First Majestic Silver Corp. (NYSE: AG) (TSX: FR) temporarily suspended all mining activities and reduced its workforce at its Jerritt Canyon, Nevada operations which led to a stock drop in the days following.
On Monday the company said it aims to suspend mining operations and process aboveground stockpiles through the plant, but will continue exploration activities to find new discoveries, optimize mining methods and reduce costs.
The processing plant will be modernized to withstand severe weather conditions. Previous production and cost guidance for Jerritt Canyon can no longer be relied upon, and a revised consolidated production and cost guidance, including capital investments, will be published in July.
After the news, company stock dropped from $10.18 to $7.69 and on Wednesday it closed at $8.60 on the Toronto Stock Exchange.
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“The decision to temporarily suspend mining activities at Jerritt Canyon, which represented approximately 21 per cent of the company’s 2022 revenue, was driven by our goal to produce profitable ounces across the company,” CEO Keith Neumeyer said in a statement.
“Since the acquisition in 2021, we have invested heavily at Jerritt Canyon and have been successful in executing several key projects.”
The company renovated and reopened the West Generator and Saval II mines and made improvements to the systems that handle the emissions from the roaster and refinery so that it meets all air quality standards set by the government.
Although mining has temporarily halted, the company will process the remaining surface stockpiles over the next few months. The company plans to explore nearby areas for potential mining opportunities to increase Jerritt Canyon’s resources, which will make it more profitable when it eventually resumes operations.
First Majestic is a mining company that operates in Mexico and the United States, focusing on producing silver and gold. Their portfolio includes the San Dimas Silver/Gold Mine, the Santa Elena Silver/Gold Mine, the La Encantada Silver Mine, and the Jerritt Canyon Gold Mine.
The company also offers its silver production for sale to the public through its Bullion Store, which provides various forms of silver such as bars, ingots, coins, and medallions at low premiums.