First Majestic Silver Corp. (AG) Earnings Call Transcript & Summary

Thank you for standing by. This is the conference operator. Welcome to the First Majestic Silver Fourth Quarter Production News and 2023 Guidance Conference Call. [Operator Instructions] And the conference is being recorded. [Operator Instructions] I would now like to turn the conference over to Mr. Keith Neumeyer, President and Chief Executive Officer. Please go ahead.

Welcome, everyone, to today's year-end production numbers and our 2023 go-forward plans. Before I get into that, I'll -- we're welcomed by a number of our staff members, COO, steve Holmes, and David Soares, our CEO -- our CFO, are joining us and Connie Lillico, who will just quickly read a disclaimer.

Prior to us beginning today, I'll read our disclaimer and forward-looking statements. Certain statements contained in this conference call regarding the company and its operations constitute forward-looking statements in accordance with applicable Canadian and U.S. securities laws. All statements that are not historical facts, including, without limitation, statements regarding future estimates, plans, objectives, assumptions or expectations of future performance constitute forward-looking statements. We caution you that such forward-looking statements involve known and unknown risks and uncertainties that could cause actual results and future events to differ materially from those anticipated in such statements. Such risks and uncertainties include the duration and effects of the coronavirus and any other pandemics on our operations and workforce and its effects on global economics and society, fluctuations in precious metal prices, unpredictable results of exploration activities, uncertainties inherent in the estimation of mineral reserves and resources; fluctuations in the cost of goods and services; problems associated with exploration and mining operations; changes in legal, social or political conditions in the jurisdictions where the company operates, lack of appropriate funding and other risk factors as discussed in the company's filings with the Canadian and U.S. securities regulatory agencies. Resources and production goals and forecasts may differ -- sorry, may be based on data insufficient to support them. The company expressly disclaims any obligation to update any forward-looking statements. Back to you, Keith.

Okay. Thanks, Connie. So First Majestic had a record 2022. We came in expecting to see a record and -- and we'll be seeing another record in 2023 as a result of increased gold production, we're expecting from Jerritt Canyon throughout the year. Q3 was really the best quarter of 2022. That's why we did have a little bit of a dip in Q4. Q4 was still a good quarter, but just Q3 was such a good quarter. It was happen to be the best quarter ever in company's history. We're now producing all the ore at Santa Elena through Ermitaño mine. Santa Elena mine has been shut down for 2024 where Santa Elena is where we're doing some drifting for exploration works and potential other development, and we're planning on bringing that back online in 2024, if all goes well. And the focus is really in 2022 as most people have been watching. The company has been Jerritt Canyon. It continues to be Jerritt Canyon throughout the next couple of quarters. We're optimistic that we'll start seeing it improve over that period of time. We're fortunate enough to finish the dual circuit at Santa Elena. We can talk a little bit more about if there's questions around it, but it's now being commissioned. And so far, it's working quite well. And we ended the year with 10 active drill rigs. For the year itself, as I said, we did produce a record, Silver-wise, 10.5 million ounces. The goal is really where we saw the big growth, with record gold production of 248,000 ounces of gold. And the expansion of the LNG plant in Santa Elena was also completed. And quite nicely, our retail store, many of you probably know, we sell our own silver ore over the e-commerce website. Welcome to go outlook for yourself, but our revenues this year exceeded $11.6 million, a new record after last year's record. So really, that's about it. There is some guidance as well, which we can cover. As I mentioned earlier, we are expecting a record 2023 gain. We're estimating somewhere around 33 million to 37 million ounces of production, may not move around 10 million, slightly north of 10 million ounces of silver and around midpoint, around 300,000 ounces of gold. So that's what 2023 is going to look like. Well, that's really about it for me. We can go -- hopefully, people have been lining up for questions. We're ready to take questions.

[Operator Instructions] The first question comes from Craig Hutchison with TD Securities.

With respect to the Jerritt Canyon, can you maybe just give us some more context in terms of what the kind of grade profile and throughput profile looks like for this year? And by my estimates, you need to be sort of north of 5 grams a tonne. It was obviously a challenging year in 2022. But any context around that would be appreciated.

Steve, are you there? Do you want to take that call? Take that question.

Sure. Yes, happy to, Keith. Yes, you're exactly right. At Jerritt Canyon for 2023, our mine grade is about 5.4 grams per tonne planned and the mill due to dilution impacts is 4.7. That's the current plan for 2023. The -- some interesting things at Jerritt Canyon that are going to be quite positive for us include in 2022, we had to mine quite a bit of random material as we developed through SSX and Smith mine, and we also rehabilitated West generator and also Salvador 2, which started delivering or at the very end of December, which is a higher grade resource but lower tonnage. So those 4 mines are going to be the basis of ore deliveries for Jerritt Canyon in 2023. And we expect that, combined with this new ore purchase agreement that we have in place will give the site a little over 3,000 tonnes a day of feed at close to 5 grams per tonne. So I hope that's helpful for you.

That is. Are you seeing those kind of grades already in Q1? Or is this really going to be a back-end weighted year at Jerritt Canyon?