as part of our
The silver market continues to be a white knuckle ride with
volatility being the watch word of the day. The oscillations can be
gut-wrenching as we have warned about many times. However, if you
have the stomach for it the silver space can be profitable for you.
As regular readers will know, our philosophy has been to acquire
physical silver as a top priority, followed by a small section of
good quality mining shares and finally for those of a more
adventurous nature a well thought out
in the options sector can give your portfolio a boost.
Today, however, we are looking at one of those quality silver
producers and for disclosure purposes we do own it. We tracked
First Majestic Corporation (
) for a long time before finally making a purchase February 2011
for an average price of $13.13. The stock has traded both higher
and lower since we bought it, but our intention was to hold it for
the long term. Today it is trading at $22.27 which is a paper
profit of 72.12%, putting a smile on our faces.
Latest Comments from AG
So today we were in touch with Todd Anthony MBA, Investments
Relationships Manager for AG regarding their latest achievement and
this is what he had to say:
"We are very pleased with the quarterly production results in
Q3'12 with total silver production breaking through the 2M ounce
mark for the first time. Del Toro (the Bull) is sharpening its
horns for initial production to commence in the latter half of
Q4'12. This operation will double the size of the Company and
it's very possible we could see a re-rating in the stock in the
near future. By 2014, silver production is estimated to be
approximately 16M ounces at which time First Majestic will have
achieved its current goal of becoming a senior silver
This is an aggressive move on their part; however, with the
possibility of producing 16M of silver by 2014 is a mouthwatering
prospect so we can see why this deal was so attractive to them.
The following is an excerpt from the news release:
First Majestic Silver Corporation is pleased to announce that
total production at its four operating mines in Mexico for the
third quarter ending September 30, 2012, reached 2,438,085
equivalent ounces of silver, representing a 36% increase compared
to the same quarter in 2011. Total silver production for the
quarter consisted of 2,205,237 ounces of silver, representing a 29%
increase compared to the same quarter in 2011. In addition,
3,307,944 pounds of lead and 844,953 pounds of zinc were produced
representing increases of 75% and 100%, respectively, compared to
the same quarter in the previous year. Also, 1,537 ounces of gold
was produced, representing an increase of 276% compared to the
third quarter of 2011.
Keith Neumeyer, CEO and President of First Majestic, states,
"I would like to congratulate the entire First Majestic team
for their efforts at reaching the milestone of producing over 2
million ounces of pure silver for the first time in the Company's
history in a single quarter. With the additional production from La
Guitarra, total silver production grew well past the 2 million
ounce mark. Over the next several quarters as Del Toro begins to
ramp up production and La Guitarra is further expanded, we can
envision attaining the next major milestone of producing 3 million
ounces of pure silver per quarter."
Background to First Majestic
First Majestic Silver Corp. is committed to building a senior
Silver producing mining company based on an aggressive development
and acquisition plan with a focus on Mexico. The Company presently
owns and operates four producing silver mines in Mexico; the La
Parrilla Silver Mine, the San Martin Silver Mine, the La Encantada
Silver Mine, and the La Guitarra Silver Mine. Production from these
four mines is anticipated to be between 9.2 to 9.5 million ounces
of silver equivalents or 8.4 to 8.7 million ounces of pure silver
in 2012. The target being to hit a major milestone of producing 3
million ounces of pure silver per quarter.
Updated construction photos from Del Toro
First Majestic Chart:
As we can see it has been a roller coaster ride for AG as the
underlying asset continues to be extremely volatile. Expect this
volatility to continue and the fortunes of AG to oscillate
Below is a table of the opinions of 10 analysts, as of today it
stands at 4 Buys and 6 Holds, 0 Sells.
There are now a great number of mining companies positioning
themselves in the silver space in an attempt to get attract your
hard earned cash, a few of which will be successful, but many of
them will fall by the wayside. In our humble opinion this is a
stock that is worth your consideration. As always do your own due
diligence, don't just take our word for it. Also remember that we
do not have the resources to cover every silver producer out there
and therefore we can only short list and place on the 'watch list'
those companies who we think have a chance of becoming profitable
investments some down the road.
First Majestic Corporation has a market capitalization of $2.63
billion, a P/E ratio of 23.47, a 52 week trading range of $12.12 to
$23.95, an EPS of $0.97, with an average volume of around 800
thousand shares traded per day and trades in Toronto under the
symbol of FR and on the NYSE under the symbol of AG. It closed
today at $22.77.
Have a good one.
Disclaimer: www.gold-prices.net or
makes no guarantee or warranty on the accuracy or completeness of
the data provided. Nothing contained herein is intended or shall be
deemed to be investment advice, implied or otherwise. This letter
represents our views and replicates trades that we are making but
nothing more than that. Always consult your registered adviser to
assist you with your investments. We accept no liability for any
loss arising from the use of the data contained on this letter.
Options contain a high level or risk that may result in the loss of
part or all invested capital and therefore are suitable for
experienced and professional investors and traders only. Past
performance is not a guide nor guarantee of future success.