First Majestic Silver Corp. (AG:CA) Q1 2026 Earnings Call Transcript
Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
Overview
The company reported record high revenues and significantly improved margins, with a 95% YoY revenue increase and a 4x improvement in margins. The dividend policy was increased, marking the largest dividend in company history, and the company holds substantial cash reserves. The Q&A session did not reveal any major concerns, with management addressing potential risks effectively. The stock's small-cap nature suggests a strong positive reaction to these developments, likely exceeding an 8% increase in the stock price over the next two weeks.
Key Financial Performance
Silver Production 3.5 million ounces of silver produced in Q1 2026, representing 26% of 2026 midpoint guidance. This was an exceptionally good quarter without the usual Q1 dip.
Gold Production Gold production was at 28% of midpoint guidance for 2026, exceeding expectations.
Average Realized Silver Price $86.35 in Q1 2026 compared to $33.10 in Q1 2025, showing a significant increase.
Revenue Record revenues of $477 million in Q1 2026, up 95% year-over-year. The increase was driven by higher silver prices and production.
Inventory Value $63 million worth of silver (676,000 ounces) and gold (2,700 ounces) held in inventory at the end of Q1 2026, not included in revenue. This was a strategic decision to hold for higher prices.
Operating Cash Flow $311 million in Q1 2026, or $0.63 per share, driven by efficiency improvements and higher silver prices.
Dividend $0.0171 per share for shareholders of record on May 15, 2026. This is 4x the size of last year's dividend, supported by revenue doubling and a policy change increasing the dividend from 1% to 2%.
Margins Margins increased from $13 per ounce in Q1 2025 to $52 per ounce in Q1 2026, a nearly 4x improvement due to higher silver prices and cost efficiencies.
Cost Per Tonne $170 per tonne in Q1 2026, the lowest in a while, reflecting cost control measures.
Free Cash Flow $224 million in Q1 2026, even after a $95 million tax payment to the Mexican government for 2025 income taxes.
Treasury Over $1.1 billion, providing flexibility for future growth and investments.
Exploration Program 266,000 meters of exploration planned for 2026, plus an additional 42,000 meters at Jerritt Canyon, totaling over 300,000 meters.
Santa Elena Resource Increase 90 million ounce increase in resources due to Santo Niño and Navidad discoveries.
Jerritt Canyon Gold Reserves 7.8 million ounces of gold, reflecting redevelopment of underground and open-pit resources based on current gold prices.
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Operating Highlights
Silver Production: Produced 3.5 million ounces of silver in Q1, representing 26% of 2026 midpoint guidance.
Gold Production: Gold production was at 28% of midpoint guidance for 2026.
New Ore Discoveries: Advancing Navidad and Santo Niño discoveries for future production at Santa Elena.
Revenue Growth: Achieved record revenues of $477 million in Q1, up 95% year-over-year.
Dividend Increase: Largest dividend in company history at $0.0171 per share, 4x the size of last year's dividend.
Operational Efficiencies: Margins increased 4x from $13/oz in Q1 2025 to $52/oz in Q1 2026. Operating cash flows reached $311 million.
Cost Management: Cost per tonne reduced to $170, the lowest in recent years. Diesel exposure minimized to 5% due to renewable energy sources.
Mine Expansion: Expanding Santa Elena mill to 3,500 tonnes/day by H2 2026 and increasing Los Gatos mining rates to 4,000 tonnes/day.
Leadership Changes: Appointed Dave Howe as COO and Alex Thompson as Managing Director for Jerritt Canyon restart.
Jerritt Canyon Restart: Investing $75 million in 2026 for restart, targeting production in H2 2027.
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Risk or Challenges
Management Changes: The retirement of Steve Holmes and the transition to Dave Howe as COO could pose risks related to leadership continuity and operational adjustments. Additionally, the hiring of Alex Thompson for Jerritt Canyon restart introduces execution risks in achieving the planned restart timeline.
Cost Management: Production costs have increased due to higher throughput and changes in mining methods, which could impact profitability if not offset by higher revenues. The fixed price ratio of 75:1 for silver and gold introduces potential financial risks due to market volatility.
Supply Chain and Equipment: Delays in equipment procurement for Jerritt Canyon and other operations could impact timelines for production and operational upgrades.
Operational Disruptions: A minor collapse at Los Gatos caused a 2.5-day disruption, highlighting potential risks of operational interruptions in mining activities.
Regulatory and Taxation: A significant tax payment of $95 million to the Mexican government impacted cash flow, indicating potential financial strain from regulatory obligations.
Energy Costs: Although diesel exposure is minimal, any unforeseen changes in energy costs could still impact operations.
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Guidance & Outlook
Silver and Gold Production: The company expects to achieve 26% of its 2026 midpoint guidance for silver production and 28% for gold production in Q1, indicating a strong start to the year.
Dividend Policy: The company has increased its dividend policy from 1% to 2% effective January 1, 2026, resulting in the largest dividend in the company's history.
Cost Management: The company plans to maintain a 75:1 silver-to-gold price ratio throughout 2026 to manage cost volatility. Additionally, self-hauling initiatives at La Encantada are expected to reduce costs and increase throughput.
