News

November 10, 2008

The Clouds Currently Hanging Over First Majestic Almost Certainly Have A Silver Lining

By Our Canadian Correspondent

All miners have felt the impact of the financial tsunami engulfing the globe, but Keith Neumeyer and his team at First Majestic Silver has been dealt a double blow of bad weather, thanks to a rather nasty rainy season in Mexico. The intense rains in Mexico during the third quarter of 2008 resulted in a 34 per cent drop in silver equivalent production from First Majestic’s three operations. Ore processed during the quarter from the La Parrilla silver mine, the San Martin silver mine and the La Encantada silver mine, tallied up at 170,298 tonnes, marking a 20 per cent drop from the second quarter. Hardest hit was the San Martin mine, 250 kilometres north of Guadalajara. A landslide wiped out an access bridge and blocked three out of four possible entrances to the mine. To make matters even worse, the rain lowered throughput in the crushing circuits and screens.

When all was said and done, First Majestic produced some 840,000 ounces of silver equivalent in the three month period. That comprised 719,399 ounces of silver, just over 1.5 million pounds of lead and 536 ounces of gold. Combined recoveries of silver at the three different mines fell to 67 per cent from 70 per cent, and the average head grade dropped to 196 grams silver per tonne from 230 grams silver per tonne.

This shortfall drove the share price of First Majestic down to below C$1.00 per...