Mining’s old guard needs strong medicine
A new report details subpar investor returns in the mining industry over the last decade, particularly big cap diversified companies which have not adapted to new realities.
First Majestic (TSE:FR) announced that its Q3 silver production was 4% lower from the prior quarter and 6% lower from the same quarter in 2010. The company produced 1,708,865 silver ounces in Q3 compared to 1,780,379 in Q2.
In early morning trading, the company’s stock was up 20 cents to $17.69 a share.
The company believes that silver production should increase due to operational improvements at La Parrilla, its Mexican mine. First Majestic completed a new 1,000 tpd flotation circuit, which will replace an old 425 tpd flotation circuit and will allow silver production to ramp up in the fourth quarter.
The company is also making capital improvements to its San Martin Mine.
“Installation of a new ball mill, replacing an older and smaller mill was completed in the quarter. Total mill capacity has now reached 950 tpd allowing for increased silver production and lower costs. In addition, two new induction furnaces and two new filter presses were installed. These mill improvements which were all completed in the third quarter are expected to have a positive impact on overall production, quality of doré and total costs,” said the company in a statement.
The company did see increased production in other metals.
“In addition, 1,891,991 pounds of lead was produced representing a 36% increase from the previous quarter and an increase of 52% compared to the same quarter in the previous year. Also, 409 ounces of gold was produced, representing an increase of 21% compared to the previous quarter and an increase of 27% compared to the third quarter of 2010.”