Operational Expansions: The Santa Elena mill expansion to 3,500 tonnes per day is expected to be completed by H2 2026. Los Gatos mine development aims to reach 4,000 tonnes per day with contractor assistance.
Exploration and Resource Development: The company plans to drill over 300,000 meters in 2026, including 42,000 meters at Jerritt Canyon. Resource upgrades at Santa Elena and Jerritt Canyon are expected to enhance future production.
Jerritt Canyon Restart: The company is investing $75 million in 2026 for the restart of Jerritt Canyon, targeting production commencement in H2 2027. A pre-feasibility study is expected by early 2027.
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Shareholder Return Plan
Dividend Amount: $0.0171 per share for shareholders of record on May 15, 2026.
Dividend Growth: The dividend is 4 times the size of last year's dividend.
Dividend Policy Change: The company increased its dividend policy from 1% to 2% effective January 1, 2026.
Historical Significance: This is the largest dividend in the company's history.
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Key Q&A
Q:Do you think rising commodity prices might lead to increased demands from labor, governments, or other stakeholders?
A:Keith Neumeyer stated that there are no rumors or discussions about government changes, and the Mexican government is benefiting from increased tax income due to high commodity prices. Union negotiations have been smooth, and bonuses tied to silver prices have increased costs. Inflationary pressures from suppliers like Sandvik have not been significant.
Q:When will hiring for Jerritt Canyon ramp up, and what is the labor pool situation?
A:Keith Neumeyer mentioned that hiring will ramp up by fall, with underground workforce additions expected in early 2027. Most hires will come from the local area, and the proximity of the mine to Elko is advantageous. Key management positions are being filled, and the community is showing interest in employment opportunities.
Q:What are the critical path items or milestones for Jerritt Canyon beyond the PFS?
A:Keith Neumeyer identified the oxygen plant and underground fleet as critical items. Orders for the underground fleet will be placed soon, with lead times of 10-12 months. Details on the oxygen plant are still being defined, and more information will be shared later.
Q:Are there any critical items for expansions at Los Gatos or Santa Elena?
A:Keith Neumeyer stated that there are no critical items, just time and money required for the expansions.
Q:What is the company's strategy regarding M&A?
A:Keith Neumeyer mentioned that the company is always looking for good silver projects, which are rare and hard to find. The team continues to search globally.
Q:What percentage of total revenue came from the First Mint business in Q1, and how is it performing?
A:Mani Alkhafaji reported that Q1 was a record quarter for the First Mint business, driven by retail demand and rising metal prices. Operations are going well, and there are plans for further expansion.
Q:How does the lower cutoff grade strategy impact mine life?
A:Keith Neumeyer explained that lowering the cutoff grade increases mine life by allowing the mining of previously uneconomic low-grade material. This results in slower advancement and wider mining stopes, positively impacting the life of the mine.
Q:Review of Unclear Management Responses
A:Keith Neumeyer avoided providing specific details about the oxygen plant for Jerritt Canyon, stating that it is still a 'moving thing' and more information will be shared later. Additionally, he did not elaborate on specific M&A opportunities, only mentioning that the company is continually searching for good silver projects.
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Earnings Word Cloud
The most frequently occurring keywords in this quarter's earning call
Corporate Secretary
Darrell Rae
Europe President
Financial
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Howe mining
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Officer Vancouver
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Silver highlight
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AG Transcript
First Majestic Silver Corp. (AG:CA) Q1 2026 Earnings Call Transcript
Positive5-12
The company reported record high revenues and significantly improved margins, with a 95% YoY revenue increase and a 4x improvement in margins. The dividend policy was increased, marking the largest dividend in company history, and the company holds substantial cash reserves. The Q&A session did not reveal any major concerns, with management addressing potential risks effectively. The stock's small-cap nature suggests a strong positive reaction to these developments, likely exceeding an 8% increase in the stock price over the next two weeks.
First Majestic Silver Corp. (AG:CA) Q4 2025 Earnings Call Transcript
Unknown2-19
The earnings report shows mixed signals: strong silver production and revenue, cash reserves, and increased dividends are positive. However, challenges like operational issues, increased costs, and uncertainties related to SAT and Jerritt Canyon pose risks. The Q&A reveals management's cautious approach to cash utilization and lack of clarity on tax issues. Given the small-cap nature of the company, these mixed factors are likely to result in a neutral stock price movement.
First Majestic Silver Corp. (AG) Q2 2025 Earnings Call Transcript
Positive8-14
Despite revenue miss and cost pressures, the company reported record high revenue, EBITDA, and cash flows, indicating strong financial performance. Increased production and exploration spending suggest growth potential. While there are concerns about costs and integration, these are largely one-time or manageable. The company's dividend policy and positive synergies from integration are additional positives. The market cap of $1.73 billion suggests the stock may react more strongly to positive news, leading to a positive prediction for the stock price movement.
First Majestic Silver Corp. (AG) Mining Forum Europe 2025 Conference - (Transcript)
Neutral4-7
AG Report
Frequently Asked Questions
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They are generated by a specialized financial-language model trained exclusively on 15+ years of earnings transcripts. The model extracts financial figures, guidance, and tone with 97%+ accuracy and is regularly validated against human analysts. The full raw transcript always remains available for verification.
