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DATE
Thursday, Nov. 5, 2026
CALL PARTICIPANTS
- Chief Executive Officer - Keith N. Neumeyer
- President and Chief Corporate Development Officer - Mani Alkhafaji
- Chief Financial Officer - Neil Norman Beaumont
- Chief Operating Officer - David J. Howe
- General Counsel and Corporate Secretary - Samir Devendra Patel
- Investor Relations - Darrell Rae
- Investor Relations - Joel Faltinsky
- Financial Team - Darren Fernandes
TAKEAWAYS
- Revenue -- $394.1 million, representing a 38% increase driven by higher realized metal prices and increased sales volume at the La Encantada mine.
- EBITDA -- $228.8 million, up 78% year over year, reflecting expanded margins from metal price appreciation and operational efficiencies.
- Net Earnings -- $74.5 million attributable to owners of the company, or $0.15 per share, including the impact of a $30.7 million one-time tax settlement expense.
- All-in Sustaining Cost (AISC) -- $30.45 per silver equivalent ounce, increasing 46% due to a lower silver equivalent conversion ratio and higher sustaining development rates.
- Silver Production -- 3.4 million ounces, decreasing 11% compared to the third quarter of 2025, primarily due to a 12-day labor disruption at San Dimas and sequencing changes at Los Gatos.
- Gold Production -- 29,552 ounces, representing a 17% decrease versus the third quarter of 2025, aligned with the company's revised budget.
- Average Realized Silver Price -- $61.52 per ounce, reflecting a 59% increase compared to $38.78 per ounce in the same period last year.
- Average Realized Gold Price -- $4,195 per ounce, representing a 23% increase from $3,399 per ounce in the third quarter of 2025.
- Cash and Cash Equivalents -- $1,070.8 million, contributing to a total treasury position of $1.23 billion including restricted cash.
- Working Capital -- $882.3 million, increasing 20% compared to $733.6 million at the end of 2025, excluding restricted cash.
- Attributable Capital Expenditures -- $101.9 million, driven by $41.9 million in investment for the Jerritt Canyon restart project.
- Jerritt Canyon Progress -- 70% to 80% completion of key hiring targets, with mill refurbishment components ordered for delivery in the first half of 2027.
- Finished Goods Inventory -- 760,832 silver ounces and 1,960 gold ounces, with a combined fair market value of $54.1 million not recognized as revenue in the third quarter.
- Share Repurchases -- 1.3 million shares repurchased year-to-date, including 100,000 shares in the third quarter at an average price of CAD$21.00.
- Drilling Activity -- 78,475 meters completed during the quarter using up to 33 active drill rigs across the mine portfolio.
- Santa Elena Expansion -- plant throughput capacity reaching 3,000 tonnes per day, with the Santo Niño portal permitted 18 months ahead of the original schedule.
- Cash Flow from Operations -- $214.3 million before working capital changes, representing $0.43 per share.
- Tax Settlement -- $36.8 million paid for Minera La Encantada assessments, resolving legacy disputes related to prior forward silver purchase agreements.
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RISKS
- Neumeyer stated, "the labor disruption continues today," noting that the strike at San Dimas, which officially began on Oct. 8, involves an impasse over union demands for the company to pay 100% of employees' income taxes on production bonuses.
- Neumeyer indicated that "lower head grades hitting the mill" from a conscious strategy to lower cutoff grades could impact unit costs if metal prices underperform.
SUMMARY
First Majestic Silver Corp. (NYSE:AG) reported a 38% increase in quarterly revenue to $394.1 million and a 78% rise in EBITDA, driven by significant appreciation in realized silver and gold prices. Management reported a record treasury position of $1.23 billion, which the company is utilizing to fund its highest capital investment program in corporate history, including the restart of the Jerritt Canyon gold mine. Operational output during the quarter was constrained by a labor dispute at the San Dimas mine, which resulted in 12 days of production loss in September and a subsequent strike in October. Management confirmed the settlement of long-standing tax disputes for its La Encantada subsidiary and announced a multi-step framework agreed in principle with Mexican authorities to resolve remaining legacy tax issues.
- CEO Neumeyer stated, "This year is our highest capital investments throughout the business in the company's history," as the company reinvests profits into mine development and expansions.
- Management noted that although all-in sustaining costs rose to $30.45 per silver equivalent ounce, margins expanded as revenue growth outpaced both inflationary and price-linked variable cost increases.
