Why First Majestic Shares Are Trading Lower Today

First Majestic AG shares are trading lower on Tuesday after the company announced plans to temporarily suspend mining activities at one of its gold mines, which represented about 21% of the company's 2022 revenue.

First Majestic said it will suspend mining activities, reduce investments and trim its workforce at its Jerritt Canyon Gold Mine, effective immediately. Since acquiring the mine nearly two years ago, the company has been focused on increasing mining rates, but despite its efforts, rates have remained low, while costs per ounce have remained elevated.

The company attributed much of its struggles to contractor inefficiencies and high costs, inflationary cost pressures, lower-than-expected head grades and multiple extreme weather events.

"The Company will continue exploring both near-mine and prospective regional greenfield targets to grow Jerritt Canyon's resources, which we believe will significantly enhance the economics for the eventual restart of operations," stated Keith Neumeyer, President and CEO.

AG Price Action: First Majestic has a 52-week high of $14.57 and a 52-week low of $5.85.

First Majestic shares are down 24.2% at $5.64 at the time of writing, according to Benzinga Pro.