Strategic Shift: First Majestic Silver Prioritizes Profit Over Production Volume

First Majestic Silver shifts strategy from record production to margin enhancement, focusing on high-grade ore and vertical integration as silver prices soar.

In a notable strategic pivot, First Majestic Silver is deliberately scaling back its output following a record-breaking year. This move is not a sign of weakness but a calculated adjustment to capitalize on a silver market experiencing a prolonged structural supply deficit.

A Foundation of Record Performance

The company's 2025 fiscal year delivered exceptional results. Silver production surged to an all-time high of 15.4 million ounces, marking an 84 percent increase from the previous year. This growth was primarily fueled by the acquisition of the Los Gatos operation, coupled with higher output from the San Dimas and La Encantada mines. Annual revenue hit $1.26 billion, and the firm ended the year with cash reserves of approximately $1 billion.

The New Focus: Margin Enhancement

For 2026, First Majestic has intentionally set a lower production guidance range of 13.0 to 14.4 million ounces. The rationale behind this reduction is clear: management is shifting focus toward processing higher-grade ores. With silver prices remaining elevated—recently trading between $84 and $100 per ounce—the strategy aims to maximize profitability per ounce rather than simply chasing production volume.

Concurrently, the company is making significant investments in its processing infrastructure. Expansion work will increase the Santa Elena mill’s capacity from 3,200 to 3,500 tonnes per day. Furthermore, the Los Gatos mill is projected to achieve a throughput of 4,000 tonnes per day by the second half of 2026.

Exploration Success at Jerritt Canyon

Promising exploration results from the 2025 drill campaign at the Jerritt Canyon gold mine in Nevada were announced in early March. Approximately 18,300 meters of drilling across 57 holes revealed that mineralized zones connecting the Mahala, Javelin, and Saval targets are broader and more continuous than previously understood. This discovery opens the possibility of implementing open-pit mining as a supplementary method alongside existing underground operations. Such an approach could enable more extensive long-term development of the 30,000-hectare land package in Nevada.

Strengthening the Value Chain

Another key element of First Majestic's strategy is its vertical integration through in-house minting. In 2025, the company processed 12 percent of its silver output into coins and bars. Plans are in place to raise this proportion to 20 percent or more in the future. As the global silver market contends with its sixth consecutive year of structural supply shortfall, this positioning along the entire value chain is likely to become increasingly advantageous.