First Majestic Silver Corp. Q1 FY2026 earnings call

• Leadership and Operational Personnel Updates

  • David Howe was appointed new Chief Operating Officer, effective May 4, 2026, following the planned retirement of former COO Steven C. Holmes, who will stay on through June 30 to support the transition. Steven was instrumental in positioning the company for its current success over his 6-year tenure.
  • Alexander Thompson joined as Managing Director for the Jerritt Canyon restart on April 20, 2026, bringing 20 years of global mine building and operating experience to lead the project.
  • A full talent ramp for Jerritt Canyon is underway, with key management roles being filled first, followed by broader operational hiring through 2026 and early 2027.

• Q1 2026 Production and Financial Performance

  • Q1 2026 silver production reached 3.5 million ounces (26% of 2026 full-year midpoint guidance), and gold production hit 28% of full-year midpoint guidance, outperforming the typical seasonal Q1 production slowdown. The average realized silver price was $86.35, up from $33.10 in Q1 2025.
  • The company held back 676,000 ounces of silver and 2,700 ounces of gold in inventory (valued at $63 million) to sell at expected higher future prices, which excluded these volumes and their associated value from Q1 revenue.
  • Operating cash flow hit $311 million ($0.63 per share), with margins expanding to $52 per ounce of silver, up from $13 per ounce in Q1 2025 (a nearly 4x increase). The company declared its largest ever dividend of 1.71 cents per share (4x larger than 2025's Q1 dividend), after raising the dividend payout policy from 1% to 2% of profit effective January 1, 2026.
  • Cash costs and all-in sustaining costs (AISC) are aligned with plan; AISC increased modestly year-over-year driven by lower cutoff grade mining (which increases volume throughput and extends mine life), a fixed 75-to-1 silver-gold pricing ratio adopted for 2026, higher profit sharing, higher smelting costs, and higher royalty payments tied to rising silver prices. Cost per ton of ore mined fell to $170, the lowest level in recent years, showing efficiency gains.
  • Total cash and treasury resources exceed $1.1 billion, supporting aggressive growth plans.

• Operational Updates Across Core Assets

  • The company has very low diesel exposure (only 5% of total energy costs), with three mines converted to liquified natural gas and the fourth connected to the electrical grid, limiting exposure to recent Middle East-driven energy price volatility.
  • La Encantada transitioned to in-house ore hauling after contractor performance issues. Twelve new haul trucks have been delivered and are fully operational, with early results showing increased mill throughput and expected future cost reductions.
  • Los Gatos is on track to reach 4,000 tons per day production, with third-party contractors engaged to resolve the historical mine-level throughput bottleneck (the mill already has capacity to support the higher rate). A small 10-meter ramp collapse caused a 2.5-day production halt in Q1, which was not material and the mine has returned to full operation.
  • Santa Elena's mill expansion is progressing to increase capacity from 3,200 tons per day to 3,500 tons per day, with completion targeted for 2026. Recent discoveries (Santo Niño and Navidad) added 90 million ounces of silver to Santa Elena's reserves, and development work to bring these ore bodies into production is ongoing.
  • The 2026 global exploration program totals 266,000 meters across core operating assets, plus an additional 42,000 meters at Jerritt Canyon, for a total of over 300,000 meters of drilling this year. Updated reserves released in March 2026 confirmed significant resource growth across the portfolio.

• Jerritt Canyon Restart Progress

  • Pre-development work is on track, with underground prepping underway. Key equipment (underground fleet, oxygen plant) is in the procurement phase, with orders for long-lead items planned in the coming weeks. A pre-feasibility study (PFS) for the restart is targeted for release in early 2027, and commercial production is targeted to begin in H2 2027.

