First Majestic Ended 2022 With Strong Liquidity
Home > Mining > News Article

First Majestic Ended 2022 With Strong Liquidity

Photo by:   Artyom Korshunov
Share it!
Fernando Mares By Fernando Mares | Journalist and Industry Analyst - Fri, 02/24/2023 - 16:58

The Canada-based silver company First Majestic announced its financial results for 4Q22 and the full year 2022. The company noted that 4Q22 and 2022 were full of contrasts due led by increasing production, but also rising costs. Nevertheless, it ended 2022 with high liquidity of US$276.6 million.

During 4Q22, the lower production at Santa Elena and San Dimas properties in Sonora and Durango respectively led to a revenue of US$148.2 million, 7% lower than what the company registered during 3Q22. Additionally, the company reported net earnings of US$16.8 million, resulting in earnings per share (EPS) of US$0.06, a smaller amount than the net earnings of US$20.7 million and EPS of US$0.08 registered during 3Q22.

According to First Majestic, net earnings once normalized for non-cash items such as a US$9.6 million impairment due to the pending sale of the La Parrilla mine, tax settlements, share-based payments and other items total US$17.4 million, trailing the US$22.6 million registered in 3Q22.

The company registered a reduction in the production of gold and silver of 6% and 12%, respectively. The decrease in production was driven by the lower performance of the Santa Elena and San Dimas projects. The total production stood at 7.6Moz of AgEq, consisting of 2.4Moz Ag and 63,039oz Au during 4Q22. 

4Q22 was characterized by an increase in cash costs/oz of AgEq, which were US$15.36/oz compared to the US$13.34/oz registered in 3Q22. These increasing costs were driven by the lower grades recovered at Santa Elena and San Dimas mines but were partially offset by lower costs at the Jerritt Canyon mine in Nevada, US, which recovered higher gold grades.

While First Majestic did not perform optimally 4Q22, it retains a positive outlook. The company generated record annual revenues of US$624.2 million in 2022, 7% higher than in 2021. The increase was driven by the first full year of production of its Ermitaño mine at the Santa Elena project.

First Majestic reported net earnings of US$114.3 million, compared to US$4.9 million in 2021. Once normalized, the net earning totaled US$55.4 million for 2022, higher than the US$6 million registered in 2021. 

Owing to its strong financial performance, the company ended 2022 with a treasury of US$151.4 million in cash and cash equivalents, as well as restricted cash of US$125.2 million.

First Majestic’s production was slightly below its guidance rate in 2022. The company produced 10.5Moz Ag and its guidance range was 11.2Moz to 11.9Moz. As for gold, the company reached a new annual record, producing 248,394oz, however, it fell below its guidance range of from 256,000oz to 273,000oz.

Photo by:   Artyom Korshunov

You May Like

Most popular