On Friday, BMO Capital maintained its Market Perform rating on First Majestic Silver Corp. (FR:CN) (NYSE: NYSE:AG), with a steady price target of Cdn$10.00. The firm's latest commentary followed First Majestic's disclosure of its second-quarter production figures, which showcased a silver equivalent output of 5.3 million ounces. This production level was broadly in alignment with BMO Capital's projection of 5.4 million ounces.
The company's performance was bolstered by strong production at Santa Elena and La Encantada, which surpassed the firm's expectations. However, these gains were somewhat offset by lower-than-anticipated production at San Dimas, attributed to ongoing labor negotiations.
Despite these challenges, First Majestic adjusted its 2024 production outlook to reflect the robust results from Santa Elena and La Encantada, while also considering the anticipated labor inefficiencies at San Dimas into the third quarter.
The overall guidance for silver-equivalent production remained largely unaltered. Nevertheless, the company did report a minor increase in its cost guidance. The adjustment was attributed to the strength of the Mexican peso and the persistent inefficiencies at the San Dimas mine.
First Majestic's update indicates a proactive response to both the positive developments at certain operations and the challenges faced at San Dimas. The company's efforts to refine its production guidance for 2024 demonstrate a commitment to transparency and strategic planning in the face of fluctuating operational dynamics.
In other recent news, First Majestic Silver Corp. reported a 7% increase in silver production and a 9% rise in gold output in the second quarter of 2024 from its three operating mines in Mexico.
The Santa Elena Silver/Gold Mine led the production increase, and the La Encantada Silver Mine saw a 28% surge in silver production due to a new water source, while the San Dimas Silver/Gold Mine experienced a slight downturn in production. The company has revised its 2024 guidance, maintaining a consolidated production forecast of 21.4 to 22.6 million silver equivalent ounces.
First Majestic also announced significant findings of silver and gold mineralization at its San Dimas Silver/Gold Mine in Mexico. The exploration program, aimed at testing new mineral targets and converting resources to reserves, has yielded positive results, particularly within the central and western parts of the property.
Additionally, BMO Capital Markets has increased its price target for First Majestic from Cdn$8.50 to Cdn$10.00, following the company's first-quarter earnings report. The company reported a loss of Cdn$0.06 per share, but its revenue and cost of sales were in line with estimates set by BMO Capital. The company's all-in sustaining costs for the first quarter were reported at $21.53 per ounce of silver equivalent, a rise from $18.50 per ounce in the previous quarter.
InvestingPro Insights
In light of First Majestic Silver Corp.'s recent production report and outlook, InvestingPro data and tips offer additional context for investors. With a market capitalization of $1.78 billion and a notable six-month price uptick of 30.97%, the company's stock performance has caught investors' attention. Despite a challenging last twelve months, analysts predict that First Majestic will become profitable this year, which could be a pivotal turn for the company's financial health.
InvestingPro Tips suggest that First Majestic's liquid assets exceed its short-term obligations, providing a cushion for potential operational hiccups. Additionally, the company operates with a moderate level of debt, which may afford it some flexibility in managing its financial structure amidst the ongoing labor negotiations at the San Dimas mine. These insights, coupled with the anticipated net income growth this year, could be promising signs for investors.
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