First Majestic Silver Q3 2026 Earnings Call Transcript

First Majestic Silver (NYSE:AG) reported third-quarter financial results on Thursday. The transcript from the company’s third-quarter earnings call has been provided below.

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Summary

First Majestic Silver reported Q3 2026 revenues of $394 million, a 38% increase year-over-year, with year-to-date revenues at $1.286 billion, up 62% from the previous year.

Silver production for the quarter reached 3.4 million ounces, and gold production was 30,000 ounces; EBITDA for the quarter rose by 78% to $228 million.

Exploration efforts continued aggressively, with 78,000 meters drilled across four assets, including Jerritt Canyon.

The company is making progress on resolving Mexican tax issues and has dropped the NAFTA case against Mexico.

A record dividend has been announced, and the company repurchased 1.3 million shares, maintaining robust liquidity with over $1.2 billion in cash.

Strategic initiatives include plant expansion at Santa Elena and advancement of the Santo Nino portal, with the aim to increase production capacity.

Operational challenges include ongoing labor disruptions at San Dimas, which caused a 12-day production halt, and efforts are underway to resolve the issue.

Capital expenditures at Jerritt Canyon are on target, and key hires are nearly complete, with significant progress in underground development and mill refurbishment.

The company is reinvesting heavily in its operations, marking the highest capital investment in its history.

Future catalysts include planned settlements of the tax dispute, further development at Santo Nino, and ongoing production enhancements across operations.

Full Transcript

OPERATOR (Conference Operator)

Thank you for standing by. This is the conference operator. Welcome to the First Majestic Silver Q3 2026 Financial Results Conference Call. As a reminder, all participants are in a listen-only mode and the conference is being recorded. After the presentation, there will be an opportunity to ask questions. To join the question queue, you may press star then one on your telephone keypad. If you are participating through the webcast, you can submit a question in writing by using the form in the lower section of the webcast frame on your screen.

Should you need assistance during the conference, you may reach an operator by pressing star then zero. I would now like to turn the conference over to Mr. Keith Neumeyer, Chief Executive Officer of First Majestic Silver. Keith, please go ahead.

Keith Neumeyer (Chief Executive Officer)

Thank you, operator, and welcome to everyone who’s dialed in and for those of you who will be listening to this podcast or conference call over our website. Before I begin, I would like to just introduce the people in the room that are with me today here in our new time zone of British Columbia: Mani Alkhafaji, our President and Chief Corporate Development Officer; our CFO, Neil Beaumont; our Chief Operating Officer, Dave Howe; and Samir Patel, General Counsel; including Secretary Daryl Ray and Joel Veltinski from Investor Relations and Daryl Fernandez from our financial team. Before I get into our presentation today, I’d like to introduce Samir to discuss the disclaimers.

Samir Patel (General Counsel)

Thanks, Pete. Before we begin today’s call, I would like to remind you that we will be referring to certain non-IFRS measures and making certain statements regarding First Majestic Silver and its operations that constitute forward-looking statements in accordance with applicable Canadian and U.S. securities laws. All statements that are not historical facts, such as statements regarding future estimates and plans or expectations of future performance, constitute forward-looking statements that reflect the Company’s current views with respect to future events.

These statements are necessarily based upon a number of assumptions and estimates that, while considered reasonable by the Company, are inherently subject to significant business, economic, competitive, political, social uncertainties and contingencies. We encourage you to refer to the cautionary language included in our news release that was disseminated earlier this morning and the disclosure on non-IFRS measures in our most recently filed Management’s Discussion & Analysis as well as the risk factors set out in our most recently filed Annual Information Form. As a reminder, these documents, along with all of our continuous disclosure documents, are available on SEDAR+ and on EDGAR.

Investors are cautioned against attributing undue certainty or reliance on any forward-looking statements made during today’s call, and the Company does not intend or assume any obligation to update these forward-looking statements or information other than as required by law. With that I will turn the call back to Keith.

Keith Neumeyer (Chief Executive Officer)

Thanks, Samir. For those of you who would like to see the presentation, it’s on our website. Hopefully you get a chance to review it. The corporate website or the corporate presentation is also there, so don’t get confused between the two. So getting into the highlights. Revenues for the quarter were 394 million, up 38% year over year. And revenues to date for the first three quarters of 2026 came in at 1.286 million. 1.2 billion in revenues, up 62% compared to last year. Our silver production was robust at 3.4 million ounces. Gold production was again on budget, 30,000 ounces of gold. Our average selling price for silver for the quarter was 6,152; year to date, 7,022. Our earnings or EBITDA for the quarter was 228 million, up 78% compared to a year ago.

