
|
1,398
|
|
|
—
|
|
|
1,398
|
|
||||
|
|
$59,285
|
|
|
|
$40,004
|
|
|
|
$98,966
|
|
|
|
$79,666
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Corporate administration
|
|
$1,825
|
|
|
|
$1,049
|
|
|
|
$2,932
|
|
|
|
$1,698
|
|
Salaries and benefits
|
2,266
|
|
|
2,082
|
|
|
4,529
|
|
|
4,449
|
|
||||
Audit, legal and professional fees
|
664
|
|
|
797
|
|
|
1,641
|
|
|
1,732
|
|
||||
Filing and listing fees
|
100
|
|
|
105
|
|
|
250
|
|
|
271
|
|
||||
Directors fees and expenses
|
176
|
|
|
195
|
|
|
360
|
|
|
373
|
|
||||
Depreciation
|
170
|
|
|
249
|
|
|
357
|
|
|
497
|
|
||||
|
|
$5,201
|
|
|
|
$4,477
|
|
|
|
$10,069
|
|
|
|
$9,020
|
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Interest income and other
|
|
|
$1,139
|
|
|
349
|
|
|
|
$1,829
|
|
|
|
$664
|
|
|
Loss from investment in marketable securities (Note
14
)
|
|
(101
|
)
|
|
|
($2,021
|
)
|
|
(2,250
|
)
|
|
(2,160
|
)
|
|||
Gain from investment in silver futures derivatives
|
|
—
|
|
|
572
|
|
|
—
|
|
|
572
|
|
||||
|
|
|
$1,038
|
|
|
|
($1,100
|
)
|
|
|
($421
|
)
|
|
|
($924
|
)
|
The accompanying notes are an integral part of the condensed interim consolidated financial statements
|
|
First Majestic Silver Corp. 2018 Second Quarter Report
|
Page
15
|
NOTES TO CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
|
|
Condensed Interim Consolidated Financial Statements - Unaudited
|
(Tabular amounts are expressed in thousands of US dollars)
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Debt facilities (Note
19
)
|
|
|
$3,083
|
|
|
|
$569
|
|
|
|
$4,966
|
|
|
|
$1,163
|
|
Equipment financing obligations (Note
20
)
|
|
142
|
|
|
161
|
|
|
290
|
|
|
282
|
|
||||
Accretion of decommissioning liabilities
|
|
358
|
|
|
237
|
|
|
687
|
|
|
459
|
|
||||
Silver sales and other
|
|
216
|
|
|
49
|
|
|
315
|
|
|
282
|
|
||||
|
|
|
$3,799
|
|
|
|
$1,016
|
|
|
|
$6,258
|
|
|
|
$2,186
|
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Net (loss) earnings for the period
|
|
|
($40,033
|
)
|
|
|
$1,412
|
|
|
|
($45,625
|
)
|
|
|
$4,132
|
|
|
|
|
|
|
|
|
|
|
||||||||
Weighted average number of shares on issue - basic
|
|
181,126,340
|
|
|
165,117,436
|
|
|
173,515,346
|
|
|
164,967,617
|
|
||||
Adjustment for stock options
|
|
—
|
|
|
2,349,516
|
|
|
—
|
|
|
2,482,840
|
|
||||
Weighted average number of shares on issue - diluted
(1)
|
|
181,126,340
|
|
|
167,466,952
|
|
|
173,515,346
|
|
|
167,450,457
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
(Loss) earnings per share - basic
|
|
|
($0.22
|
)
|
|
|
$0.01
|
|
|
|
($0.26
|
)
|
|
|
$0.03
|
|
(Loss) earnings per share - diluted
|
|
|
($0.22
|
)
|
|
|
$0.01
|
|
|
|
($0.26
|
)
|
|
|
$0.02
|
|
(1)
|
Diluted weighted average number of shares excluded
5,786,161
(2017 -
5,073,853
) options and
16,327,598
common shares issuable under the convertible debentures (Note
19(a)
)that were anti-dilutive for the
three and six
months ended
June 30, 2018
.
|
|
June 30,
2018 |
|
December 31, 2017
|
||||
Trade receivables
|
|
$4,680
|
|
|
|
$4,038
|
|
Other
|
949
|
|
|
1,340
|
|
||
|
|
$5,629
|
|
|
|
$5,378
|
|
The accompanying notes are an integral part of the condensed interim consolidated financial statements
|
|
First Majestic Silver Corp. 2018 Second Quarter Report
|
Page
16
|
NOTES TO CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
|
|
Condensed Interim Consolidated Financial Statements - Unaudited
|
(Tabular amounts are expressed in thousands of US dollars)
|
|
June 30,
2018 |
|
December 31,
2017 |
||||
Finished goods - doré and concentrates
|
|
$2,258
|
|
|
|
$1,299
|
|
Work-in-process
|
3,510
|
|
|
1,152
|
|
||
Stockpile
|
320
|
|
|
217
|
|
||
Silver coins and bullion
|
419
|
|
|
303
|
|
||
Materials and supplies
|
22,722
|
|
|
15,887
|
|
||
|
|
$29,229
|
|
|
|
$18,858
|
|
|
June 30,
2018 |
|
December 31,
2017 |
||||
First Mining Gold Corp. (TSX: FF)
|
|
$5,239
|
|
|
|
$7,576
|
|
Sprott Physical Silver Trust (NYSE: PSLV)
|
2,348
|
|
|
2,536
|
|
||
FVTPL Marketable Securities
|
|
$7,587
|
|
|
|
$10,112
|
|
FVTOCI Marketable Securities
|
|
$1,243
|
|
|
|
$1,214
|
|
Total Marketable Securities
|
|
$8,830
|
|
|
|
$11,326
|
|
|
|
|
|
||||
Foreign Exchange Derivatives
|
|
$186
|
|
|
|
$—
|
|
Total Other Financial Assets
|
|
$9,016
|
|
|
|
$11,326
|
|
(a)
|
Marketable Securities
|
(b)
|
Foreign Exchange Derivatives
|
The accompanying notes are an integral part of the condensed interim consolidated financial statements
|
|
First Majestic Silver Corp. 2018 Second Quarter Report
|
Page
17
|
NOTES TO CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
|
|
Condensed Interim Consolidated Financial Statements - Unaudited
|
(Tabular amounts are expressed in thousands of US dollars)
|
|
June 30,
2018 |
|
December 31,
2017 |
||||
Producing properties
|
|
$445,124
|
|
|
|
$287,218
|
|
Exploration properties (non-depletable)
|
91,188
|
|
|
86,928
|
|
||
|
|
$536,312
|
|
|
|
$374,146
|
|
Producing properties
|
San Dimas
|
|
Santa Elena
|
|
La Encantada
|
|
La Parrilla
|
|
Del Toro
|
|
San Martin
|
|
La Guitarra
|
|
Total
|
||||||||||||||||
Cost
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
At December 31, 2016
|
|
$—
|
|
|
|
$27,629
|
|
|
|
$85,829
|
|
|
|
$146,189
|
|
|
|
$99,678
|
|
|
|
$86,314
|
|
|
|
$101,000
|
|
|
|
$546,639
|
|
Additions
|
—
|
|
|
8,386
|
|
|
2,588
|
|
|
8,339
|
|
|
4,512
|
|
|
3,613
|
|
|
5,233
|
|
|
32,671
|
|
||||||||
Change in decommissioning liabilities
|
—
|
|
|
356
|
|
|
210
|
|
|
823
|
|
|
445
|
|
|
1,028
|
|
|
458
|
|
|
3,320
|
|
||||||||
At December 31, 2017
|
|
$—
|
|
|
|
$36,371
|
|
|
|
$88,627
|
|
|
|
$155,351
|
|
|
|
$104,635
|
|
|
|
$90,955
|
|
|
|
$106,691
|
|
|
|
$582,630
|
|
Additions
|
2,313
|
|
|
4,226
|
|
|
3,002
|
|
|
3,219
|
|
|
2,918
|
|
|
2,051
|
|
|
2,179
|
|
|
19,908
|
|
||||||||
Acquired from Primero (Note
4
)
|
178,183
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
178,183
|
|
||||||||
Change in decommissioning liabilities
|
446
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
446
|
|
||||||||
Transfer from exploration properties
|
—
|
|
|
1,694
|
|
|
1,900
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3,594
|
|
||||||||
At June 30, 2018
|
|
$180,942
|
|
|
|
$42,291
|
|
|
|
$93,529
|
|
|
|
$158,570
|
|
|
|
$107,553
|
|
|
|
$93,006
|
|
|
|
$108,870
|
|
|
|
$784,761
|
|
Accumulated depletion, amortization and impairment
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
At December 31, 2016
|
|
$—
|
|
|
|
($3,404
|
)
|
|
|
($51,399
|
)
|
|
|
($48,975
|
)
|
|
|
($27,274
|
)
|
|
|
($37,354
|
)
|
|
|
($59,020
|
)
|
|
|
($227,426
|
)
|
Depletion and amortization
|
—
|
|
|
(4,235
|
)
|
|
(4,165
|
)
|
|
(13,169
|
)
|
|
(5,480
|
)
|
|
(2,963
|
)
|
|
(3,574
|
)
|
|
(33,586
|
)
|
||||||||
Impairment
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(34,400
|
)
|
|
—
|
|
|
—
|
|
|
(34,400
|
)
|
||||||||
At December 31, 2017
|
|
$—
|
|
|
|
($7,639
|
)
|
|
|
($55,564
|
)
|
|
|
($62,144
|
)
|
|
|
($67,154
|
)
|
|
|
($40,317
|
)
|
|
|
($62,594
|
)
|
|
|
($295,412
|
)
|
Depletion and amortization
|
(2,070
|
)
|
|
(1,817
|
)
|
|
(2,281
|
)
|
|
(8,147
|
)
|
|
(2,529
|
)
|
|
(2,184
|
)
|
|
(2,543
|
)
|
|
(21,571
|
)
|
||||||||
Impairment (Note
17
)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(22,654
|
)
|
|
(22,654
|
)
|
||||||||
At June 30, 2018
|
|
($2,070
|
)
|
|
|
($9,456
|
)
|
|
|
($57,845
|
)
|
|
|
($70,291
|
)
|
|
|
($69,683
|
)
|
|
|
($42,501
|
)
|
|
|
($87,791
|
)
|
|
|
($339,637
|
)
|
Carrying values
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
At December 31, 2017
|
|
$—
|
|
|
|
$28,732
|
|
|
|
$33,063
|
|
|
|
$93,207
|
|
|
|
$37,481
|
|
|
|
$50,638
|
|
|
|
$44,097
|
|
|
|
$287,218
|
|
At June 30, 2018
|
|
$178,872
|
|
|
|
$32,835
|
|
|
|
$35,684
|
|
|
|
$88,279
|
|
|
|
$37,870
|
|
|
|
$50,505
|
|
|
|
$21,079
|
|
|
|
$445,124
|
|
The accompanying notes are an integral part of the condensed interim consolidated financial statements
|
|
|
First Majestic Silver Corp. 2018 Second Quarter Report
|
Page
18
|
NOTES TO CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
|
|
Condensed Interim Consolidated Financial Statements - Unaudited
|
(Tabular amounts are expressed in thousands of US dollars)
|
Exploration
properties
|
San Dimas
|
|
Santa
Elena
|
|
La Encantada
|
|
La Parrilla
|
|
Del
Toro
|
|
San
Martin
|
|
La Guitarra
|
|
Other
|
|
Total
|
||||||||||||||||||
Cost
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
At
December
31,
2016
|
|
$—
|
|
|
|
$1,028
|
|
|
|
$2,557
|
|
|
|
$10,628
|
|
|
|
$16,812
|
|
|
|
$6,101
|
|
|
|
$7,810
|
|
|
|
$26,260
|
|
|
|
$71,196
|
|
Exploration and evaluation expenditures
|
—
|
|
|
6,749
|
|
|
2,664
|
|
|
3,354
|
|
|
2,605
|
|
|
3,498
|
|
|
2,575
|
|
|
3,587
|
|
|
25,032
|
|
|||||||||
Impairment
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(9,300
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(9,300
|
)
|
|||||||||
At
December
31,
2017
|
|
$—
|
|
|
|
$7,777
|
|
|
|
$5,221
|
|
|
|
$13,982
|
|
|
|
$10,117
|
|
|
|
$9,599
|
|
|
|
$10,385
|
|
|
|
$29,847
|
|
|
|
$86,928
|
|
Exploration and evaluation expenditures
|
840
|
|
|
3,191
|
|
|
1,225
|
|
|
1,851
|
|
|
1,554
|
|
|
1,608
|
|
|
1,173
|
|
|
2,399
|
|
|
13,841
|
|
|||||||||
Impairment (Note
17
)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(5,987
|
)
|
|
—
|
|
|
(5,987
|
)
|
|||||||||
Transfer to producing properties
|
—
|
|
|
(1,694
|
)
|
|
(1,900
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(3,594
|
)
|
|||||||||
At June 30, 2018
|
|
$840
|
|
|
|
$9,274
|
|
|
|
$4,546
|
|
|
|
$15,833
|
|
|
|
$11,671
|
|
|
|
$11,207
|
|
|
|
$5,571
|
|
|
|
$32,246
|
|
|
|
$91,188
|
|
(a)
|
San Dimas Silver/Gold Mine, Durango State
|
(b)
|
Santa Elena Silver/Gold Mine, Sonora State
|
The accompanying notes are an integral part of the condensed interim consolidated financial statements
|
|
|
First Majestic Silver Corp. 2018 Second Quarter Report
|
Page
19
|
NOTES TO CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
|
|
Condensed Interim Consolidated Financial Statements - Unaudited
|
(Tabular amounts are expressed in thousands of US dollars)
|
|
Land and Buildings
(1)
|
|
Machinery and Equipment
|
|
Assets under Construction
|
|
Other
|
|
Total
|
||||||||||
Cost
|
|
|
|
|
|
|
|
|
|
||||||||||
At December 31, 2016
|
|
$133,122
|
|
|
|
$325,230
|
|
|
|
$21,815
|
|
|
|
$13,150
|
|
|
|
$493,317
|
|
Additions
|
—
|
|
|
6,295
|
|
|
17,281
|
|
|
123
|
|
|
23,699
|
|
|||||
Transfers and disposals
|
1,276
|
|
|
10,374
|
|
|
(17,147
|
)
|
|
1,438
|
|
|
(4,059
|
)
|
|||||
At December 31, 2017
|
|
$134,398
|
|
|
|
$341,899
|
|
|
|
$21,949
|
|
|
|
$14,711
|
|
|
|
$512,957
|
|
Additions
|
9
|
|
|
2,919
|
|
|
9,866
|
|
|
174
|
|
|
12,968
|
|
|||||
Acquired from Primero (Note
4
)
|
40,404
|
|
|
70,064
|
|
|
7,169
|
|
|
5,178
|
|
|
122,815
|
|
|||||
Transfers and disposals
|
88
|
|
|
2,620
|
|
|
(3,064
|
)
|
|
107
|
|
|
(249
|
)
|
|||||
At June 30, 2018
|
|
$174,899
|
|
|
|
$417,502
|
|
|
|
$35,920
|
|
|
|
$20,170
|
|
|
|
$648,491
|
|
Accumulated depreciation, amortization and impairment
|
|
|
|
|
|
|
|||||||||||||
At December 31, 2016
|
|
($65,982
|
)
|
|
|
($180,362
|
)
|
|
|
$—
|
|
|
|
($9,335
|
)
|
|
|
($255,679
|
)
|
Depreciation and amortization
|
(8,347
|
)
|
|
(34,556
|
)
|
|
—
|
|
|
(1,896
|
)
|
|
(44,799
|
)
|
|||||
Transfers and disposals
|
226
|
|
|
961
|
|
|
—
|
|
|
186
|
|
|
1,373
|
|
|||||
Impairment
|
(12,301
|
)
|
|
(9,396
|
)
|
|
—
|
|
|
(103
|
)
|
|
(21,800
|
)
|
|||||
At December 31, 2017
|
|
($86,404
|
)
|
|
|
($223,353
|
)
|
|
|
$—
|
|
|
|
($11,148
|
)
|
|
|
($320,905
|
)
|
Depreciation and amortization
|
(3,244
|
)
|
|
(16,805
|
)
|
|
—
|
|
|
(813
|
)
|
|
(20,862
|
)
|
|||||
Impairment (Note
17
)
|
(652
|
)
|
|
(1,753
|
)
|
|
(474
|
)
|
|
(140
|
)
|
|
(3,019
|
)
|
|||||
Transfers and disposals
|
—
|
|
|
78
|
|
|
—
|
|
|
21
|
|
|
99
|
|
|||||
At June 30, 2018
|
|
($90,300
|
)
|
|
|
($241,833
|
)
|
|
|
($474
|
)
|
|
|
($12,080
|
)
|
|
|
($344,687
|
)
|
Carrying values
|
|
|
|
|
|
|
|
|
|
||||||||||
At December 31, 2017
|
|
$47,994
|
|
|
|
$118,546
|
|
|
|
$21,949
|
|
|
|
$3,563
|
|
|
|
$192,052
|
|
At June 30, 2018
|
|
$84,599
|
|
|
|
$175,669
|
|
|
|
$35,446
|
|
|
|
$8,090
|
|
|
|
$303,804
|
|
The accompanying notes are an integral part of the condensed interim consolidated financial statements
|
|
|
First Majestic Silver Corp. 2018 Second Quarter Report
|
Page
20
|
NOTES TO CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
|
|
Condensed Interim Consolidated Financial Statements - Unaudited
|
(Tabular amounts are expressed in thousands of US dollars)
|
|
San Dimas
|
|
Santa Elena
|
|
La Encantada
|
|
La Parrilla
|
|
Del Toro
|
|
San Martin
|
|
La Guitarra
|
|
Other
|
|
Total
|
||||||||||||||||||
Cost
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
At December 31, 2016
|
|
$—
|
|
|
|
$69,370
|
|
|
|
$116,923
|
|
|
|
$94,693
|
|
|
|
$117,128
|
|
|
|
$45,879
|
|
|
|
$25,751
|
|
|
|
$23,573
|
|
|
|
$493,317
|
|
Additions
|
—
|
|
|
2,913
|
|
|
7,246
|
|
|
3,630
|
|
|
1,473
|
|
|
3,724
|
|
|
2,029
|
|
|
2,684
|
|
|
23,699
|
|
|||||||||
Transfers and disposals
|
—
|
|
|
1,401
|
|
|
29
|
|
|
(1,832
|
)
|
|
(1,400
|
)
|
|
(2,062
|
)
|
|
335
|
|
|
(530
|
)
|
|
(4,059
|
)
|
|||||||||
At December 31, 2017
|
|
$—
|
|
|
|
$73,684
|
|
|
|
$124,198
|
|
|
|
$96,491
|
|
|
|
$117,201
|
|
|
|
$47,541
|
|
|
|
$28,115
|
|
|
|
$25,727
|
|
|
|
$512,957
|
|
Additions
|
885
|
|
|
1,848
|
|
|
4,108
|
|
|
1,310
|
|
|
1,096
|
|
|
607
|
|
|
1,067
|
|
|
2,047
|
|
|
12,968
|
|
|||||||||
Acquired from Primero (Note
4
)
|
122,815
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
122,815
|
|
|||||||||
Transfers and disposals
|
(166
|
)
|
|
668
|
|
|
(1,149
|
)
|
|
(286
|
)
|
|
158
|
|
|
34
|
|
|
592
|
|
|
(100
|
)
|
|
(249
|
)
|
|||||||||
At June 30, 2018
|
|
$123,534
|
|
|
|
$76,200
|
|
|
|
$127,157
|
|
|
|
$97,515
|
|
|
|
$118,455
|
|
|
|
$48,182
|
|
|
|
$29,774
|
|
|
|
$27,674
|
|
|
|
$648,491
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Accumulated depreciation, amortization and impairment
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||
At December 31, 2016
|
|
$—
|
|
|
|
($15,870
|
)
|
|
|
($72,013
|
)
|
|
|
($46,566
|
)
|
|
|
($63,234
|
)
|
|
|
($25,782
|
)
|
|
|
($18,347
|
)
|
|
|
($13,867
|
)
|
|
|
($255,679
|
)
|
Depreciation and amortization
|
—
|
|
|
(12,181
|
)
|
|
(8,779
|
)
|
|
(6,585
|
)
|
|
(8,580
|
)
|
|
(3,691
|
)
|
|
(2,974
|
)
|
|
(2,009
|
)
|
|
(44,799
|
)
|
|||||||||
Transfers and disposals
|
—
|
|
|
(847
|
)
|
|
523
|
|
|
167
|
|
|
35
|
|
|
1,684
|
|
|
(333
|
)
|
|
144
|
|
|
1,373
|
|
|||||||||
Impairment
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(21,800
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(21,800
|
)
|
|||||||||
At December 31, 2017
|
|
$—
|
|
|
|
($28,898
|
)
|
|
|
($80,269
|
)
|
|
|
($52,984
|
)
|
|
|
($93,579
|
)
|
|
|
($27,789
|
)
|
|
|
($21,654
|
)
|
|
|
($15,732
|
)
|
|
|
($320,905
|
)
|
Depreciation and amortization
|
(1,575
|
)
|
|
(4,086
|
)
|
|
(4,421
|
)
|
|
(4,185
|
)
|
|
(1,845
|
)
|
|
(2,129
|
)
|
|
(1,862
|
)
|
|
(759
|
)
|
|
(20,862
|
)
|
|||||||||
Impairment (Note
17
)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(3,019
|
)
|
|
—
|
|
|
(3,019
|
)
|
|||||||||
Transfers and disposals
|
—
|
|
|
(446
|
)
|
|
909
|
|
|
148
|
|
|
(110
|
)
|
|
(1
|
)
|
|
(429
|
)
|
|
28
|
|
|
99
|
|
|||||||||
At June 30, 2018
|
|
($1,575
|
)
|
|
|
($33,430
|
)
|
|
|
($83,781
|
)
|
|
|
($57,021
|
)
|
|
|
($95,534
|
)
|
|
|
($29,919
|
)
|
|
|
($26,964
|
)
|
|
|
($16,463
|
)
|
|
|
($344,687
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Carrying values
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
At December 31, 2017
|
|
$—
|
|
|
|
$44,786
|
|
|
|
$43,929
|
|
|
|
$43,507
|
|
|
|
$23,622
|
|
|
|
$19,752
|
|
|
|
$6,461
|
|
|
|
$9,995
|
|
|
|
$192,052
|
|
At June 30, 2018
|
|
$121,959
|
|
|
|
$42,770
|
|
|
|
$43,376
|
|
|
|
$40,494
|
|
|
|
$22,921
|
|
|
|
$18,263
|
|
|
|
$2,810
|
|
|
|
$11,211
|
|
|
|
$303,804
|
|
The accompanying notes are an integral part of the condensed interim consolidated financial statements
|
|
|
First Majestic Silver Corp. 2018 Second Quarter Report
|
Page
21
|
NOTES TO CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
|
|
Condensed Interim Consolidated Financial Statements - Unaudited
|
(Tabular amounts are expressed in thousands of US dollars)
|
|
|
Three and Six Months Ended June 30, 2018
|
|
|
Impairment of non-current assets
|
|
|
$31,660
|
|
Deferred income tax recovery
|
|
(11,160
|
)
|
|
Impairment of non-current assets, net of tax
|
|
|
$20,500
|
|
|
|
Three and Six Months Ended June 30, 2018
|
|
|
Mining interests - producing properties
|
|
|
$22,654
|
|
Mining interests - exploration properties (non-depletable)
|
|
5,987
|
|
|
Property, plant and equipment
|
|
3,019
|
|
|
Impairment of non-current assets
|
|
|
$31,660
|
|
|
June 30, 2018
|
||||||
Commodity Prices
|
2018-2021
Average
|
|
Long-term
|
||||
Silver (per ounce)
|
|
$19.38
|
|
|
|
$20.00
|
|
Gold (per ounce)
|
|
$1,333
|
|
|
|
$1,350
|
|
The accompanying notes are an integral part of the condensed interim consolidated financial statements
|
|
