FULL DISCLOSURE: This is sponsored content for First Majestic Silver Corp.
First Majestic Silver (TSX: AG) (NYSE: AG) has continued to see its revenue profile improve on a sequential basis, thanks in part to the rising price of precious metals. The company reported its third quarter financial results this morning, headlined by topline revenues of $146.1 million, a 10% increase on a year over year basis, and a 7% sequential improvement.
The increase in revenue was off the back of producing 5.5 million silver equivalent ounces in the third quarter, a 4% sequential increase. Production consisted of 2.0 million silver ounces and a further 41,761 gold ounces.
Cash flow from operations also improved, hitting $39.8 million in Q3, versus $14.1 million in the year ago period, which First Majestic said was a result of lower general and administrative expenses and restructuring costs, and an improvement in mine operating earnings. Free cash flow meanwhile improved to $31.3 million, versus $6.4 million in both the second quarter and Q3 2023.
All in sustaining costs for the third quarter came in at $21.03 an ounce, a 3% decline from the $21.64 per ounce cost recorded in the second quarter. Average realized price per silver equivalent ounce meanwhile continued to rise, climbing from $27.81 an ounce in Q2 to $29.84 an ounce in the third quarter.
Mine operating earnings in the third quarter improved to $28.5 million, an 84% sequential increase from $15.5 million in Q2. The substantial increase was attributed to First Majestic’s Santa Elena operations, where operating earnings improved 67%, driven by higher average realized silver prices.
EBITDA during the quarter also improved, hitting $36.9 million, a 71% sequential improvement over the $21.6 million figure recorded in the second quarter. Adjusted EBITDA meanwhile amounted to $39.8 million, a 49% sequential improvement over the $26.8 million reported in the second quarter, which was attributed to improved operating earnings and lower restructuring costs.
On the balance sheet side of things, cash and cash equivalents improved to $154.7 million, versus $152.7 million as of the end of the second quarter, while working capital improved to $238.2 million. A $0.0048 per share dividend meanwhile was declared for the third quarter for shareholders of record as of November 15.
The third quarter also saw the company enter a transaction to acquire Gatos Silver (NYSE: GATOS) in a transaction valued at $970 million. The acquisition, on a pro-forma basis, is expected to push annual production to 30-32 million silver equivalent ounces for First Majestic.
First Majestic Silver last traded at $9.13 on the TSX.
FULL DISCLOSURE: First Majestic Silver Corp is a client of Canacom Group, the parent company of The Deep Dive. The author has been compensated to cover First Majestic Silver Corp on The Deep Dive, with The Deep Dive having full editorial control. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security.
