Published: March 23, 2023 |

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First Majestic Silver said it is taking action to reduce overall costs by reducing investments, temporarily suspending all mining activities and reducing its workforce at Jerritt Canyon Mine effective immediately.

Over the past 22 months since the acquisition of the Jerritt Canyon Gold Mine in Nevada, the company has been focused on increasing underground mining rates in order to sustainably feed the processing plant at a minimum of 3,000 tpd in order to generate free cash flow as their plans suggested. Despite these efforts, mining rates have remained below this threshold and cash costs per ounce have remained higher than anticipated primarily due to ongoing challenges such as contractor inefficiencies and high costs, inflationary cost pressures, lower than expected head grades, and multiple extreme weather events affecting northern Nevada, which have compounded conditions and caused material headwinds for the operation.

“The decision to temporarily suspend mining activities at Jerritt Canyon, which represented approximately 21 percent of the company’s 2022 revenue, was driven by our goal to produce profitable ounces across the company,” said Keith Neumeyer, president and CEO.

“Since the acquisition in 2021, we have invested heavily at Jerritt Canyon and have been successful in executing several key projects. We rehabilitated and reopened the West Generator and Saval II underground mines and have successfully upgraded and modified the roaster and refinery off-gas handling systems to insure we remain fully compliant with all state and federal air quality standards. The team at Jerritt Canyon has helped the company achieve significant milestones and we are thankful for their service,” added Neumeyer.

“While mining activities have temporarily stopped, processing of the remaining surface stockpiles will occur for the next couple of months. The company will continue exploring both near-mine and prospective regional greenfield targets to grow Jerritt Canyon’s resources, which we believe will significantly enhance the economics for the eventual restart of operations,” concluded Neumeyer.

During the suspension, the company intends to process approximately 45,000 tonnes of above-ground stockpiles through the plant. Exploration activities are expected to also continue throughout 2023 with additional plans to:
• Explore for new regional discoveries and expand current known reserves and resources.
• Analyze the optimization of bulk mining and cost-effective mining methods.
• Conversion of inferred and indicated resources into measured resources.
• Reduce mining costs through adopting self-perform mining and improve contractor rates and terms.
• Continue modernizing the processing plant to be able to better withstand severe weather conditions.

As a result of the suspension, the company’s previous production and cost guidance for Jerritt Canyon can no longer be relied upon. Guidance for the company’s Mexican operations remain current and a revised consolidated production and cost guidance, including capital investments, are expected to be published in July.

About First Majestic
First Majestic is a publicly traded mining company focused on silver and gold production in Mexico and the United States. The company presently owns and operates the San Dimas Silver/Gold Mine, the Santa Elena Silver/Gold Mine, the La Encantada Silver Mine, and the Jerritt Canyon Gold Mine. First Majestic is proud to offer a portion of its silver production for sale to the public. Bars, ingots, coins, and medallions are available for purchase online at its Bullion Store at some of the lowest premiums available.

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