First Majestic Silver Corp. 2018 Second Quarter Report
|
Page
22
|
NOTES TO CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
|
|
Condensed Interim Consolidated Financial Statements - Unaudited
|
(Tabular amounts are expressed in thousands of US dollars)
|
|
June 30,
2018 |
|
December 31,
2017 |
||||
Trade payables
|
|
$23,396
|
|
|
|
$18,281
|
|
Trade related accruals
|
14,199
|
|
|
11,378
|
|
||
Payroll and related benefits
(1)
|
15,606
|
|
|
4,028
|
|
||
Environmental duty
|
846
|
|
|
1,047
|
|
||
Other accrued liabilities
|
1,174
|
|
|
833
|
|
||
|
|
$55,221
|
|
|
|
$35,567
|
|
|
|
Convertible Debentures
(a)
|
|
Revolving Credit Facility
(b)
|
|
Scotia
Debt Facilities
(c)
|
|
Primero Debt Facilities
(d)
|
|
Total
|
||||||||||
Balance at December 31, 2016
|
|
|
$—
|
|
|
|
$—
|
|
|
|
$43,938
|
|
|
|
$—
|
|
|
|
$43,938
|
|
Interest and accretion expense
|
|
—
|
|
|
—
|
|
|
2,206
|
|
|
—
|
|
|
2,206
|
|
|||||
Repayments of principal
|
|
—
|
|
|
—
|
|
|
(12,726
|
)
|
|
—
|
|
|
(12,726
|
)
|
|||||
Repayments of finance costs
|
|
—
|
|
|
—
|
|
|
(1,649
|
)
|
|
—
|
|
|
(1,649
|
)
|
|||||
Balance at December 31, 2017
|
|
|
$—
|
|
|
|
$—
|
|
|
|
$31,769
|
|
|
|
$—
|
|
|
|
$31,769
|
|
Net proceeds from debt financing
|
|
151,079
|
|
|
34,006
|
|
|
—
|
|
|
—
|
|
|
185,085
|
|
|||||
Acquired from Primero (Note
4
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
106,111
|
|
|
106,111
|
|
|||||
Portion allocated to equity reserves
|
|
(26,252
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(26,252
|
)
|
|||||
Finance costs
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Interest expense
|
|
1,239
|
|
|
340
|
|
|
529
|
|
|
—
|
|
|
2,108
|
|
|||||
Accretion
|
|
2,213
|
|
|
91
|
|
|
555
|
|
|
—
|
|
|
2,859
|
|
|||||
Repayments of principal
|
|
—
|
|
|
(16,000
|
)
|
|
(32,072
|
)
|
|
(106,111
|
)
|
|
(154,183
|
)
|
|||||
Repayments of finance costs
|
|
—
|
|
|
(23
|
)
|
|
(781
|
)
|
|
—
|
|
|
(804
|
)
|
|||||
Balance at June 30, 2018
|
|
|
$128,279
|
|
|
|
$18,414
|
|
|
|
$—
|
|
|
|
$—
|
|
|
|
$146,693
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Statements of Financial Position Presentation
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Current portion of debt facilities
|
|
|
$1,239
|
|
|
|
$316
|
|
|
|
$—
|
|
|
|
$—
|
|
|
|
$1,555
|
|
Non-current portion of debt facilities
|
|
127,040
|
|
|
18,098
|
|
|
—
|
|
|
—
|
|
|
145,138
|
|
|||||
Balance at June 30, 2018
|
|
|
$128,279
|
|
|
|
$18,414
|
|
|
|
$—
|
|
|
|
$—
|
|
|
|
$146,693
|
|
The accompanying notes are an integral part of the condensed interim consolidated financial statements
|
|
First Majestic Silver Corp. 2018 Second Quarter Report
|
Page
23
|
NOTES TO CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
|
|
Condensed Interim Consolidated Financial Statements - Unaudited
|
(Tabular amounts are expressed in thousands of US dollars)
|
(a)
|
Convertible Debentures
|
(b)
|
Revolving Credit Facility
|
The accompanying notes are an integral part of the condensed interim consolidated financial statements
|
|
First Majestic Silver Corp. 2018 Second Quarter Report
|
Page
24
|
NOTES TO CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
|
|
Condensed Interim Consolidated Financial Statements - Unaudited
|
(Tabular amounts are expressed in thousands of US dollars)
|
The accompanying notes are an integral part of the condensed interim consolidated financial statements
|
|
First Majestic Silver Corp. 2018 Second Quarter Report
|
Page
25
|
NOTES TO CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
|
|
Condensed Interim Consolidated Financial Statements - Unaudited
|
(Tabular amounts are expressed in thousands of US dollars)
|
|
Finance
Leases
(a)
|
|
Equipment Financing
(b)
|
|
Total
|
||||||
Balance at December 31, 2016
|
|
$8,186
|
|
|
|
$—
|
|
|
|
$8,186
|
|
Net proceeds from equipment financing
|
—
|
|
|
7,894
|
|
|
7,894
|
|
|||
Finance costs
|
326
|
|
|
233
|
|
|
559
|
|
|||
Repayments of principal
|
(6,083
|
)
|
|
(698
|
)
|
|
(6,781
|
)
|
|||
Repayments of finance costs
|
(320
|
)
|
|
(233
|
)
|
|
(553
|
)
|
|||
Balance at December 31, 2017
|
|
$2,109
|
|
|
|
$7,196
|
|
|
|
$9,305
|
|
Finance costs
|
57
|
|
|
233
|
|
|
290
|
|
|||
Repayments of principal
|
(1,337
|
)
|
|
(615
|
)
|
|
(1,952
|
)
|
|||
Repayments of finance costs
|
(57
|
)
|
|
(122
|
)
|
|
(179
|
)
|
|||
Balance at June 30, 2018
|
|
$772
|
|
|
|
$6,692
|
|
|
|
$7,464
|
|
Statements of Financial Position Presentation
|
|
|
|
|
|
||||||
Current portion of equipment financing obligations
|
|
$554
|
|
|
|
$2,576
|
|
|
|
$3,130
|
|
Non-current portion of equipment financing obligations
|
218
|
|
|
4,116
|
|
|
4,334
|
|
|||
Balance at June 30, 2018
|
|
$772
|
|
|
|
$6,692
|
|
|
|
$7,464
|
|
(a)
|
Finance Leases
|
The accompanying notes are an integral part of the condensed interim consolidated financial statements
|
|
First Majestic Silver Corp. 2018 Second Quarter Report
|
Page
26
|
NOTES TO CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
|
|
Condensed Interim Consolidated Financial Statements - Unaudited
|
(Tabular amounts are expressed in thousands of US dollars)
|
(a)
|
Authorized and issued capital
|
(b)
|
Stock options
|
|
Six Months Ended
|
|
Year Ended
|
||||||||
|
June 30, 2018
|
|
December 31, 2017
|
||||||||
|
Number of
Options
|
|
Weighted Average Exercise Price (CAD $/Share)
|
|
Number of
Options |
|
Weighted Average Exercise Price (CAD $/Share)
|
||||
Balance, beginning of the period
|
9,431,737
|
|
|
9.35
|
|
|
9,599,270
|
|
|
9.76
|
|
Granted
(1)
|
2,232,796
|
|
|
17.24
|
|
|
3,205,137
|
|
|
10.48
|
|
Exercised
|
(462,440
|
)
|
|
5.25
|
|
|
(1,292,206
|
)
|
|
5.76
|
|
Cancelled or expired
|
(734,415
|
)
|
|
18.12
|
|
|
(2,080,464
|
)
|
|
15.21
|
|
Balance, end of the period
|
10,467,678
|
|
|
10.60
|
|
|
9,431,737
|
|
|
9.35
|
|
(1)
|
Includes 221,908 stock options issued to replace pre-existing stock options of Primero in accordance with the Primero arrangement (see Note
4
) with a nominal fair value.
|
The accompanying notes are an integral part of the condensed interim consolidated financial statements
|
|
First Majestic Silver Corp. 2018 Second Quarter Report
|
Page
27
|
NOTES TO CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
|
|
Condensed Interim Consolidated Financial Statements - Unaudited
|
(Tabular amounts are expressed in thousands of US dollars)
|
|
|
|
|
Six Months Ended
|
|
Year Ended
|
Assumption
|
|
Based
on
|
|
June 30, 2018
|
|
December 31, 2017
|
Risk-free interest rate (%)
|
|
Yield curves on Canadian government zero- coupon bonds with a remaining term equal to the stock options’ expected life
|
|
1.80
|
|
1.02
|
Expected life (years)
|
|
Average of the expected vesting term and expiry term of the option
|
|
5.34
|
|
3.77
|
Expected volatility (%)
|
|
Historical and implied volatility of the precious metals mining sector
|
|
52.00
|
|
52.00
|
Expected dividend yield (%)
|
|
Annualized dividend rate as of the date of grant
|
|
—
|
|
—
|
(c)
|
Warrants
|
The accompanying notes are an integral part of the condensed interim consolidated financial statements
|
|
First Majestic Silver Corp. 2018 Second Quarter Report
|
Page
28
|
NOTES TO CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
|
|
Condensed Interim Consolidated Financial Statements - Unaudited
|
(Tabular amounts are expressed in thousands of US dollars)
|
(a)
|
|
Fair value and categories of financial instruments
|
|
|
|
|
|
Financial instruments included in the consolidated statements of financial position are measured either at fair value or amortized cost. Estimated fair values for financial instruments are designed to approximate amounts for which the instruments could be exchanged in an arm’s-length transaction between knowledgeable and willing parties.
|
|
|
|
|
|
The Company uses various valuation techniques in determining the fair value of financial assets and liabilities based on the extent to which the fair value is observable. The following fair value hierarchy is used to categorize and disclose the Company’s financial assets and liabilities held at fair value for which a valuation technique is used:
|
|
|
|
|
|
Level 1: Unadjusted quoted prices in active markets that are accessible at the measurement date for identical assets or liabilities.
|
|
|
|
|
|
Level 2: All inputs which have a significant effect on the fair value are observable, either directly or indirectly, for substantially the full contractual term.
|
|
|
|
|
|
Level 3: Inputs which have a significant effect on the fair value are not based on observable market data.
|
Financial Instruments Measured at Fair Value
|
|
Valuation Method
|
Trade receivables (related to concentrate sales)
|
|
Receivables that are subject to provisional pricing and final price adjustment at the end of the quotational period are estimated based on observable forward price of metal per London Metal Exchange (Level 2)
|
|
|
|
Marketable securities
|
|
Based on quoted market prices for identical assets in an active market (Level 1) as at the date of statements of financial position
|
Silver futures derivatives
|
|
|
Foreign exchange derivatives
|
|
|
|
|
|
Financial Instruments Measured at Amortized Costs
|
|
Valuation Method
|
Cash and cash equivalents
|
|
Approximated carrying value due to their short-term nature
|
Trade and other receivables
|
|
|
Value added taxes receivable
|
|
|
Trade and other payables
|
|
|
Debt facilities
|
|
Assumed to approximate carrying value as discount rate on
|
Equipment financing obligations
|
|
these instruments approximate the Company's credit risk.
|
The accompanying notes are an integral part of the condensed interim consolidated financial statements
|
|
First Majestic Silver Corp. 2018 Second Quarter Report
|
Page
29
|
NOTES TO CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
|
|
Condensed Interim Consolidated Financial Statements - Unaudited
|
(Tabular amounts are expressed in thousands of US dollars)
|
|
June 30, 2018
|
|
December 31, 2017
|
||||||||||||||||||||
|
|
|
Fair value measurement
|
|
|
|
Fair value measurement
|
||||||||||||||||
|
Carrying value
|
|
Level 1
|
|
Level 2
|
|
Carrying value
|
|
Level 1
|
|
Level 2
|
||||||||||||
Financial assets
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Trade receivables
|
|
$1,963
|
|
|
|
$—
|
|
|
|
$1,963
|
|
|
|
$1,847
|
|
|
|
$—
|
|
|
|
$1,847
|
|
Marketable securities (Note
14
)
|
8,830
|
|
|
8,830
|
|
|
—
|
|
|
11,326
|
|
|
11,326
|
|
|
—
|
|
(b)
|
|
Capital risk management
|
|
|
|
|
|
The Company’s objectives when managing capital are to maintain financial flexibility to continue as a going concern while optimizing growth and maximizing returns of investments from shareholders.
|
|
|
|
|
|
The Company monitors its capital structure and, based on changes in operations and economic conditions, may adjust the structure by repurchasing shares, issuing new shares, issuing new debt or retiring existing debt. The Company prepares annual budget and quarterly forecasts to facilitate the management of its capital requirements. The annual budget is approved by the Company’s Board of Directors.
|
|
June 30,
2018 |
|
December 31,
2017 |
||||
Equity
|
|
$747,610
|
|
|
|
$582,485
|
|
Debt facilities
|
146,693
|
|
|
31,769
|
|
||
Equipment financing obligations
|
7,464
|
|
|
9,305
|
|
||
Less: cash and cash equivalents
|
(109,228
|
)
|
|
(118,141
|
)
|
||
|
|
$792,539
|
|
|
|
$505,418
|
|
The accompanying notes are an integral part of the condensed interim consolidated financial statements
|
|
First Majestic Silver Corp. 2018 Second Quarter Report
|
Page
30
|
NOTES TO CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
|
|
Condensed Interim Consolidated Financial Statements - Unaudited
|
(Tabular amounts are expressed in thousands of US dollars)
|
(c)
|
|
Financial risk management
|
|
|
|
|
|
The Company thoroughly examines the various financial instruments and risks to which it is exposed and assesses the impact and likelihood of those risks. These risks may include credit risk, liquidity risk, currency risk, commodity price risk, and interest rate risk. Where material, these risks are reviewed and monitored by the Board of Directors.
|
|
|
|
|
|
Credit Risk
|
|
|
|
|
|
Credit risk is the risk of financial loss if a customer or counterparty fails to meet its contractual obligations. The Company’s credit risk relates primarily to trade receivables in the ordinary course of business, VAT and other receivables (Note
12
).
|
|
|
|
|
|
The Company sells and receives payment upon delivery of its silver doré and by-products primarily through three international customers. Silver-lead concentrates and related base metal by-products are sold primarily through two international customers. All of the Company's customers have good ratings and payments of receivables are scheduled, routine and fully received within 60 days of submission; therefore, the balance of trade receivables owed to the Company in the ordinary course of business is not significant.
|
|
|
|
|
|
The carrying amount of financial assets recorded in the consolidated financial statements represents the Company’s maximum exposure to credit risk. With the exception to the above, the Company believes it is not exposed to significant credit risk.
|
|
|
|
|
|
Liquidity Risk
|
|
|
|
|
|
Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they arise. The Company has in place a planning and budgeting process to help determine the funds required to support the Company’s normal operating requirements and contractual obligations.
|
|
|
Carrying Amount
|
|
Contractual
Cash
Flows
|
|
Less
than
1
year
|
|
1 to 3 years
|
|
4 to 5 years
|
|
After 5 years
|
||||||||||||
Trade and other payables
|
|
|
$55,221
|
|
|
|
$55,221
|
|
|
|
$55,221
|
|
|
|
$—
|
|
|
|
$—
|
|
|
|
$—
|
|
Debt facilities
|
|
146,693
|
|
|
194,692
|
|
|
4,533
|
|
|
28,768
|
|
|
161,391
|
|
|
—
|
|
||||||
Equipment financing obligations
|
|
7,464
|
|
|
8,190
|
|
|
3,555
|
|
|
4,388
|
|
|
247
|
|
|
—
|
|
||||||
Other liabilities
|
|
4,698
|
|
|
4,729
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4,729
|
|
||||||
|
|
|
$214,076
|
|
|
|
$262,832
|
|
|
|
$63,309
|
|
|
|
$33,156
|
|
|
|
$161,638
|
|
|
|
$4,729
|
|
Currency Risk
|
|
The Company is exposed to foreign exchange risk primarily relating to financial instruments that are denominated in Canadian dollars or Mexican pesos, which would impact the Company’s net earnings or loss. To manage foreign exchange risk, the Company may occasionally enter into short-term foreign currency derivatives. The foreign currency derivatives are not designated as hedging instruments for accounting purposes.
|
The accompanying notes are an integral part of the condensed interim consolidated financial statements
|
|
First Majestic Silver Corp. 2018 Second Quarter Report
|
Page
31
|
NOTES TO CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
|
|
Condensed Interim Consolidated Financial Statements - Unaudited
|
(Tabular amounts are expressed in thousands of US dollars)
|
|
June 30, 2018
|
|
|||||||||||||||||||||||||||||
|
Cash and cash equivalents
|
|
|
Trade and other receivables
|
|
|
Value added taxes receivable
|
|
|
Other financial assets
|
|
|
Trade and other payables
|
|
|
Foreign exchange derivative
|
|
|
Net assets (liabilities) exposure
|
|
|
Effect of +/- 10% change in currency
|
|
||||||||
Canadian dollar
|
|
$36,886
|
|
|
|
$273
|
|
|
|
$—
|
|
|
|
$5,239
|
|
|
|
($1,613
|
)
|
|
|
$—
|
|
|
|
$40,785
|
|
|
|
$4,079
|
|
Mexican peso
|
6,630
|
|
|
646
|
|
|
49,737
|
|
|
—
|
|
|
(24,332
|
)
|
|
11,000
|
|
|
43,681
|
|
|
4,368
|
|
||||||||
|
|
$43,516
|
|
|
|
$919
|
|
|
|
$49,737
|
|
|
|
$5,239
|
|
|
|
($25,945
|
)
|
|
|
$11,000
|
|
|
|
$84,466
|
|
|
|
$8,447
|
|
|
|
Commodity Price Risk
|
|
|
|
|
|
The Company is exposed to commodity price risk on silver, gold, lead and zinc, which have a direct and immediate impact on the value of its related financial instruments and net earnings. The Company’s revenues are directly dependent on commodity prices that have shown volatility and are beyond the Company’s control. The Company does not use derivative instruments to hedge its commodity price risk to silver.
|
|
|
|
|
|
|
|
June 30, 2018
|
|
|||||||||||
|
Effect of +/- 10% change in metal prices
|
|
|||||||||||||||||
|
Silver
|
|
|
Gold
|
|
|
Lead
|
|
|
Zinc
|
|
|
Total
|
|
|||||
Metals subject to provisional price adjustments
|
|
$299
|
|
|
|
$44
|
|
|
|
$409
|
|
|
|
$49
|
|
|
|
$801
|
|
Metals in doré and concentrates inventory
|
82
|
|
|
171
|
|
|
23
|
|
|
5
|
|
|
281
|
|
|||||
|
|
$381
|
|
|
|
$215
|
|
|
|
$432
|
|
|
|
$54
|
|
|
|
$1,082
|
|
Interest Rate Risk
|
|
The Company is exposed to interest rate risk on its short-term investments, debt facilities and equipment financing obligations. The Company monitors its exposure to interest rates and has not entered into any derivative contracts to manage this risk. The Company’s interest bearing financial assets comprise of cash and cash equivalents which bear interest at a mixture of variable and fixed rates for pre-set periods of time.
