First Majestic Silver Corp. · TSX:AG
First Majestic Silver — Investor Presentation (November 2017)
36 slides from First Majestic Silver's investor presentation, November 2017
Slide 1: First Majestic Silver Corp.
FIRST MAJESTIC SILVER CORP. TSX: FR | NYSE: AG | FWB: FMV | BMV:AG
Slide 2: Forward-looking statements
2 Certain statements contained herein regarding First Majestic Silver Corp. (the “Company”) and its operations constitute “forward-looking statements” within the meaning of the United States Private Securities Litigation Reform Act of 1995 and applicable Canadian securities legislation. All statemen
Slide 3: Pure silver producer in Mexico
3 Pure Silver Producer ~70% of revenue from Silver (18% Au, 10% Pb, 2% Zn) One Country: Mexico World’s largest silver producing country Multi-Asset Producer Six producing silver mines; 100% owned Future Growth Two advanced stage silver projects Goal Achieve annual production of 20M+ Ag oz
Slide 4: Market capitalization and share data
4 Market Capitalization: US$1.2B Shareholders: Shares Outstanding: 165.7M (FD 175.9M) 3M Avg. Daily Volume: 4.7M shares ~ US$33M (NYSE & TSX) Cash & Cash Eqv: US$120.8M Production Growth Cost Reductions
Slide 5: Broad depth of people
5 BROAD DEPTH OF PEOPLE • ~ 3,900 direct employees • Internally design, develop and construct 100% of our silver projects • Awarded ‘Socially Responsible Company’ for nine consecutive years, 2008 to 2016, from the Centro Mexicano para la Filantropia (CEMEFI)
Slide 6: Q3 2017 financial highlights
6 Q/Q Y/Y Full Year (All shown in $USD) Q3 2017 Q2 2017 Q3 2016 2016 Revenue 61.9M 60.1M 79.3M 278.1M Mine Operating Earnings 3.2M 1.4M 20.0M 49.2M Net Earnings after taxes (1.3M) 1.4M 8.1M 8.6M Earnings per share - Adjusted1 0.00 (0.02) 0.07 0.12 Operating Cash Flows, before movements in WC 17.7M 1
Slide 7: Mines and projects in Mexico
7 IN PRODUCTION 1 La Encantada 2 La Parrilla 6 3 San Martin 1 4 La Guitarra 5 Del Toro 9 6 Santa Elena 2 7 5 8 PROJECTS 3 7 Plomosas 4 8 La Luz EXPLORATION 9 La Joya
Slide 8: Silver production growth history
8 30 Silver Ounces Only 25 Silver Eqv. Ounces (M) 20 15 10 5 0 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017E 2-4 Year Goal
Slide 9: 2016 production and costs by mine
9 Mine Silver Oz (M) Silver Eqv Oz (M) Cash Costs ($) AISC ($) Santa Elena 1.7 4.3 1.93 5.29 La Encantada 1.7 1.7 12.03 14.42 La Parrilla 1.3 1.9 11.08 16.50 Del Toro 0.9 1.9 4.10 9.18 San Martin 1.3 1.7 6.35 8.79 La Guitarra 0.4 0.7 11.66 19.43 Totals: 7.4 12.1 $7.51 $14.10 *Certain amounts shown m
Slide 10: 2017E production and cost guidance
10 Mine Silver Oz (M) Silver Eqv Oz (M) Cash Costs ($) AISC ($) Santa Elena 2.2 - 2.3 5.2 - 5.5 2.58 - 2.85 6.23 - 6.71 La Encantada 2.3 - 2.5 2.3 - 2.5 11.06 - 12.23 14.68 - 16.07 La Parrilla 1.8 - 1.9 2.5 - 2.7 9.36 - 10.35 14.37 - 15.65 Del Toro 1.3 - 1.4 2.5 - 2.7 3.33 - 3.68 9.32 - 10.00 San Ma
Slide 11: AISC trend and 2017E guidance
11 Operating Cost Sustaining Capex G&A Other Excluding $20.00 non-cash items: 2017E AISC $15.73 $13.48 - $14.52 $15.00 $14.58 $12.90 $12.21 $10.52 $10.00 $14.40 to $15.50 $5.00 $- Q3'16 Q4'16 Q1'17 Q2'17 Q3'17 2017E 1) AISC is a non-GAAP measure and was calculated based on guidance provided by the W
Slide 12: 2017E capex
