First Majestic Silver Corp T.AG

Alternate Symbol(s): AG

Metals & Mining Silver

First Majestic Silver Corp. is a mining company. It is focused on silver and gold production in Mexico and the United States. It owns and operates the San Dimas Silver/Gold Mine, the Santa Elena Silver/Gold Mine, and the La Encantada Silver Mine, and a portfolio of development and exploration assets, including the Jerritt Canyon Gold project located in northeastern Nevada, United States. It also owns and operates its own minting facility, First Mint, LLC, and offers a portion of its silver production for sale to the public. The San Dimas Silver/Gold Mine is located over 130 kilometers (km) northwest of the city of Durango, Durango State, Mexico and consists of 71,868 hectares of mining claims located in the states of Durango and Sinaloa, Mexico. The Santa Elena Silver/Gold Mine is located over 150 km northeast of the city of Hermosillo, Sonora, Mexico. The La Encantada Silver Mine is an underground mine located in the northern Mexico State of Coahuila, 708 km northeast of Torreon.

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First Majestic Silver Corp

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Post by Hourglass11on May 10, 2012 2:03pm

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Post# 19895523

1st Quarter earnings

News Release - Thursday, May 10, 2012
First Majestic Reports Strong Earnings of $26.4M in Q1 2012, Up 10% compared with Q1 2011; Revenues top $57.8M, Up 5% from Q1 2011

FIRST MAJESTIC SILVER CORP. (AG: NYSE; FR: TSX) (the "Company" or "First Majestic") is pleased to announce the unaudited condensed consolidated interim financial results for the Company for the first quarter ending March 31, 2012. The full version of the financial statements and the management discussion and analysis can be viewed on the Company's web site at www.firstmajestic.com or on SEDAR at www.sedar.com and on EDGAR at www.sec.gov.

2012 FIRST QUARTER HIGHLIGHTS

Earnings per Share (basic) amounted to
.25, representing a 5% increase from Q1 2011
Cash Flow per share (non-GAAP) of
.35, unchanged from Q1 2011
Adjusted Earnings per Share (non-GAAP) amounted to
.26 after removing an unrealized loss on silver futures
Gross Revenue of $57.8 million showing a 5% increase from Q1 2011
Net Earnings after Taxes amounted to $26.4 million, a 10% increase from Q1 2011
Mine Operating Earnings totaling $35.7 million
Total Production Cost per Tonne was $29.24, a decrease of 3% from Q1 2011
Total Cash Cost was $8.96 per ounce, up 8% compared to Q1 2011
Silver ounces produced increased by 3% to 1,826,803 compared to 1,769,208 ounces in Q1 2011
Cash and Cash Equivalents now stand at $85.3 million and Working Capital of $108.3 million
In addition to Cash, First Majestic was carrying 596,520 PSLV (Sprott Physical Silver Trust) units at quarter end

2012 FIRST QUARTER HIGHLIGHTS TABLE

(1) Payable Silver Ounces Produced is equivalent to Silver Ounces Produced less metal deductions from smelters and refineries.
(2) The Company reports non-GAAP measures which include Total Cash Costs per Ounce, Total Production Cost per Tonne, Average Revenue per Payable Equivalent Ounces Sold and Cash Flow Per Share Before Movements in Working Capital. These measures are widely used in the mining industry as a benchmark for performance, but do not have a standardized meaning and may differ from methods used by other companies with similar descriptions. See Reconciliation to IFRS on pages 13 and 14.

Keith Neumeyer, President & CEO of First Majestic, stated, "The first quarter was another successful period for the Company as it continues its growth objective. Our strong financial position ensures the timely construction of our Del Toro mine with the goal of initial production scheduled in the fourth quarter of this year. Also, an updated NI 43-101 and Preliminary Economic Assessment (PEA) on Del Toro is scheduled to be released in the coming weeks."

"While cost inflation continues to be a strong headwind for the mining industry, First Majestic's operational team has done an exceptional job maintaining costs. On a year-over-year basis, total production costs have been reduced by 3% to an industry-leading $29.24 per tonne while many of our peers have experienced cost increases ranging between 25% to 50% per tonne. First Majestic remains on track to meet its production guidance for 2012 and management plans to provide further guidance regarding the Silvermex acquisition once the deal closes over the coming months."