|
|
As at June 30, 2018, the Company’s exposure to interest rate risk on interest bearing liabilities is limited to its debt facilities and equipment financing obligations. The Company’s equipment leases bear interest at fixed rates.
|
|
Based on the Company’s interest rate exposure at June 30, 2018, a change of 25 basis points increase or decrease of market interest rate does not have a significant impact on net earnings or loss.
|
The accompanying notes are an integral part of the condensed interim consolidated financial statements
|
|
First Majestic Silver Corp. 2018 Second Quarter Report
|
Page
32
|
NOTES TO CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
|
|
Condensed Interim Consolidated Financial Statements - Unaudited
|
(Tabular amounts are expressed in thousands of US dollars)
|
|
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
Note
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Adjustments
to
reconcile
net
earnings
to
operating
cash
flows
before
movements
in
working
capital:
|
|
|
|
|
|
|
|
|
|
||||||||
Unrealized foreign exchange (gain) loss and other
|
|
|
|
($1,995
|
)
|
|
|
$512
|
|
|
|
$1,021
|
|
|
|
$1,251
|
|
Unrealized loss from marketable securities
|
|
101
|
|
|
2,021
|
|
|
2,250
|
|
|
2,160
|
|
|||||
|
|
|
|
($1,894
|
)
|
|
|
$2,533
|
|
|
|
$3,271
|
|
|
|
$3,411
|
|
Net
change
in
non-cash
working
capital
items:
|
|
|
|
|
|
|
|
|
|
||||||||
(Increase) decrease in trade and other receivables
|
|
|
|
($2,385
|
)
|
|
|
($23
|
)
|
|
|
($6,505
|
)
|
|
|
$1,828
|
|
Decrease in inventories
|
|
|
4,581
|
|
|
1,057
|
|
|
5,247
|
|
|
2,718
|
|
||||
Decrease (increase) in prepaid expenses and other
|
|
|
2,322
|
|
|
452
|
|
|
(158
|
)
|
|
(620
|
)
|
||||
Increase (decrease) in income taxes payable
|
|
|
158
|
|
|
(1,103
|
)
|
|
(474
|
)
|
|
(827
|
)
|
||||
Decrease in trade and other payables
|
|
|
(7,190
|
)
|
|
(844
|
)
|
|
(6,133
|
)
|
|
(6,239
|
)
|
||||
|
|
|
|
($2,514
|
)
|
|
|
($461
|
)
|
|
|
($8,023
|
)
|
|
|
($3,140
|
)
|
Non-cash
investing
and
financing
activities:
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Transfer of share-based payments reserve upon
exercise of options
|
|
|
|
$60
|
|
|
|
$165
|
|
|
|
$512
|
|
|
|
$1,008
|
|
The accompanying notes are an integral part of the condensed interim consolidated financial statements
|
|
First Majestic Silver Corp. 2018 Second Quarter Report
|
Page
33
|
NOTES TO CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
|
|
Condensed Interim Consolidated Financial Statements - Unaudited
|
(Tabular amounts are expressed in thousands of US dollars)
|
The accompanying notes are an integral part of the condensed interim consolidated financial statements
|
|
First Majestic Silver Corp. 2018 Second Quarter Report
|
Page
34
|
|
||
925 West Georgia Street, Suite 1800, Vancouver, B.C., Canada V6C 3L2
Phone: 604.688.3033 | Fax: 604.639.8873| Toll Free: 1.866.529.2807 | Email: info@firstmajestic.com
www.firstmajestic.com
|
TABLE OF CONTENTS
|
|
|
|
|
|
|
|
|
|
|
|
|
OVERVIEW OF OPERATING RESULTS
|
|
|
|
||
|
||
|
||
|
||
|
||
|
||
|
||
|
||
|
||
|
||
|
|
|
OVERVIEW OF FINANCIAL PERFORMANCE
|
|
|
|
||
|
||
|
||
|
|
|
OTHER DISCLOSURES
|
|
|
|
||
|
||
|
||
|
||
|
||
|
||
|
|
||
First Majestic Silver Corp. 2018 Second Quarter Report
|
Page
2
|
COMPANY OVERVIEW
|
|
||
First Majestic Silver Corp. 2018 Second Quarter Report
|
Page
3
|
2018 SECOND QUARTER HIGHLIGHTS
|
Key Performance Metrics
|
|
2018-Q2
|
|
2018-Q1
|
Change
Q2 vs Q1 |
|
2017-Q2
|
Change
Q2 vs Q2 |
|
2018-YTD
|
|
2017-YTD
|
Change
|
|||||||||||||
Operational
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Ore Processed / Tonnes Milled
|
|
851,349
|
|
|
809,775
|
|
5
|
%
|
|
691,833
|
|
23
|
%
|
|
1,661,124
|
|
|
1,514,170
|
|
10
|
%
|
|||||
Silver Ounces Produced
|
|
2,756,263
|
|
|
2,167,030
|
|
27
|
%
|
|
2,287,188
|
|
21
|
%
|
|
4,923,292
|
|
|
4,996,166
|
|
(1
|
%)
|
|||||
Silver Equivalent Ounces Produced
|
|
5,137,318
|
|
|
3,879,678
|
|
32
|
%
|
|
3,888,944
|
|
32
|
%
|
|
9,016,996
|
|
|
8,156,294
|
|
11
|
%
|
|||||
Cash Costs per Ounce
(1)
|
|
|
$7.59
|
|
|
|
$7.83
|
|
(3
|
%)
|
|
|
$7.01
|
|
8
|
%
|
|
|
$7.70
|
|
|
|
$6.63
|
|
16
|
%
|
All-in Sustaining Cost per Ounce
(1)
|
|
|
$16.43
|
|
|
|
$16.01
|
|
3
|
%
|
|
|
$14.17
|
|
16
|
%
|
|
|
$16.25
|
|
|
|
$12.92
|
|
26
|
%
|
Total Production Cost per Tonne
(1)
|
|
|
$61.04
|
|
|
|
$46.88
|
|
30
|
%
|
|
|
$51.53
|
|
18
|
%
|
|
|
$54.14
|
|
|
|
$47.83
|
|
13
|
%
|
Average Realized Silver Price per Ounce
(1)
|
|
|
$16.74
|
|
|
|
$16.76
|
|
0
|
%
|
|
|
$17.17
|
|
(3
|
%)
|
|
|
$16.75
|
|
|
|
$17.37
|
|
(4
|
%)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Financial (in $millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Revenues
|
|
|
$79.7
|
|
|
|
$58.6
|
|
36
|
%
|
|
|
$60.1
|
|
33
|
%
|
|
|
$138.3
|
|
|
|
$129.2
|
|
7
|
%
|
Mine Operating (Loss) Earnings
|
|
|
($2.3
|
)
|
|
|
($0.4
|
)
|
(445
|
%)
|
|
|
$1.4
|
|
(264
|
%)
|
|
|
($2.7
|
)
|
|
|
$11.4
|
|
(124
|
%)
|
Impairment of non-current assets
|
|
|
$31.7
|
|
|
|
$0.0
|
|
100
|
%
|
|
|
$0.0
|
|
100
|
%
|
|
|
$31.7
|
|
|
|
$0.0
|
|
100
|
%
|
Net (Loss) Earnings
|
|
|
($40.0
|
)
|
|
|
($5.6
|
)
|
(616
|
%)
|
|
|
$1.4
|
|
(2,935
|
%)
|
|
|
($45.6
|
)
|
|
|
$4.1
|
|
(1,204
|
%)
|
Operating Cash Flows before Working
Capital and Taxes |
|
|
$14.2
|
|
|
|
$15.6
|
|
(9
|
%)
|
|
|
$18.0
|
|
(21
|
%)
|
|
|
$29.9
|
|
|
|
$44.6
|
|
(33
|
%)
|
Cash and Cash Equivalents
|
|
|
$109.2
|
|
|
|
$249.2
|
|
(56
|
%)
|
|
|
$126.9
|
|
(14
|
%)
|
|
|
$109.2
|
|
|
|
$126.9
|
|
(14
|
%)
|
Working Capital
(1)
|
|
|
$141.4
|
|
|
|
$235.6
|
|
(40
|
%)
|
|
|
$130.9
|
|
8
|
%
|
|
|
$141.4
|
|
|
|
$130.9
|
|
8
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Shareholders
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
(Loss) Earnings per Share ("EPS") - Basic
|
|
|
($0.22
|
)
|
|
|
($0.03
|
)
|
(555
|
%)
|
|
|
$0.01
|
|
(2,685
|
%)
|
|
|
($0.26
|
)
|
|
|
$0.03
|
|
(1,150
|
%)
|
Adjusted EPS
(1)
|
|
|
($0.07
|
)
|
|
|
($0.06
|
)
|
(8
|
%)
|
|
|
($0.02
|
)
|
(197
|
%)
|
|
|
($0.13
|
)
|
|
|
$0.00
|
|
(25,524
|
%)
|
Cash Flow per Share
(1)
|
|
|
$0.08
|
|
|
|
$0.09
|
|
(17
|
%)
|
|
|
$0.11
|
|
(28
|
%)
|
|
|
$0.17
|
|
|
|
$0.27
|
|
(36
|
%)
|
(1)
|
The Company reports non-GAAP measures which include cash costs per ounce produced, all-in sustaining cost per ounce, total production cost per tonne, average realized silver price per ounce sold, working capital, adjusted EPS and cash flow per share. These measures are widely used in the mining industry as a benchmark for performance, but do not have a standardized meaning and may differ from methods used by other companies with similar descriptions. See “Non-GAAP Measures” on pages 38 to 44 for a reconciliation of non-GAAP to GAAP measures.
|
Second Quarter
Production Summary |
San Dimas
|
Santa Elena
|
La Encantada
|
La Parrilla
|
Del Toro
|
San Martin
|
La Guitarra
|
Consolidated
|
||||||||||||||||
Ore Processed / Tonnes Milled
|
85,765
|
|
228,054
|
|
237,862
|
|
123,642
|
|
65,879
|
|
74,431
|
|
35,715
|
|
851,349
|
|
||||||||
Silver Ounces Produced
|
808,923
|
|
535,015
|
|
325,603
|
|
360,862
|
|
167,591
|
|
419,815
|
|
138,454
|
|
2,756,263
|
|
||||||||
Silver Equivalent Ounces Produced
|
1,698,382
|
|
1,407,880
|
|
327,458
|
|
605,826
|
|
323,714
|
|
524,843
|
|
249,214
|
|
5,137,318
|
|
||||||||
Cash Costs per Ounce
|
|
$0.24
|
|
|
$1.39
|
|
|
$23.05
|
|
|
$10.42
|
|
|
$18.01
|
|
|
$9.68
|
|
|
$12.89
|
|
|
$7.59
|
|
All-in Sustaining Cost per Ounce
|
|
$5.41
|
|
|
$6.60
|
|
|
$30.81
|
|
|
$16.39
|
|
|
$32.08
|
|
|
$12.49
|
|
|
$18.11
|
|
|
$16.43
|
|
Total Production Cost per Tonne
|
|
$148.91
|
|
|
$55.97
|
|
|
$31.09
|
|
|
$49.10
|
|
|
$69.23
|
|
|
$72.77
|
|
|
$83.68
|
|
|
$61.04
|
|
•
|
On May 10, 2018, the Company completed its acquisition of all of the issued and outstanding common shares of Primero Mining Corp. ("Primero") for a total consideration of
$187.0
million in common shares of First Majestic. With the acquisition, First Majestic has integrated a large, world-class, silver and gold mine into its portfolio of operating mines. The San Dimas mine, becoming First Majestic's seventh mine in Mexico, will result in significant growth in our production profile with an estimated doubling of silver equivalent ounces produced.
|
•
|
In connection with the plan of arrangement, the Company has restructured the pre-existing silver purchase agreement with Wheaton Precious Metals Corp. ("WPM"). Pursuant to the New Stream Agreement, WPM will be entitled to receive 25% of the gold production and 25% of the silver production converted to gold equivalent at a fixed exchange ratio of 70:1 at San Dimas in exchange for ongoing payments equal to the lesser of US$600 (subject to a 1% annual inflation adjustment) and the prevailing market price, for each gold ounce delivered under the agreement ("New Stream Agreement"). The New
|
|
||
First Majestic Silver Corp. 2018 Second Quarter Report
|
Page
4
|
•
|
During the 52 days since being acquired by First Majestic, San Dimas made an immediate impact to First Majestic's production profile and bottom line by producing
808,923
ounces of silver or
1,698,382
ounces of silver equivalents while generating mine operating earnings of
$5.1
million.
|
•
|
During the quarter, First Majestic has also entered into a $75.0 million senior secured revolving credit facility, which will mature on its third anniversary date in May 2021. Interest will accrue at LIBOR plus an applicable range dependent on certain financial parameters of First Majestic. Proceeds from the credit facility were used primarily to repay and close First Majestic's pre-existing debt facilities as well as the $30.2 million revolving credit facility assumed from the Primero acquisition.
|
•
|
See more details of the arrangement agreement in connection with the acquisition of Primero in the "Acquisition of Primero" section below.
|
•
|
In the
second
quarter, the Company's production from its seven operating mines reached a new Company record. Total silver equivalents production increased by
32%
to
5,137,318
ounces while silver production increased
27%
to
2,756,263
ounces compared to the previous quarter. The increase in production was primarily due to the addition of the San Dimas Silver/Gold mine.
|
•
|
Total ore processed during the quarter amounted to
851,349
tonnes, representing a
5%
increase compared to the previous quarter. The increase in tonnes compared to the prior quarter was primarily due to the addition of San Dimas production, offset by a
17%
decrease in throughput at Del Toro and a
14%
decrease at La Encantada.
|
•
|
Consolidated silver grades in the quarter averaged 127 g/t compared to 111 g/t in the previous quarter. The 14% increase in silver grades was primarily the result of the addition of 52 days of production from San Dimas, which had average silver head grades of
307
g/t.
|
•
|
Consolidated silver recoveries averaged
79%
, representing a
5%
increase compared to the previous quarter. The Company expects further improvements in recoveries with the anticipated installation and commissioning of the microbubble flotation columns at La Parrilla in the third quarter of 2018, followed by Del Toro in the first quarter of 2019.
|
•
|
Cash cost per ounce in the quarter was
$7.59
, a
decrease
of
3%
or
$0.24
per ounce compared to the previous quarter. Cash cost per ounce was lower than the previous quarter primarily due to the addition of San Dimas, which was producing at a cash cost of
$0.24
per ounce, partially offset by higher cash costs at La Encantada and Del Toro due to lower production.
|
•
|
All-in sustaining cost per ounce (“AISC”) in the
second
quarter was
$16.43
, an
increase
of
3%
or
$0.42
per ounce compared to the previous quarter, primarily attributed to higher general and administrative expenses and sustaining capital expenditures pursuant to the integration of San Dimas. AISC per ounce was also higher due to lower production from La Encantada and Del Toro.
|
•
|
The Company's underground development in the
second
quarter consisted of
17,838
metres, reflecting a
20%
increase compared to
14,914
metres completed in the previous quarter. Additional development contractors were brought in during the second quarter at La Encantada and Del Toro to focus on increasing development rates to support expanding production in the coming quarters. Development remains focused on opening new production areas, exploring high potential zones and new stope preparation.
|
•
|
During the quarter, up to 29 diamond drill rigs were active across the Company’s properties. A total of 298 drill holes were completed for a total of
73,899
metres on the seven producing assets as well as the Plomosas Silver Project, representing a 65% increase in drilled metres compared to the previous quarter. Primary exploration activities focused on replacement deposits at the Quebradillas mine and the epithermal vein system at Cerro de Santiago at La Parrilla, exploring extensions of the main Santa Elena vein, vein splays of Santa Elena and at the Ermitaño-West project at Santa Elena, exploring Santa Jessica, Santa Regina and Alexa veins in the Central block and Sinaloa Graben at San Dimas and exploring vein mineralization at the San Juan mine at the Plomosas Silver Project.
|
•
|
Generated revenues of $
79.7
million in the quarter, an increase of
33%
compared to
$60.1
million in the
second
quarter of
2017
primarily due to a
43%
increase in silver equivalent ounces sold, partially offset by a
3%
decrease in average realized silver price compared to the same quarter of the prior year.
|
|
||
First Majestic Silver Corp. 2018 Second Quarter Report
|
Page
5
|
•
|
The Company recognized a mine operating loss of
$2.3
million compared to mine operating earnings of
$1.4
million in the
second
quarter of
2017
. Despite the addition of San Dimas, which contributed
$5.1
million in mine operating earnings during its 52 days of operations under First Majestic management, consolidated mine operating earnings underperformed the previous year due to decline in production from Del Toro and La Encantada.
|
•
|
The Company recorded an impairment charge of
$31.7
million, or
$20.5
million net of tax, on the non-current assets of La Guitarra Silver Mine pursuant to management's decision to place the mine on care and maintenance effective August 3, 2018.
|
•
|
Adjusted net loss for the quarter was
$11.8
million (adjusted loss per share of
$0.07
), after excluding non-cash and non-recurring items including impairment of non-current assets, share-based payments, gain or loss from marketable securities, deferred income tax recovery or expense and acquisition costs (see "Adjusted EPS" on page 43).
|
•
|
The Company generated a net loss of
$40.0
million (loss per share of
$0.22
) compared to net earnings of
$1.4
million (EPS of
$0.01
) in the
second
quarter of
2017
, primarily due to
$31.7
million impairment of non-current assets, a decrease in mine operating earnings, acquisition costs and higher financing costs associated with convertible debentures issued in the first quarter of 2018.
|
•
|
Cash flow from operations before movements in working capital and income taxes in the quarter was
$14.2
million (
$0.08
per share) compared to
$18.0
million (
$0.11
per share) in the
second
quarter of
2017
.
|
ACQUISITION OF PRIMERO MINING CORP.
|
|
||
First Majestic Silver Corp. 2018 Second Quarter Report
|
Page
6
|
•
|
$156.5 million unsecured senior convertible debentures (the “Notes”) issued on January 29, 2018 and February 15, 2018, respectively, the proceeds of which were used primarily for repayment of the Debentures, other costs related to the closing of the Arrangement and general working capital purposes. The Notes mature on March 1, 2023 and bear an interest rate of 1.875% per annum. The Notes are convertible into common shares of the Company at a conversion rate of 104.3297 common shares per $1,000 principal amount of Notes converted, representing an initial conversion price of $9.59 per common share, subject to certain anti-dilution adjustments. Proceeds from the Notes were primarily used to pay out all outstanding amounts of Primero's $75.8 million of convertible debentures.
|
•
|
A $75.0 million senior secured revolving term credit facility (the “New Credit Facility”) which was used to replace an existing First Majestic credit facility and the prior credit facility of Primero. The New Credit Facility will mature on the third anniversary date but can be prepaid in advance of such date. Interest will accrue at LIBOR plus an applicable range which is dependent on certain financial parameters of First Majestic.
|
|
||
First Majestic Silver Corp. 2018 Second Quarter Report
|
Page
7
|
2018 SECOND HALF PRODUCTION OUTLOOK AND COST GUIDANCE UPDATE
|
1.
|
The addition of approximately 3.7 to 4.0 million ounces of silver (or 7.1 to 7.7 million silver equivalent ounces) of production in 2018 from San Dimas. On an annualized rate, production at San Dimas is projected to be 5.8 to 6.4 million ounces of silver (or 10.8 to 12.0 million silver equivalent ounces).
|
2.
|
Increased silver grades at Santa Elena to 94 g/t compared to the previous estimate of 89 g/t, due to mine sequencing into areas of the mine with higher silver grades and lower gold grades. Blended gold grades from the heap leach pad together with fresh underground ore are expected to average 1.5 g/t for the full year compared to 1.7 g/t which was achieved in the first half of the 2018.
|
3.
|
Reduction of head grades at La Encantada to 110 g/t, from previous estimates of 150 g/t, due to a delay in accessing higher grade material from sub-level caving at the San Javier and La Prieta breccias. The slight production delay was due to difficult ground conditions affecting drilling and support in the cave initiation and have since been resolved. Grades and tonnage from these two areas are expected to increase in the second half of 2018 and improve silver production. In addition, initial production from the new roaster is now scheduled to begin at the end of August, previous start-up guidance was March, and ramping up to commercial production by the end of the year. The delays with the roaster and accessing higher grade ounces from sub-level caving resulted in approximately a 1.0 million ounce deferral in annual silver production at La Encantada compared to the original guidance.
|
4.
|
Reduction in throughput at Del Toro in the second half of the year to 800 tpd due to decreased development rates in the San Juan and Dolores mines. In addition, silver recoveries are now planned at 67% compared to 78% due to a higher volume of transitional ore being processed through the flotation circuit. The microbubble flotation cells which are planned to be installed in the first quarter of 2019 are expected to improve these recoveries.