- The company dropped its NAFTA arbitration case against Mexico, which Neumeyer stated should indicate to shareholders that "we actually are making progress" on resolving international tax disputes.
- San Dimas operations remain suspended pending a court ruling on the legality of the union strike, with Neumeyer stating the company remains firm in its refusal to pay the employees' personal income taxes.
- Santa Elena continues to advance its development pipeline, with management reporting that the Navidad portal began construction in the fourth quarter following the earlier-than-expected permitting of Santo Niño.
- Management indicated that Jerritt Canyon remains on track for its first gold pour in the fourth quarter of 2026, with underground development and mill refurbishment activities proceeding as scheduled.
- The company declared a third-quarter dividend of $0.0142 per share, representing a nearly threefold increase compared to the same period in the previous year.
INDUSTRY GLOSSARY
- AgEq (Silver Equivalent): A metric used to express the combined value of all metals produced in terms of silver ounces, calculated based on the relative prices of silver, gold, and base metals.
- AISC (All-in Sustaining Cost): A non-GAAP financial measure that includes cash costs plus sustaining capital expenditures, corporate general and administrative expenses, and exploration costs.
- APA (Advance Pricing Agreement): A contract between a taxpayer and a tax authority on the pricing of transactions between related parties, such as the sale of silver between subsidiaries.
- LOM (Life of Mine): The expected duration of time that a mining operation will remain productive based on current proven and probable mineral reserves.
- PTU (Participación de los Trabajadores en las Utilidades): A mandatory employee profit-sharing requirement in Mexico, typically calculated as 10% of a company's taxable income.
- SAT (Servicio de Administración Tributaria): The federal tax authority of Mexico responsible for tax collection and administration.
Full Conference Call Transcript
Operator: Thank you for standing by. This is the conference operator. Welcome to the First Majestic Silver Q3 26 Financial Results Conference Call. As a reminder, all participants are in a listen-only mode, and the conference is being recorded. After the presentation, there will be an opportunity to ask questions. To join the question queue, you may press star, then 1. If you are participating through the webcast, you can submit a question in writing by using the form in the lower section of the webcast frame on your screen. Should you need assistance during the conference, you may reach an operator by pressing star then 0. I would now like to turn the conference over to Mr. Keith N.
Neumeyer, Chief Executive Officer of First Majestic Silver. Keith, please go ahead.
Keith N. Neumeyer: Thank you, operator, and welcome to everyone who is dialed in and those of you who will be listening to this podcast or conference call over our website, Before I begin, I would like to just introduce the people in the room that are with me today here in our new time zone of British Columbia. Mani Alkhafaji, our President and Chief Corporate Development Officer our CFO, Neil Norman Beaumont our Chief Operating Officer, David J. Howe; and Samir Devendra Patel, general counsel and corporate secretary, Darrell Rae and Joel Faltinsky from Investor Relations; and Darren Fernandes from our financial team. Before I get into our presentation today, I would like to introduce Samir to discuss the disclaimers.
Samir Devendra Patel: Thanks. Before we begin today's call, I would like to remind you that we will be referring to certain non-IFRS measures and making certain statements regarding First Majestic Silver and its operations that constitute forward looking statements in accordance with applicable Canadian and U. S. Securities laws. All statements that are not historical facts, such as statements regarding future estimates and plans or expectations of future performance constitute forward looking statements that reflect the company's current views with respect to future events. These statements are necessarily based upon a number of assumptions and estimates that while considered reasonable by the company are inherently subject to significant business, economic, competitive, political, social uncertainties and contingencies.
We encourage you to refer to the cautionary language included in our news release that was disseminated earlier this morning and the disclosure on non-IFRS measures in our most recently filed management discussion and analysis. As well as the risk factors set out in our most recently filed annual information form. As a reminder, these documents, along with all of our continuous disclosure documents, are available on SEDAR plus and on EDGAR. Investors are cautioned against attributing undue certainty or reliance on any forward looking statements made during today's call. And the company does not intend or assume any obligation to update these forward looking statements or information other than as required by law.
With that, I will turn the call back to Keith.
Keith N. Neumeyer: Thanks, Samir. For those of you who would like to see the presentation, it is on our website. Hopefully, you get a chance to review it. The corporate website or the corporate presentation is also there, so do not get confused between the 2. So getting into the highlights, revenues for the quarter were $394 million. Up 38% year over year. And we have got revenues to date for 3 quarters of 26 came in at $1.29 million or $1.2 billion in revenues, 62% compared to last year. Our silver production was robust at 3.4 million ounces. Gold production was again on budget, 30 thousand ounces of gold.
