July 10 Canada's First Majestic Silver Corp
said it would cut 10 percent of its workforce by
the end of this year as it struggles with weak silver prices,
which have fallen to their lowest in nearly three years.
Smaller rival Endeavour Silver Corp is also looking
to prune costs further after it said in April it would defer 20
percent of its planned 2013 capex and cut jobs.
Silver prices fell to $18.39 an ounce in June, their lowest
since August 2010, while spot gold tumbled to a near
three-year low of $1,223.54 an ounce. Spot silver has
fallen 36.5 percent so far this year to close at $19.23 per
ounce on Tuesday.
Miners around the world have slashed spending to control
runaway development budgets and many precious metal miners have
shelved projects as they grapple with higher wages for workers
and a rise in fuel prices.
First Majestic said on Wednesday most of its drilling
contracts had been canceled due to the cost cutting.
It had about 3,588 employees as of Dec. 31, according to the
company's 2012 annual report. The company also said it plans to
reduce the number of contractors.
First Majestic said it had suspended silver sales for a
short while due to the slump in prices.
The suspension will result in lower revenue and profit for
the second quarter, First Majestic said. The company held about
700,000 ounces of silver in inventory as at June 30.
The company, which lowered its full-year capital expenditure
estimate in May, expects the inventory to be cleared in the
First Majestic said its vice president of exploration,
Guillermo Lozanohas, had resigned due to the budget cuts and
personal reasons and that the position had been eliminated.
The company reaffirmed its production guidance of 12.3-13.0
million silver equivalent ounces for the year. Total production
jumped 55 percent to 3,268,117 silver equivalent ounces in the
Endeavour said silver production in the second quarter rose
48 percent to 1,535,873 ounces, but realized silver price fell
35 percent to $19.08 per ounce. Revenue rose 57 percent to $63.5
Both the companies have mines in Mexico, with First Majestic
operating five silver mines and Endeavour operating three in the
Hecla Mining Co, the No. 2 U.S. silver miner by
output, cut its full-year capital spending plan by 5 percent in
May and said it expects metal prices to extend their decline in
the second quarter.
First Majestic shares rose more than 3 percent to C$12.07 on
the Toronto Stock Exchange on Wednesday, while Endeavour Silver
was down less than 1 percent at C$3.23.