|
5.
|
Following an extensive review of the La Guitarra operation, the Company has decided to place the mine and mill under care and maintenance and review strategic options including the potential sale of the operation. The decision to place the operation under care and maintenance on August 3rd. The reallocation of capital and resources to projects that have better economics and internal rates of return such as the newly acquired San Dimas operation are taking priority. The Company will continue with current permitting activities and remediation programs to prepare the operation for a potential reopening in the future, subject to a sufficient improvement in the economic situation to justify a restart of the operation.
|
|
||
First Majestic Silver Corp. 2018 Second Quarter Report
|
Page
8
|
Mine
|
Silver Oz (M)
|
Silver Eqv Oz (M)
|
Cash Costs ($)
|
AISC ($)
|
San Dimas
|
2.9 - 3.2
|
5.4 - 6.0
|
2.71 - 3.74
|
7.12 - 8.64
|
Santa Elena
|
1.2 - 1.3
|
2.4 - 2.7
|
5.70 - 6.67
|
9.52 - 10.63
|
La Encantada
|
1.4 - 1.6
|
1.4 - 1.6
|
11.74 - 12.52
|
15.47 - 16.58
|
La Parrilla
|
0.7 - 0.8
|
1.2 - 1.3
|
8.65 - 9.29
|
14.71 - 15.76
|
Del Toro
|
0.4 - 0.5
|
0.8 - 0.9
|
10.74 - 12.08
|
21.61 - 24.20
|
San Martin
|
0.9 - 1.0
|
1.0 - 1.2
|
8.60 - 9.30
|
11.83 - 12.82
|
La Guitarra
(1)
|
0.0
|
0.1
|
15.15 - 16.29
|
29.63 - 31.70
|
Consolidated
|
7.6 - 8.4
|
12.4 - 13.8
|
$6.63 - $7.54
|
$13.28 - $14.84
|
Mine
|
Silver Oz (M)
|
Silver Eqv Oz (M)
|
Cash Costs ($)
|
AISC ($)
|
San Dimas
|
3.7 - 4.0
|
7.1 - 7.7
|
2.88 - 3.66
|
6.99 - 8.19
|
Santa Elena
|
2.1 - 2.3
|
5.0 - 5.6
|
2.48 - 3.03
|
7.28 - 8.18
|
La Encantada
|
2.1 - 2.3
|
2.1 - 2.4
|
14.25 - 14.79
|
18.52 - 19.47
|
La Parrilla
|
1.4 - 1.5
|
2.3 - 2.5
|
9.67 - 10.08
|
15.77 - 16.70
|
Del Toro
|
0.7 - 0.8
|
1.5 - 1.6
|
12.16 - 12.91
|
22.25 - 24.15
|
San Martin
|
1.7 - 1.9
|
2.0 - 2.2
|
8.61 - 9.00
|
11.53 - 12.20
|
La Guitarra
|
0.3
|
0.5
|
11.17 - 11.45
|
20.28 - 21.38
|
Consolidated
|
12.0 - 13.2
|
20.5 - 22.6
|
$7.18 - $7.75
|
$14.53 - $15.83
|
|
||
First Majestic Silver Corp. 2018 Second Quarter Report
|
Page
9
|
Capital Budget ($millions)
|
San Dimas
|
|
Santa Elena
|
|
La Encantada
|
|
La Parrilla
|
|
Del Toro
|
|
San Martin
|
|
La Guitarra
|
|
Other
(1)
|
|
Total
|
||||||||||||||||||
Mining Interest
|
|
$16.6
|
|
|
|
$9.8
|
|
|
|
$4.0
|
|
|
|
$6.4
|
|
|
|
$4.8
|
|
|
|
$3.9
|
|
|
|
$2.2
|
|
|
|
$2.5
|
|
|
|
$50.2
|
|
Property Plant and Equipment
|
5.8
|
|
|
1.6
|
|
|
7.1
|
|
|
2.5
|
|
|
3.1
|
|
|
2.0
|
|
|
0.4
|
|
|
24.2
|
|
|
46.7
|
|
|||||||||
Total
|
|
$22.4
|
|
|
|
$11.4
|
|
|
|
$11.1
|
|
|
|
$8.9
|
|
|
|
$7.9
|
|
|
|
$5.9
|
|
|
|
$2.6
|
|
|
|
$26.7
|
|
|
|
$96.9
|
|
Revised 2018 Capital Budget ($millions)
|
Sustaining
|
Expansionary
|
Total
|
||||||
Underground Development
|
|
$32.8
|
|
|
$26.4
|
|
|
$59.2
|
|
Exploration
|
4.4
|
|
23.0
|
|
27.4
|
|
|||
Property, Plant and Equipment
|
23.9
|
|
11.7
|
|
35.6
|
|
|||
Corporate Projects
(1)
|
3.5
|
|
23.0
|
|
26.5
|
|
|||
Total
|
|
$64.8
|
|
|
$83.9
|
|
|
$148.7
|
|
($millions)
|
San Dimas
|
|
Santa Elena
|
|
La Encantada
|
|
La Parrilla
|
|
Del Toro
|
|
San Martin
|
|
La Guitarra
|
|
Other
(1)
|
|
Total
|
||||||||||||||||||
Sustaining
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Mining Interest
|
|
$11.9
|
|
|
|
$6.9
|
|
|
|
$3.5
|
|
|
|
$5.1
|
|
|
|
$5.4
|
|
|
|
$2.3
|
|
|
|
$2.2
|
|
|
|
$—
|
|
|
|
$37.3
|
|
Property Plant and Equipment
|
5.8
|
|
|
3.7
|
|
|
5.9
|
|
|
3.1
|
|
|
2.1
|
|
|
2.9
|
|
|
0.5
|
|
|
3.5
|
|
|
27.5
|
|
|||||||||
Total
|
|
$17.7
|
|
|
|
$10.6
|
|
|
|
$9.4
|
|
|
|
$8.2
|
|
|
|
$7.5
|
|
|
|
$5.2
|
|
|
|
$2.7
|
|
|
|
$3.5
|
|
|
|
$64.8
|
|
Expansionary
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Mining Interest
|
|
$8.2
|
|
|
|
$10.6
|
|
|
|
$4.8
|
|
|
|
$6.6
|
|
|
|
$4.3
|
|
|
|
$5.4
|
|
|
|
$4.1
|
|
|
|
$5.4
|
|
|
|
$49.4
|
|
Property Plant and Equipment
|
1.0
|
|
|
0.5
|
|
|
5.1
|
|
|
0.8
|
|
|
2.7
|
|
|
—
|
|
|
1.1
|
|
|
23.3
|
|
|
34.5
|
|
|||||||||
Total
|
|
$9.2
|
|
|
|
$11.1
|
|
|
|
$9.9
|
|
|
|
$7.4
|
|
|
|
$7.0
|
|
|
|
$5.4
|
|
|
|
$5.2
|
|
|
|
$28.7
|
|
|
|
$83.9
|
|
|
||
First Majestic Silver Corp. 2018 Second Quarter Report
|
Page
10
|
OVERVIEW OF OPERATING RESULTS
|
|
|
2018
|
|
2017
|
|
2016
|
|||||||||||||||||||||
PRODUCTION HIGHLIGHTS
|
|
Q2
(1)
|
Q1
|
|
Q4
|
Q3
|
Q2
|
Q1
|
|
Q4
|
Q3
|
||||||||||||||||
Ore processed/tonnes milled
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
San Dimas
|
|
85,765
|
|
—
|
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
||||||||
Santa Elena
|
|
228,054
|
|
223,498
|
|
|
232,575
|
|
232,662
|
|
232,451
|
|
230,050
|
|
|
257,771
|
|
241,996
|
|
||||||||
La Encantada
|
|
237,862
|
|
276,191
|
|
|
198,845
|
|
212,092
|
|
148,039
|
|
266,510
|
|
|
235,039
|
|
247,858
|
|
||||||||
La Parrilla
|
|
123,642
|
|
125,114
|
|
|
138,124
|
|
132,389
|
|
132,880
|
|
140,592
|
|
|
153,309
|
|
147,414
|
|
||||||||
Del Toro
|
|
65,879
|
|
79,769
|
|
|
56,753
|
|
60,501
|
|
81,843
|
|
79,108
|
|
|
82,767
|
|
86,646
|
|
||||||||
San Martin
|
|
74,431
|
|
75,374
|
|
|
72,503
|
|
69,113
|
|
67,073
|
|
69,563
|
|
|
76,848
|
|
75,228
|
|
||||||||
La Guitarra
|
|
35,715
|
|
29,829
|
|
|
37,885
|
|
23,896
|
|
29,547
|
|
36,514
|
|
|
38,422
|
|
39,092
|
|
||||||||
Consolidated
|
|
851,349
|
|
809,775
|
|
|
736,684
|
|
730,652
|
|
691,833
|
|
822,336
|
|
|
844,155
|
|
838,233
|
|
||||||||
Silver equivalent ounces produced
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
San Dimas
|
|
1,698,382
|
|
—
|
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
||||||||
Santa Elena
|
|
1,407,880
|
|
1,543,776
|
|
|
1,653,941
|
|
1,503,376
|
|
1,399,940
|
|
1,369,875
|
|
|
1,470,612
|
|
1,430,506
|
|
||||||||
La Encantada
|
|
327,458
|
|
452,420
|
|
|
489,071
|
|
610,307
|
|
375,563
|
|
708,959
|
|
|
569,504
|
|
687,841
|
|
||||||||
La Parrilla
|
|
605,826
|
|
615,541
|
|
|
643,799
|
|
612,116
|
|
593,852
|
|
667,431
|
|
|
699,497
|
|
739,026
|
|
||||||||
Del Toro
|
|
323,714
|
|
437,743
|
|
|
369,992
|
|
472,804
|
|
712,714
|
|
682,219
|
|
|
680,802
|
|
707,524
|
|
||||||||
San Martin
|
|
524,843
|
|
574,838
|
|
|
617,879
|
|
604,686
|
|
577,598
|
|
522,672
|
|
|
573,349
|
|
562,096
|
|
||||||||
La Guitarra
|
|
249,214
|
|
255,359
|
|
|
290,654
|
|
182,986
|
|
229,276
|
|
316,195
|
|
|
386,713
|
|
397,627
|
|
||||||||
Consolidated
|
|
5,137,318
|
|
3,879,678
|
|
|
4,065,336
|
|
3,986,274
|
|
3,888,944
|
|
4,267,350
|
|
|
4,380,477
|
|
4,524,619
|
|
||||||||
Silver ounces produced
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
San Dimas
|
|
808,923
|
|
—
|
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
||||||||
Santa Elena
|
|
535,015
|
|
521,784
|
|
|
582,789
|
|
560,054
|
|
557,914
|
|
581,425
|
|
|
660,207
|
|
671,423
|
|
||||||||
La Encantada
|
|
325,603
|
|
449,522
|
|
|
486,514
|
|
609,138
|
|
374,901
|
|
707,479
|
|
|
567,930
|
|
685,478
|
|
||||||||
La Parrilla
|
|
360,862
|
|
337,332
|
|
|
401,090
|
|
424,358
|
|
425,060
|
|
479,875
|
|
|
497,466
|
|
547,913
|
|
||||||||
Del Toro
|
|
167,591
|
|
236,478
|
|
|
185,695
|
|
233,015
|
|
365,323
|
|
340,958
|
|
|
343,894
|
|
446,137
|
|
||||||||
San Martin
|
|
419,815
|
|
483,740
|
|
|
514,678
|
|
471,893
|
|
425,645
|
|
410,082
|
|
|
510,423
|
|
500,441
|
|
||||||||
La Guitarra
|
|
138,454
|
|
138,173
|
|
|
166,698
|
|
117,504
|
|
138,345
|
|
189,159
|
|
|
239,788
|
|
263,235
|
|
||||||||
Consolidated
|
|
2,756,263
|
|
2,167,030
|
|
|
2,337,463
|
|
2,415,962
|
|
2,287,188
|
|
2,708,978
|
|
|
2,819,708
|
|
3,114,627
|
|
||||||||
Cash cost per ounce
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
San Dimas
|
|
|
$0.24
|
|
—
|
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
|||||||
Santa Elena
|
|
|
$1.39
|
|
|
($4.74
|
)
|
|
|
($6.93
|
)
|
|
($0.18
|
)
|
|
$1.24
|
|
|
($0.12
|
)
|
|
|
($1.43
|
)
|
|
($0.81
|
)
|
La Encantada
|
|
|
$23.05
|
|
|
$16.93
|
|
|
|
$15.23
|
|
|
$12.47
|
|
|
$13.59
|
|
|
$10.83
|
|
|
|
$13.87
|
|
|
$11.20
|
|
La Parrilla
|
|
|
$10.42
|
|
|
$11.02
|
|
|
|
$11.21
|
|
|
$12.26
|
|
|
$11.15
|
|
|
$9.96
|
|
|
|
$10.22
|
|
|
$7.70
|
|
Del Toro
|
|
|
$18.01
|
|
|
$13.66
|
|
|
|
$12.53
|
|
|
$6.41
|
|
|
$3.99
|
|
|
$2.64
|
|
|
|
$2.80
|
|
|
$3.41
|
|
San Martin
|
|
|
$9.68
|
|
|
$8.04
|
|
|
|
$7.55
|
|
|
$7.11
|
|
|
$5.43
|
|
|
$6.42
|
|
|
|
$6.94
|
|
|
$7.05
|
|
La Guitarra
|
|
|
$12.89
|
|
|
$7.97
|
|
|
|
$11.20
|
|
|
$19.02
|
|
|
$12.65
|
|
|
$6.36
|
|
|
|
$7.74
|
|
|
$6.93
|
|
Consolidated
|
|
|
$7.59
|
|
|
$7.83
|
|
|
|
$6.76
|
|
|
$8.15
|
|
|
$7.01
|
|
|
$6.31
|
|
|
|
$6.49
|
|
|
$5.84
|
|
All-in sustaining cost per ounce
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
San Dimas
|
|
|
$5.41
|
|
—
|
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
|||||||
Santa Elena
|
|
|
$6.60
|
|
|
($0.17
|
)
|
|
|
($2.01
|
)
|
|
$3.08
|
|
|
$5.02
|
|
|
$2.95
|
|
|
|
$1.64
|
|
|
$1.82
|
|
La Encantada
|
|
|
$30.81
|
|
|
$20.97
|
|
|
|
$19.20
|
|
|
$14.98
|
|
|
$17.95
|
|
|
$12.07
|
|
|
|
$16.53
|
|
|
$12.81
|
|
La Parrilla
|
|
|
$16.39
|
|
|
$17.66
|
|
|
|
$15.28
|
|
|
$18.85
|
|
|
$17.12
|
|
|
$13.86
|
|
|
|
$15.34
|
|
|
$10.65
|
|
Del Toro
|
|
|
$32.08
|
|
|
$20.61
|
|
|
|
$25.48
|
|
|
$12.92
|
|
|
$7.93
|
|
|
$7.95
|
|
|
|
$8.43
|
|
|
$6.01
|
|
San Martin
|
|
|
$12.49
|
|
|
$9.98
|
|
|
|
$9.73
|
|
|
$10.03
|
|
|
$7.53
|
|
|
$8.66
|
|
|
|
$10.01
|
|
|
$9.92
|
|
La Guitarra
|
|
|
$18.11
|
|
|
$15.76
|
|
|
|
$17.77
|
|
|
$31.55
|
|
|
$19.51
|
|
|
$11.83
|
|
|
|
$15.99
|
|
|
$13.60
|
|
Consolidated
|
|
|
$16.43
|
|
|
$16.01
|
|
|
|
$14.13
|
|
|
$15.36
|
|
|
$14.17
|
|
|
$11.85
|
|
|
|
$12.90
|
|
|
$10.52
|
|
Production cost per tonne
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
San Dimas
|
|
|
$148.91
|
|
—
|
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
|||||||
Santa Elena
|
|
|
$55.97
|
|
|
$54.31
|
|
|
|
$47.13
|
|
|
$55.65
|
|
|
$54.44
|
|
|
$52.90
|
|
|
|
$37.57
|
|
|
$44.75
|
|
La Encantada
|
|
|
$31.09
|
|
|
$27.00
|
|
|
|
$36.42
|
|
|
$34.77
|
|
|
$33.65
|
|
|
$27.92
|
|
|
|
$32.96
|
|
|
$30.18
|
|
La Parrilla
|
|
|
$49.10
|
|
|
$48.12
|
|
|
|
$48.00
|
|
|
$50.75
|
|
|
$44.54
|
|
|
$43.22
|
|
|
|
$41.92
|
|
|
$41.20
|
|
Del Toro
|
|
|
$69.23
|
|
|
$58.12
|
|
|
|
$72.77
|
|
|
$71.80
|
|
|
$57.16
|
|
|
$51.58
|
|
|
|
$52.45
|
|
|
$48.15
|
|
San Martin
|
|
|
$72.77
|
|
|
$68.06
|
|
|
|
$73.14
|
|
|
$76.81
|
|
|
$69.37
|
|
|
$61.28
|
|
|
|
$56.70
|
|
|
$59.39
|
|
La Guitarra
|
|
|
$83.68
|
|
|
$86.50
|
|
|
|
$83.61
|
|
|
$120.09
|
|
|
$93.49
|
|
|
$75.33
|
|
|
|
$78.31
|
|
|
$79.68
|
|
Consolidated
|
|
|
$61.04
|
|
|
$46.88
|
|
|
|
$50.81
|
|
|
$54.15
|
|
|
$51.53
|
|
|
$44.72
|
|
|
|
$42.13
|
|
|
$43.11
|
|
|
||
First Majestic Silver Corp. 2018 Second Quarter Report
|
Page
11
|
CONSOLIDATED
|
|
2018-Q2
|
2018-Q1
|
|
2018-YTD
|
|
2017-YTD
|
|
Change Q2 vs Q1
|
|
Change '18 vs '17
|
|||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Ore processed/tonnes milled
|
|
851,349
|
|
809,775
|
|
|
1,661,124
|
|
|
1,514,170
|
|
|
5
|
%
|
|
10
|
%
|
|||
Average silver grade (g/t)
|
|
127
|
|
111
|
|
|
119
|
|
|
133
|
|
|
14
|
%
|
|
(11
|
%)
|
|||
Average gold grade (g/t)
|
|
0.99
|
|
0.66
|
|
|
0.83
|
|
|
0.68
|
|
|
50
|
%
|
|
22
|
%
|
|||
Average lead grade (g/t)
|
|
1.61
|
|
1.77
|
|
|
1.69
|
|
|
2.51
|
|
|
(9
|
%)
|
|
(33
|
%)
|
|||
Average zinc grade (g/t)
|
|
0.61
|
|
0.69
|
|
|
0.65
|
|
|
0.42
|
|
|
(12
|
%)
|
|
55
|
%
|
|||
Silver recovery (%)
|
|
79
|
%
|
75
|
%
|
|
77
|
%
|
|
77
|
%
|
|
5
|
%
|
|
0
|
%
|
|||
Gold recovery (%)
|
|
94
|
%
|
93
|
%
|
|
93
|
%
|
|
92
|
%
|
|
1
|
%
|
|
1
|
%
|
|||
Lead recovery (%)
|
|
64
|
%
|
62
|
%
|
|
63
|
%
|
|
70
|
%
|
|
3
|
%
|
|
(10
|
%)
|
|||
Zinc recovery (%)
|
|
60
|
%
|
57
|
%
|
|
58
|
%
|
|
48
|
%
|
|
5
|
%
|
|
21
|
%
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Production
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Silver ounces produced
|
|
2,756,263
|
|
2,167,030
|
|
|
4,923,292
|
|
|
4,996,166
|
|
|
27
|
%
|
|
(1
|
%)
|
|||
Gold ounces produced
|
|
25,449
|
|
15,887
|
|
|
41,336
|
|
|
30,233
|
|
|
60
|
%
|
|
37
|
%
|
|||
Pounds of lead produced
|
|
3,949,410
|
|
4,448,378
|
|
|
8,397,788
|
|
|
15,079,301
|
|
|
(11
|
%)
|
|
(44
|
%)
|
|||
Pounds of zinc produced
|
|
1,382,760
|
|
1,611,699
|
|
|
2,994,459
|
|
|
1,732,535
|
|
|
(14
|
%)
|
|
73
|
%
|
|||
Total production - ounces silver equivalent
|
|
5,137,318
|
|
3,879,678
|
|
|
9,016,996
|
|
|
8,156,294
|
|
|
32
|
%
|
|
11
|
%
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Cost
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Cash cost per ounce
|
|
|
$7.59
|
|
|
$7.83
|
|
|
|
$7.70
|
|
|
6.63
|
|
|
(3
|
%)
|
|
16
|
%
|
All-In sustaining costs per ounce
|
|
|
$16.43
|
|
|
$16.01
|
|
|
|
$16.25
|
|
|
12.92
|
|
|
3
|
%
|
|
26
|
%
|
Total production cost per tonne
|
|
|
$61.04
|
|
|
$46.88
|
|
|
|
$54.14
|
|
|
47.83
|
|
|
30
|
%
|
|
13
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Underground development (m)
|
|
17,838
|
|
14,914
|
|
|
32,752
|
|
|
28,692
|
|
|
20
|
%
|
|
14
|
%
|
|||
Diamond drilling (m)
|
|
73,899
|
|
44,827
|
|
|
118,726
|
|
|
58,070
|
|
|
65
|
%
|
|
104
|
%
|
|
||
First Majestic Silver Corp. 2018 Second Quarter Report
|
Page
12
|
|
||
First Majestic Silver Corp. 2018 Second Quarter Report
|
Page
13
|
San Dimas
|
2018-Q2
|
||
|
|
||
Total ore processed/tonnes milled
|
85,765
|
|
|
Average silver grade (g/t)
|
307
|
|
|
Average gold grade (g/t)
|
4.3
|
|
|
Silver recovery (%)
|
96
|
%
|
|
Gold recovery (%)
|
97
|
%
|
|
|
|
||
Production
|
|
||
Silver ounces produced
|
808,923
|
|
|
Gold ounces produced
|
11,348
|
|
|
Total production - ounces silver equivalent
|
1,698,382
|
|
|
|
|
||
Cost
|
|
||
Cash cost per ounce
|
|
$0.24
|
|
All-In sustaining costs per ounce
|
|
$5.41
|
|
Total production cost per tonne
|
|
$148.91
|
|
|
|
||
Underground development (m)
|
2,481
|
|
|
Diamond drilling (m)
|
10,522
|
|
|
||
First Majestic Silver Corp. 2018 Second Quarter Report
|
Page
14
|
1)
|
Implementation of High Intensity Grinding technology
|
2)
|
Lime automation and pH control
|
3)
|
Upgrading the tailings filtration plant
|
4)
|
Modernization of the Merrill-Crowe and smelting operations
|
5)
|
Installation of the third counter-current decantation tank
|
6)
|
Estimated 40% reduction in dilution and reductions in costs associated with standard ground support
|
7)
|
Pillar recoveries from Tayoltita, Santa Rita and Noche Buena mines
|
|
||
First Majestic Silver Corp. 2018 Second Quarter Report
|
Page
15
|
SANTA ELENA
