This performance prompted the company to revise its annual silver production guidance upward to 9.2-9.7 million ounces, a 10% increase on the low side compared to previous estimates.
CEO Dale Andres praised the mine’s consistent performance and the plant’s improved throughput, which resulted in a 12% reduction in all-in byproduct supporting costs (AISC). Gatos Silver is also exploring a merger with First Majestic Silver Corp. to consolidate its activities and further strengthen its position as a leading silver producer.
Market sentiment strengthened by production gains and merger plans
Robust production numbers and merger plans have boosted sentiment in the silver market and supported prices in a risky environment. Analysts suggest Gatos Silver’s merger with First Majestic could strengthen its role in Mexico’s silver mining sector, creating a more stable supply and potentially boosting prices.
Rising dollar puts pressure on silver prices
Meanwhile, the US dollar hit an eight-week high as traders grew confident the Federal Reserve could halt further interest rate cuts. This has traditionally weighed on silver prices, as a stronger dollar makes the metal more expensive for foreign buyers.
However, persistent inflation and geopolitical tensions continue to support safe-haven demand, keeping silver resilient.
While a stronger dollar poses challenges, production growth and the potential Gatos Silver merger could provide a solid foundation for the recovery and stabilization of silver prices.