First Majestic, Endeavour Silver brace for more cost cutting as prices slump
July 10 (Reuters) - 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 third quarter. Continued...