|
2018-Q2
|
2018-Q1
|
|
2018-YTD
|
|
2017-YTD
|
|
Change Q2 vs Q1
|
|
Change '18 vs '17
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Total ore processed/tonnes milled
|
228,054
|
|
223,498
|
|
|
451,553
|
|
|
462,501
|
|
|
2
|
%
|
|
(2
|
%)
|
||||
Underground tonnes
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Tonnes milled
|
128,200
|
|
124,827
|
|
|
253,028
|
|
|
279,027
|
|
|
3
|
%
|
|
(9
|
%)
|
||||
Average silver grade (g/t)
|
120
|
|
124
|
|
|
122
|
|
|
112
|
|
|
(3
|
%)
|
|
9
|
%
|
||||
Average gold grade (g/t)
|
2.3
|
|
2.9
|
|
|
2.6
|
|
|
2.2
|
|
|
(21
|
%)
|
|
18
|
%
|
||||
Heap leach tonnes
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Tonnes milled
|
99,854
|
|
98,671
|
|
|
198,525
|
|
|
183,473
|
|
|
1
|
%
|
|
8
|
%
|
||||
Average silver grade (g/t)
|
36
|
|
32
|
|
|
34
|
|
|
45
|
|
|
13
|
%
|
|
(24
|
%)
|
||||
Average gold grade (g/t)
|
0.7
|
|
0.6
|
|
|
0.6
|
|
|
0.7
|
|
|
17
|
%
|
|
(14
|
%)
|
||||
Silver recovery (%)
|
87
|
%
|
87
|
%
|
|
87
|
%
|
|
89
|
%
|
|
0
|
%
|
|
(2
|
%)
|
||||
Gold recovery (%)
|
95
|
%
|
95
|
%
|
|
95
|
%
|
|
95
|
%
|
|
0
|
%
|
|
0
|
%
|
||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Production
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Silver ounces produced
|
535,015
|
|
521,784
|
|
|
1,056,799
|
|
|
1,139,339
|
|
|
3
|
%
|
|
(7
|
%)
|
||||
Gold ounces produced
|
11,040
|
|
12,887
|
|
|
23,927
|
|
|
22,784
|
|
|
(14
|
%)
|
|
5
|
%
|
||||
Total production - ounces silver equivalent
|
1,407,880
|
|
1,543,776
|
|
|
2,951,656
|
|
|
2,769,815
|
|
|
(9
|
%)
|
|
7
|
%
|
||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Cost
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash cost per ounce
|
|
$1.39
|
|
|
($4.74
|
)
|
|
|
($1.64
|
)
|
|
|
$0.55
|
|
|
(129
|
%)
|
|
(398
|
%)
|
All-In sustaining costs per ounce
|
|
$6.60
|
|
|
($0.17
|
)
|
|
|
$3.25
|
|
|
|
$3.96
|
|
|
(3,982
|
%)
|
|
(18
|
%)
|
Total production cost per tonne
|
|
$55.97
|
|
|
$54.31
|
|
|
|
$55.15
|
|
|
|
$53.68
|
|
|
3
|
%
|
|
3
|
%
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Underground development (m)
|
2,926
|
|
3,030
|
|
|
5,956
|
|
|
5,469
|
|
|
(3
|
%)
|
|
9
|
%
|
||||
Diamond drilling (m)
|
10,717
|
|
7,097
|
|
|
17,814
|
|
|
6,338
|
|
|
51
|
%
|
|
181
|
%
|
|
||
First Majestic Silver Corp. 2018 Second Quarter Report
|
Page
16
|
|
||
First Majestic Silver Corp. 2018 Second Quarter Report
|
Page
17
|
LA PARRILLA
|
2018-Q2
|
2018-Q1
|
|
2018-YTD
|
|
2017-YTD
|
|
Change Q2 vs Q1
|
|
Change
'18 vs '17 |
||||||||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Total ore processed/tonnes milled
|
123,642
|
|
125,114
|
|
|
248,756
|
|
|
273,472
|
|
|
(1
|
%)
|
|
(9
|
%)
|
||||
Cyanidation
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Tonnes milled
|
52,871
|
|
49,260
|
|
|
102,131
|
|
|
112,740
|
|
|
7
|
%
|
|
(9
|
%)
|
||||
Average silver grade (g/t)
|
105
|
|
125
|
|
|
114
|
|
|
134
|
|
|
(16
|
%)
|
|
(15
|
%)
|
||||
Average gold grade (g/t)
|
0.13
|
|
0.14
|
|
|
0.13
|
|
|
0.12
|
|
|
(7
|
%)
|
|
8
|
%
|
||||
Silver recovery (%)
|
71
|
%
|
71
|
%
|
|
71
|
%
|
|
71
|
%
|
|
0
|
%
|
|
0
|
%
|
||||
Gold recovery (%)
|
81
|
%
|
81
|
%
|
|
81
|
%
|
|
79
|
%
|
|
0
|
%
|
|
3
|
%
|
||||
Flotation
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Tonnes milled
|
70,771
|
|
75,854
|
|
|
146,625
|
|
|
160,732
|
|
|
(7
|
%)
|
|
(9
|
%)
|
||||
Average silver grade (g/t)
|
131
|
|
105
|
|
|
118
|
|
|
128
|
|
|
25
|
%
|
|
(8
|
%)
|
||||
Average lead grade (g/t)
|
1.4
|
|
1.3
|
|
|
1.4
|
|
|
1.3
|
|
|
8
|
%
|
|
8
|
%
|
||||
Average zinc grade (g/t)
|
1.5
|
|
1.7
|
|
|
1.6
|
|
|
1.0
|
|
|
(12
|
%)
|
|
60
|
%
|
||||
Silver recovery (%)
|
78
|
%
|
77
|
%
|
|
78
|
%
|
|
81
|
%
|
|
1
|
%
|
|
(4
|
%)
|
||||
Lead recovery (%)
|
77
|
%
|
73
|
%
|
|
75
|
%
|
|
76
|
%
|
|
5
|
%
|
|
(1
|
%)
|
||||
Zinc recovery (%)
|
60
|
%
|
57
|
%
|
|
58
|
%
|
|
48
|
%
|
|
5
|
%
|
|
21
|
%
|
||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Production
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Silver ounces produced
|
360,862
|
|
337,332
|
|
|
698,193
|
|
|
904,935
|
|
|
7
|
%
|
|
(23
|
%)
|
||||
Gold ounces produced
|
235
|
|
247
|
|
|
482
|
|
|
465
|
|
|
(5
|
%)
|
|
4
|
%
|
||||
Pounds of lead produced
|
1,653,868
|
|
1,606,332
|
|
|
3,260,200
|
|
|
3,459,096
|
|
|
3
|
%
|
|
(6
|
%)
|
||||
Pounds of zinc produced
|
1,382,760
|
|
1,611,699
|
|
|
2,994,459
|
|
|
1,732,535
|
|
|
(14
|
%)
|
|
73
|
%
|
||||
Total production - ounces silver equivalent
|
605,826
|
|
615,541
|
|
|
1,221,367
|
|
|
1,261,284
|
|
|
(2
|
%)
|
|
(3
|
%)
|
||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Cost
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash cost per ounce
|
|
$10.42
|
|
|
$11.02
|
|
|
|
$10.71
|
|
|
|
$10.52
|
|
|
(5
|
%)
|
|
2
|
%
|
All-In sustaining costs per ounce
|
|
$16.39
|
|
|
$17.67
|
|
|
|
$17.00
|
|
|
|
$15.39
|
|
|
(7
|
%)
|
|
10
|
%
|
Total production cost per tonne
|
|
$49.10
|
|
|
$48.12
|
|
|
|
$48.61
|
|
|
|
$43.87
|
|
|
2
|
%
|
|
11
|
%
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Underground development (m)
|
2,761
|
|
3,254
|
|
|
6,015
|
|
|
6,060
|
|
|
(15
|
%)
|
|
(1
|
%)
|
||||
Diamond drilling (m)
|
10,444
|
|
8,358
|
|
|
18,801
|
|
|
11,236
|
|
|
25
|
%
|
|
67
|
%
|
|
||
First Majestic Silver Corp. 2018 Second Quarter Report
|
Page
18
|
|
||
First Majestic Silver Corp. 2018 Second Quarter Report
|
Page
19
|
LA ENCANTADA
|
2018-Q2
|
2018-Q1
|
|
2018-YTD
|
|
2017-YTD
|
|
Change Q2 vs Q1
|
|
Change
'18 vs '17 |
||||||||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Ore processed/tonnes milled
|
237,862
|
|
276,191
|
|
|
514,053
|
|
|
414,549
|
|
|
(14
|
%)
|
|
24
|
%
|
||||
Average silver grade (g/t)
|
83
|
|
85
|
|
|
84
|
|
|
131
|
|
|
(2
|
%)
|
|
(36
|
%)
|
||||
Silver recovery (%)
|
51
|
%
|
60
|
%
|
|
56
|
%
|
|
62
|
%
|
|
(15
|
%)
|
|
(10
|
%)
|
||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Production
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Silver ounces produced
|
325,603
|
|
449,522
|
|
|
775,125
|
|
|
1,082,380
|
|
|
(28
|
%)
|
|
(28
|
%)
|
||||
Gold ounces produced
|
23
|
|
37
|
|
|
60
|
|
|
30
|
|
|
(38
|
%)
|
|
100
|
%
|
||||
Total production - ounces silver equivalent
|
327,458
|
|
452,420
|
|
|
779,878
|
|
|
1,084,522
|
|
|
(28
|
%)
|
|
(28
|
%)
|
||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Cost
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash cost per ounce
|
|
$23.05
|
|
|
$16.93
|
|
|
|
$19.50
|
|
|
|
$11.78
|
|
|
36
|
%
|
|
66
|
%
|
All-In sustaining costs per ounce
|
|
$30.81
|
|
|
$20.97
|
|
|
|
$25.11
|
|
|
|
$14.10
|
|
|
47
|
%
|
|
78
|
%
|
Total production cost per tonne
|
|
$31.09
|
|
|
$27.00
|
|
|
|
$28.89
|
|
|
|
$29.96
|
|
|
15
|
%
|
|
(4
|
%)
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Underground development (m)
|
1,718
|
|
1,445
|
|
|
3,162
|
|
|
1,148
|
|
|
19
|
%
|
|
175
|
%
|
||||
Diamond drilling (m)
|
7,020
|
|
4,574
|
|
|
11,593
|
|
|
5,704
|
|
|
53
|
%
|
|
103
|
%
|
|
||
First Majestic Silver Corp. 2018 Second Quarter Report
|
Page
20
|
|
||
First Majestic Silver Corp. 2018 Second Quarter Report
|
Page
21
|
DEL TORO
|
2018-Q2
|
2018-Q1
|
|
2018-YTD
|
|
2017-YTD
|
|
Change Q2 vs Q1
|
|
Change
'18 vs '17 |
||||||||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Ore processed/tonnes milled
|
65,879
|
|
79,769
|
|
|
145,648
|
|
|
160,951
|
|
|
(17
|
%)
|
|
(10
|
%)
|
||||
Average silver grade (g/t)
|
117
|
|
133
|
|
|
126
|
|
|
168
|
|
|
(12
|
%)
|
|
(25
|
%)
|
||||
Average lead grade (g/t)
|
2.7
|
|
2.9
|
|
|
2.8
|
|
|
4.8
|
|
|
(7
|
%)
|
|
(42
|
%)
|
||||
Silver recovery (%)
|
68
|
%
|
69
|
%
|
|
69
|
%
|
|
81
|
%
|
|
(1
|
%)
|
|
(15
|
%)
|
||||
Lead recovery (%)
|
58
|
%
|
57
|
%
|
|
57
|
%
|
|
69
|
%
|
|
2
|
%
|
|
(17
|
%)
|
||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Production
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Silver ounces produced
|
167,591
|
|
236,478
|
|
|
404,070
|
|
|
706,282
|
|
|
(29
|
%)
|
|
(43
|
%)
|
||||
Pounds of lead produced
|
2,295,542
|
|
2,842,046
|
|
|
5,137,588
|
|
|
11,620,205
|
|
|
(19
|
%)
|
|
(56
|
%)
|
||||
Total production - ounces silver equivalent
|
323,714
|
|
437,743
|
|
|
761,458
|
|
|
1,394,933
|
|
|
(26
|
%)
|
|
(45
|
%)
|
||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Cost
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash cost per ounce
|
|
$18.01
|
|
|
$13.66
|
|
|
|
$15.47
|
|
|
|
$3.34
|
|
|
32
|
%
|
|
363
|
%
|
All-In sustaining costs per ounce
|
|
$32.08
|
|
|
$20.61
|
|
|
|
$25.37
|
|
|
|
$7.94
|
|
|
56
|
%
|
|
220
|
%
|
Total production cost per tonne
|
|
$69.23
|
|
|
$58.12
|
|
|
|
$63.14
|
|
|
|
$54.41
|
|
|
19
|
%
|
|
16
|
%
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Underground development (m)
|
3,044
|
|
2,836
|
|
|
5,880
|
|
|
5,932
|
|
|
7
|
%
|
|
(1
|
%)
|
||||
Diamond drilling (m)
|
9,145
|
|
5,824
|
|
|
14,969
|
|
|
7,667
|
|
|
57
|
%
|
|
95
|
%
|
|
||
First Majestic Silver Corp. 2018 Second Quarter Report
|
Page
22
|
|
||
First Majestic Silver Corp. 2018 Second Quarter Report
|
Page
23
|
SAN MARTIN
|
2018-Q2
|
2018-Q1
|
|
2018-YTD
|
|
2017-YTD
|
|
Change Q2 vs Q1
|
|
Change
'18 vs '17 |
||||||||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Ore processed/tonnes milled
|
74,431
|
|
75,374
|
|
|
149,806
|
|
|
136,636
|
|
|
(1
|
%)
|
|
10
|
%
|
||||
Average silver grade (g/t)
|
203
|
|
234
|
|
|
218
|
|
|
227
|
|
|
(13
|
%)
|
|
(4
|
%)
|
||||
Average gold grade (g/t)
|
0.6
|
|
0.5
|
|
|
0.6
|
|
|
0.9
|
|
|
20
|
%
|
|
(33
|
%)
|
||||
Silver recovery (%)
|
87
|
%
|
85
|
%
|
|
86
|
%
|
|
84
|
%
|
|
2
|
%
|
|
2
|
%
|
||||
Gold recovery (%)
|
87
|
%
|
91
|
%
|
|
89
|
%
|
|
93
|
%
|
|
(4
|
%)
|
|
(4
|
%)
|
||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Production
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Silver ounces produced
|
419,815
|
|
483,740
|
|
|
903,555
|
|
|
835,727
|
|
|
(13
|
%)
|
|
8
|
%
|
||||
Gold ounces produced
|
1,331
|
|
1,148
|
|
|
2,480
|
|
|
3,693
|
|
|
16
|
%
|
|
(33
|
%)
|
||||
Total production - ounces silver equivalent
|
524,843
|
|
574,838
|
|
|
1,099,681
|
|
|
1,100,270
|
|
|
(9
|
%)
|
|
0
|
%
|
||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Cost
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash cost per ounce
|
|
$9.68
|
|
|
$8.04
|
|
|
|
$8.81
|
|
|
|
$5.91
|
|
|
20
|
%
|
|
49
|
%
|
All-In sustaining costs per ounce
|
|
$12.49
|
|
|
$9.98
|
|
|
|
$11.15
|
|
|
|
$8.08
|
|
|
25
|
%
|
|
38
|
%
|
Total production cost per tonne
|
|
$72.77
|
|
|
$68.06
|
|
|
|
$70.40
|
|
|
|
$65.25
|
|
|
7
|
%
|
|
8
|
%
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Underground development (m)
|
2,957
|
|
2,966
|
|
|
5,923
|
|
|
5,351
|
|
|
0
|
%
|
|
11
|
%
|
||||
Diamond drilling (m)
|
9,781
|
|
4,928
|
|
|
14,709
|
|
|
11,487
|
|
|
98
|
%
|
|
28
|
%
|
|
||
First Majestic Silver Corp. 2018 Second Quarter Report
|
Page
24
|
LA GUITARRA
|
2018-Q2
|
2018-Q1
|
|
2018-YTD
|
|
2017-YTD
|
|
Change Q2 vs Q1
|
|
Change
'18 vs '17 |
||||||||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Ore processed/tonnes milled
|
35,715
|
|
29,829
|
|
|
65,544
|
|
|
66,061
|
|
|
20
|
%
|
|
(1
|
%)
|
||||
Average silver grade (g/t)
|
154
|
|
187
|
|
|
169
|
|
|
200
|
|
|
(18
|
%)
|
|
(16
|
%)
|
||||
Average gold grade (g/t)
|
1.5
|
|
1.9
|
|
|
1.7
|
|
|
2.0
|
|
|
(21
|
%)
|
|
(15
|
%)
|
||||
Silver recovery (%)
|
78
|
%
|
77
|
%
|
|
78
|
%
|
|
77
|
%
|
|
1
|
%
|
|
1
|
%
|
||||
Gold recovery (%)
|
79
|
%
|
80
|
%
|
|
80
|
%
|
|
73
|
%
|
|
(1
|
%)
|
|
10
|
%
|
||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Production
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Silver ounces produced
|
138,454
|
|
138,173
|
|
|
276,627
|
|
|
327,504
|
|
|
0
|
%
|
|
(16
|
%)
|
||||
Gold ounces produced
|
1,399
|
|
1,477
|
|
|
2,876
|
|
|
3,070
|
|
|
(5
|
%)
|
|
(6
|
%)
|
||||
Total production - ounces silver equivalent
|
249,214
|
|
255,359
|
|
|
504,574
|
|
|
545,471
|
|
|
(2
|
%)
|
|
(7
|
%)
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Cost
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash cost per ounce
|
|
$12.89
|
|
|
$7.97
|
|
|
|
$10.43
|
|
|
|
$9.02
|
|
|
62
|
%
|
|
16
|
%
|
All-In sustaining costs per ounce
|
|
$18.11
|
|
|
$15.76
|
|
|
|
$16.94
|
|
|
|
$15.08
|
|
|
15
|
%
|
|
12
|
%
|
Total production cost per tonne
|
|
$83.68
|
|
|
$86.50
|
|
|
|
$84.96
|
|
|
|
$83.45
|
|
|
(3
|
%)
|
|
2
|
%
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Underground development (m)
|
1,950
|
|
1,384
|
|
|
3,334
|
|
|
4,373
|
|
|
41
|
%
|
|
(24
|
%)
|
||||
Diamond drilling (m)
|
7,613
|
|
5,806
|
|
|
13,420
|
|
|
10,508
|
|
|
31
|
%
|
|
28
|
%
|
|
||
First Majestic Silver Corp. 2018 Second Quarter Report
|
Page
25
|
|
||
First Majestic Silver Corp. 2018 Second Quarter Report
|
Page
26
|
OVERVIEW OF FINANCIAL PERFORMANCE
|
|
|
Second Quarter
|
|
Second Quarter
|
|
|
|
|||||
|
|
2018
|
|
2017
|
|
Variance %
|
|
|||||
|
|
|
|
|
|
|
|
|||||
Revenues
|
|
|
$79,687
|
|
|
|
$60,116
|
|
|
33
|
%
|
(1)
|
Mine operating costs
|
|
|
|
|
|
|
|
|||||
Cost of sales
|
|
59,285
|
|
|
40,004
|
|
|
48
|
%
|
(2)
|
||
Depletion, depreciation and amortization
|
|
22,706
|
|
|
18,707
|
|
|
21
|
%
|
(3)
|
||
|
|
81,991
|
|
|
58,711
|
|
|
40
|
%
|
|
||
|
|
|
|
|
|
|
|
|||||
Mine operating (loss) earnings
|
|
(2,304
|
)
|
|
1,405
|
|
|
(264
|
)%
|
(4)
|
||
|
|
|
|
|
|
|
|
|||||
General and administrative expenses
|
|
5,201
|
|
|
4,477
|
|
|
16
|
%
|
(5)
|
||
Share-based payments
|
|
2,247
|
|
|
2,169
|
|
|
4
|
%
|
|
||
Impairment of non-current assets
|
|
31,660
|
|
|
—
|
|
|
100
|
%
|
(6)
|
||
Acquisition costs
|
|
4,877
|
|
|
—
|
|
|
100
|
%
|
(7)
|
||
Foreign exchange loss (gain)
|
|
285
|
|
|
(661
|
)
|
|
(143
|
)%
|
|
||
Operating loss
|
|
(46,574
|
)
|
|
(4,580
|
)
|
|
917
|
%
|
|
||
Investment and other income
|
|
1,038
|
|
|
(1,100
|
)
|
|
(194
|
)%
|
|
||
Finance costs
|
|
(3,799
|
)
|
|
(1,016
|
)
|
|
274
|
%
|
(8)
|
||
Loss before income taxes
|
|
(49,335
|
)
|
|
(6,696
|
)
|
|
637
|
%
|
|
||
Current income tax expense
|
|
1,680
|
|
|
1,663
|
|
|
1
|
%
|
|
||
Deferred income tax (recovery)
|
|
(10,982
|
)
|
|
(9,771
|
)
|
|
12
|
%
|
|
||
Income tax (recovery)
|
|
(9,302
|
)
|
|
(8,108
|
)
|
|
15
|
%
|
(9)
|
||
Net (loss) earnings for the period
|
|
|
($40,033
|
)
|
|
|
$1,412
|
|
|
(2,935
|
)%
|
(10)
|
|
|
|
|
|
|
|
|
|||||
(Loss) earnings per share (basic and diluted)
|
|
|
($0.22
|
)
|
|
|
$0.01
|
|
|
(2,685
|
)%
|
(10)
|
1.
