First Majestic Silver Nears Divestiture of Idled Del Toro Mine

First Majestic Silver to sell idled Del Toro mine to Sierra Madre for up to $60M, aligning with its new 'margin over volume' strategy for 2026.

First Majestic Silver Corp. is poised to finalize the sale of a long-idled Mexican silver mine, a move that aligns with its strategic pivot toward profitability over sheer production volume. The pending shareholder vote at Sierra Madre Gold & Silver Ltd. on the acquisition of the Del Toro mine marks a timely divestiture for the silver producer.

Strategic Shift Toward Margin Discipline

The company has formally transitioned from a volume-driven growth model to a disciplined "margin over volume" philosophy for 2026. This strategic realignment is underscored by a deliberately conservative production forecast for the current fiscal year, set at 13.0 to 14.4 million silver ounces. The aim is to preserve high-grade resources for more profitable market conditions.

Selling the non-producing Del Toro asset fits seamlessly into this new framework. The company's strong financial position provides a cushion for this strategy. In 2025, First Majestic achieved record revenues of approximately $1.3 billion, building a cash reserve of $938 million—the largest in its history. This liquidity has become increasingly valuable amid recent volatility in silver prices.

Transaction Details and Milestones

The agreement with Sierra Madre carries a total potential value of up to $60 million. Upon closing, First Majestic will receive $30 million, comprising $20 million in cash and $10 million in Sierra Madre shares. An additional $30 million is contingent on Sierra Madre meeting specific development and production milestones within the next five years.

Located in Chalchihuites, Zacatecas, the Del Toro mine produced an average of 2.54 million silver equivalent ounces annually between 2015 and 2018. It has been on care and maintenance since January 2020. This deal represents the second transaction between the two companies; Sierra Madre previously acquired First Majestic's La Guitarra silver mine in 2022 and successfully recommissioned it in January 2025.

Sierra Madre is targeting a shareholder vote on the acquisition by the end of April 2026. Completion remains subject to certain conditions, including a private placement of at least C$40 million and approval from Mexican antitrust authorities. The transaction is expected to close in the first half of 2026.

Market Context and Share Performance

The silver market has faced headwinds in early 2026. After reaching a record high at the start of the year, the metal's price has retreated significantly, trading near $73 per ounce in early April. Geopolitical tensions and rising oil prices have fueled concerns about an economic slowdown, triggering selling pressure on silver.

Despite this market pressure, First Majestic's equity has demonstrated remarkable strength over the past twelve months, posting gains of more than 230%. However, the shares currently trade approximately 30% below their 52-week high.

Key Upcoming Events for Shareholders

Two near-term events are now in focus for investors. The Sierra Madre shareholder vote on the Del Toro sale is anticipated before April concludes. Subsequently, on May 13, 2026, First Majestic will report its quarterly results.

This earnings release will also mark the company's first dividend payment under a new distribution policy, which stipulates a payout equivalent to 2% of revenue. The upcoming report will provide insight into whether the company can effectively translate periods of elevated silver prices into tangible returns for its shareholders.