Expanding Operator Talks Organic, Inorganic GrowthWed, 02/07/2018 - 12:56
First Majestic Silver wants to keep its story simple, according to Dustin VanDoorselaere, the company’s COO. Addressing the audience at Mexico Mining Forum at the Sheraton Maria Isabel hotel in Mexico City on Wednesday, he detailed First Majestic’s growth strategy: “One metal, one country.”
The company grew rapidly from a relatively bloated junior mining company prior to the metals downturn in 2013. This was the catalyst for the operator to seek optimization, and it recently announced its acquisition of fellow Canadian Primero Mining, taking on its flagship San Dimas asset in Durango. “We are a multi-asset producer, with six 100 percent owned and operated mines in Mexico, focusing both on organic growth and some M&A growth,” said VanDoorselaere.
According to the COO, 60 percent of First Majestic’s revenue comes from silver, almost 30 percent from gold and the rest from lead and zinc. The company has six operating assets spread across the country: Santa Elena in Sonora, La Parilla in Durango, San Martin in Jalisco, La Guitarra in Edomex, La Encantada in Coahuila and Del Toro in Zacatecas.
The key to success, according to VanDoorselaere, is the team of people behind that business. “We employ about 4,000 contractors and employees directly, and of those people we are over 99 percent Mexico,” he explained. “We are truly a Mexican company that is truly committed to Mexico.”
The company wants to continue its impressive expansion, and has provided ambitious guidance. “We aim for an annual silver production of 20 million ounces,” said VanDoorselaere. This is a concerted effort, considering the company has produced 71 million ounces since 2011. “We currently have about US$180 million of cash on hand in our treasury, which was our big push to look to grow the company through an acquisition.”
For 2018, the operator’s total CAPEX will be US$125 million, and this amount will include US$49 million in underground development and US$27 million in exploration (its most ambitious project ever). La Guitarra will be expanded to process 1,000t/d, according to VanDoorselaere, while Plomosas in Sinaloa will be First Majestic’s next big focus with 5 percent of the company’s investment guidance focused on the asset.
“Our goal and vision is to be the world’s purest silver producer,” he concluded.