FINANCIAL HIGHLIGHTS

The Company generated revenues of $57.8 million for the quarter ended March 31, 2012, an increase of $2.5 million or 5% compared to $55.3 million in the first quarter of 2011 based on higher production totals compared with the first quarter 2011.
Recognized mine operating earnings of $35.7 million, which was consistent with $35.6 million in the first quarter of 2011.
Net earnings after taxes for the three months ended March 31, 2012 were $26.4 million compared to $23.9 million in the first quarter of 2011, an increase of 10%.
Earnings per share ("EPS") for the three months ended March 31, 2012 was
.25, an increase of 5% compared to
.24 for the three months ended March 31, 2011.
During the quarter, the Company converted the unrealized loss of $4.2 million related to the prior quarter's one million silver ounce long position into gains of $5.475 million. At the end of the first quarter, the Company was long 500,000 ounces at an average price of $34.063 per ounce which was marked to market at $32.484 at March 31, 2012 resulting in an unrealized loss of
.8 million.
Net earnings for the quarter ended March 31, 2012 reflects the unrealized loss on silver futures of
.8 million. Adjusted EPS (a non-GAAP measure) after removing the unrealized loss on silver futures was
.26 for the quarter.
In January 2012, the Company purchased 757,500 trust units of Sprott Physical Silver Trust (PSLV) at $13.20 per unit for a total cost of $9,999,000. During Q1 2012, the Company also sold 160,980 trust units at an average price of $15.45 per unit for total proceeds of $2.5 million and realized a $362,677 gain on the sale. At March 31, 2012, there was an unrealized gain of $255,601 recognized related to the remaining 596,520 trust units, revalued at $13.63 per unit.
Cash flows from operations before movements in non-cash working capital and income taxes in the first quarter of 2012 increased by 6% to $37.1 million (
.35 per share) compared to $35.0 million (
.35 per share) in first quarter of 2011.
Cash cost per ounce (a non-GAAP measure) for the first quarter of 2012 was $8.96, an increase of 8% compared to $8.26 in the first quarter of 2011. Cash cost was higher primarily due to lower grades and recoveries at the La Encantada mine in the first quarter. Since installing a new ball mill in mid-April, recoveries have been improving due to a higher proportion of fresh ore being processed.
Production costs per tonne decreased 3% to $29.24 per tonne compared to $30.04 per tonne in the first quarter of 2011, reflecting production cost decreases at the La Parrilla mine associated with its increased scale of production.
The new 1,000 tpd cyanidation circuit at the La Parrilla Silver Mine was commissioned effective March 1, 2012. The new parallel 1,000 tpd flotation and 1,000 tpd cyanidation circuits (2,000 tpd combined), which replaced the old 850 tpd mill, are now fully operational and were operating at an average throughput of 1,850 tpd in the month of March 2012.

IN SUMMARY

First Majestic has experienced another solid quarter of earnings and cash flow due in part to an increase in total production to 2,007,219 silver equivalent ounces, an increase of 10% compared to 1,825,366 silver equivalent ounces produced in the first quarter of 2011. Silver production remained robust during the first quarter with 1,826,803 ounces of silver being produced, representing an increase of 3% compared to 1,769,208 ounces of silver produced in the first quarter of 2011.

At the La Parrilla Silver Mine, the recently expanded 1,000 tpd oxide circuit was commissioned on March 1, 2012 allowing for increases in production of silver doré bars. The second quarter of 2012 will mark the first full quarter of commercial operation for both expanded production circuits (1,000 tpd flotation + 1,000 tpd cyanidation). As a result, cash costs per ounce at La Parrilla are expected to decrease due to the increased scale of production to 2,000 tpd, and a higher portion of silver doré which has a lower refining cost compared to concentrates.

At the La Encantada Silver Mine, the recent installation of the third ball mill is showing a positive effect on silver recoveries. The third ball mill became operational on April 19, 2012 with the objective of increasing recoveries and average head grades by enabling increases in the rate of production of fresh mine ore. Due to ore stockpiling over the past few months and successful developments in the mine, management has decided to bring the fresh ore production component to 1,800 tpd compared with the previous guidance of 1,500 tpd. In addition, the metallurgical testing continues with final assessment of economics. The mill construction progress at the Company's exciting Del Toro Silver Mine remains on track for initial production in the fourth quarter of 2012.

First Majestic is a producing silver company focused on silver production in México and is aggressively pursuing its business plan of becoming a senior silver producer through the development of its existing mineral property assets and the pursuit through acquisition of additional mineral assets which contribute to the Company achieving its aggressive corporate growth objectives.

FOR FURTHER INFORMATION contact info@firstmajestic.com, visit our website at www.firstmajestic.com or call our toll free number 1.866.529.2807 .

FIRST MAJESTIC SILVER CORP.

"signed"
Keith Neumeyer, President & CEO