|
Revenues
in the quarter
increase
d
33%
compared to the same quarter of the previous year primarily attributed to:
|
•
|
a
43%
increase in
silver equivalent ounces sold
compared to the
second
quarter of
2017
, primarily attributed to the addition of 52 days of production from San Dimas; and
|
•
|
smelting and refining
costs decreased from
$3.2
million (
$1.63
per ounce) to
$2.0
million (
$0.75
per ounce). The savings in smelting and refining costs per ounce were attributed to the lower smelting and refining rates renegotiated in July 2017, as well as lower per unit costs from doré production at San Dimas.
|
•
|
a
3%
decrease in
average realized silver price
of
$16.74
per ounce compared to
$17.17
in the same quarter of the prior year; and
|
•
|
finished goods inventory acquired from Primero
, consisting of
452,198
ounces of silver which, were sold by First Majestic under the old WPM stream agreement at $4.32 per ounce. Had these inventories been sold at spot market prices, the Company would have realized an additional $5.6 million in revenue.
|
2.
|
Cost of sales
in the quarter increased
48%
or
$19.3
million compared to the same quarter of the previous year as a result of the following factors:
|
•
|
the
addition of the San Dimas mine
on May 10, 2018, which contributed $13.1 million to cost of sales during its 52 days of operations under First Majestic;
|
•
|
a $4.5 million
increase in inventory changes
, primarily due to $3.9 million of finished goods inventory acquired from Primero which were subsequently sold during the quarter; and
|
|
||
First Majestic Silver Corp. 2018 Second Quarter Report
|
Page
27
|
•
|
increase in energy costs
compared to the
second
quarter of 2017, primarily due to an approximately 30% rate hike by Mexico's Federal Electricity Commission during the second quarter.
|
3.
|
Depletion, depreciation and amortization
in the quarter increased
$4.0
million or
21%
compared to the same quarter of the previous year primarily as a result of the addition of the San Dimas mine, which incurred
$4.2
million of depletion, depreciation and amortization during the quarter.
|
4.
|
Mine operating earnings
during the quarter
decrease
d by
$3.7
million to mine operating loss of
$2.3
million compared to the
second
quarter of 2017. In the first 52 days under management by First Majestic, Primero generated mine operating earnings of
$5.1
million; however, this was offset by $2.6 million decrease in mine operating earnings at La Encantada and $2.6 million decrease in Del Toro, respectively.
|
5.
|
General and administrative expenses
increased
$0.7
million or
16%
during the quarter compared to the same quarter of 2017, primarily attributed to incremental general and administrative costs absorbed from the acquisition of Primero. The Company expects these costs to reduce in the coming quarters as further synergies are achieved.
|
6.
|
As a result of management's decision to place the La Guitarra Silver Mine on care and maintenance effective August 3, 2018, the Company assessed the recoverable value of the mine and concluded that its carrying value had an estimated recoverable value below its carrying value. Consequently, the Company recognized an
impairment loss
of
$31.7
million during the quarter.
|
7.
|
Acquisition costs
of
$4.9
million relates to due diligence costs and closing fees incurred in connection with the acquisition of Primero Mining Corp. which closed on May 10, 2018.
|
8.
|
Finance costs
increased
$2.8
million compared to the same quarter of the prior year, primarily attributed to $0.7 million in interest expense and $1.4 million in accretion expense related to the $156.5 million convertible debentures that the Company issued in the first quarter of 2018.
|
9.
|
During the quarter, the Company recorded a current income tax expense of
$1.7
million and a deferred income tax recovery of
$11.0
million, resulting in a
net income tax recovery
of
$9.3
million compared to an income tax recovery of
$8.1
million in the
second
quarter of 2017. The increase in income tax recovery in the quarter was primarily attributed to an
$11.2
million
|
10.
|
As a result of the foregoing,
net loss
for the quarter was
$40.0
million (loss per share of
$0.22
) compared to net earnings of
$1.4
million (EPS of
$0.01
) in the same quarter of the prior year.
|
|
||
First Majestic Silver Corp. 2018 Second Quarter Report
|
Page
28
|
|
|
Year to date
|
|
Year to date
|
|
Variance %
|
|
|||||
|
|
2018
|
|
2017
|
|
'18 vs '17
|
|
|||||
|
|
|
|
|
|
|
|
|||||
Revenues
|
|
|
$138,280
|
|
|
|
$129,222
|
|
|
7
|
%
|
(1)
|
Mine operating costs
|
|
|
|
|
|
|
|
|||||
Cost of sales
|
|
98,966
|
|
|
79,666
|
|
|
24
|
%
|
(2)
|
||
Depletion, depreciation and amortization
|
|
42,041
|
|
|
38,155
|
|
|
10
|
%
|
(3)
|
||
|
|
141,007
|
|
|
117,821
|
|
|
|
|
|||
|
|
|
|
|
|
|
|
|||||
Mine operating (loss) earnings
|
|
(2,727
|
)
|
|
11,401
|
|
|
(124
|
)%
|
(4)
|
||
|
|
|
|
|
|
|
|
|||||
General and administrative
|
|
10,069
|
|
|
9,020
|
|
|
12
|
%
|
|
||
Share-based payments
|
|
4,763
|
|
|
4,460
|
|
|
7
|
%
|
|
||
Impairment of non-current assets
|
|
31,660
|
|
|
—
|
|
|
100
|
%
|
(5)
|
||
Acquisition costs
|
|
4,877
|
|
|
—
|
|
|
100
|
%
|
(6)
|
||
Foreign exchange loss (gain)
|
|
2,581
|
|
|
(1,075
|
)
|
|
340
|
%
|
|
||
Operating (loss) earnings
|
|
(56,677
|
)
|
|
(1,004
|
)
|
|
5,545
|
%
|
|
||
Investment and other (loss) income
|
|
(421
|
)
|
|
(924
|
)
|
|
(54
|
)%
|
|
||
Finance costs
|
|
(6,258
|
)
|
|
(2,186
|
)
|
|
186
|
%
|
(7)
|
||
(Loss) before income taxes
|
|
(63,356
|
)
|
|
(4,114
|
)
|
|
1,440
|
%
|
|
||
Current income tax expense
|
|
2,374
|
|
|
2,445
|
|
|
(3
|
)%
|
|
||
Deferred income tax (recovery)
|
|
(20,105
|
)
|
|
(10,691
|
)
|
|
88
|
%
|
|
||
Income tax (recovery)
|
|
(17,731
|
)
|
|
(8,246
|
)
|
|
115
|
%
|
(8)
|
||
Net (Loss) earnings for the period
|
|
|
($45,625
|
)
|
|
|
$4,132
|
|
|
(1,204
|
)%
|
(9)
|
|
|
|
|
|
|
|
|
|||||
Earnings (Loss) per share (basic and diluted)
|
|
|
($0.26
|
)
|
|
|
$0.03
|
|
|
(1,150
|
)%
|
(9)
|
|
|
|
|
|
|
|
|
|||||
Cash and cash equivalents
|
|
|
$109,228
|
|
|
|
$118,141
|
|
|
|
|
|
Total assets
|
|
|
$1,131,446
|
|
|
|
$781,441
|
|
|
|
|
|
Non-current liabilities
|
|
|
$319,558
|
|
|
|
$144,581
|
|
|
|
|
1.
|
Revenues
in the
six months ended
June 30, 2018
increase
d
7%
compared to the previous year due to the following significant contributors:
|
•
|
Silver equivalent ounces sold
increased by
14%
compared to the previous year, primarily attributed to the addition of 52 days of production from San Dimas; and
|
•
|
Smelting and refining
costs
decreased from
$7.0
million (
$1.43
per ounce) to
$4.7
million (
$0.97
per ounce) as a result of savings attributed to the new smelting and refining agreements negotiated over in 2017, as well as lower per unit costs from doré production at San Dimas.
|
•
|
a
4%
decrease in
average realized silver price
of
$16.75
per ounce compared to
$17.37
per ounce in the same period of the prior year;
|
•
|
finished goods inventory acquired from Primero
, consisting of
452,198
ounces of silver, were sold by First Majestic under the old WPM stream agreement at $4.32 per ounce. Had these inventories been sold at spot market prices, the Company would have realized an additional $5.6 million in revenue.
|
2.
|
Cost of sales
in the year
increase
d
$19.3
million or
24%
compared to 2017 as a result of the following factors:
|
•
|
the
addition of the San Dimas mine
on May 10, 2018, which contributed $13.1 million to cost of sales during its 52 days of operations under First Majestic;
|
|
||
First Majestic Silver Corp. 2018 Second Quarter Report
|
Page
29
|
•
|
a $3.4 million
increase in inventory changes
, primarily due to $3.9 million of finished goods inventory acquired from Primero which were subsequently sold during the quarter; and
|
•
|
increase in energy costs
compared to the
second
quarter of 2017, primarily due to an approximately 30% rate hike by Mexico's Federal Electricity Commission during the second quarter.
|
3.
|
Depletion, depreciation and amortization
in the year increased
$3.9
million or
10%
compared to the same quarter of the previous year primarily as a result of the addition of the San Dimas mine, which incurred
$4.2
million of depletion, depreciation and amortization during the quarter.
|
4.
|
Mine operating earnings
during the
six months ended
June 30, 2018
decrease
d
$14.1
million from 2017. In the first 52 days under management by First Majestic, Primero generated mine operating earnings of
$5.1
million. However, this was offset by $7.2 million decrease in mine operating earnings at La Encantada, $5.5 million decrease in Del Toro and $4.5 million decrease in La Parrilla, respectively.
|
5.
|
As a result of management's decision to place the La Guitarra Silver Mine on care and maintenance effective August 3, 2018, the Company assessed the recoverable value of the mine and concluded that its carrying value had an estimated recoverable value below its carrying value. Consequently, the Company recognized an
impairment loss
of
$31.7
million during the quarter.
|
6.
|
Acquisition costs
in the year were
$4.9
million relates to due diligence costs and closing fees incurred in connection with the acquisition of Primero Mining Corp. which closed on May 10, 2018.
|
7.
|
Finance costs
increased
$4.1
million during the
six months ended
June 30, 2018
compared to the previous year, primarily due to $1.2 million in interest expense and $2.2 million in accretion expense related to the $156.5 million convertible debentures that the Company issued in the first quarter of 2018, as well as $0.5 million in accelerated accretion costs as a result of early termination of previous debt facilities.
|
8.
|
During the
six months ended
June 30, 2018
, the Company recorded a current income tax expense of
$2.4
million and a deferred income tax recovery of
$20.1
million for a net
income tax recovery
of
$17.7
million, compared to an income tax recovery of
$8.2
million in the same period of 2017. The increase in income tax recovery was attributed to deferred income tax effect of
$11.2
million on the
$31.7
million impairment charge on non-current assets.
|
9.
|
As a result of the foregoing,
net loss
for the
six months ended
June 30, 2018
was
$45.6
million (loss per share of
$0.26
), compared to earnings of
$4.1
million (EPS of
$0.03
) in the prior year.
|
|
||
First Majestic Silver Corp. 2018 Second Quarter Report
|
Page
30
|
SUMMARY OF QUARTERLY RESULTS
|
|
|
2018
|
|
2017
|
|
2016
|
|||||||||||||||||||||
Selected Financial Information
|
|
Q2
|
Q1
|
|
Q4
|
Q3
|
Q2
|
Q1
|
|
Q4
|
Q3
|
||||||||||||||||
Revenue
|
|
|
$79,687
|
|
|
$58,593
|
|
|
|
$61,165
|
|
|
$61,901
|
|
|
$60,116
|
|
|
$69,106
|
|
|
|
$66,170
|
|
|
$79,326
|
|
Cost of sales
|
|
|
$59,285
|
|
|
$39,681
|
|
|
|
$39,309
|
|
|
$40,290
|
|
|
$40,004
|
|
|
$39,662
|
|
|
|
$37,346
|
|
|
$38,421
|
|
Depletion, depreciation and amortization
|
|
|
$22,706
|
|
|
$19,335
|
|
|
|
$20,454
|
|
|
$18,436
|
|
|
$18,707
|
|
|
$19,448
|
|
|
|
$18,881
|
|
|
$20,955
|
|
Mine operating (loss) earnings
|
|
|
($2,304
|
)
|
|
($423
|
)
|
|
|
$1,402
|
|
|
$3,175
|
|
|
$1,405
|
|
|
$9,996
|
|
|
|
$9,943
|
|
|
$19,950
|
|
Net (loss) earnings after tax
|
|
|
($40,033
|
)
|
|
($5,592
|
)
|
|
|
($56,084
|
)
|
|
($1,320
|
)
|
|
$1,412
|
|
|
$2,720
|
|
|
|
$1,814
|
|
|
$8,115
|
|
(Loss) earnings per share-basic
|
|
|
($0.22
|
)
|
|
($0.03
|
)
|
|
|
($0.34
|
)
|
|
($0.01
|
)
|
|
$0.01
|
|
|
$0.02
|
|
|
|
$0.01
|
|
|
$0.05
|
|
(Loss) earnings per share-diluted
|
|
|
($0.22
|
)
|
|
($0.03
|
)
|
|
|
($0.34
|
)
|
|
($0.01
|
)
|
|
$0.01
|
|
|
$0.02
|
|
|
|
$0.01
|
|
|
$0.05
|
|
LIQUIDITY, CAPITAL RESOURCES AND CONTRACTUAL OBLIGATIONS
|
|
||
First Majestic Silver Corp. 2018 Second Quarter Report
|
Page
31
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Cash flow
|
|
|
|
|
|
|
|
||||||||
Cash generated by operating activities
|
6,831
|
|
|
17,499
|
|
|
16,702
|
|
|
35,519
|
|
||||
Cash used in investing activities
|
(28,576
|
)
|
|
(17,482
|
)
|
|
(52,310
|
)
|
|
(34,585
|
)
|
||||
Cash used in financing activities
|
(117,726
|
)
|
|
(1,805
|
)
|
|
28,215
|
|
|
(5,264
|
)
|
||||
Decrease in cash and cash equivalents
|
(139,471
|
)
|
|
(1,788
|
)
|
|
(7,393
|
)
|
|
(4,330
|
)
|
||||
Effect of exchange rate on cash and cash equivalents
held in foreign currencies
|
(540
|
)
|
|
1,082
|
|
|
(1,520
|
)
|
|
2,180
|
|
||||
Cash and cash equivalents, beginning of the period
|
249,239
|
|
|
127,605
|
|
|
118,141
|
|
|
129,049
|
|
||||
Cash and cash equivalents, end of period
|
|
$109,228
|
|
|
|
$126,899
|
|
|
|
$109,228
|
|
|
|
$126,899
|
|
•
|
Cash provided from operating activities
of
$16.7
million, a decrease of
$18.8
million compared to the same period of the prior year primarily due to a
$49.8
million decrease in net earnings, partially offset by non-cash impairment charge of
$31.7
million;
|
•
|
Cash used in investing activities
of
$52.3
million, primarily related to:
|
•
|
$34.3
million spent on mine development and exploration activities;
|
•
|
$14.9
million spent on purchase of property, plant and equipment; and
|
•
|
$2.2
million spent on deposit on non-current assets;
|
•
|
$1.0
million spent on the the Primero acquisition.
|
•
|
Cash provided from financing activities
of
$28.2
million, primarily consists of the following:
|
|
||
First Majestic Silver Corp. 2018 Second Quarter Report
|
Page
32
|
|
Contractual
|
|
Less than
|
|
1 to 3
|
|
4 to 5
|
|
After 5
|
||||||||||
|
Cash Flows
|
|
1 year
|
|
years
|
|
years
|
|
years
|
||||||||||
Trade and other payables
|
|
$55,221
|
|
|
|
$55,221
|
|
|
|
$—
|
|
|
|
$—
|
|
|
|
$—
|
|
Debt facilities
|
194,692
|
|
|
4,533
|
|
|
28,768
|
|
|
161,391
|
|
|
—
|
|
|||||
Equipment financing obligations
|
8,190
|
|
|
3,555
|
|
|
4,388
|
|
|
247
|
|
|
—
|
|
|||||
Other liabilities
|
4,729
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4,729
|
|
|||||
Purchase obligations and commitments
|
11,346
|
|
|
10,579
|
|
|
767
|
|
|
—
|
|
|
—
|
|
|||||
|
|
$274,178
|
|
|
|
$73,888
|
|
|
|
$33,923
|
|
|
|
$161,638
|
|
|
|
$4,729
|
|
MANAGEMENT OF RISKS AND UNCERTAINTIES
|
The Company thoroughly examines the various financial instruments and risks to which it is exposed and assesses the impact and likelihood of those risks. These risks may include credit risk, liquidity risk, currency risk, commodity price risk, and interest rate risk. Where material, these risks are reviewed and monitored by the Board of Directors.
|
|
Credit Risk
|
|
Credit risk is the risk of financial loss if a customer or counterparty fails to meet its contractual obligations. The Company’s credit risk relates primarily to trade receivables in the ordinary course of business, VAT and other receivables (Note
12
).
|
|
The Company sells and receives payment upon delivery of its silver doré and by-products primarily through three international customers. Silver-lead concentrates and related base metal by-products are sold primarily through two international customers. All of the Company's customers have good ratings and payments of receivables are scheduled, routine and fully received within 60 days of submission; therefore, the balance of trade receivables owed to the Company in the ordinary course of business is not significant.
|
|
The carrying amount of financial assets recorded in the consolidated financial statements represents the Company’s maximum exposure to credit risk. With the exception to the above, the Company believes it is not exposed to significant credit risk.
|
Liquidity Risk
|
|
Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they arise. The Company has in place a planning and budgeting process to help determine the funds required to support the Company’s normal operating requirements and contractual obligations.
|
Based on the Company's current operating plan, the Company believes it has sufficient cash on hand, combined with cash flows from operations, to meet operating requirements as they arise for at least the next 12 months. If commodity prices in the metal markets were to decrease significantly, or the Company was to deviate significantly from its operating plan, the Company may need further injection of capital to address its cash flow requirements.
|
|
||
First Majestic Silver Corp. 2018 Second Quarter Report
|
Page
33
|
Currency Risk
|
|
The Company is exposed to foreign exchange risk primarily relating to financial instruments that are denominated in Canadian dollars or Mexican pesos, which would impact the Company’s net earnings or loss. To manage foreign exchange risk, the Company may occasionally enter into short-term foreign currency derivatives. The foreign currency derivatives are not designated as hedging instruments for accounting purposes.
