First Majestic Silver Q3 Earnings Call Highlights

Key Points

• Strong financial results: Q3 revenue rose about 38% year over year to $394 million, while EBITDA climbed 78% to $228 million. The company produced 3.4 million ounces of silver and 30,000 ounces of gold.
• San Dimas labor disruption continued during the earnings call after causing 12 days of lost production in Q3; the dispute centers on taxes tied to worker bonuses, with discussions and court proceedings underway.
• Growth and restart projects advanced: Santa Elena exceeded its plant expansion target, Los Gatos is progressing toward higher throughput, and Jerritt Canyon remains on track for planned mining activity and first gold production. First Majestic also said its Mexican tax-settlement process was progressing through multiple steps.

First Majestic Silver NYSE: AG reported third-quarter revenue of $394 million, up about 38% from a year earlier, as the company continued investing in its mines while navigating a labor disruption at San Dimas and a multistep process to resolve a Mexican tax dispute.

CEO Keith Neumeyer said on the company’s earnings call that third-quarter EBITDA rose 78% year over year to $228 million. Cash flow was $0.43 per share, and revenue for the first nine months of 2026 was more than $1.2 billion, up 62% from the prior-year period.

The company produced 3.4 million ounces of silver and 30,000 ounces of gold during the quarter. Its average silver selling price was $61.52 per ounce for the quarter and $70.22 year to date. Neumeyer said cash flows remained robust despite lower silver and gold prices over the course of the year.

San Dimas Labor Disruption Continues

A labor disruption at San Dimas began in mid-September and resulted in 12 days of lost production in the third quarter, Neumeyer said. The disruption was continuing at the time of the call, with discussions and court proceedings underway.

Neumeyer said the dispute centers on whether the company should pay income taxes associated with worker bonuses. He said previous owners had periodically paid all or part of those taxes, while First Majestic has sought to avoid the practice as profitability and bonus amounts have increased.

New union leadership wants the company to pay 100% of the associated income taxes, Neumeyer said. “We’ve said no, and we’re firm on that point,” he said, adding that the government has been included in the process.

Costs Rise as Company Lowers Cutoff Grades

Neumeyer said First Majestic deliberately began lowering cutoff grades about a year ago, allowing it to process more rock containing less metal. The approach increases costs but remains economic at current metal prices, he said. The company could reverse the strategy if prices underperform.

President and Chief Corporate Development Officer Mani Alkhafaji said all-in sustaining costs were higher than last year partly because of a change in the metal equivalency ratio used in the calculation. He also cited price-linked bonuses and Mexican profit sharing, as well as some inflation in diesel and other input materials.

Alkhafaji said expanding margins were outpacing the increase in all-in sustaining costs. The company has sought to offset some input inflation by renegotiating contracts and reducing energy costs, he added.

Expansion and Restart Projects Advance

At Santa Elena, Neumeyer said the company had exceeded its plant expansion target of 3,500 tons per day several times during the quarter and was working to maintain that rate. He said permits for the Santo Niño portal arrived in August, ahead of the company’s earlier schedule, and that ore should reach the mill at the end of 2027.

COO Dave Howe said development at Santo Niño was ahead of plan. He said first ore from development was planned for the first quarter, while the longer-term mine plan was still being developed.

At Los Gatos, Howe said the company was advancing underground development and improving equipment availability and paste fill as it works toward 4,000 tons per day. Some ground-control issues prompted sequencing changes during the quarter, pushing higher-grade material into the fourth quarter, he said.

First Majestic spent $42 million at Jerritt Canyon in the third quarter. Neumeyer said the underground fleet and major mill refurbishment components had been ordered, and the company remained on track for its objectives of starting mining activity in the third quarter and producing first gold in the fourth quarter. He said a more detailed update, including a hoped-for resource estimate, could come in February or March.

Tax Dispute Process and Shareholder Returns

Neumeyer said the company was making progress on its Mexican tax issue after announcing during the quarter that it was dropping its NAFTA case against Mexico. He said the process would involve multiple payments over several months, but the timing of the first payment was uncertain.

“Settlement requires all steps to be completed in its entirety,” Neumeyer said, describing the company as being approximately five or six steps into a 30-step process.

The company also announced what Neumeyer described as a record dividend and said it had repurchased 1.3 million shares to date. Exploration spending remained active, with 78,000 meters drilled across four assets during the quarter, including Jerritt Canyon.

About First Majestic Silver (NYSE:AG)

First Majestic Silver Corp. is a mining company focused on the exploration, development, and production of silver and gold. The company operates producing mines in Mexico and the United States and sells silver bullion and related products through its in-house First Mint division.

First Majestic's Mexican operations include the San Dimas Silver/Gold Mine in Durango, the Santa Elena Silver/Gold Mine in Sonora, and the La Encantada Silver Mine in Coahuila. The company also owns the Jerritt Canyon Gold Mine in Nevada, although operations there have been suspended while First Majestic evaluates its future.

Founded in 2002 and headquartered in Vancouver, British Columbia, First Majestic has historically concentrated its growth strategy on acquiring and developing precious-metals assets in the Americas.

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