12 $61M Expansionary $46M Sustaining $44M - U/G Development 2017E CAPEX include: $22M - Exploration $37M - PP&E $4M - Corporate Projects
Slide 13: Exploration metres and 2P silver ounces
13 Our largest drill program ever! 2P Silver Ounces (M) Exploration Metres Also produced 61M oz of Silver over this period
Slide 14: 2017 total capital budget
14 2017 Capital Budget Producing Mines (*CAPEX US$) Exploration Development PP&E Total La Encantada 2M 6M 13M 21M Santa Elena 3M 11M 6M 20M La Parrilla 4M 7M 5M 16M La Guitarra 3M 7M 4M 15M San Martin 3M 4M 5M 13M Del Toro 2M 6M 4M 12M Total 18M 42M 37M 97M Non-Producing Mines Exploration Developmen
Slide 15: Tailings reprocessing key metrics
15 Dust Feeding Exhaust Fans Collectors System Key Metrics Base Case* Tailings Life (LOM) 6.2 years Dryer Throughput 2,000 tpd LOM Avg. Grade 110 g/t LOM Avg. Recovery 64% Cyclones LOM Avg. Production 1.5M oz/yr Roasting LOM Total Production 9.3M oz Furnace Costs and Capital Plates Cooler Processing
Slide 16: Cyanidation optimization and recovery goal
16 Microbubbles Cyanide Mill & Grind Oxygen Lime feed pH monitoring & consumption optimization Injection Fine Grinding Target Recovery Goal = 90% Every 1% increase ~ 100K Ag oz
Slide 17: Microbubbles flotation technology
17 • Improves the metallurgical performance of our plants by pairing fine grinding and microbubbles • Pilot test results showed silver recoveries from flotation improve 5% to 10% • Installation expected to begin at Del Toro, La Parrilla, La Guitarra and San Martin in 2018 Microbubble test column Typ
Slide 18: Ancient technology, cutting edge
18 Ancient Technology Cutting Edge 100 Year Old Ball Mill Vertical Mill
Slide 19: Silver purity increasing to 75% in 2018
19 Our Silver purity is INCREASING to 75% in 2018 with the La Encantada Roaster 1) Revenue forecasts calculated using BMO metal price assumptions of $17.29/oz silver, $1,216/oz gold, $2.64/lb copper, $1.07/lb lead and $1.43/lb zinc. 2) Source: BMO
Slide 20: Share price performance
20 AG +36% AG +182% AG +407% AG ? AU -24% AU +69% AU +105% AU ?
Slide 21: Leverage to silver
NYSE: AG EWB: FMV. BMV: AG LEVERAGE TO SILVER Track Annotate News Zoom Normalized As Of 2008 r | 284.1534 SPOT SILVER 48.9693 Source: Bloomberg FIRST MAJESTIC
Slide 22: Upcoming catalysts
22 Commissioning of roasting circuit at La Encantada - expected to add 1.5 million Ag ounces per year La Guitarra expansion decision to 1,000 tpd Continued improvements in metallurgical recoveries through implementation of microbubbles, fine grinding & other R&D Connection to power grid at S
Slide 23: Our strategy
23 Our Strategy… One Metal One Country Continue to Acquire the Best Talent in Mexico Build through Development and Acquisitions Become a 20+ Million Ounce Producer
Slide 24: Reliance on technology and silver
S S en tes ne Sy & Thess ua > et Ea b H “AS WE BECOME MORE RELIANT ON TECHNOLOGY... WE BECOME MORE RELIANT ON SILVER’
Slide 25: Natural gas generators
25 Natural Gas Generators
Slide 26: Research coverage and institutional holders
26 Research Coverage Institution % S/O Bank of Montreal - Andrew Kaip Van Eck (GDXJ) 7.1% Cormark - Richard Gray Van Eck (GDX) 4.3% Echelon Wealth Partners - Matt O'Keefe The Vanguard Group 2.1% National Bank Financial - Shane Nagle Connor Clark & Lunn 1.9% Raymond James - Chris Thompson Blackrock 1
