First Majestic Silver Corp. (TSX: FR.TO) (NYSE: AG) reviewed 9-30-2020
Market Cap: $2.1B
Share Price: $9.55
Shares outstanding: 209.7 M
Cash on hand: $95 M (Q2 2020) Credit facility: $65 M
Long-term Debt: $139.64 M
Current operations: Yes Administrative Expenses: $5.85 M (Q2 2020)
Insiders: Minimal < 400,000 shares
Website: firstmajestic.com
Investor Presentation: https://www.firstmajestic.com/investors/presentation/
Total Q2 2020 production for the company was 1,834,575 ounces of silver and 15,764 ounces of gold, impacted by COVID-19 response in Mexico. Revenues were down for the 3- and 6-month periods leading to a loss of (0.20) for the first six months of 2020
AISC of $18.57 per ounce of silver produced (Q2 2020)
Location: Company HQs in Vancouver. Operates three producing mines in Mexico (San Dimas, Santa Elena, La Encantada), seven developmental & exploration properties and non-producing assets
Fully permitted: Yes
Type: Underground and open-pit; silver and gold, primarily silver
Opinion: Shares of First Majestic could have performed better during silver’s 2020 bull run from just below $18 per ounce on 1 January to August’s peak at $29 per ounce
The company has a negative (0.83%) return year-to-date, although spot silver is up 36%
AISC(s) appear high at all three mines, and First Majestic sold silver at below AISC in Q2 2020
Costs of care & maintenance for non-operating mines are high at 1/3 of the total operating budget
Recent tax dispute with Mexico
Bottom line:
- Investor sentiment is slightly negative here, better opportunities in silver elsewhere?
- I hold a position of 8.2% portfolio weighting, and expect share higher prices in 4Q2020 based on my expectation that Silver prices will lift