Can you give us some background on First Majestic Silver?
I founded First Majestic 18 years ago after successfully putting together a copper company called First Quantum Minerals. Much like I saw the growing demand for copper, I saw a growing demand for silver. What I wanted to build was a pure silver mining company, that continually focuses on maintaining its purity while striving to become the world’s largest primary silver producer.
In September, it was announced that Eric Sprott agreed to purchase shares amounting to CAD $78M. What is the background to this deal and what signals does this give regarding the company?
We are extremely pleased to have Eric on board as a major investor in the Company. Eric and I have been friends for a number of years and of course the both of us are extremely bullish on silver.
Eric recognized the lack of appreciation in First Majestic’s share price in a rising silver market. He’s invested in the Company before when he managed the Sprott Asset funds and his timing has historically worked out well for him. The investment in First Majestic is now Eric’s largest placement in a silver producer, let alone the entire silver space.
You received Kitco’s award for Best Mining CEO 2019. What made 2019 a stand-out year for you and First Majestic?
The award from Kitco was of a great honour to receive.
2019 was an extremely busy year for First Majestic. At the beginning of the year we were still in the process of integrating the San Dimas mine into our portfolio. The mine is now our flagship asset and with this acquisition we essentially doubled the size of Company. We also completed the successful commissioning and installation of our first High Intensity Grinding (HIG) mill at the Santa Elena operation. That same year, we also embarked upon plans to convert the Santa Elena mine from diesel to clean burning natural gas. And, later in the same year, ground was broken at the Santa Elena’s new high-grade Ermitaño project.
How has COVID-19 impacted your operations this year?
Like every business around the world our operations were affected by COVID-19. Mexico’s Ministry of Health issued a Decree in April 2020 forcing all mines to temporarily close being deemed as a “non-essential service”. This two-month forced shutdown disrupted our production, but it also added some minor delays to a few of our growth projects.
What are your plans as we come to the close of 2020 and, hopefully, out of the pandemic?
During the balance of 2020, we are planning to recover as much of the lost production from the COVID-19 shutdown as possible. For example, our La Encantada operation produced 978,416 silver ounces in Q3, representing a 92% increase from Q2 and the second highest quarterly production since 2014. We anticipate strong production rates from this operation for the remainder of the year. We have also increased the total number of exploration rigs (26 in total) across our properties with approximately 30% of the rigs prospecting for new greenfield discoveries.
What are the Company’s milestones and goals for 2021?
In 2021, First Majestic anticipates initial production to begin at the Ermitaño project near the Santa Elena operation. This high-grade ore body is located only 4km away from the mill and contains a current resource of 68 million silver equivalent ounces. In addition, the Company is expected to release a pre-feasibility report on the Ermitaño project by the end of March 2021.
At San Dimas, the mill optimization program is expected to continue with the installation and commissioning of a new 3,000 tpd HIG mill in the second half of 2021. Once installed, we expect to realize higher milling rates and recoveries at San Dimas. Finally, the mill modernization project at La Encantada designed to improve processing and milling efficiencies is expected to accelerate into 2021.
What do you think we can expect from the silver market as we move into 2021?
Silver’s use in solar panels and electric vehicles will continue to be one of the main drivers for the silver market in 2021. These two relatively new industries consume more than 150 million ounces per year, or nearly 20% of mine supply and this demand growth is expected to continue well beyond 2021 as we go “green” and wean our planet off oil.