And cash flows $0.43 a share. Exploration remains very aggressive. We drilled 78,000 meters in the quarter over the four assets including Jerritt Canyon. We’re making some good progress on the Mexican tax issue. We did come out with a news release during the quarter regarding dropping the NAFTA case against Mexico. So, you know, that should tell our shareholders that we actually are making progress and we hope to have updates over the next few weeks or a few months on that particular issue.

We announced our dividend as well, which is our record dividend which will be payable in the next couple of months. And our share buyback program was active in the quarter to date. We’ve 1.3 million shares back out of the market. Our liquidity remains robust with about $1.2 billion in the bank, 1.3 billion in the bank, breakdown of liquidity on this slide. So moving forward to slide four, we have all-in sustaining cost impact for the year. We are, of course, seeing inflation like the rest of the industry; that’s laid out here. One of the bigger drivers to cost is the fact that we made a conscious effort a year ago to start lowering our cutoff grades. That was something that can be reversed if metal prices do underperform. But it’s a great strategy right now. Despite the lower head grades hitting the mill, throughputs continue to be very good, but it does have an impact on cost because you are moving more rock for less metal.

But it is highly economic to do that and it’s paying off well for the business. Going to our costs on a per tonne basis, you can see on this chart it’s been pretty stable for the last couple of years at about 105, 110 cost per ton. So that shows you that we’re managing our costs quite well. You know, some of the other costs like bonuses and PTUs and things like that, of course, do fluctuate positively in the favor of our employees as the metal price does go up.

So it’s a great benefit for them. Of course, the company is benefiting as well. So going to the next slide, slide five, we’ll get into our cash flows for the year. It’s very, very much metal price driven. The business is running quite well. But of course we are impacted by the silver and gold prices declining throughout the year, but still very robust cash flows at current levels. Our capital expenditures are on target. We spent $42 million on Jerritt this past quarter, so making great inroads there at Jerritt. It’s coming along quite nicely and on budget and on time.

Jumping to our next slide, just really getting into, you know, some of the initiatives that we’ve been working on for most of the year. The plant expansion at Santa Elena to 3,500 tons a day is going well and we have actually exceeded that number a few times during the quarter, but we’re looking at maintaining that level on a daily basis for most of the balance of the year. Our Santo Nino portal—and I would suggest people go to our website and have a look at this photograph to work on a series of photographs—because that portal, not only was it permitted 18 months ahead of schedule, we hadn’t expected to start developing the Santo Nino Navidad until mid-2027, but the permits came in in August of this year and we’re able to get that development going. So we’re very happy that we’re well advanced into Santo Nino and should be hitting the mill at the end of 2027.

We’ll get further guidance as we get closer. Navidad portal is in the early stage of construction. Q4 will see similar progress at Navidad, as you can see on this photograph regarding Santo Nino. So La… we’re pushing to get to 4,000 tons a day again. We have achieved that number a few times. We’re really looking to devolve the mine. The mine is the hindrance right now and we’re doing a number of things underground and within that operation to get that ore out of the mine and get it into the mill through different mining methods. San Dimas, we had a very, very good first half. Unfortunately, we did get a labor disruption in mid-September.

We did have 12 days of loss of production in Q3. The labor disruption continues today. There was a hearing yesterday and it’s a very active process, as you can imagine. There’s discussions going on every day and we’re looking to get that operation back up and running as soon as we can. [Another asset] continues to outperform the budget due to grades and ore flow to the mill. So I know there’s lots of questions about Jerritt Canyon. So we do have a slide dedicated just to Jerritt Canyon. But the hiring is going well. We started hiring six months ago and we’re about 70, 80% of the key hires now complete. And as I said earlier, there’s tons of activity on site. The underground fleet has now been fully ordered, and deliveries will start happening in Q1. Underground development has been going on for the last several months and continues today.

You know, all major components for the mill refurbishment have also been ordered and will be arriving in Q1 and Q2. So there’s some more details on this slide for people to review and if you have any further questions, you’re welcome to ask them. We are coming out with an exploration update in the next couple of weeks. There’s been some pretty interesting results coming out from drilling there throughout the year. So we’re anxious to get those results out to the market.

So look for that in the coming weeks. So just going to the next slide. I’m on the last slide. This is future catalysts. We continue to really plow money back into the business. This year is our highest capital investments throughout the business in the company’s history. With the profits that the company is currently making, we’ve made a conscious effort to reinvest in a variety of areas of the business to improve the business going forward. So we’re pretty excited about the work that’s currently happening, and that’s really it for the presentation.

I’ll pass it on to the operator for questions.