|
|
June 30, 2018
|
|
|||||||||||||||||||||||||||||
|
Cash and cash equivalents
|
|
|
Trade and other receivables
|
|
|
Value added taxes receivable
|
|
|
Other financial assets
|
|
|
Trade and other payables
|
|
|
Foreign exchange derivative
|
|
|
Net assets (liabilities) exposure
|
|
|
Effect of +/- 10% change in currency
|
|
||||||||
Canadian dollar
|
|
$36,886
|
|
|
|
$273
|
|
|
|
$—
|
|
|
|
$5,239
|
|
|
|
($1,613
|
)
|
|
|
$—
|
|
|
|
$40,785
|
|
|
|
$4,079
|
|
Mexican peso
|
6,630
|
|
|
646
|
|
|
49,737
|
|
|
—
|
|
|
(24,332
|
)
|
|
11,000
|
|
|
43,681
|
|
|
4,368
|
|
||||||||
|
|
$43,516
|
|
|
|
$919
|
|
|
|
$49,737
|
|
|
|
$5,239
|
|
|
|
($25,945
|
)
|
|
|
$11,000
|
|
|
|
$84,466
|
|
|
|
$8,447
|
|
The Company is exposed to commodity price risk on silver, gold, lead and zinc, which have a direct and immediate impact on the value of its related financial instruments and net earnings. The Company’s revenues are directly dependent on commodity prices that have shown volatility and are beyond the Company’s control. The Company does not use derivative instruments to hedge its commodity price risk to silver.
|
|
|
|
|
|
|
|
June 30, 2018
|
|
|||||||||||
|
Effect of +/- 10% change in metal prices
|
|
|||||||||||||||||
|
Silver
|
|
|
Gold
|
|
|
Lead
|
|
|
Zinc
|
|
|
Total
|
|
|||||
Metals subject to provisional price adjustments
|
|
$299
|
|
|
|
$44
|
|
|
|
$409
|
|
|
|
$49
|
|
|
|
$801
|
|
Metals in doré and concentrates inventory
|
82
|
|
|
171
|
|
|
23
|
|
|
5
|
|
|
281
|
|
|||||
|
|
$381
|
|
|
|
$215
|
|
|
|
$432
|
|
|
|
$54
|
|
|
|
$1,082
|
|
|
||
First Majestic Silver Corp. 2018 Second Quarter Report
|
Page
34
|
|
||
First Majestic Silver Corp. 2018 Second Quarter Report
|
Page
35
|
|
||
First Majestic Silver Corp. 2018 Second Quarter Report
|
Page
36
|
OTHER FINANCIAL INFORMATION
|
ACCOUNTING POLICIES, JUDGMENTS AND ESTIMATES
|
|
||
First Majestic Silver Corp. 2018 Second Quarter Report
|
Page
37
|
NON-GAAP MEASURES
|
|
||
First Majestic Silver Corp. 2018 Second Quarter Report
|
Page
38
|
(expressed in thousands of U.S. dollars,
|
Three Months Ended June 30, 2018
|
|||||||||||||||||||||||
except ounce and per ounce amounts)
|
San Dimas
|
Santa Elena
|
La Encantada
|
La Parrilla
|
Del Toro
|
San Martin
|
La Guitarra
|
Consolidated
|
||||||||||||||||
Mining cost
|
|
$6,882
|
|
|
$4,618
|
|
|
$1,381
|
|
|
$2,498
|
|
|
$1,740
|
|
|
$2,099
|
|
|
$1,134
|
|
|
$20,353
|
|
Milling cost
|
2,791
|
|
5,751
|
|
4,142
|
|
2,114
|
|
1,459
|
|
1,904
|
|
698
|
|
18,859
|
|
||||||||
Indirect cost
|
3,097
|
|
2,395
|
|
1,871
|
|
1,459
|
|
1,362
|
|
1,413
|
|
1,156
|
|
12,753
|
|
||||||||
Total production cost (A)
|
|
$12,771
|
|
|
$12,764
|
|
|
$7,391
|
|
|
$6,071
|
|
|
$4,560
|
|
|
$5,416
|
|
|
$2,989
|
|
|
$51,962
|
|
Add: transportation and other selling cost
|
93
|
|
125
|
|
46
|
|
207
|
|
126
|
|
112
|
|
143
|
|
900
|
|
||||||||
Add: smelting and refining cost
|
147
|
|
124
|
|
70
|
|
909
|
|
490
|
|
84
|
|
225
|
|
2,049
|
|
||||||||
Add: environmental duty and royalties cost
|
99
|
|
116
|
|
13
|
|
31
|
|
15
|
|
45
|
|
21
|
|
340
|
|
||||||||
Total cash cost before by-product credits (B)
|
|
$13,110
|
|
|
$13,129
|
|
|
$7,520
|
|
|
$7,218
|
|
|
$5,191
|
|
|
$5,657
|
|
|
$3,378
|
|
|
$55,251
|
|
Deduct: By-product credits attributed to
|
|
|
|
|
|
|
|
|
||||||||||||||||
Gold by-product credits
|
(12,912
|
)
|
(12,387
|
)
|
(48
|
)
|
(229
|
)
|
(7
|
)
|
(1,597
|
)
|
(1,682
|
)
|
(28,862
|
)
|
||||||||
Lead by-product credits
|
—
|
|
—
|
|
—
|
|
(1,771
|
)
|
(2,325
|
)
|
—
|
|
—
|
|
(4,096
|
)
|
||||||||
Zinc by-product credits
|
—
|
|
—
|
|
—
|
|
(1,691
|
)
|
—
|
|
—
|
|
—
|
|
(1,691
|
)
|
||||||||
Total by-product credits
|
|
($12,912
|
)
|
|
($12,387
|
)
|
|
($48
|
)
|
|
($3,691
|
)
|
|
($2,332
|
)
|
|
($1,597
|
)
|
|
($1,682
|
)
|
|
($34,649
|
)
|
Total cash cost (C)
|
|
$198
|
|
|
$742
|
|
|
$7,472
|
|
|
$3,527
|
|
|
$2,859
|
|
|
$4,060
|
|
|
$1,696
|
|
|
$20,602
|
|
Workers’ participation
|
91
|
|
171
|
|
86
|
|
62
|
|
80
|
|
132
|
|
(5
|
)
|
711
|
|
||||||||
General and administrative expenses
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
5,031
|
|
||||||||
Share-based payments
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
2,247
|
|
||||||||
Accretion of decommissioning liabilities
|
45
|
|
55
|
|
66
|
|
60
|
|
51
|
|
50
|
|
31
|
|
358
|
|
||||||||
Sustaining capital expenditures
|
4,038
|
|
2,559
|
|
2,366
|
|
1,898
|
|
2,103
|
|
995
|
|
661
|
|
15,663
|
|
||||||||
All-In Sustaining Costs (D)
|
|
$4,372
|
|
|
$3,527
|
|
|
$9,990
|
|
|
$5,547
|
|
|
$5,092.6
|
|
|
$5,237
|
|
|
$2,383
|
|
|
$44,612
|
|
Payable silver ounces produced (E)
|
808,114
|
|
534,480
|
|
324,300
|
|
338,465
|
|
158,734
|
|
419,395
|
|
131,532
|
|
2,715,020
|
|
||||||||
Tonnes milled (F)
|
85,765
|
|
228,054
|
|
237,862
|
|
123,642
|
|
65,879
|
|
74,431
|
|
35,715
|
|
851,349
|
|
||||||||
|
|
|
|
|
|
|
|
|
||||||||||||||||
Total cash cost per ounce, before by-product credits (B/E)
|
|
$16.22
|
|
|
$24.56
|
|
|
$23.19
|
|
|
$21.33
|
|
|
$32.70
|
|
|
$13.49
|
|
|
$25.68
|
|
|
$20.35
|
|
Total cash cost per ounce (C/E)
|
|
$0.24
|
|
|
$1.38
|
|
|
$23.05
|
|
|
$10.42
|
|
|
$18.01
|
|
|
$9.68
|
|
|
$12.89
|
|
|
$7.59
|
|
All-in sustaining cost per ounce (D/E)
|
|
$5.41
|
|
|
$6.59
|
|
|
$30.81
|
|
|
$16.39
|
|
|
$32.08
|
|
|
$12.49
|
|
|
$18.11
|
|
|
$16.43
|
|
Production cost per tonne (A/F)
|
|
$148.91
|
|
|
$55.97
|
|
|
$31.09
|
|
|
$49.10
|
|
|
$69.23
|
|
|
$72.77
|
|
|
$83.68
|
|
|
$61.04
|
|
First Majestic Silver Corp. 2018 Second Quarter Report
|
Page
39
|
(expressed in thousands of U.S. dollars,
|
Three Months Ended June 30, 2017
|
||||||||||||||||||||
except ounce and per ounce amounts)
|
Santa Elena
|
La Encantada
|
La Parrilla
|
Del Toro
|
San Martin
|
La Guitarra
|
Consolidated
|
||||||||||||||
Mining cost
|
|
$4,701
|
|
|
$1,489
|
|
|
$2,490
|
|
|
$1,595
|
|
|
$1,499
|
|
|
$1,078
|
|
|
$12,851
|
|
Milling cost
|
5,936
|
|
4,303
|
|
2,135
|
|
1,358
|
|
1,632
|
|
701
|
|
16,064
|
|
|||||||
Indirect cost
|
1,529
|
|
1,649
|
|
1,452
|
|
1,128
|
|
1,132
|
|
972
|
|
7,862
|
|
|||||||
Total production cost (A)
|
|
$12,655
|
|
|
$4,981
|
|
|
$5,919
|
|
|
$4,678
|
|
|
$4,653
|
|
|
$2,762
|
|
|
$35,647
|
|
Add: transportation and other selling cost
|
121
|
|
23
|
|
151
|
|
233
|
|
92
|
|
126
|
|
795
|
|
|||||||
Add: smelting and refining cost
|
137
|
|
81
|
|
963
|
|
1,742
|
|
89
|
|
207
|
|
3,220
|
|
|||||||
Add: environmental duty and royalties cost
|
110
|
|
13
|
|
37
|
|
27
|
|
45
|
|
16
|
|
249
|
|
|||||||
Total cash cost before by-product credits (B)
|
|
$13,023
|
|
|
$5,098
|
|
|
$7,069
|
|
|
$6,680
|
|
|
$4,879
|
|
|
$3,111
|
|
|
$39,911
|
|
Deduct: By-product credits attributed to
|
|
|
|
|
|
|
|
||||||||||||||
Gold by-product credits
|
(12,331
|
)
|
(23
|
)
|
(228
|
)
|
—
|
|
(2,567
|
)
|
(1,449
|
)
|
(16,600
|
)
|
|||||||
Lead by-product credits
|
—
|
|
—
|
|
(1,502
|
)
|
(5,297
|
)
|
—
|
|
—
|
|
(6,799
|
)
|
|||||||
Zinc by-product credits
|
—
|
|
—
|
|
(819
|
)
|
—
|
|
—
|
|
—
|
|
(819
|
)
|
|||||||
Total by-product credits
|
|
($12,331
|
)
|
|
($23
|
)
|
|
($2,549
|
)
|
|
($5,297
|
)
|
|
($2,567
|
)
|
|
($1,449
|
)
|
|
($24,218
|
)
|
Total cash cost (C)
|
|
$692
|
|
|
$5,075
|
|
|
$4,520
|
|
|
$1,383
|
|
|
$2,312
|
|
|
$1,662
|
|
|
$15,693
|
|
Workers’ participation
|
216
|
|
220
|
|
274
|
|
87
|
|
202
|
|
27
|
|
1,026
|
|
|||||||
General and administrative expenses
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
4,228
|
|
|||||||
Share-based payments
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
2,169
|
|
|||||||
Accretion of decommissioning liabilities
|
44
|
|
59
|
|
43
|
|
40
|
|
30
|
|
21
|
|
237
|
|
|||||||
Sustaining capital expenditures
|
1,843
|
|
1,347
|
|
2,100
|
|
1,238
|
|
662
|
|
853
|
|
8,415
|
|
|||||||
All-In Sustaining Costs (D)
|
|
$2,795
|
|
|
$6,701
|
|
|
$6,937
|
|
|
$2,748
|
|
|
$3,206
|
|
|
$2,563
|
|
|
$31,768
|
|
Payable silver ounces produced (E)
|
557,077
|
|
373,402
|
|
405,221
|
|
346,536
|
|
425,219
|
|
131,428
|
|
2,238,882
|
|
|||||||
Tonnes milled (F)
|
232,451
|
|
148,039
|
|
132,880
|
|
81,843
|
|
67,073
|
|
29,547
|
|
691,833
|
|
|||||||
|
|
|
|
|
|
|
|
||||||||||||||
Total cash cost per ounce, before by-product credits (B/E)
|
|
$12.90
|
|
|
$13.61
|
|
|
$14.11
|
|
|
$11.90
|
|
|
$8.50
|
|
|
$17.32
|
|
|
$15.82
|
|
Total cash cost per ounce (C/E)
|
|
$1.24
|
|
|
$13.59
|
|
|
$11.15
|
|
|
$3.99
|
|
|
$5.43
|
|
|
$12.66
|
|
|
$7.01
|
|
All-in sustaining cost per ounce (D/E)
|
|
$5.02
|
|
|
$17.95
|
|
|
$17.12
|
|
|
$7.93
|
|
|
$7.53
|
|
|
$19.51
|
|
|
$14.17
|
|
Production cost per tonne (A/F)
|
|
$54.44
|
|
|
$33.65
|
|
|
$44.54
|
|
|
$57.16
|
|
|
$69.37
|
|
|
$93.49
|
|
|
$51.53
|
|
First Majestic Silver Corp. 2018 Second Quarter Report
|
Page
40
|
(expressed in thousands of U.S. dollars,
|
Six Months Ended June 30, 2018
|
|||||||||||||||||||||||
except ounce and per ounce amounts)
|
San Dimas
|
Santa Elena
|
La Encantada
|
La Parrilla
|
Del Toro
|
San Martin
|
La Guitarra
|
Consolidated
|
||||||||||||||||
Mining cost
|
|
$6,882
|
|
|
$8,748
|
|
|
$2,664
|
|
|
$4,825
|
|
|
$3,433
|
|
|
$4,090
|
|
|
$1,985
|
|
|
$32,626
|
|
Milling cost
|
2,791
|
|
11,464
|
|
8,543
|
|
4,229
|
|
3,078
|
|
3,618
|
|
1,406
|
|
35,130
|
|
||||||||
Indirect cost
|
3,097
|
|
4,691
|
|
3,645
|
|
3,037
|
|
2,685
|
|
2,838
|
|
2,178
|
|
22,173
|
|
||||||||
Total production cost (A)
|
|
$12,771
|
|
|
$24,903
|
|
|
$14,848
|
|
|
$12,091
|
|
|
$9,196
|
|
|
$10,546
|
|
|
$5,569
|
|
|
$89,924
|
|
Add: transportation and other selling cost
|
93
|
|
261
|
|
89
|
|
473
|
|
279
|
|
226
|
|
282
|
|
1,802
|
|
||||||||
Add: smelting and refining cost
|
147
|
|
245
|
|
166
|
|
1,952
|
|
1,565
|
|
185
|
|
449
|
|
4,709
|
|
||||||||
Add: environmental duty and royalties cost
|
99
|
|
235
|
|
27
|
|
62
|
|
36
|
|
93
|
|
43
|
|
595
|
|
||||||||
Total cash cost before by-product credits (B)
|
|
$13,110
|
|
|
$25,644
|
|
|
$15,130
|
|
|
$14,578
|
|
|
$11,076
|
|
|
$11,050
|
|
|
$6,343
|
|
|
$97,030
|
|
Deduct: By-product credits attributed to
|
|
|
|
|
|
|
|
|
||||||||||||||||
Gold by-product credits
|
(12,912
|
)
|
(27,373
|
)
|
(79
|
)
|
(478
|
)
|
(8
|
)
|
(3,102
|
)
|
(3,601
|
)
|
(47,553
|
)
|
||||||||
Lead by-product credits
|
—
|
|
—
|
|
—
|
|
(3,384
|
)
|
(5,149
|
)
|
—
|
|
—
|
|
(8,533
|
)
|
||||||||
Zinc by-product credits
|
—
|
|
—
|
|
—
|
|
(3,710
|
)
|
—
|
|
—
|
|
—
|
|
(3,710
|
)
|
||||||||
Total by-product credits
|
|
($12,912
|
)
|
|
($27,373
|
)
|
|
($79
|
)
|
|
($7,572
|
)
|
|
($5,157
|
)
|
|
($3,102
|
)
|
|
($3,601
|
)
|
|
($59,796
|
)
|
Total cash cost (C)
|
|
$198
|
|
|
($1,729
|
)
|
|
$15,051
|
|
|
$7,006
|
|
|
$5,919
|
|
|
$7,948
|
|
|
$2,742
|
|
|
$37,234
|
|
Workers’ participation
|
91
|
|
215
|
|
166
|
|
143
|
|
156
|
|
171
|
|
16
|
|
1,052
|
|
||||||||
General and administrative expenses
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
9,712
|
|
||||||||
Share-based payments
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
4,763
|
|
||||||||
Accretion of decommissioning liabilities
|
45
|
|
112
|
|
136
|
|
123
|
|
105
|
|
103
|
|
63
|
|
687
|
|
||||||||
Sustaining capital expenditures
|
4,038
|
|
4,838
|
|
4,026
|
|
3,852
|
|
3,528
|
|
1,842
|
|
1,631
|
|
25,145
|
|
||||||||
All-In Sustaining Costs (D)
|
|
$4,372
|
|
|
$3,436
|
|
|
$19,379
|
|
|
$11,124
|
|
|
$9,708
|
|
|
$10,064
|
|
|
$4,452
|
|
|
$78,593
|
|
Payable silver ounces produced (E)
|
808,114
|
|
1,055,742
|
|
772,025
|
|
654,210
|
|
382,715
|
|
902,651
|
|
262,796
|
|
4,838,253
|
|
||||||||
Tonnes milled (F)
|
85,765
|
|
451,553
|
|
514,053
|
|
248,756
|
|
145,648
|
|
149,806
|
|
65,544
|
|
1,661,124
|
|
||||||||
|
|
|
|
|
|
|
|
|
||||||||||||||||
Total cash cost per ounce, before by-product credits (B/E)
|
|
$16.22
|
|
|
$24.29
|
|
|
$19.60
|
|
|
$22.28
|
|
|
$28.94
|
|
|
$12.24
|
|
|
$24.13
|
|
|
$20.06
|
|
Total cash cost per ounce (C/E)
|
|
$0.24
|
|
|
($1.64
|
)
|
|
$19.50
|
|
|
$10.71
|
|
|
$15.47
|
|
|
$8.81
|
|
|
$10.43
|
|
|
$7.70
|
|
All-in sustaining cost per ounce (D/E)
|
|
$5.41
|
|
|
$3.25
|
|
|
$25.11
|
|
|
$17.00
|
|
|
$25.37
|
|
|
$11.15
|
|
|
$16.94
|
|
|
$16.25
|
|
Production cost per tonne (A/F)
|
|
$148.91
|
|
|
$55.15
|
|
|
$28.89
|
|
|
$48.61
|
|
|
$63.14
|
|
|
$70.40
|
|
|
$84.96
|
|
|
$54.14
|
|
First Majestic Silver Corp. 2018 Second Quarter Report
|
Page
41
|
(expressed in thousands of U.S. dollars,
|
Six Months Ended June 30, 2017
|
||||||||||||||||||||
except ounce and per ounce amounts)
|
Santa Elena
|
La Encantada
|
La Parrilla
|
Del Toro
|
San Martin
|
La Guitarra
|
Consolidated
|
||||||||||||||
Mining cost
|
|
$9,051
|
|
|
$2,427
|
|
|
$4,853
|
|
|
$3,379
|
|
|
$3,207
|
|
|
$2,132
|
|
|
$25,050
|
|
Milling cost
|
12,465
|
|
7,025
|
|
4,113
|
|
2,881
|
|
3,272
|
|
1,329
|
|
31,083
|
|
|||||||
Indirect cost
|
3,305
|
|
2,970
|
|
3,029
|
|
2,499
|
|
2,437
|
|
2,052
|
|
16,292
|
|
|||||||
Total production cost (A)
|
|
$24,821
|
|
|
$12,422
|
|
|
$11,995
|
|
|
$8,758
|
|
|
$8,916
|
|
|
$5,513
|
|
|
$72,425
|
|
Add: transportation and other selling cost
|
235
|
|
47
|
|
289
|
|
468
|
|
183
|
|
288
|
|
1,595
|
|
|||||||
Add: smelting and refining cost
|
295
|
|
249
|
|
2,164
|
|
3,578
|
|
171
|
|
506
|
|
6,973
|
|
|||||||
Add: environmental duty and royalties cost
|
233
|
|
37
|
|
81
|
|
59
|
|
95
|
|
45
|
|
551
|
|
|||||||
Total cash cost before by-product credits (B)
|
|
$25,584
|
|
|
$12,755
|
|
|
$14,529
|
|
|
$12,863
|
|
|
$9,365
|
|
|
$6,352
|
|
|
$81,544
|
|
Deduct: By-product credits attributed to
|
|
|
|
|
|
|
|
||||||||||||||
Gold by-product credits
|
(24,966
|
)
|
(51
|
)
|
(435
|
)
|
—
|
|
(4,423
|
)
|
(3,547
|
)
|
(33,423
|
)
|
|||||||
Lead by-product credits
|
—
|
|
—
|
|
(3,298
|
)
|
(10,627
|
)
|
—
|
|
—
|
|
(13,925
|
)
|
|||||||
Zinc by-product credits
|
—
|
|
—
|
|
(1,742
|
)
|
—
|
|
—
|
|
—
|
|
(1,742
|
)
|
|||||||
Total by-product credits
|
|
($24,966
|
)
|
|
($51
|
)
|
|
($5,475
|
)
|
|
($10,627
|
)
|
|
($4,423
|
)
|
|
($3,547
|
)
|
|
($49,090
|
)
|
Total cash cost (C)
|
|
$618
|
|
|
$12,704
|
|
|
$9,054
|
|
|
$2,236
|
|
|
$4,942
|
|
|
$2,805
|
|
|
$32,454
|
|
Workers’ participation
|
216
|
|
304
|
|
301
|
|
422
|
|
304
|
|
—
|
|
1,547
|
|
|||||||
General and administrative expenses
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
8,523
|
|
|||||||
Share-based payments
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
4,460
|
|
|||||||
Accretion of decommissioning liabilities
|
86
|
|
115
|
|
82
|
|
78
|
|
57
|
|
41
|
|
459
|
|
|||||||
Sustaining capital expenditures
|
3,581
|
|
2,082
|
|
3,810
|
|
2,585
|
|
1,452
|
|
1,845
|
|
15,768
|
|
|||||||
All-In Sustaining Costs (D)
|
|
$4,501
|
|
|
$15,205
|
|
|
$13,247
|
|
|
$5,321
|
|
|
$6,755
|
|
|
$4,691
|
|
|
$63,211
|
|
Payable silver ounces produced (E)
|
1,137,630
|
|
1,078,050
|
|
860,575
|
|
669,961
|
|
834,891
|
|
311,128
|
|
4,892,235
|
|
|||||||
Tonnes milled (F)
|
462,501
|
|
414,549
|
|
273,472
|
|
160,951
|
|
136,636
|
|
66,061
|
|
1,514,170
|
|
|||||||
|
|
|
|
|
|
|
|
||||||||||||||
Total cash cost per ounce, before by-product credits (B/E)
|
|
$22.49
|
|
|
$11.83
|
|
|
$16.88
|
|
|
$19.20
|
|
|
$11.22
|
|
|
$20.42
|
|
|
$16.67
|
|
Total cash cost per ounce (C/E)
|
|
$0.55
|
|
|
$11.78
|
|
|
$10.52
|
|
|
$3.34
|
|
|
$5.92
|
|
|
$9.02
|
|
|
$6.63
|
|
All-in sustaining cost per ounce (D/E)
|
|
$3.96
|
|
|
$14.10
|
|
|
$15.39
|
|
|
$7.94
|
|
|
$8.09
|
|
|
$15.08
|
|
|
$12.92
|
|
Production cost per tonne (A/F)
|
|
$53.68
|
|
|
$29.96
|
|
|
$43.87
|
|
|
$54.41
|
|
|
$65.25
|
|
|
$83.45
|
|
|
$47.83
|
|
First Majestic Silver Corp. 2018 Second Quarter Report
|
Page
42
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Revenues as reported
|
|
$79,687
|
|
|
|
$60,116
|
|
|
|
$138,280
|
|
|
|
$129,222
|
|
Add back: smelting and refining charges
|
2,049
|
|
|
3,220
|
|
|
4,709
|
|
|
6,973
|
|
||||
Gross revenues
|
81,736
|
|
|
63,336
|
|
|
142,989
|
|
|
136,195
|
|
||||
Less: Sandstorm gold revenues
|
(979
|
)
|
|
(904
|
)
|
|
(2,201
|
)
|
|
(1,869
|
)
|
||||
Less: Wheaton silver and gold revenues
|
(4,196
|
)
|
|
—
|
|
|
(4,196
|
)
|
|
—
|
|
||||
Gross revenues, excluding Sandstorm, Wheaton (A)
|
|
$76,561
|
|
|
|
$62,432
|
|
|
|
$136,592
|
|
|
|
$134,326
|
|
|
|
|
|
|
|
|
|
||||||||
Payable equivalent silver ounces sold
|
5,455,405
|
|
|
3,818,897
|
|
|
9,253,817
|
|
|
8,102,841
|
|
||||
Less: Payable equivalent silver ounces sold to Sandstorm
|
(168,588
|
)
|
|
(182,721
|
)
|
|
(385,592
|
)
|
|
(370,075
|
)
|
||||
Less: Payable equivalent silver ounces sold to Wheaton
|
(713,869
|
)
|
|
—
|
|
|
(713,869
|
)
|
|
—
|
|
||||
Payable equivalent silver ounces sold, excluding
Sandstorm and Wheaton (B)
|
4,572,948
|
|
|
3,636,176
|
|
|
8,154,356
|
|
|
7,732,766
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Average realized price per ounce of silver sold (A/B)
(1)
|
|
$16.74
|
|
|
|
$17.17
|
|
|
|
$16.75
|
|
|
|
$17.37
|
|
Average market price per ounce of silver per COMEX
|
|
$16.65
|
|
|
|
$17.19
|
|
|
|
$16.81
|
|
|
|
$17.32
|
|
(1)
|
Average realized price per ounce of silver sold in each reporting period is affected by mark-to-market adjustments and final settlements on concentrate shipments in prior periods. Concentrates sold to third-party smelters are provisionally priced and the price is not settled until a predetermined future date, typically one month after delivery to the customer, based on the market price at that time. The mark-to-market adjustments do not apply to doré sales.
