First Majestic Silver Q1 Earnings Call Highlights

Key Points

• First Majestic Silver delivered a strong Q1, producing 3.5 million ounces of silver and reporting record revenue of $477 million, up 95% year over year. Operating cash flow reached $311 million and free cash flow was $224 million despite a $95 million tax payment in Mexico.
• Higher silver prices drove a major margin expansion, with average realized silver prices rising to $86.35 per ounce from $33.10 a year earlier. Management said margins improved to $52 per ounce, and the company ended the quarter with more than $1.1 billion in treasury assets.
• The company raised its dividend to $0.0171 per share and is pushing ahead with growth projects, including mine expansions, a 300,000-meter-plus exploration program, and a targeted 2027 restart at Jerritt Canyon. Management said the restart remains on track and that second-quarter trends look strong.

First Majestic Silver NYSE: AG reported what Chief Executive Officer Keith Neumeyer described as an “exceptionally good” first quarter, with production ahead of the midpoint of guidance and record revenue driven by higher realized silver prices and stronger margins.

On the company’s quarterly conference call, Neumeyer said First Majestic produced 3.5 million ounces of silver in the period, representing 26% of the midpoint of 2026 guidance. Gold production came in at 28% of the midpoint of guidance. He said both metals were tracking above the company’s current midpoint guidance to start the year.

Neumeyer said First Majestic recorded revenue of $477 million, up 95% from a year earlier, while operating cash flow totaled $311 million, or $0.63 per share. He said free cash flow was $224 million, despite a $95 million tax payment in January related to 2025 income taxes in Mexico.

Higher Silver Prices Lift Margins

The company’s average realized silver price was $86.35, compared with $33.10 in the prior-year quarter, Neumeyer said. First Majestic also held back 676,000 ounces of silver and 2,700 ounces of gold in inventory at the end of the quarter, with a stated value of $63 million.

“If we'd sold it, that obviously would have improved our revenue and also improved our profitability,” Neumeyer said, adding that the company elected to hold the metal for higher prices.

Neumeyer emphasized the company’s expanding margins, saying margins increased to $52 per ounce in the first quarter of 2026 from $13 per ounce in the same period a year earlier. He said the improvement more than offset higher costs tied to lower cutoff grades, profit sharing, smelting and royalties.

He said all-in sustaining costs would have been about $3 per ounce lower if First Majestic had used the same 90-to-1 silver-to-gold price ratio it used in 2025. The company fixed the ratio at 75-to-1 for 2026 due to volatility in silver and gold prices.

Neumeyer also said the company’s cost per ton was $170, which he said showed the impact of efforts to keep costs in line with expectations. He noted that First Majestic has limited diesel exposure, saying diesel represents only 5% of total costs because three mines have been converted to liquid natural gas and one mine is on the grid.

Dividend Raised as Cash Position Builds

First Majestic declared what Neumeyer called its largest dividend ever, at $0.0171 per share for shareholders of record on May 15. He said the dividend was roughly four times the size of last year’s dividend, reflecting both higher revenue and a change in the company’s policy that increased the dividend rate from 1% to 2% effective Jan. 1, 2026.

The company ended the quarter with a treasury of more than $1.1 billion, according to Neumeyer, giving it flexibility to fund development, exploration and expansion projects.

Mine Expansions and Exploration Advance

Neumeyer said all four operating mines showed notable year-over-year improvements in profitability. He singled out La Encantada, which he said generated $30 million in profit during the quarter after experiencing challenges in recent years.

At Los Gatos, First Majestic is working to increase mining rates to 4,000 tons per day. Neumeyer said the mill is not the bottleneck and that the company has brought in a third-party contractor to help expand mine output.

At Santa Elena, the company is expanding the mill to 3,500 tons per day from 3,200 tons per day, with the goal of reaching that level in the second half of 2026. Neumeyer said the Navidad and Santo Niño discoveries continue to advance, and the company is working to bring those ore bodies into the mill as soon as possible.

At La Encantada, the company has moved to self-hauling after challenges with contractors. Neumeyer said First Majestic purchased a dozen trucks, all of which are now on site and operational, and expects the change to help lower costs and increase mill throughput.

The company plans 266,000 meters of exploration drilling across its sites this year, excluding an additional 42,000 meters at Jerritt Canyon. Neumeyer said the total drilling program will exceed 300,000 meters.

Jerritt Canyon Restart Remains Targeted for 2027

First Majestic is investing $75 million in 2026 at Jerritt Canyon as it works toward a restart. Neumeyer said Alex Thompson, hired April 20 as managing director for the restart, will be a key part of the effort.

The company is preparing a pre-feasibility study, which Neumeyer said is expected in early 2027. He said crews are preparing the underground area, while plant upgrades have not yet started. Purchase orders have been issued for some equipment, with additional orders expected soon.

Neumeyer said the restart remains targeted for the second half of 2027 and is currently on track. In response to an analyst question, he identified the oxygen plant and underground fleet as the two most critical path items for Jerritt Canyon, noting that some underground fleet equipment has lead times of 10 to 12 months.

On staffing, Neumeyer said the company has hired several people for key management roles in recent weeks and expects the site to be “well manned” by fall, with underground workforce additions expected in early 2027. He said Jerritt Canyon’s proximity to Elko, Nevada, should help with recruiting.

Management Changes and Outlook

First Majestic also highlighted management changes during the call. Neumeyer said Steve Holmes, who has been with the company for six years, plans to retire and will work until June 30 to assist newly appointed Chief Operating Officer David Howe during the transition.

During the question-and-answer session, Neumeyer said he was not aware of discussions by the Mexican government to change mining-related taxes and said recent union negotiations had gone smoothly. He also said the company had not seen the kind of supplier cost inflation that occurred during the prior silver bull market.

Asked about mergers and acquisitions, Neumeyer said First Majestic is “always looking for ways to grow” and continues to look for silver projects, though he added that they are difficult to find.

President and Chief Corporate Development Officer Mani Alkhafaji said First Mint had another record quarter, with retail demand rising as metal prices increased. He said the mint is operating well and that the company has plans for further expansion “in due course.”

In closing remarks, Neumeyer said the second quarter is “looking pretty darn good” and that the company expects to provide more updates as it advances exploration, development, mill expansions and mine expansions through the year.

About First Majestic Silver NYSE: AG

First Majestic Silver Corp. NYSE: AG engages in the production of silver from its wholly owned operations in Mexico. Headquartered in Vancouver, British Columbia, the company focuses on acquiring, developing and operating high-grade silver projects. Established in 2002, First Majestic has built a multi-mine portfolio to supply silver primarily for the global industrial and investment markets while generating by-products such as gold, lead and zinc concentrates.

First Majestic’s principal operations are located in the historic Mexican Silver Belt, with producing mines including La Encantada in Coahuila, Santa Elena in Sonora and La Parrilla in Durango.

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