Slide 27: Santa Elena
27 Plant Operations Mill Throughput: 2,750 tpd 2017E Production: 2.2M – 2.3M Ag oz (5.2M – 5.5M AgEq oz) 2017E AISC: $6.23 - $6.71 Reserves & Resources Proven & Probable: 11.1M Ag + 174K Au oz Measured & Indicated: 12.9M Ag + 209K Au oz Inferred: 2.0M Ag + 39K Au oz *M&I Resources are inclusive of R
Slide 28: La Encantada
28 Plant Operations Mill Throughput: 3,000 tpd 2017E Production: 2.3M – 2.5M Ag oz 2017E AISC: $14.68 – $16.07 Reserves & Resources Proven & Probable: 31.0M Ag oz Measured & Indicated: 31.9M Ag oz Inferred: 5.8M Ag oz *M&I Resources are inclusive of Reserves • Recently installed natural gas Quarter
Slide 29: La Parrilla
29 Plant Operations Mill Throughput: 1,500 tpd 2017E Production: 1.8M – 1.9M Ag oz (2.5M – 2.7M AgEq oz) 2017E AISC: $14.37– $15.65 Reserves & Resources Proven & Probable: 11.5M Ag oz Measured & Indicated: 13.0M Ag oz Inferred: 32.3M Ag oz *M&I Resources are inclusive of Reserves • Connecting the mi
Slide 30: Del Toro
30 Plant Operations Mill Throughput: 1,000 tpd 2017E Production: 1.3M – 1.4M Ag oz (2.5M – 2.7M AgEq oz) 2017E AISC: $9.32 - $10.00 Reserves & Resources Proven & Probable: 9.7M Ag oz Measured & Indicated: 15.6M Ag oz Inferred: 24.4M Ag oz *M&I Resources are inclusive of Reserves Quarter End • Curren
Slide 31: San Martin
31 Plant Operations Mill Throughput: 1,000 tpd 2017E Production: 1.7M – 1.8M Ag oz (2.2M – 2.3M AgEq oz) 2017E AISC: $9.46 - $10.29 Reserves & Resources Proven & Probable: 17.2M Ag oz Measured & Indicated: 21.9M Ag oz Inferred: 32.6M Ag oz *M&I Resources are inclusive of Reserves Quarter End Full Ye
Slide 32: La Guitarra
32 Plant Operations Mill Throughput: 400 tpd 2017E Production: 0.6M – 0.7M Ag oz (0.9M – 1.0M AgEq oz) 2017E AISC: $19.64 - $21.28 Reserves & Resources Proven & Probable: 9.1M Ag + 49K Au oz Measured & Indicated: 9.8M Ag + 53K Au oz Inferred: 6.3M Ag + 31K Au oz *M&I Resources are inclusive of Reser
Slide 33: Mineral reserves
33 (1) Mineral Reserves have been classified in accordance with the Canadian Institute of Mining, Metallurgy and Petroleum (“CIM”) Definition Standards on Mineral Resources and Mineral Reserves, whose definitions are incorporated by reference into NI 43-101. (2) Metal prices considered for Mineral R
Slide 34: Measured and indicated mineral resources
34 Measured and Indicated Mineral Resources are reported inclusive of Mineral Reserves) *See footnotes on next page
Slide 35: Mineral resources footnotes
35 (1) Mineral Resources have been classified in accordance with the CIM Definition Standards on Mineral Resources and Mineral Reserves, whose definitions are incorporated by reference into NI 43-101. (2) In all cases, metal prices considered for Mineral Resource estimates were $19.00 /oz Ag, $1,300
Slide 36: Plomosas and La Luz historical estimates
36 Plomosas Historical Estimates Project Category Mineral Type k tonnes Ag (g/t) Au (g/t) Pb (%) Zn (%) Ag (k Oz) Ag-Eq (k Oz) Not in accordance with PLOMOSAS CIM Standards Sulphides (UG) 896 192 0.8 2.1 3.4 5,500 11,000 (1) Plomosas historical estimates figures are taken from Grupo México’s estimat
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