Silver Miner Delivers Massive 95% Revenue Surge in Mexico

1. As of the date of this article, officers, contractors, shareholders, and/or employees of Streetwise Reports LLC (including members of their household) own securities of First Majestic Silver Corp.
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1. Ownership and Share Structure Information

The information listed above was updated on the date this article was published and was compiled from information from the company and various other data providers.

First Majestic Silver Corp. (AG:TSX; AG:NYSE; FMV:FSE) released its unaudited condensed interim consolidated financial results for the first quarter ending March 31, 2026, according to a May 12 release.

The detailed financial statements and management's discussion and analysis are available on the company's website and can also be accessed through SEDAR+ and EDGAR.

The company experienced a robust first quarter, with silver and gold production aligning well with its 2026 guidance targets, the release noted. There was a notable 95% increase in revenues year-over-year, amounting to US$476.7 million. This surge was primarily due to higher realized prices for silver and gold, despite the company retaining US$63.6 million worth of silver and gold bullion. Enhanced operational efficiency contributed to revenue growth outpacing the rise in costs, including variable costs like royalties and worker production bonuses, which tend to increase with the price of silver. This efficiency led to significant margin expansion.

For this quarter, First Majestic reported net earnings of US$128.1 million, with earnings per share (EPS) at US$0.26. Adjusted net earnings were higher at US$151.7 million, or US$0.31 per share. The company also said it saw a 12% increase in throughput rates, which allowed for the optimization of lower marginal cut-off grades, improving overall profitability across all mine sites. However, reported per-ounce costs were higher, primarily due to unfavorable year-over-year changes in the silver equivalent (AgEq) conversion ratios, influenced by rising metal prices. Despite this, the higher metal prices overall positively impacted the company.

In terms of cash flow, First Majestic generated US$223.5 million in free cash flow after accounting for US$95.5 million in cash income taxes, primarily for the year 2025. This marked a substantial increase from the US$43.5 million in free cash flow recorded in the first quarter of 2025. Operating cash flow before changes in working capital and taxes reached US$310.6 million or US$0.63 per share, up 182% from US$110 million or US$0.24 per share in the previous year.

The company concluded the quarter with a record treasury of US$1,128.6 million, up 20% from US$937.7 million at the end of 2025, marking the highest treasury position in the company’s history. This includes US$143.8 million held in restricted cash, slightly down from US$144.3 million as of December 31, 2025.

Co. Highlights Cost Efficiency

Mine operating earnings saw a dramatic increase to US$266.6 million, up from US$63.8 million in the first quarter of 2025, largely due to the higher metal prices, First Majestic noted. Earnings Before Income Tax, Depreciation, and Amortization (EBITDA) also rose significantly to US$306.8 million, compared to US$98.8 million in the prior year's first quarter. This improvement was primarily due to enhanced mine operating earnings and was further supported by US$13.4 million in investment income.

The company also highlighted its cost efficiency, with cash costs and All-in Sustaining Cost (AISC) per attributable payable silver equivalent ounce for the quarter at US$20.28 and US$29.76, respectively. These costs are expected to decrease in the second half of the year. The AISC margin showed a significant improvement, standing at US$52.24 per silver equivalent ounce, compared to US$13.26 per ounce in the first quarter of 2025.

Additionally, First Majestic declared a cash dividend of US$0.0171 per common share for the first quarter of 2026, nearly four times higher than the dividend in the same period last year. This increase reflects the company's strong financial performance and confidence in its continued growth.

In terms of production, the company produced 3.5 million ounces (Moz) silver and 34,341 gold ounces in the first quarter of 2026. These figures represent 26% and 28% of the company's midpoint guidance for silver and gold production in 2026, respectively. However, there was a slight decrease in production compared to the first quarter of 2025, which saw 3.7 Moz silver and 36,469 gold ounces produced.

The cash costs per attributable payable silver equivalent (AgEq) ounce for the quarter were US$20.28, up from US$13.68 per AgEq ounce in the first quarter of 2025, the release said. This increase was primarily due to a decrease in AgEq ounces produced and was further influenced by higher metal prices, which affected labor production bonuses, mining and milling rates, and royalty payments. Additionally, the strengthening of the Mexican peso against the U.S. dollar, which was 14% stronger on average during the quarter, also impacted cash costs.

A Dominant Player in the Silver Market, Analyst Says

According to an updated research note by Analyst Heiko F. Ihle for H.C. Wainwright & Co. on May 12, First Majestic reported a substantial increase in revenue, reaching US$476.7 million, up from US$243.9 million in the first quarter of 2025. This growth translated into a significant rise in net income attributable to shareholders, which was US$128.1 million, or US$0.26 per share, compared to just US$2.3 million, or US$0.01 per share, in the same period last year. The impressive revenue growth was largely driven by the strong market prices for gold and silver, which averaged US$5,018 per ounce and US$86.35 per ounce, respectively, marking increases of 81% and 161% year-over-year.

First Majestic also reported a robust cash position, with cash and cash equivalents totaling US$984.8 million after generating US$223.5 million in free cash flow during the quarter. Looking forward, the company is well-prepared financially to restart operations at Jerritt Canyon and to explore additional mergers and acquisitions opportunities. Management is actively returning value to shareholders through ongoing share repurchase programs and a recent increase in dividends to 2% of net revenue.

Despite facing cost pressures, including a 55% year-over-year increase in all-in sustaining costs (AISC) to US$29.76 per silver equivalent ounce, the company managed to expand its AISC margin significantly to US$52.24 per ounce. This expansion is nearly four times the margin of US$13.26 per ounce recorded in the first quarter of 2025. These cost pressures were primarily due to the strengthening of the Mexican Peso and changes in the silver equivalent conversion ratio.

