Black clouds hang over First Majestic’s third quarter silver production

Vancouver – A particularly nasty wet season disrupted operations at First Majestic Silver‘s (FR-T, FRMSF-O) three mines in Mexico this summer, raining on its production numbers. In the third quarter ending Sept. 30 silver-equivalent production was down 34%.

The situation at the San Martin mine, 250 km north of Guadalajara, Mexico, was particularly grim. A rock slurry weighing thousands of tonnes poured down the slopes above the mine and blocked three of its four entrances, as well as destroying an access bridge.

And if that wasn’t enough, not only did water cause rock slides but First Majestic also reports that it lowered throughput in the crushing circuits and screens.

As a result ore production decreased about 170,000 tonnes, or 20%, in the third quarter compared to the second. That translated into about 840,000 ounces of silver equivalent produced.

Despite the hit to production in the third quarter, First Majestic says it is en route to record production in 2009 with mill capacity upgrades at its three mines. The other two mines are La Parrilla, 65km southeast of Durango, and La Encantada, in Coahuila State near the Texan border.

San Martin and La Parilla will get modest boosts from 800 to 1,000 tonnes per day while La Encantada will jump from 800 to 3,500 tonnes per day.

And there may be a silver lining in this year’s production-lowering rains. First Majestic president and CEO Keith Neumeyer said in a statement that, given recent declines in the price of silver, it wasn’t a bad time to sell less of it.

Mindful of repeat performance next year, he also said the company is taking measures to avoid lower throughput in the crushing circuit.

On news of the production decrease First Majestic’s share price slid 17 to close at 99.