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Thank you for standing by. This is the conference operator. Welcome to the First Majestic Silver Production and Guidance Update Conference Call. [Operator Instructions] And the conference is being recorded. [Operator Instructions]I would now like to turn the conference over to Keith Neumeyer, President and Chief Executive Officer. Please go ahead.
Thank you, and welcome, everyone, for joining today's call. It's been some time. It's about now 6 months since our last call. And with us today, I just want to introduce our team. And we have Ray Polman, our Chief Financial Officer. We have Steve Holmes, our Chief Operating Officer. We also have Connie Lillico, our Corporate Secretary; Todd Anthony is also on line with us, VP, Corporate Development; and Mark Carruthers, our investor -- Manager of Investor Relations, is also with us today.But before I get on to the call, I'd like to pass the call over to Connie Lillico.
Prior to us beginning today, I'll read our disclaimer and forward-looking statements. Certain statements contained in this conference call regarding the company and its operations constitute forward-looking statements in accordance with applicable Canadian and U.S. securities laws. All statements that are not historical facts, including, without limitation, statements regarding future estimates, plans, objectives, assumptions or expectations of future performance constitute forward-looking statements. We caution you that such forward-looking statements involve known and unknown risks and uncertainties that could cause actual results and future events to differ materially from those anticipated in such statements. Such risks and uncertainties include the duration and effects of the coronavirus and COVID-19 and any other pandemics on our operations and workforce and its effects on global economics and society; fluctuations in precious metal prices, unpredictable results of exploration activities, uncertainties inherent in the estimation of mineral reserves and resources, fluctuations in the cost of goods and services; problems associated with exploration and mining operations; changes in legal, social or political conditions in the jurisdictions where the company operates; lack of appropriate funding and other risk factors as discussed in the company's filings with the Canadian-U.S. regulatory agencies. Resources and production goals and forecasts may be based on data insufficient to support them. The company expressly disclaims any obligations to update any forward-looking statements.Back to you, Keith.
Thanks, Connie and quite the mouthful. Okay. So I'm assuming that people that are online today have looked at our announcement yesterday showing our first half on the [indiscernible] production, also filing our second quarter production and our forward-looking guidance, which we generally update twice per year in January and July. So I'm just going to cover the highlights, and then we'll go into the question-and-answer period. Total production was a record -- all-time record for us on a silver equivalency basis. It had everything to do with Jerritt Canyon, addition of gold to the portfolio, quite excited about that. We'll be talking about Jerritt Canyon as we get through this presentation, obviously.The LNG plan that we've been working on for almost 2 years was finally completed with some delays due to COVID last year. It got back on track, and it's now finally producing 100% of the energy needs that Santa Elena -- pretty exciting. We have no longer any mine in the business that's working 100% on diesel. Of course, diesel will still get used here and there, but the primary energy source is no longer diesel, which is a great thing for the environment and also should result in lower costs.The Ermitaño development is continuing at quite a hefty clip. We're committed to extracting 40,000 to 50,000 tonnes of material or as they bring on surface prior to the end of the year for production in the first quarter of 2022. It's looking really good. It's a fantastic project, and it's really going to change Santa Elena for many years into the future.The Jerritt Canyon acquisition was completed as well. Gold in Nevada, obviously, a bit of a new area for us. We've been in Mexico for 19 years or close to 19 years, and for us to step into a new jurisdiction, I think Nevada was a great choice. And it's one of the best mining jurisdictions in the world, and we're a new player in the area. But we're really adding to the team there, changing management. We're doing all kinds of exciting things that will result in a lot of improvements coming at Jerritt Canyon. I'm sure there'll be questions around that. It's super active in the exploration area, 26 rigs operating throughout the business, pretty exciting. We're spending a lot of money on exploration, which is pretty key. And it's actually adding to reserves, which should -- obviously should be. So the success is there from the drill bit, which is what we want to see.Going to just quickly before we get into question and answers, the Jerritt Canyon optimization plans. We know that the cost of Jerritt Canyon are a little bit on the high side. It's something that we're addressing. We're going to have a couple of quarters here of elevated cost. But right now, we're building a tailings lift, which is costing around [ $13 million ], and that's getting our all-in sustaining costs last couple of quarters. That will die off at the end of the year or mid-Q4. So we're going to see about a $200 drop in all-in sustaining costs, we're expecting by the end of the year just due to that one cost item. But there's many other things that we're doing at Jerritt Canyon to even optimize it even further. The management team, of course, is key, and that's in the process of being changed out. I'm not going to get into a bunch of details on that. But it's -- the team there is being assembled to really achieve the growth that we're hoping to achieve over the next couple of quarters.One of the -- a couple of the short-term objectives, which are laid out in the news release, is really joining the SSX mine and the Smith mine underground and just having a single exit point for the ore and then using that development for exploration drift, which is pretty exciting to me. A number of the open pits or several open pits have been operated since the '90s, which we're hoping to -- we've -- could potentially get going again. We're doing that evaluation now. So we'll have news on that over the next couple of quarters as things develop, and the exploration there, the targets there are just amazing. We've got 25 targets that we've identified that we're going to be drilling over the next couple of years. We're not going to get it all done immediately, but we're -- it's a long-term sustainable investment that this mine requires that has lacked over the last 15 years.And I've said a number of times, we're expecting to see production in 2024 to be in the 200,000 ounce range from the current about 110,000 ounce range. So in order to get to those types of growth numbers, we need to spend that money today. And that's why the CapEx has increased as probably people have already noticed. We did have our guidance out in January showing a CapEx of $168 million, our new CapEx number of $205 million. Most of that is Jerritt Canyon related. So -- and it's necessary capital to be spent, but it's going to really bring a lot of growth into the business. So the internal rate of return on that spend, I think, is quite good.And that's really it for me. Why don't we just go to questions, and I see there's a few people in the queue.
