Yahoo Finance First Majestic (AG) Halts Mining Operations at Jerritt Canyon
First Majestic Silver Corp. AG announced its decision to temporarily suspend all mining operations and lower its workforce at Jerritt Canyon Mine (which generated about 21% of AG's 2022 revenues). The decision to halt mining activities at the mine is in sync with the company’s aim to produce profitable ounces across all businesses.
Since acquiring the Jerritt Canyon Gold Mine in 2021, AG has attempted to raise underground mining rates to sustainably feed the processing plant at a minimum of 3,000 tpd in order to generate a free cash flow. However, mining rates remained below the target, while cash costs per ounce remained higher than anticipated. This was mainly driven by ongoing challenges like contractor inefficiencies and high costs, inflationary cost pressures, and extreme weather conditions in northern Nevada.
Even though mining operations are being ceased, effective immediately, the remaining surface stockpiles will be processed over the next few months. First Majestic will keep exploring near-mine and potential regional greenfield targets to expand Jerritt Canyon's resources and potentially improve the economics for the eventual restart of operations. The company expects to continue the exploration activities throughout 2023.
During the suspension, First Majestic intends to explore new regional finds, and increase known reserves and resources. It plans to further analyze the optimization of bulk mining and cost-effective mining techniques.
The company also recently announced that it received regulatory approval to extend its share repurchase program for the next 12 months through a normal course issuer bid in the open market via the facilities of the Toronto Stock Exchange or alternative Canadian trading systems.
First Majestic has the ability to repurchase up to 5,000,000 of its common shares under the Share Repurchase Agreement, which represents 1.83% of the 274,479,942 issued and outstanding shares as of Mar 10, 2023.
In the fourth quarter of 2022, the company reported an adjusted loss per share of 7 cents in fourth-quarter 2022, wider than the Zacks Consensus Estimate of a loss of 4 cents mainly due to lower prices. Revenues plunged 28% year over year to $148 million in the quarter.
Price Performance
Shares of the company have lost 46.9% in the past year compared with the industry’s fall of 30.1%.
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Zacks Rank & Stocks to Consider
First Majestic currently carries a Zacks Rank #4 (Sell).
Some better-ranked stocks in the basic materials space are CalMaine Foods, Inc. CALM, Reliance Steel & Aluminum Co. RS and Alpha Metallurgical Resources AMR. CALM and RS currently flaunt a Zacks Rank #1 (Strong Buy), and AMR carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for CalMaine Foods’ fiscal 2023 earnings per share is pegged at $16.75, suggesting 515.8% growth from the year-ago reported figure. Earnings estimates have moved 106.8% north in the past 60 days. CALM has a trailing four-quarter earnings surprise of 15.3%, on average. Its shares have gained 9.6% in the past year.
The Zacks Consensus Estimate for Reliance Steel’s earnings per share is pegged at $20.86 for 2023. Earnings estimates have been revised 16.1% upward in the past 60 days. RS has a trailing four-quarter average surprise of 13.4%, on average. The company has gained 26.7% in a year.
The Zacks Consensus Estimate for Alpha Metallurgical’s 2023 earnings per share is pegged at $46.09. Earnings estimates have moved 56.5% north in the past 60 days. AMR’s shares have gained 14.1% in the past year.
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Alpha Metallurgical Resources, Inc. (AMR) : Free Stock Analysis Report
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First Majestic Silver Corp. (AG) : Free Stock Analysis Report
