First Majestic Silver (NYSE:AG) reported higher revenue, production and cash flow in the second quarter of 2026, while advancing development work at its Mexican operations and preparing for a planned restart at the Jerritt Canyon gold mine in Nevada.
Chief Executive Officer Keith Neumeyer said quarterly revenue rose 53% from a year earlier to $416 million. The company produced 3.8 million ounces of silver during the quarter, bringing first-half output to 7.3 million ounces, or roughly 50% of its revised full-year production guidance. First Majestic increased its guidance in July by about 10% from the outlook issued in January.
The company ended June with $1.25 billion in its treasury. First Majestic remains unhedged to gold and silver prices, Neumeyer said, adding that quarterly operating cash flow declined modestly from the first quarter because of pricing movements.
Costs, shareholder returns and inventory
Neumeyer said costs were affected by larger workforce bonuses tied to silver prices, but added that First Majestic was maintaining cost discipline. The company reported costs per ton of 107, which he said compared favorably with the prior four years.
First Majestic declared a dividend that represented a 270% year-over-year increase, according to Neumeyer. It also repurchased 1.2 million shares during the quarter, spending $22 million, which Neumeyer described as the largest quarterly share-buyback expenditure in the company’s history.
On capital allocation, Neumeyer said further buybacks and dividend increases remain under consideration, but he emphasized the company’s desire to continue building its treasury. He identified two potentially significant cash requirements: a potential tax settlement in Mexico involving Primero San Dimas, which the company hopes to resolve by year-end, and capital spending associated with the Jerritt Canyon restart.
In response to an analyst question on finished-goods inventory, Neumeyer said the company’s mint requires about 400,000 ounces of silver in its vaults to operate efficiently. Finished-goods silver inventory exceeded 1 million ounces at the end of the quarter, compared with slightly more than 600,000 ounces at the end of the preceding quarter. He said First Majestic held additional inventory after a sharp decline in silver prices and expected the inventory balance to fall during the current quarter.
Mine performance and Mexican development
At Los Gatos, First Majestic exceeded its 4,000-tonne-per-day throughput target in June, reaching a record 4,070 tonnes per day. Neumeyer said the company was working toward sustained throughput at that level.
Santa Elena was nearing 3,500 tonnes per day of throughput, with the company expecting to operate at that rate through the second half of the year. Both Santa Elena and La Encantada were performing above budget, Neumeyer said.
La Encantada has begun using a company-owned truck fleet to transport ore to the mill, replacing the prior transportation approach. Neumeyer said the change was contributing to higher throughput levels at the operation.
San Dimas recorded what Neumeyer characterized as a good quarter despite labor disruptions. He said workforce development rates had improved compared with the prior two years.
The company received permits in Mexico for the Santo Niño and Navidad portals near Santa Elena. First Majestic has started development at Santo Niño and expected its first blast around Aug. 15, according to Chief Operating Officer David Howe. Howe said ground-control equipment had been ordered and that he did not see issues affecting development progress.
- Santo Niño is expected to begin contributing ore to the Santa Elena mill near the end of 2027.
- Navidad is expected to begin adding ore about 18 months after Santo Niño.
- Metallurgical testing indicates gold and silver recoveries above 95% for both Santo Niño and Navidad, according to a company representative.
The company said the new deposits could extend Santa Elena’s mine life. Neumeyer said Santo Niño development was running more than a year ahead of the company’s prior schedule.
Jerritt Canyon restart and exploration
First Majestic is conducting underground development, rehabilitation and drilling at Jerritt Canyon, which is currently being prepared for a return to production. The company expects production to resume in the third quarter of 2027.
Neumeyer said First Majestic had budgeted $75 million for the restart in 2026 and remained within that figure. Deposits have been made for a sand-treatment system and other equipment, with additional orders expected within 30 days. The company expects to provide further details on 2027 capital needs when it releases its 2027 budget in January.
Jerritt Canyon had approximately 40 employees during care and maintenance, and First Majestic needed to fill 45 additional roles for the restart. Neumeyer said about 80% of those positions had been filled.
Exploration remained a central focus, with 94,000 meters drilled across the portfolio during the second quarter and 160,000 meters drilled during the first half. Neumeyer said the company continued to identify structures and ore bodies, including recent drilling results at San Dimas, while work continued at Santo Niño and Navidad.
First Majestic expects to release an updated NI 43-101 technical report for Los Gatos in the next quarter or so, followed by a Santa Elena report later this year or early next year. Capital spending is expected to be weighted toward the second half of 2026, with Neumeyer citing timing effects and noting that Los Gatos development was slightly behind budget but not materially so.
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.
