The first silver doré bar production at First Majestic’s T.FR Del Toro Silver Mine in Zacatecas, Mexico was announced December 4, 2013. In making that announcement, First Majestic CEO Keith Neumeyer stated, “The commencement of silver doré production at Del Toro is another significant milestone for First Majestic this year. The Del Toro Silver Mine continues to be a substantial growth driver for the Company as silver production ramps up from this new mine. With the plant construction nearly complete, this achievement puts First Majestic on track to reaching its tenth consecutive year of growth in silver production.”

We had the opportunity to speak with Mr. Neumeyer December 16th, 2013, “Since 2005 we have invested approximately $150 million dollars in the Del Toro mine. It’s the Company’s largest investment ever so achieving production from Del Toro is our most important achievement in 2013.” said Neumeyer.

Del Toro is a big step forward for First Majestic but it should be seen in the context of a company which has five producing silver mines in Mexico with a combined production of roughly 12.3 to 13.0 million silver equivalent ounces in 2013.

Neumeyer points to the San Martin Silver Mine which the company purchased in 2006. “It began by producing 700 tonnes per day (tpd) which we quickly expanded to 900 tpd. In 2013, we invested $15 million dollars and expanded capacity to 1,300 tpd. We expect to see further growth in 2014.”

Looking forward to 2014 Neumeyer is wary of making predictions. “Who would have predicted the sudden decrease in the price of silver from $49 to $18? That move was much more dramatic than I expected. What happens to the silver price in 2014 is anyone’s guess. I hope we have seen the worst of it and that we are right at the bottom.”

In 2014 First Majestic will be at the end of the investment cycle at Del Toro. “We’ll be cutting expenses and, while the silver price is down, putting off investment. Overall, we will be in a capital accumulation phase and we will be looking at acquisitions.” said Neumeyer.

Like other silver producers First Majestic looks at the cost per ounce of silver mined but Neumeyer points out that the basis of that calculation is changing in the mining industry. “Cash cost per ounce is being replaced with “all in sustaining cash costs”. This new standard includes the cash costs of production plus the development and exploration costs. It shines a bright light on the gold and silver producers. I think it is a healthy thing.”

First Majestic operates in Mexico and Neumeyer recognizes that Mexico presents challenges: “Operations are fine but the Mexican government is changing the tax code. This could affect mining because the taxes on individuals and corporations are increasing. This means cash out the door.

That is a double whammy because there is also the cost of the added security you need in Mexico. The combination is tough in a lower metal price environment.”

Looking at the overall market, Neumeyer is concerned the business environment itself has changed. “We’re living in a world where governments are manipulating all the markets. You can’t really invest in fundamentals. You have to pay attention to the headline news, to the central banks. Now central banks overwhelm fundamentals. It is difficult for investors to invest in fundamentals because governments put new risk elements into the marketplace.”

For First Majestic 2014 will be about maintaining its high operating margin and profitability. Neumeyer remains optimistic. “When the resource industry starts to improve the mining sector should experience the quickest rebound.”

At time of writing First Majestic was trading at $11.30 for a market cap of 1.3 billion dollars.