First Majestic Silver Corp.’s shares sank Tuesday after the Canadian precious metals producer suspended mining at its Jerritt Canyon gold mine, which accounted for slightly more than 20% of revenue last year.
In morning trading, the shares were 24% lower, at US$5.65, in New York and down 22%, at 7.96 Canadian dollars (US$5.82), on the Toronto Stock Exchange.
Mining rates at the Nevada mine have remained below target over the 22 months since it was bought by First Majestic and cash costs have been higher than expected thanks to challenges including inflationary cost pressures, contractor inefficiencies and a number of extreme weather events in the state’s north, the company said.
Mining activities have temporarily stopped and the workforce at the mine will be reduced, but the processing of remaining surface stockpiles will occur for the next couple of months and the company will continue exploring both targets to grow Jerritt Canyon’s resources in an effort to bolster the economics for an eventual restart of operations, First Majestic said.
It said that during the suspension it plans to process about 45,000 metric tons of above-ground stockpiles through the mine’s plant, and exploration activities are expected to also continue throughout 2023.
Revised consolidated production and cost guidance are expected to be published in July, the company said.