[Operator Instructions] Our first question comes from Heiko Ihle of H.C. Wainwright.
This is Tyler Bisset on for Heiko. And congrats on closing the deal. It's nice to see almost 19,000 ounces from the site already.
Well, thanks.
In your release, you stated that you have more than 25 near mine and greenfield targets that you want to follow up on. Any idea as to your total expenditures for the site? I assume it's fair to say that the 5 drill rates you have at site right now will be expanded?
Will the 5 drill rigs will be expanded. Is that what your question is?
Yes. Just how much do you guys plan on spending on exploration and if you plan on expanding those drill rigs?
Yes, I don't have the breakdown on the exploration per mine. Todd Anthony has that information available. I'm not sure. Todd, do you want to address that now? Or you'd like to address it separately?
We can follow up with H.C. after the call. So yes, let's follow up afterwards.
Sounds good. And I mean speaking [indiscernible] ...
It's a big land package. There's 30,000 hectare land package. It's one of the things that excited us most about this acquisition was its exploration upside. These 25 targets were not identified by us. They were identified prior to us purchasing the asset. And we, of course, through our due diligence, identified these as real targets that need to be tested. So it's going to take a while to do it. That's a lot of targets. It's not going to happen overnight. But just based on what we know and what we -- and because the drilling program has started. And just based on what we know, it's looking very exciting. So we think life of mine, we think resources are going to expand quite nicely over the next couple of years. But putting numbers out to the public is a different thing altogether, right? So we're highly optimistic, but you have to be patient. We've only had the asset in our portfolio since April 30. So we need some time. We need time to reduce costs because that's our first objective is to reduce costs. The costs are too high, and we need to knock $400 or $500 off the cost. And we're going to work on accomplishing that over the next 6 to 12 months. The other focus is development because this mine needs development to extract ore. This mill is only operating at 2,100 tonnes per day. The capacity is 4,500 tonnes per day. We want to fill that mill. We think we can fill that mill, but we need to spend money on development. Exploration is also key for long-term life of mine. So that's the focus. We only have it in our portfolio for a couple of months. We need time to prove that we could really show value for this asset. We've done it before. This is our forte. You go back over the 19 years and look at our acquisition's strategy and what we've done when we bought new assets and how we've turned them around. This is a turnaround asset, and we're super excited about it. And it's going to be successful as far as we are concerned.
I appreciate that. And can you disclose how much cash you guys have spent at site since closing the deal?
I don't -- I'm not quite sure. There's normal G&A and stuff like that. But the 2 -- or maybe Steve wants to jump in. But the 2 primary -- well, I guess, exploration we've been spending money on, the tailings lift we've been spending money on. And Steve, is there anything else you want to add to that?
No, I would just say that regarding exploration, we're going to have a program all in this year, the total year of about 70,000 meters, 25 targets Keith talked about. Since we've acquired it, we'll be close to $14 million in terms of our investment. We've got the rigs on site, and we're a little late in the season, we recognize that. But we're moving really quickly. And so that will be part of the investment. And the other bigger investment on the CapEx side is this 12-foot TSF2 lift that we have a contractor lifting now, and we received permits from NDEP in June. And so that lift's coming up nicely. Once that lift is done, we're going to be solid there for the next 4 to 5 years in terms of tailing capacity. So these are the kind of projects that we've been tackling. And as Keith said, what I see is the potential for production improvement and cost reduction, exploration success in the district is extremely high, and that's what attracted us to this asset to begin with. It's going to require some investment in some time, but there's a lot of low-hanging fruit here. And we're -- as I've said to the officers before, we're picking it just as fast as we can go.
I appreciate that. And finally, I know you provided some production and cost guidance for Jerritt Canyon this year. But can you discuss your longer-term outlook for the site and sort of walk us through your assumptions on what kind of impact your optimization plans could have on production and cost at site next year and beyond?
Well, we're not -- we haven't put out 2022 guidance and nor are we prepared to do that today. The -- we've said quite clearly to the market, and this is very back-to-the-envelope type of estimate that I don't want to be hung to this number. And I've said that previously, but [indiscernible] goal by spending the investment that we're currently spending. And you can get into the details with Todd Anthony over on a telephone call. But the investment on exploration and development, our target is to reach 200,000 ounces of gold production in 2024. And that's really all we're willing to say. What that means from a guidance perspective, costs and exact numbers, we're not prepared to get into those details.
[Operator Instructions]
Well, it appears that we have very few callers on the call today. And there's actually no other questions in the queue. So thanks for everyone's time today. And if you do have further questions about the company, please go to the company's website. There's a very good PowerPoint there on the website with lots of information covering all our assets. Also, if you have further questions regarding anything else that you might not be able to find on the website, please feel free to call Todd Anthony, our VP, Corporate Development; or Mark Carruthers, our Manager of Investor Relations. Thanks again, and have a great day.
This concludes today's conference call. You may disconnect your lines. Thank you for participating, and have a pleasant day.