Shares of silver and gold miner First Majestic Silver Corp AG are getting 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 trim its workforce at Jerritt Canyon, effective immediately. 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 attributed much of its struggles to contractor inefficiencies and high costs, inflationary cost pressures, lower-than-expected head grades and multiple extreme weather events.
Jerritt Canyon represented 21% of the company’s total revenues last year.
“While mining activities have temporarily stopped, processing of the remaining surface stockpiles will occur for the next couple of months. The Company will continue exploring both near-mine and prospective regional greenfield targets to grow Jerritt Canyon’s resources, which we believe will significantly enhance the economics for the eventual restart of operations,” said Keith Neumeyer, president and CEO of First Majestic.
As a result of the mining suspension, the company said its previous production and cost guidance for Jerritt Canyon is unreliable. Revised guidance is expected to be released in July.
AG Price Action: First Majestic shares were down 16.9% after hours at $6.18 at time of publication, according to Benzinga Pro.
Photo: Dariusz Sankowski from Pixabay.
Image and article originally from www.benzinga.com. Read the original article here.