OPERATOR (Conference Operator)

Thank you, Keith. We will now proceed to the question and answer session. Once again, to join the question queue, you may press star then 1 on your telephone keypad. You will hear a tone acknowledging your request. If you are using a speakerphone, please pick up your handset before pressing the keys. To withdraw your question, please press star then 2. If you are participating today through the webcast, you can submit a question in writing by using the form in the lower section of the webcast frame on your screen.

The first question will come from Wayne Lamb with TD Securities. Please go ahead.

Wayne Lamb (Analyst at TD Securities)

Yeah, thanks. Morning, guys. Just wanted to understand on the ongoing labor state at San Dimas. Just trying to understand why the decision or resolution is guided to the back half of November. Can you give us a bit more detail on the nature of the hearings that have taken place and what means of recourse the company has, even if it is deemed as illegal? Just trying to understand if you’re currently just at an impasse or what avenues are to kind of prompt any movement towards the resolution.

Keith Neumeyer (Chief Executive Officer)

Well, it’s a very active, you know, file right when these kinds of things happen. You know, we have people in place that, you know, deal with the different issues that, you know, are coming up. You know, a lot of it’s headline stuff really. It comes down to income taxes. San Dimas is historically, under old ownership, has periodically or often paid all or a part of the income taxes to the workers. So they basically pay the worker a bonus, they true it up for taxes.

And we’ve been, you know, consciously trying to avoid that over the last few years, you know, because as you know, profitability increases, of course that amount increases substantially. So the bonus that has been earned by the employees of the union at the site are actually the highest bonuses that will ever be paid to the workers in the history of the mine, you know, all related to profitability. So it’s great news for the workers. But unfortunately the union did go through a vote this summer. Every two years they vote in new leadership. The individuals that have been put into the leadership role this past summer have taken the position that they want, you know, 100% of the income taxes trued up or paid by the company. And we’ve said no. And we’re firm on that point. So, you know, we’re going through the court system right now and we’ve included the government in the process and, you know, I can’t really get into further details than that.

It’s just, you know, it’s an active process that everyone is going on daily.

Wayne Lamb (Analyst at TD Securities)

Okay, great, thanks. And then maybe just on the ongoing ramp up at Gatos and Santa Elena. At Gatos, it’s nice to see improvement in the development meters and just wondering what the limiting factors are to getting to 4,000 tons per day.

Keith Neumeyer (Chief Executive Officer)

Let me pass that on to Dave Howe, COO.

Dave Howe (Chief Operating Officer)

Right. Good morning, everybody. Yeah, I mean we had pretty good ore process at the mine in Q3. I mean, we’re accessing, developing ramps and accessing, defining and drilling stopes, right, to get our inventory and production up. You know, as you saw, we’ve had some sequencing changes during the quarter due to a few sort of ground control issues we control, but that’s normal operations. So we’ve already pushed some high grade into Q4. That’s what we’re milling now.

So in terms of just, you know, pushing forward, it’s advancing our development, and we’ve made some improvements, for example on better development cycling, making it a little bit faster pace, fill improvements, and better equipment availability too has helped. So that’s it.

Keith Neumeyer (Chief Executive Officer)

Is that okay, Wayne? Does that answer your question?

Wayne Lamb (Analyst at TD Securities)

Yeah, that’s great. And then maybe just last one on the potential tax settlement, obviously a big step forward in the suspension of the arbitration. Just wondering if you could give us an idea of how we should think about the proposed settlement relative to the 142 million held in restricted cash towards the dispute. And then just on the framework of that agreement, are there any details outside of the actual payment that we should be thinking about?

Keith Neumeyer (Chief Executive Officer)

Well, there won’t be one payment. There will be a number of payments over several months, but we’re not certain when the first payment will be made. There’s a couple of steps that need to be taken prior to actual payments being made. It’s a very detailed step process that both parties have to follow. You know, if I was to give you a step number, we’re likely on step five or six out of a 30-step process. So this will take some time, but it’s obviously good news for the company.

Wayne Lamb (Analyst at TD Securities)

Okay, wait, sorry. So when you say step five or six out of 30, I mean we’re a lot further along than that on a potential settlement though, right?

Keith Neumeyer (Chief Executive Officer)

Well, settlement requires all steps to be completed in its entirety.

Wayne Lamb (Analyst at TD Securities)

Okay, understood. All right, thanks for taking my questions.

OPERATOR (Conference Operator)

Again, if you’d like to ask a question on the audio side, please press star and then one. I will now pass the floor over to Mr. Darrell Ray, Investor Relations at First Majestic Silver, to take us through questions submitted through the webcast.

Darrell Ray (Investor Relations)

Yeah, okay, thank you. We’ve had a few questions here on the webcast, Keith. One is about AISC. All-in sustaining costs is moving higher. What specific inflation-hit inputs are pushing this higher?