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Net (loss) earnings as reported
|
|
($40,033
|
)
|
|
|
$1,412
|
|
|
|
($45,625
|
)
|
|
|
$4,132
|
|
Adjustments for non-cash or unusual items:
|
|
|
|
|
|
|
|
||||||||
Impairment of non-current assets
|
31,660
|
|
|
—
|
|
|
31,660
|
|
|
—
|
|
||||
Deferred income tax recovery
|
(10,982
|
)
|
|
(9,771
|
)
|
|
(20,105
|
)
|
|
(10,691
|
)
|
||||
Share-based payments
|
2,247
|
|
|
2,169
|
|
|
4,763
|
|
|
4,460
|
|
||||
Loss from investment in derivatives and marketable securities
|
101
|
|
|
2,021
|
|
|
2,250
|
|
|
2,160
|
|
||||
Write-down of mineral inventory
|
495
|
|
|
546
|
|
|
408
|
|
|
21
|
|
||||
Primero acquisition costs
|
4,721
|
|
|
—
|
|
|
4,721
|
|
|
—
|
|
||||
Adjusted net (loss) earnings
|
|
($11,791
|
)
|
|
|
($3,623
|
)
|
|
|
($21,928
|
)
|
|
|
$82
|
|
Weighted average number of shares on issue - basic
|
181,126,340
|
|
|
165,117,436
|
|
|
173,515,346
|
|
|
164,967,617
|
|
||||
Adjusted EPS
|
|
($0.07
|
)
|
|
|
($0.02
|
)
|
|
|
($0.13
|
)
|
|
|
$0.00
|
|
|
||
First Majestic Silver Corp. 2018 Second Quarter Report
|
Page
43
|
|
Three Months Ended June 30,
|
|
Six Months Ended June 30,
|
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Operating Cash Flows before Working Capital and Taxes
|
|
$14,230
|
|
|
|
$17,977
|
|
|
|
$29,871
|
|
|
|
$44,595
|
|
Weighted average number of shares on issue - basic
|
181,126,340
|
|
|
165,117,436
|
|
|
173,515,346
|
|
|
164,967,617
|
|
||||
Cash Flow per Share
|
|
$0.08
|
|
|
|
$0.11
|
|
|
|
$0.17
|
|
|
|
$0.27
|
|
|
June 30,
2018
|
|
December 31, 2017
|
||||
Current Assets
|
|
$205,634
|
|
|
|
$170,658
|
|
Less: Current Liabilities
|
(64,278
|
)
|
|
(54,375
|
)
|
||
Working Capital
|
|
$141,356
|
|
|
|
$116,283
|
|
Available Undrawn Revolving Credit Facility
|
55,031
|
|
|
8,782
|
|
||
Available Liquidity
|
|
$196,387
|
|
|
|
$125,065
|
|
MANAGEMENT’S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING
|
•
|
maintain records that accurately and fairly reflect, in reasonable detail, the transactions and dispositions of assets of the Company;
|
•
|
provide reasonable assurance that transactions are recorded as necessary for preparation of financial statements in accordance with IFRS as issued by IASB;
|
•
|
provide reasonable assurance that the Company’s receipts and expenditures are made only in accordance with authorizations of management and the Company’s Directors; and
|
•
|
provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the Company’s assets that could have a material effect on the Company’s consolidated financial statements.
|
|
||
First Majestic Silver Corp. 2018 Second Quarter Report
|
Page
44
|
CAUTIONARY STATEMENTS
|
|
||
First Majestic Silver Corp. 2018 Second Quarter Report
|
Page
45
|
|
||
First Majestic Silver Corp. 2018 Second Quarter Report
|
Page
46
|
1.
|
Review:
I have reviewed the interim financial report and interim MD&A (together, the “interim filings”) of
First Majestic Silver Corp.
(the “issuer”) for the interim period ended
June 30, 2018
.
|
2.
|
No misrepresentations:
Based on my knowledge, having exercised reasonable diligence, the interim filings do not contain any untrue statement of a material fact or omit to state a material fact required to be stated or that is necessary to make a statement not misleading in light of the circumstances under which it was made, with respect to the period covered by the interim filings.
|
3.
|
Fair presentation:
Based on my knowledge, having exercised reasonable diligence, the interim financial report together with the other financial information included in the interim filings fairly present in all material respects the financial condition, financial performance and cash flows of the issuer, as of the date of and for the periods presented in the interim filings.
|
4.
|
Responsibility:
The issuer’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (DC&P) and internal control over financial reporting (ICFR), as those terms are defined in National Instrument 52-109
Certification of Disclosure in Issuers’ Annual and Interim Filings,
for the issuer.
|
5.
|
Design:
Subject to the limitations, if any, described in paragraphs 5.2 and 5.3, the issuer’s other certifying officer(s) and I have, as at the end of the period covered by the interim filings
|
(a)
|
designed DC&P, or caused it to be designed under our supervision, to provide reasonable assurance that
|
(i)
|
material information relating to the issuer is made known to us by others, particularly during the period in which the interim filings are being prepared; and
|
(ii)
|
information required to be disclosed by the issuer in its annual filings, interim filings or other reports filed or submitted by it under securities legislation is recorded, processed, summarized and reported within the time periods specified in securities legislation; and
|
(b)
|
designed ICFR, or caused it to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with the issuer’s GAAP.
|
5.1
|
Control framework:
The control framework the issuer’s other certifying officer(s) and I used to design the issuer’s ICFR is
COSO’s 2013 Internal Control – Integrated Framework
.
|
5.2
|
ICFR – material weakness relating to design:
The issuer has disclosed in its interim MD&A for each material weakness relating to design existing at the end of the interim period
|
(a)
|
a description of the material weakness;
|
(b)
|
the impact of the material weakness on the issuer’s financial reporting and its ICFR; and
|
(c)
|
the issuer’s current plans, if any, or any actions already undertaken, for remediating the material weakness.
|
(i)
|
a proportionately consolidated entity in which the issuer has an interest;
|
(ii)
|
a special purpose entity in which the issuer has an interest; or
|
(iii)
|
a business that the issuer acquired not more than 365
days before the last day of the period covered by the interim filings; and
|
6.3
|
Reporting changes in ICFR:
The issuer has disclosed in its interim MD&A any change in the issuer’s ICFR that occurred during the period beginning on
April 1, 2018
and ended on
June 30, 2018
that has materially affected, or is reasonably likely to materially affect, the issuer’s ICFR.
|
Date:
|
August 9, 2018
|
|
|
|
|
“Keith Neumeyer”
|
|
|
Keith Neumeyer
|
|
|
Chief Executive Officer
|
|
1.
|
Review:
I have reviewed the interim financial report and interim MD&A (together, the “interim filings”) of
First Majestic Silver Corp.
(the “issuer”) for the interim period ended
June 30, 2018
.
|
2.
|
No misrepresentations:
Based on my knowledge, having exercised reasonable diligence, the interim filings do not contain any untrue statement of a material fact or omit to state a material fact required to be stated or that is necessary to make a statement not misleading in light of the circumstances under which it was made, with respect to the period covered by the interim filings.
|
3.
|
Fair presentation:
Based on my knowledge, having exercised reasonable diligence, the interim financial report together with the other financial information included in the interim filings fairly present in all material respects the financial condition, financial performance and cash flows of the issuer, as of the date of and for the periods presented in the interim filings.
|
4.
|
Responsibility:
The issuer’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (DC&P) and internal control over financial reporting (ICFR), as those terms are defined in National Instrument 52-109
Certification of Disclosure in Issuers’ Annual and Interim Filings,
for the issuer.
|
5.
|
Design:
Subject to the limitations, if any, described in paragraphs 5.2 and 5.3, the issuer’s other certifying officer(s) and I have, as at the end of the period covered by the interim filings
|
(a)
|
designed DC&P, or caused it to be designed under our supervision, to provide reasonable assurance that
|
(i)
|
material information relating to the issuer is made known to us by others, particularly during the period in which the interim filings are being prepared; and
|
(ii)
|
information required to be disclosed by the issuer in its annual filings, interim filings or other reports filed or submitted by it under securities legislation is recorded, processed, summarized and reported within the time periods specified in securities legislation; and
|
(b)
|
designed ICFR, or caused it to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with the issuer’s GAAP.
|
5.1
|
Control framework:
The control framework the issuer’s other certifying officer(s) and I used to design the issuer’s ICFR is
COSO’s 2013 Internal Control – Integrated Framework
.
|
5.2
|
ICFR – material weakness relating to design:
The issuer has disclosed in its interim MD&A for each material weakness relating to design existing at the end of the interim period
|
(a)
|
a description of the material weakness;
|
(b)
|
the impact of the material weakness on the issuer’s financial reporting and its ICFR; and
|
(c)
|
the issuer’s current plans, if any, or any actions already undertaken, for remediating the material weakness.
|
(i)
|
a proportionately consolidated entity in which the issuer has an interest;
|
(ii)
|
a special purpose entity in which the issuer has an interest; or
|
(iii)
|
a business that the issuer acquired not more than 365
days before the last day of the period covered by the interim filings; and
|
6.3
|
Reporting changes in ICFR:
The issuer has disclosed in its interim MD&A any change in the issuer’s ICFR that occurred during the period beginning on
April 1, 2018
and ended on
June 30, 2018
that has materially affected, or is reasonably likely to materially affect, the issuer’s ICFR.
|
Date:
|
August 9, 2018
|
|
|
|
|
“Raymond Polman”
|
|
|
Raymond Polman
|
|
|
Chief Financial Officer
|
|
New York - AG
|
August 13, 2018
|
Toronto – FR
|
|
Frankfurt – FMV
|
|
•
|
Record silver equivalent production of 5.1 million ounces, a 32% increase compared to Q1 2018
|
•
|
Silver production of 2.8 million ounces, a 27% increase compared to Q1 2018
|
•
|
Revenues of $79.7 million, a 36% increase compared to Q1 2018
|
•
|
Mine operating earnings of ($2.3) million
|
•
|
Cash flow per share was $0.08 per share (non-GAAP)
|
•
|
Cash costs were $7.59 per payable silver ounce (net of by-product credits), a 3% decrease compared to Q1 2018
|
•
|
All-in sustaining costs (“AISC”) were $16.43 per payable silver ounce, a 3% increase compared to Q1 2018
|
•
|
Realized average silver price of $16.74 per ounce, relatively consistent with the prior quarter
|
•
|
Recorded an impairment charge due to placing the La Guitarra mine on care and maintenance of $31.7 million, or $20.5 million net of tax
|
•
|
Adjusted net loss of $11.8 million (adjusted loss per share of $0.07)
|
•
|
Invested $26.6 million on capital expenditures
|
•
|
Ended the quarter with $109.2 million in cash and cash equivalents
|
Key Performance Metrics
|
|
2018-Q2
|
|
2018-Q1
|
Change
Q2 vs Q1 |
|
2017-Q2
|
Change
Q2 vs Q2 |
|
2018-YTD
|
||||||||||
Operational
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Ore Processed / Tonnes Milled
|
|
851,349
|
|
|
809,775
|
|
5
|
%
|
|
691,833
|
|
23
|
%
|
|
1,661,124
|
|
||||
Silver Ounces Produced
|
|
2,756,263
|
|
|
2,167,030
|
|
27
|
%
|
|
2,287,188
|
|
21
|
%
|
|
4,923,292
|
|
||||
Silver Equivalent Ounces Produced
|
|
5,137,318
|
|
|
3,879,678
|
|
32
|
%
|
|
3,888,944
|
|
32
|
%
|
|
9,016,996
|
|
||||
Cash Costs per Ounce
(1)
|
|
|
$7.59
|
|
|
|
$7.83
|
|
(3
|
%)
|
|
|
$7.01
|
|
8
|
%
|
|
|
$7.70
|
|
All-in Sustaining Cost per Ounce
(1)
|
|
|
$16.43
|
|
|
|
$16.01
|
|
3
|
%
|
|
|
$14.17
|
|
16
|
%
|
|
|
$16.25
|
|
Total Production Cost per Tonne
(1)
|
|
|
$61.04
|
|
|
|
$46.88
|
|
30
|
%
|
|
|
$51.53
|
|
18
|
%
|
|
|
$54.14
|
|
Average Realized Silver Price per Ounce
(1)
|
|
|
$16.74
|
|
|
|
$16.76
|
|
0
|
%
|
|
|
$17.17
|
|
(3
|
%)
|
|
|
$16.75
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Financial (in $millions)
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Revenues
|
|
|
$79.7
|
|
|
|
$58.6
|
|
36
|
%
|
|
|
$60.1
|
|
33
|
%
|
|
|
$138.3
|
|
Mine Operating (Loss) Earnings
|
|
|
($2.3
|
)
|
|
|
($0.4
|
)
|
(445
|
%)
|
|
|
$1.4
|
|
(264
|
%)
|
|
|
($2.7
|
)
|
Net (Loss) Earnings
|
|
|
($40.0
|
)
|
|
|
($5.6
|
)
|
(616
|
%)
|
|
|
$1.4
|
|
(2,935
|
%)
|
|
|
($45.6
|
)
|
Operating Cash Flows before Working
Capital and Taxes |
|
|
$14.2
|
|
|
|
$15.6
|
|
(9
|
%)
|
|
|
$18.0
|
|
(21
|
%)
|
|
|
$29.9
|
|
Cash and Cash Equivalents
|
|
|
$109.2
|
|
|
|
$249.2
|
|
(56
|
%)
|
|
|
$126.9
|
|
(14
|
%)
|
|
|
$109.2
|
|
Working Capital
(1)
|
|
|
$141.4
|
|
|
|
$235.6
|
|
(40
|
%)
|
|
|
$130.9
|
|
8
|
%
|
|
|
$141.4
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Shareholders
|
|
|
|
|
|
|
|
|
|
|
||||||||||
(Loss) Earnings per Share ("EPS") - Basic
|
|
|
($0.22
|
)
|
|
|
($0.03
|
)
|
(555
|
%)
|
|
|
$0.01
|
|
(2,685
|
%)
|
|
|
($0.26
|
)
|
Adjusted EPS
(1)
|
|
|
($0.07
|
)
|
|
|
($0.06
|
)
|
(8
|
%)
|
|
|
($0.02
|
)
|
(197
|
%)
|
|
|
($0.13
|
)
|
Cash Flow per Share
(1)
|
|
|
$0.08
|
|
|
|
$0.09
|
|
(17
|
%)
|
|
|
$0.11
|
|
(28
|
%)
|
|
|
$0.17
|
|
(1)
|
The Company reports non-GAAP measures which include cash costs per ounce produced, all-in sustaining cost per ounce, total production cost per tonne, average realized silver price per ounce, working capital, adjusted EPS and cash flow per share. These measures are widely used in the mining industry as a benchmark for performance, but do not have a standardized meaning and may differ from methods used by other companies with similar descriptions.
|
Second Quarter
Production Summary |
San Dimas
|
Santa Elena
|
La Encantada
|
La Parrilla
|
Del Toro
|
San Martin
|
La Guitarra
|
Consolidated
|
||||||||||||||||
Ore Processed / Tonnes Milled
|
85,765
|
|
228,054
|
|
237,862
|
|
123,642
|
|
65,879
|
|
74,431
|
|
35,715
|
|
851,349
|
|
||||||||
Silver Ounces Produced
|
808,923
|
|
535,015
|
|
325,603
|
|
360,862
|
|
167,591
|
|
419,815
|
|
138,454
|
|
2,756,263
|
|
||||||||
Silver Equivalent Ounces Produced
|
1,698,382
|
|
1,407,880
|
|
327,458
|
|
605,826
|
|
323,714
|
|
524,843
|
|
249,214
|
|
5,137,318
|
|
||||||||
Cash Costs per Ounce
|
|
$0.24
|
|
|
$1.39
|
|
|
$23.05
|
|
|
$10.42
|
|
|
$18.01
|
|
|
$9.68
|
|
|
$12.89
|
|
|
$7.59
|
|
All-in Sustaining Cost per Ounce
|
|
$5.41
|
|
|
$6.60
|
|
|
$30.81
|
|
|
$16.39
|
|
|
$32.08
|
|
|
$12.49
|
|
|
$18.11
|
|
|
$16.43
|
|
Total Production Cost per Tonne
|
|
$148.91
|
|
|
$55.97
|
|
|
$31.09
|
|
|
$49.10
|
|
|
$69.23
|
|
|
$72.77
|
|
|
$83.68
|
|
|
$61.04
|
|