First Majestic Silver Buys Jerritt Canyon
Jerritt Canyon owns and operates the Jerritt Canyon gold mine located in Elko County, Nevada. The mine currently operates as an underground mine and has one of three permitted gold processing plants in Nevada that uses roasting in its treatment of ore. This processing plant has a capacity of 4,500 metric tons per day (mt/d) and is currently operating at an average rate of approximately 2,200 mt/d due to limited ore production from two underground mines. The property consists of a large, underexplored land package consisting of 30,821 hectares (119 square miles).
In 2020, Jerritt Canyon produced 112,749 ounces (oz) of gold at a cash cost of $1,289/oz. First Majestic said it has identified several opportunities to enhance both the cost and production profile of Jerritt Canyon as well as near-term brownfield potential between the SSX and Smith mines and long-term property wide exploration potential.
“While we remain focused on maintaining our peer-leading exposure to silver, Jerritt Canyon is a unique opportunity to create value for First Majestic’s shareholders and provides a new geographic operating platform while preserving our pristine balance sheet,” First Majestic CEO Keith Neumeyer said. “We look forward to working with the operating team at Jerritt Canyon and are excited about the opportunities we have identified to enhance operations to unlock value.” Together with its existing three operating silver mines in Mexico, First Majestic said the combined company will be a premier North American silver and gold producer with expected pro forma annualized attributable production of 30 million to 33 million silver equivalent oz based on historical production rates.
“This deal is a win-win for both parties and we look forward to having continued exposure to Jerritt Canyon’s bright future through our increased ownership in First Majestic,” Sprott said. “We have a long-standing respect and high regard for Keith Neumeyer and his leadership in the silver industry, an industry with which we have had an increasing involvement over the past two years. We also see this as a big step forward for Jerritt Canyon where it can flourish under the larger umbrella of First Majestic.”