Keith Neumeyer (Chief Executive Officer)

Manny, you want to take that?

Mani Alkhafaji (President & Chief Corporate Development Officer)

Yeah. So a couple of things. When you look at our AISC, it is high compared to last year. A couple of non-specific inflation driving that: our equivalency ratio has changed, so if you’re comparing it to 2025, we’re using 75 to 1 versus 87 to 1, so that gives us a lower denominator. The other direct inflation is related to labor, as Keith mentioned. So we have price-linked bonuses at the union level and profit sharing. So as the company makes more money, the payouts—you know, in Mexico it’s 10% of the profit is shared with the labor—so that hits our all-in sustaining cost.

But again, if you look at the slide that we showed earlier, the margins are expanding higher and faster than the incremental increase in all-in sustaining. Besides that, no really direct inflation we’re seeing. You know, we see some in diesel as a raw material or an input material and other reagents that we use, but we offset that with renegotiating contracts, you know, reducing our energy costs with converting to LNG as an example.

Darrell Ray (Investor Relations)

Okay, we have another question here. With operations going so well at La Encantada, would you increase the exploration budget to prove out more ounces and increase the life of mine of that operation?

Keith Neumeyer (Chief Executive Officer)

Well, the life of mine of La Encantada has been three years for 30 years. Those of you who have met me or met Manny in one-on-one meetings, we’ve always said that the best way of exploring there is through underground development. You know, drilling from surface is difficult; recovery is very poor. It’s a very brecciated oxide-type material that breaks up very easily with normal surface drilling. So we generally don’t—we use drilling just for, you know, general type work.

But, you know, really the GM is spending most of his time drifting into new areas within that mine. And it’s worked well for the last 10 years. And I don’t expect the life of mine at La Encantada to increase much. But at the same time I don’t expect it to drop at all. So, you know, we’re very enthusiastic there. There’s a number of new areas that we’re developing into and grades look, you know, better than budgeted. And I think that’s going to continue into 2027.

Darrell Ray (Investor Relations)

Okay, thanks, Keith. The next one is about Jerritt Canyon, of course. You are planning to spend 75 million at Jerritt Canyon this year after investing 42 million this quarter. How much more capital will you have to invest in 2027 before you get Jerritt Canyon up and running?

Keith Neumeyer (Chief Executive Officer)

We’ll be putting out more guidance on Jerritt for the next couple of years, months. As I said earlier, there will be a news release coming in the next few weeks more focused on exploration. But we will put an update in there at the same time talking a little bit about what we’ve been doing and some of our short-term plans. We will put out a more thorough update. We’re hoping to put a resource estimate out and some numbers out to the market in February or March.

But, you know, we’re still well on our way of meeting our objective of first gold in Q4, mining activity starting in Q3. And unless that changes, of course, we’ll put out the appropriate announcement. But everyone’s pretty excited. The team’s engaged and everything’s going very, very well.

Darrell Ray (Investor Relations)

Okay. And one more here from the web. How will bringing Santo Nino ore online in the future affect the production profile? What is the outlook at your Santa Elena operations?

Keith Neumeyer (Chief Executive Officer)

Dave, you want to do that one?

Dave Howe (Chief Operating Officer)

Well, I think I’ll start off with, you know, we started off right now in August on the ramp, right. It’s currently ahead of plan. Our team’s done very well. Happy with that. Our first ore from development is planned sort of Q1. So we’ve got, you know, 500 meters or so of ramp to go there and then we’ll start getting into some ore, and we’re still working on our long-term plan. But in terms of ore grades and mine planning, we’re looking at probably July, around 1,500 tonnes a day in terms of our development ore.

A long-term plan—we’re still working on it, really.

Keith Neumeyer (Chief Executive Officer)

Thanks, Dave.

Darrell Ray (Investor Relations)

Okay, that’s it from my perspective. Nick, are there any more from the dial-ins?

OPERATOR (Conference Operator)

They are showing no audio questions at this time.

Keith Neumeyer (Chief Executive Officer)

Okay, we’re good. Okay. Well thanks, everyone, for listening in today, and any further questions that come in as a result of our numbers that were released, please contact us and we’re happy to answer any further. Have a great day.

OPERATOR (Conference Operator)

This brings today’s conference call to a close. You may now disconnect your lines. Thank you for participating and have a pleasant day.

Disclaimer: This transcript is provided for informational purposes only. While we strive for accuracy, there may be errors or omissions in this automated transcription. For official company statements and financial information, please refer to the company’s SEC filings and official press releases. Corporate participants’ and analysts’ statements reflect their views as of the date of this call and are subject to change without notice.