Our average selling price for silver for the quarter was $61.20 year to date $70.22 Our earnings or EBITDA for the quarter was $228 million up 78% compared to a year ago. And cash flows, $0.43 a share. Exploration remains very aggressive. We drill 78 thousand meters in the quarter over the 4 assets, including Jerritt Canyon, We are making some good progress on the Mexican tax issue. We did come out with a news release during the quarter regarding us dropping the NAFTA case against Mexico. So that should tell our shareholders that we actually are making progress and we hope to have updates over the next few weeks or few months on that particular issue.
We announced our dividend as well, which is our record dividend. Which will be payable in the next couple of months. And our share back program was active in the quarter. To date, we have bought 1.3 million shares back out of the market. Our liquidity remains robust. With about $1.2 billion in the bank. $3 billion in the bank, which will break down our liquidity on this slide. So moving forward to Slide 4, we have all in sustaining cost impact for the year. We are, of course, seeing inflation like the rest of the industry. As laid out here.
1 of the bigger drivers to cost is the fact that we made a conscious effort a year ago to lowering our cutoff grades, That was something that can be reversed. If metal prices do underperform. But it is a great strategy right now. it is despite the lower head grades hitting the mill, throughputs continue to be very good. And but it does have an impact on cost because you are moving more rock for less metal, but it is highly economic to do that. And it is paying off well for the business.
Going to our costs on a ton per ton basis, you can see on this chart, it is been pretty stable for the last couple of years at about 105, 110. Cost per ton. So that shows you that we are managing our costs quite well. Some of the other costs like bonuses and PTUs and things like that, of course, do fluctuate positively in the favor of our employees as the metal price does go up. So it is a great benefit for them. Of course, the company is benefiting as well. So going to the next slide, Slide 5. We will get into our cash flows for the year. It was very, very much price metal price driven.
The business is running quite well. But of course we are impacted by the silver and gold prices declining throughout the year, but still very robust cash flows at current levels. Our capital expenditures are on target. We spent $42 million on Jared this past quarter. So we are making great inroads there at Jared. it is coming along quite nicely and on budget and on time. Jumping to our next slide, just really getting into some of the initiatives that we have been working on for most of the year. The plant expansion at Santa Elena to 3 thousand tonnes a day is going well. And so we have actually exceeded that number a few times during the quarter.
We are looking at maintaining that level on a daily basis for the most of the balance of the year, Our San Antonio portal and I would suggest people go to our website and have a look at this photograph or series of photographs because that portal not only was it permitted 18 months ahead of schedule, we had not expected to start developing Santo Niño Navidad until mid-27, but permits came in August of this year. And we are able to get that development going. So we are very happy that we are well advanced into Santo Niño and ore should be hitting the mill at the end of 27. You will get further guidance as we get closer.
Navidad portal is in the early stage of construction in Q4, we will see a similar progress at Navidad as you see on this photograph regarding Santo Nino. So let's go to--you know, we are pushing to get to 4 thousand tons a day again. We have achieved that number a few times. We are really trying to debottleneck the mine. The mine is the hindrance right now. We are doing a number of things underground and within that operation to get that ore out of the mill and. Or out of the mine and get it in into the mill through different mining methods. San Dimas, assuming we had a very, very good first half of the year.
Unfortunately, we did get a labor disruption in mid September. We did have 12 days of loss of production in Q3. The labor disruption continues today. There was a hearing yesterday and it is a very active process as you can imagine. there is discussions going on every day. We are looking to get that operation back up and running as soon as we can. Deploying Montana continues to outperform the budget due to grades and overflow to the mill. So I know there is lots of questions about Jerritt Canyon, so we do have a slide dedicated just to Jerritt Canyon, but the hiring is going well.
We started hiring 6 months ago and we are about 70-80% of the key hires now complete. And as I said earlier, there is tons of activity on-site. The underground fleet has now been ordered fully ordered and deliveries will start happening in Q1 underground development has been going on for the last several months and continues today. All major components for the mill refurbishment of all been ordered. Will be arriving in Q1 and Q2. So there is some more details on this slide for people to review it and if you have any further questions, welcome to ask them.
