First Majestic’s Plan To Stockpile Silver Pays Off As Company Reports Record Revenue In Q3

November 5, 2020

First Majestic Silver (NYSE: AG) announced record revenue in the third quarter as silver prices rallied to a seven-year high.

In its earnings report released Thursday, the silver producer said that revenue generated between July and September rose to $125.9 million, representing a 30% increase compared to the third quarter of 2019. The company’s plan to stockpile silver because of low prices appears to have paid off.

The company said it sold $25.0 million worth of stockpiled metal inventory held over from the prior quarter.

“We generated record quarterly revenues, cash flows and earnings as a result of higher metal prices, improved production rates, good cost control management and the decision to delay the sale of inventory from the prior quarter. Along with our record cash and working capital position, the company is poised to close out 2020 as one of its strongest years in the company’s 18-year history,” said Keith Neumeyer, president and CEO of First Majestic, in a statement.

The company reported adjusted earnings for the quarter was $25.7 million or $0.12 per share, up compared to $11.9 million or $0.06 per share reported in the third quarter of 2019.

The substantial earnings come as the company reported a 22% drop in production compared to last year. First Majestic said that it produced 5.2 million silver equivalent ounces in the third quarter, down from 6.6 million silver equivalent ounces produced during the same quarter of 2019.

Although production was down, so were costs. First Majestic said that all-in sustaining costs dropped 8% to $9.94 per payable silver ounce.

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The melting point for silver is 961.93 °C - 1235.08 °K

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