First Majestic Silver has temporarily paused mining activities and is cutting its workforce at the Jerritt Canyon Gold Mine in Nevada, US,
The move forms part of the firm’s efforts to reduce costs at the mine, which comprises 30,821ha of mining claims.
First Majestic purchased the Jerritt Canyon mine in April 2021 from Sprott Mining.
The Jerritt Canyon underground gold mine has one permitted gold processing plant, which has a capacity of 4,500 tonnes per day (tpd).
Since the acquisition, First Majestic has focused on increasing the mine’s underground mining rates to sustainably feed the processing plant to generate free cash flow.
However, the mining rates have remained less than the minimum threshold of 3,000tpd while the cash costs per ounce remained more than projected.
This was the result of contractor inefficiencies and high costs, lower-than-expected head grades, inflationary cost pressures, and extreme weather events, among others, the firm said.
First Majestic president and CEO Keith Neumeyer said: “The decision to temporarily suspend mining activities at Jerritt Canyon, which represented approximately 21% of the company’s 2022 revenue, was driven by our goal to produce profitable ounces across the company.
“Since the acquisition in 2021, we have invested heavily at Jerritt Canyon and have been successful in executing several key projects.
“We rehabilitated and reopened the West Generator and Saval II underground mines and have successfully upgraded and modified the roaster and refinery off-gas handling systems to insure we remain fully compliant with all state and federal air quality standards.”
The firm plans to continue to process the remaining around 45,000t of surface stockpiles at the processing facility for the next couple of months.
Furthermore, First Majestic will continue to explore both near-mine and prospective regional greenfield targets to expand the resources in Jerritt Canyon to enhance the economics for the eventual restart.