First Majestic Silver Hits Pause on NAFTA Fight as Mexico Tax Deal Takes Shape

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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 and the Government of Mexico have agreed in principle to a framework to settle a legacy tax dispute involving its subsidiary Primero, and the NAFTA arbitration has been suspended until Dec. 31, 2026.
• The company expects to finalize a settlement by year-end, with the option to extend the suspension into Q1 2027. The terms and amount have not been disclosed.
• The dispute dates to a 2010–2014 tax agreement at the San Dimas mine. Mexico's tax authority issued assessments totaling about US$260 million, including penalties and interest, for 2010 through 2012.
• First Majestic produced 3.4 million ounces of silver and 29,552 ounces of gold in Q3. A 12-day labor dispute at San Dimas weighed on output, while La Encantada's silver production rose 68% year over year.
• H.C. Wainwright maintained a Buy rating on Oct. 9 with a US$25.50 price target.
• The silver market is expected to post its sixth straight annual deficit in 2026, though silver remains well below its January record high.

First Majestic Silver Corp. (AG:TSX; AG:NYSE; FMV:FSE) and the Government of Mexico have agreed in principle to a framework to settle a long-running tax dispute involving its subsidiary Primero Empresa Minera, S.A. de C.V. (PEM), the company announced in an October 13 release. As a result, the NAFTA arbitration First Majestic brought against Mexico has been temporarily suspended.

The two sides asked the tribunal hearing the case, known as the APA Arbitration, to suspend proceedings while they finalize and carry out the settlement. The tribunal issued an order suspending the case until Dec. 31, 2026.

First Majestic and Mexico have been negotiating the legacy tax issue for several years, with significant progress this year.

"The negotiations to date have been constructive and cordial," the company said.

First Majestic expects to reach a final settlement by year-end. If more time is needed, the parties can ask the tribunal to extend the suspension into the first quarter of 2027. If no settlement is reached and neither side believes more time would help, the company will ask the tribunal to lift the suspension, and the arbitration will resume. The release did not disclose the terms or amount of the proposed settlement.

The dispute centers on an advance pricing agreement (APA) that set the tax basis for silver sold from PEM's San Dimas mine from 2010 to 2014, under a streaming agreement that predated First Majestic's 2018 purchase of Primero. Mexico's tax authority, the SAT, argued the company kept silver prices artificially low and calculated it owed more than US$500 million, Mining Journal reported, citing Reuters. The SAT issued assessments totaling about US$260 million for 2010 through 2012, including penalties and interest, which First Majestic challenged in court. After saying the government had refused to engage, the company filed for arbitration under Chapter 11 of NAFTA in March 2021.

In July, First Majestic raised its 2026 guidance to 14.6 million to 15.5 million ounces of silver and 128,000 to 135,000 ounces of gold. The company is scheduled to report Q3 financial results on Nov. 5.

In an October 14 update for The Silver Stock Investor, Peter Krauth noted that First Majestic produced 3.4 million ounces of silver and 29,552 ounces of gold in Q3 2026, "with output impacted by a 12-day labour dispute at its San Dimas mine."

Krauth pointed to bright spots elsewhere in the portfolio. "La Encantada delivered a strong performance, increasing silver production by 68% year-over-year to 967,067 ounces, while Los Gatos continued advancing its mill throughput expansion and Santa Elena progressed toward its 3,500-tonne-per-day capacity target," he wrote.

Scotiabank analyst Eric Winmill reiterated a Hold rating with a US$22.50 

He added that the company completed about 78,475 meters of exploration drilling across its Mexican operations and at Jerritt Canyon in Nevada, "where restart preparations remain on track for production in the second half of 2027." First Majestic is also renewing its share buyback, he noted, allowing it to repurchase up to 10 million shares for cancellation over the next 12 months.

Four analysts have weighed in on First Majestic Silver over the past two months, according to TipRanks, with three rating the stock a Buy and one a Hold.

On October 14, Scotiabank analyst Eric Winmill reiterated a Hold rating with a US$22.50 price target, implying 5.93% upside.

On October 9, H.C. Wainwright analyst Heiko Ihle reiterated his Buy rating while trimming his target to US$25.50 from US$27, still the highest on the list at 20.06% upside, and ATB Cormark Capital analyst Richard Gray reiterated a Buy with a US$21.13 target, slightly below the current price, implying 0.54% downside.

On October 8, BMO Capital analyst Kevin O'Halloran reiterated a Buy rating with a US$24.65 target, implying 16.04% upside.

Silver has pulled back from its January highs, but the forces behind its rally remain in place. The metal hit an all-time high of US$121.67 an ounce on Jan. 29, 2026, according to Money Metals, and was trading at about US$56.75 on Oct. 15, still up about 9.5% from a year earlier, Yahoo!Finance reported.

The supply picture remains tight. The Silver Institute and Metals Focus expect the silver market to post a 46.3-million-ounce deficit in 2026, its sixth straight year of shortfall, with mine supply flat. Since 2021, the market has drawn 762 million ounces from above-ground stocks. Investors are stepping in, with coin and bar demand forecast to rise 18% this year.

Gold has followed a similar path. After reaching a record US$5,598 an ounce in January, it traded at about US$4,140 on Oct. 14, Fortune reported. Central banks used the dip to buy: they purchased a net 288.9 tonnes in Q2 2026, the most ever recorded for a second quarter, according to World Gold Council data compiled by Metals Focus.

For producers like First Majestic, the pullback still leaves silver near levels that were record territory before this year's run.

About 1.2% of First Majestic is owned by insiders and management, and about 53.21% by institutions. The rest is retail.

Its market cap is US$7.52 billion with 493.08 million shares outstanding. It trades in a 52-week range of US$10.19 and US$32.04.

What is the status of First Majestic's tax dispute with Mexico? 

The company and the Government of Mexico have agreed in principle to a framework to settle the legacy tax issue involving Primero. The NAFTA arbitration is suspended until Dec. 31, 2026, while the two sides finalize the settlement.

What happens if a settlement isn't reached by year-end?

The parties can ask the tribunal to extend the suspension into Q1 2027. If no settlement is reached and neither side believes more time would help, First Majestic will ask the tribunal to lift the suspension, and the arbitration will resume.

What is the dispute about?

It centers on an advance pricing agreement that set the tax basis for silver sold from the San Dimas mine from 2010 to 2014 under a streaming agreement. Mexico's tax authority later challenged the agreement and issued reassessments, and First Majestic filed for NAFTA arbitration in 2021.

How did First Majestic perform in Q3 2026?

It produced 3.4 million ounces of silver and 29,552 ounces of gold. A 12-day labor dispute and lower grades hurt output at San Dimas, while La Encantada's silver production rose 68% to 967,067 ounces. The company also renewed its buyback of up to 10 million shares.