First Majestic reports record Q1 earnings on higher silver prices

Vancouver-based First Majestic Silver (TSX: FR, Amex: AG) posted record quarterly earnings of Cdn$23.9mn (US$24.6mn) in 1Q11 compared with Cdn$0.4mn year-on-year due to a 95% increase in average realized silver prices, the company said in its latest financial statements. Revenues came in at Cdn$55.3mn, up 211% over Cdn$17.7mn in the first quarter of 2010 on higher prices and increased production. Silver equivalent produced was up 13% year-on-year to almost 1.83Moz. Cash costs rose 8% to Cdn$8.26/oz from Cdn$7.67/oz due to increased power costs and the appreciation of the Mexican peso relative to the US dollar, the company said. Mine operating earnings were Cdn$35.6mn in the quarter, up 397% over Cdn$7.2mn in the same quarter last year due to the increase in production and silver sales prices which increased from Cdn$16.73 in 1Q10 to Cdn$32.60 in the first quarter. Smelting and refining charges decreased to 4% of gross revenue in 2011 compared to 17% of gross revenue in the first quarter of 2010. First Majestic has set 2011 guidance at 7.5Moz silver or 8.0Moz of silver equivalent as the La Encantada mill in Mexico has its first full year of commercial production. The expansion currently underway at the compatriot La Parrilla operation is expected to begin to ramp up in Q3 from 850t/d to 1,600t/d by year-end. The company also has the San Martín operation and is building the new Del Toro operation, both in Mexico. To read the full results, go to this link