FIRST MAJESTIC SILVER CORP. (TSX VENTURE:FR)(PINK SHEETS:FRMSF)(FRANKFURT:FMV) (the "Company")
is pleased to announce the financial results of the Company's first quarter
ending March 31st, 2007. The full version of the financial statements can be
viewed on the Company's web site at www.firstmajestic.com or on SEDAR at
www.sedar.com. The following are highlights only from the first quarter
financial results of the Company and shareholders or interested parties are
encouraged to review the complete statements for further details.
Overall Operating Performance and Highlights
- As of the date of this report, silver producing operations of the Company are
carried out through three operating segments being the La Parrilla Silver Mine,
the La Encantada Silver Mine, and the San Martin Silver Mine. This period
marked the first full quarter of operations in which all three mines operated
under the First Majestic umbrella.
- Sales revenue for the quarter ended March 31, 2007, increased significantly
to $10,158,621 representing a 24.8% increase from the prior quarter's revenues
of $8,138,284, and a 1,415% increase from the same quarter revenues ended March
31, 2006 of $671,435.
- Mine earnings (cash basis) for the quarter ended March 31, 2007 increased to
$3,375,730 representing a 1,165% increase from the prior quarter's mine
earnings of $266,767, and an increase of 4,432% from mine earnings of $74,486
for the quarter ended March 31, 2006.
- The average realized silver price was $15.00 (US$12.80) per ounce of silver
for the three months ended March 31, 2007, compared to $13.70 (US$12.03) per
ounce for the quarter ended December 31, 2006 and $10.06 (US$8.72) per ounce
for the quarter ended March 31, 2006.
- For the quarter ended March 31, 2007, the Company's three operating mines
produced a combined 753,442 ounces of silver equivalent at a cash cost of
$10.02 (US$8.55) per ounce of silver which consisted of 719,993 ounces of
silver, 519 ounces of gold and 327,818 pounds of lead. Production for the
quarter increased by more than 31% compared to the prior quarter's production
of 574,704 ounces of silver equivalent, and was an increase of 1,290% over the
59,329 ounces of silver equivalent produced in the quarter ended March 31,
2006. Of the silver produced in the period, a total of 677,241 equivalent
ounces was sold at an average sales price of $15.00 in the quarter (US$12.80),
and an average cost to produce of $10.02 (US$8.55); the balance remained in
inventory at the end of the quarter.
- Average cost of production per ounce of silver has been reduced by 27% from
$13.70 (US$12.03) for the six month transitional period ended December 31,
2006, to $10.02 (US$8.55) for the three months ended March 31, 2007. The
Company does not reduce its costs of production by other metal credits for
silver equivalents, and has chosen to recognize the credits in revenues of the
period in which the silver equivalents are sold.
- On March 20, 2007, the Company completed the acquisition of Minera La
Encantada S.A. de C.V. ("La Encantada"), a Mexican mining company whose primary
asset is the La Encantada Silver Mine located at the Coahuila State in Mexico.
- Subsequent to the period end, the Company completed a private placement of
special warrants for gross proceeds of $34,415,000. A total of 6,883,000
special warrants were sold at a price of $5.00 per special warrant through
Cormark Securities Inc. (formerly Sprott Securities Inc.) and CIBC World
Markets Inc. (as co-lead underwriters) and Blackmont Capital Inc.
- The loss before income taxes increased by $1,143,665 to $2,139,663 for the
three months ended March 31, 2007, compared to $995,998 for the three months
ended March 31, 2006, due to the higher amortization, depreciation and
depletion, and additional operating costs resulting from the extreme growth
experienced between this period and the same period in the prior year.
- The net loss after taxes increased to $3,061,899 ($0.06 per share) from
$995,998 ($0.03 per share) due primarily to the additional amortization,
depreciation and depletion, and additional operating expenses being experienced
as a result in the large scale growth in the Company from $25.5 million in
total assets to $189.7 million in total assets. The growth experienced is as a
result of acquiring First Silver, La Encantada and Desmin, as well as the large
investments in expansion capital at the La Parrilla mine and mill. By way of
comparison, the Company presently has three producing mines with a total
operating capacity of 2,600 tonnes per day, whereas on March 31, 2006, only one
mine was operating, the La Parrilla Silver Mine which had a capacity of 180
tonnes per day.
Management is very encouraged by these positive results from operations. Mr.
Neumeyer, President, stated; "This is our first quarter where we have had all
mines operating to the credit of our own accounts and even though there is
still much room for improvement, we are pleased with the direction in which the
Company is moving. A lot of work is going into increasing production levels and
lowering costs which we anticipate will become more evident over the coming
quarters."
First Majestic is a producing silver company focused in Mexico and is
aggressively pursuing its business plan to become a senior silver producer
through the development of its existing assets and the pursuit through
acquisition of additional assets that contribute to achieving its corporate
growth objectives.
FIRST MAJESTIC SILVER CORP.
Keith Neumeyer, President & CEO
