First Majestic Silver Doubles Down on Margins and Metals Diversification

First Majestic Silver prioritizes cash flow over volume, restarts Jerritt Canyon gold project. Strong earnings support a doubled dividend as silver prices get a geopolitical boost.

First Majestic Silver is executing a dual-track strategy, prioritizing profitability in its core silver business while aggressively restarting a major gold project. This shift comes as geopolitical developments provide a tailwind for silver prices, even as the company's shares experienced a recent pullback.

The silver market found relief following a two-week ceasefire agreement between the US and Iran, which included a reopening of the Strait of Hormuz. This development eased fears of energy-driven inflation, helping the silver price climb back above $76 per ounce. Despite this supportive backdrop, First Majestic Silver's stock traded at €17.79, marking a daily decline of 9.65 percent. However, the longer-term performance remains robust, with the share price up approximately 227 percent over a twelve-month span. Another measure shows an impressive year-to-date gain of over 262 percent, with the stock closing at €19.68 in a recent session, trading notably above its 200-day moving average.

Financially, the company is operating from a position of strength. Its latest quarterly results surpassed market expectations, enabling a significant shift in capital allocation. For the fourth quarter of 2025, earnings per share (EPS) came in at $0.30, while quarterly revenue reached $463.9 million. Building on this performance, the company has doubled its quarterly dividend payout from 1% to 2% of net sales, effectively linking shareholder returns directly to revenue, which scales with the silver price.

A cornerstone of the new strategic focus is a deliberate move toward profitability over pure production volume. For 2026, First Majestic has lowered its silver production guidance to a range of 13.0 to 14.4 million ounces, down from 15.4 million ounces produced the previous year. This reduction stems from a decision to raise the cut-off grades at its mines, meaning only higher-grade ore will be processed. The goal is to maximize the cash flow generated from every ounce brought to surface. This disciplined approach has already helped amass a substantial cash reserve of $938 million, providing a critical buffer against short-term commodity price volatility.

Concurrently, the company is advancing a significant diversification effort with the planned restart of its Jerritt Canyon gold mine in Nevada. The operation has been idle since March 2023 due to high contractor costs and extreme weather. Following successful drilling programs over the past two years and based on higher long-term gold price assumptions, First Majestic is committing $75 million to revive the project. The mine hosts an estimated 4.1 million ounces of gold in measured and indicated resources.

Work to reopen the underground facilities is scheduled to begin in the second quarter of 2026, supported by extensive drilling campaigns. Analysts view the move favorably; Wayne Lam of TD Cowen sees substantial strategic optionality in the project at a high gold price, valuing the asset at approximately $582 million. Production is anticipated to recommence in the second half of 2027.

The company's core silver business continues to be underpinned by strong structural demand. Management highlights that industrial silver demand has surged 33% since 2020. It expects double-digit growth to continue in the coming years, driven by needs in the chip industry, server infrastructure, and robotics.

Investors can expect more concrete data on both fronts in July 2026. First Majestic Silver will use its mid-year update to present specific production targets, a revised capital budget, and further operational progress details on the Jerritt Canyon restart.