First Majestic Silver shares slide 16.9% after mining suspension

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First Majestic Silver shares slide 16.9% after mining suspension

Shares of silver and gold miner First Majestic Silver Corp AG are buried in Monday's after-hours session after the company announced plans to temporarily suspend all mining activities at one of its gold mines.

What Happened: First Majestic said it will suspend mining activities, reduce investments and reduce its workforce at Jerritt Canyon. Since acquiring the mine nearly two years ago, the company has been focused on increasing mining rates, but despite its efforts, rates have remained low, while costs per ounce have remained elevated.

First Majestic blamed its struggles on contractor inefficiencies and high costs, inflationary cost pressures, lower-than-expected head grades and multiple extreme weather events.

Jerritt Canyon was 21% of the company's total revenues last year.

Processing of the remaining surface stockpiles will take place over the next couple of months, while mining activities have temporarily stopped. Keith Neumeyer, president and CEO of First Majestic, said that the Company will continue to explore both near-mine and potential regional greenfield targets to grow Jerritt Canyon's resources.

As a result of the mining suspension, the company said its previous production and cost guidance for Jerritt Canyon was unreliable. The guidance is expected to be released in July.

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AG Price Action: First Majestic shares were down 16.9% after hours at $6.18 at the time of publication, according to Benzinga Pro.