First Majestic Silver operates four producing silver/gold mines plus the non-core First Mint retail business and the restarting Jerritt Canyon gold project:

1. Four operating mines (San Dimas, La Encantada, Santa Elena, Los Gatos): Generated $311 million in operating cash flow and $224 million in free cash flow in Q1 2026, with notable year-over-year profitability improvements across all assets. La Encantada specifically earned $30 million in Q1 2026, a strong turnaround after prior operational challenges. Total consolidated revenue hit a record $477 million, up 95% year-over-year, with 66% of revenue attributable to silver (up from 60% in 2025).
2. First Mint: The retail-driven precious metals business posted another record quarter in Q1 2026, with order volumes increasing alongside rising metal prices. Exact revenue contribution was not disclosed, but the business has built strong momentum and expansion plans are in development.
3. Jerritt Canyon (restart project): No current operating revenue; the company is investing $75 million in 2026 for restart preparations, with an additional 42,000 meters of exploration drilling planned for the site this year. The project currently hosts 7.8 million ounces of gold in reserves/resources.

• Full-year 2026 production guidance was maintained, with Q1 2026 silver and gold production both exceeding the midpoint of the guidance range (hitting 26% and 28% of midpoint guidance, respectively).
• The company expects 2026 to be a record year if current silver and gold price levels are sustained, with Q2 2026 also tracking for strong performance.
• Jerritt Canyon restart guidance is maintained: commercial production is still targeted to begin in H2 2027, with a pre-feasibility study expected in early 2027, and $75 million in capital investment planned for 2026.
• Santa Elena mill expansion (to 3,500 tons per day from 3,200 tons per day) is still on track to be completed in 2026.
• Los Gatos ramp up to 4,000 tons per day remains on schedule, with the mine throughput bottleneck being resolved via third-party contracting.

• The company noted that policy changes from the Mexican government (which has seen a large windfall in tax revenue from higher silver prices) cannot be predicted, though there are no current rumors or active discussions of imminent changes.
• As a silver and gold producer, the company's financial performance and cash flow are highly leveraged to commodity price volatility, which is reflected in the company's share price volatility.
• Mining operations inherently carry operational risk: the company experienced a small non-material 10-meter ramp collapse at Los Gatos that caused a 2.5-day production halt, and larger operational incidents could impact production in the future.
• Input cost inflation and stakeholder demands for a larger share of profits (from labor, suppliers, or governments) could increase costs, though management has not observed significant broad-based inflation to date.

Q: If commodity prices stay at current elevated levels, will stakeholders (governments, labor, suppliers) demand higher compensation or create cost pressures? / A: Management noted there are no current plans or discussions for Mexican government policy changes, and the government is already receiving a large windfall in tax revenue from higher profitability. Labor unions have been cooperative, with recent negotiations completed smoothly, as worker bonuses are already tied to silver prices, leading to higher payouts that keep stakeholders satisfied. Management has not seen the 15-25% supplier price increases that occurred during the 2011 silver bull market, and recent major equipment purchases are being completed at reasonable pricing with no broad input inflation observed to date. Cost increases from higher taxes and profit sharing were already expected and incorporated into current AISC figures, and expanding margins easily absorb these increases.

Q: What is the hiring timeline for the Jerritt Canyon restart, and will the local labor pool support the project? / A: Key management positions are being filled first, with a handful of senior roles already filled in recent weeks and more senior hires planned over the next two weeks. Broader operational hiring will ramp after that, with the project expected to be fully manned by fall 2026, and underground workforce hiring completed in early 2027. Jerritt Canyon is located just 45 minutes from Elko, Nevada, a major regional mining hub, giving it a better location than competing mines that require much longer commutes. Local community excitement is high, and potential labor availability may be boosted by ongoing turmoil at nearby Newmont operations, so management does not expect hiring difficulties.

Q: Beyond the pre-feasibility study, what are the key critical path milestones for the Jerritt Canyon restart in 2026 and 2027? / A: The two most critical long-lead items for the restart are the new oxygen plant for the processing facility and the underground mining fleet. Procurement is ongoing for both assets, with orders for the underground fleet expected in the next two weeks (these have 10-12 month lead times). The company will provide additional public updates once procurement details are finalized.

Q: What is the company's current M&A strategy? / A: Management confirmed the company is continually searching for high-quality silver growth projects, which are relatively rare, and the company's business development team actively scours the global market for attractive acquisition opportunities. No specific targets or timelines were disclosed.