First Majestic is actively pursuing its plan to restart Jerritt Canyon, targeting production in the second half of 2027, while also progressing towards achieving a sustainable production rate of 4,000 tonnes per day at Los Gatos by the second half of 2026, Ihle said. The company's strategy to expand margins and increase throughput is expected to support substantial growth in cash flow in the near to intermediate term.

Given these developments, First Majestic is positioned as a dominant, cash-rich player in the silver market, poised for further growth due to its significant margins and well-funded growth initiatives, the analyst noted. The company's stock continues to hold a Buy rating, with a slightly increased price target of US$30.75, up from US$30. This adjustment is based on minor updates to the balance sheet, particularly the recent cash and cash equivalents balance. The valuation remains grounded in several discounted cash flow models for the company's core assets, applying a 6.0% discount rate to key projects and maintaining a 3x net asset value multiple, reflecting the geopolitical risk factors comparable to other firms in the coverage universe and recent mergers and acquisitions in the precious metals space.

'A Perfect Uptrend Line'

On May 18, Chen Lin of What is Chen Buying? What is Chen Selling? remarked about the company: "From the longer-term point of view, silver had a perfect retracement to (the) US$75 area. This is a trend line support. I am buying silver here. I bought some silver futures to test the water. I am also buying back my former top silver position AG here and made (it) my number 3 silver producer. My top silver producers are Couer Mining/Silvercorp Metals/AG right now. AG is now sitting on a perfect uptrend line and is trading at much lower prices than I sold early this year."

An AI analysis of the stock on StockInvest.us on May 19 noted that the stock "finds support from accumulated volume at $19.20 and this level may hold a buying opportunity as an upwards reaction can be expected when the support is being tested."

It continued, "Our systems sees the trading risk/reward intra-day as attractive and believe profit can be made before the stock reaches first resistance."

The Catalyst: Silver's Price to Increase, Then Fall Back?

James Steel, the chief precious metals analyst at HSBC, recently updated the bank’s forecast for silver prices, presenting a nuanced view of the market's future, according to a report by Hillary Remy for The Street on May 18. HSBC has increased its average silver price prediction for 2026 to US$75 per troy ounce, up from the previous estimate of $68.25, Investing.com, according to Remy.

For 2027, the forecast has been raised to US$68 per troy ounce from US$57. Despite these upward revisions, HSBC has set its year-end targets for 2026 and 2027 at US$70 and US$65 respectively, which are below the current spot prices. This indicates that the bank anticipates a weakening in silver prices in the latter half of both years, as confirmed by InvestorsHub.

Steel provided a clear rationale for the seemingly contradictory forecasts. He explained that while silver has shown strength, the factors driving its rise are expected to diminish as the year progresses. “Moderating deficits, in our view, will not be sufficient to propel silver sharply higher for prolonged periods,” he stated, suggesting a tempering of market optimism in the near future. Additionally, Steel highlighted a potential widening in the gold-to-silver ratio, which could lead to silver prices easing even if gold prices continue to rally. This serves as a caution to investors who might assume that silver will automatically track gold’s gains.

The basis for HSBC’s revised forecasts centers on the expected changes in the silver supply deficit. The bank projects that the global silver market deficit will decrease significantly, from 143 Moz in 2025 to 73 Moz in 2026, and then further to just 25 Moz in 2027. This anticipated reduction is attributed to stable mine production, which is expected to be around 848 Moz in 2026 and increase to 868 Moz in 2027, coupled with a rise in recycling supply from 197 Moz in 2025 to 216 Moz in the current year.

These supply increases, while not dramatic, are occurring against a backdrop of softening demand, which significantly alters the deficit calculations and impacts the overall market dynamics for silver, Remy wrote. This complex interplay of factors forms the core of HSBC’s updated outlook, providing a detailed and specific analysis of the silver market’s trajectory over the next few years.

Nicky Shiels, head of research and metals strategy at MKS PAMP, recently shared her insights on the trajectory of gold and silver prices in light of the ongoing Iran conflict, according to a May 19 report by Ernest Hoffman for Kitco News.

Despite the challenges posed by the war, Shiels remains optimistic about the prospects for gold, predicting that it will reach a new all-time high of US$5,800 per ounce before the end of the year. She anticipates a 30% gain for gold in 2026, maintaining an average price of US$4,500 per ounce for the year.

Shiels explained that gold has transitioned from being primarily a hedge against currency debasement to acting as an inverse proxy for oil prices during the current conflict. Although this correlation has recently weakened, she believes the stagflationary environment will continue to support gold's value. In the short term, she expects gold prices to consolidate, with prices below US$5,000 per ounce being reasonable given the current oil prices and a dip in physical demand during the summer. However, she forecasts that prices will rise above US$5,000 in the second half of 2026.

Looking towards the more distant future, Shiels expressed an even more bullish stance, suggesting that it is "unlikely, but possible" for gold prices to reach US$10,000 per ounce by 2030, she said. She bases this projection on the potential for real assets to continue appreciating and the possibility of a significant shift by U.S. institutional investors from equities to gold. Shiels elaborated on various narratives that support such high valuations, often viewing gold through the lens of debasement and adjusting for historical relative values compared to the stock market, U.S. debt, and the foreign-held portion of U.S. debt.

Ownership and Share Structure¹

About 1% of the company is held by insiders and management, about 60% by institutions, and about 39% by retail.

Its market cap is US$10.06 billion with 492.97 million shares outstanding. It trades in a 52-week range of US$5.55 and US$32.04.