We are coming out with an exploration update in a couple of weeks. there is been some pretty interesting results coming out from drilling there throughout the year. So we are anxious to get those results out to the market. Look for that in the company's-- so just go to the next slide. I am on the last slide. This is future catalysts. We continue to really plow money back into the business. This year is our highest capital investments throughout the business in the company's history. With the profits that the company is currently making. We have made conscious effort to reinvest in variety of areas of the business to improve the business going forward.
So we are pretty excited about the work that is currently happening. And that is really it for the presentation. I will pass it on to the operator. We will call over for questions.
Operator: Thank you, Keith. We will now proceed to the question and answer session. If you are using a speakerphone, please pick up your handset before pressing the keys, then 2. If you are participating today through the webcast, you can submit a question in writing by using the form in the lower section of the webcast frame on your screen. The first question will come from Wayne Lam with TD Securities. Please go ahead.
Wayne Lam: Just want to understand on the ongoing labor dispute at San Dimas, trying to understand why the decision or resolution is guided to the back half of November. Can you give us a bit more detail on the nature of the hearings that have taken place and what means of recourse the company has even if it is deemed as illegal. Trying to understand if you are currently just at an impasse or what avenues there are to kind of prompt any movement towards the resolution.
Keith N. Neumeyer: Well, it is a very active file, right? When these kinds of things happen, we have people in place that deal with the different issues that are coming up. But a lot of it is headline stuff, really comes down to income taxes. San Dimas historically under old ownership, it has periodically or often paid all or a part of their income taxes to the so to the workers. So they basically. They pay the worker a bonus, and they true it up for taxes. And we have been consciously trying to avoid that over the last few years because as profitability increases, of course, that amount increases substantially.
So the bonus that has been earned by the employees or the union employees at the site. Are actually the highest bonuses that will ever be paid to the workers in the history of the mine. All related to profitability. So it is great news for the workers, but unfortunately, the union did go through a vote this summer. Every 2 years, they go they do vote in new leadership. The individuals that have been put into the leadership role this past summer, taking the position that they want 100% of the income taxes trued up or paid by the company. And we have said no, and we are firm on that point.
So we are going through the court system right now, and we have included the government in the process and you know, without. I cannot really get into further details on that. it is just you know, it is an active process that everyone has things going on daily. Okay. Great. Thanks. And then maybe just on the ongoing ramp up at Gatos and Santa Elena, At Gatos, it is nice to see improvement in the development meters and wondering what the limiting factors are to get to 4 thousand tonnes per day? Let me pass that on to David J. Howe, COO.
David J. Howe: Yes. I mean, we had a pretty good ore processed to mine in Q3. I mean, we are accessing development routes and accessing defining and drilling stopes, right, to get our inventory and production up.
Keith N. Neumeyer: As you saw, we have had some sequencing changes during the quarter just due to a few ground control issues we control, but that is normal operations. So we have really pushed some high grade into Q4. that is where we are milling now.
David J. Howe: So in terms of just pushing forward as advancing our development and we have made some improvements, for example, on better development cycling. But make it a little bit faster, Pace improvements and better equipment availability too has helped. So that is it.
Keith N. Neumeyer: Is that okay? Wayne, does that answer your question?
Wayne Lam: Yes, that is great. And then maybe just last 1 on this potential tax settlement. Obviously, a big step forward in the suspension of the arbitration. Just wondering if you could give us an idea of how we should think about the proposed settlement relative to the $142 million held in restricted cash towards the dispute? And then just on the framework of that agreement, are there any details outside of the actual payment that we should be thinking about?
Keith N. Neumeyer: Well, there will not be 1 payment. It will be a number of payments over several months. But we are not certain when the payment will be made. there is a couple of steps that need to be taken prior to actual payments being made. it is a very detailed step process that both parties have to follow. You know, if I was to give you a step number, we are likely on to, you know, step 5 or 6 out of a 30-step process. So this will take some time, but it is obviously good news for the company.
Wayne Lam: Okay. Wait. Sorry. So you say step 5 or 6 out of 30, I mean, we are a lot further along than that on a potential settlement though. Right?
Keith N. Neumeyer: Well, settlement requires all steps to be completed in its entirety. Okay, understood. Thanks for taking my questions.
Operator: I will now pass the floor over to Mr. Darrell Rae, Investor Relations at First Majestic Silver to take us through questions submitted through the webcast.
Darrell Rae: Yes. Okay. Thank you. We have had a few questions here on the webcast, Keith. 1 is about AISC, all in sustaining costs is moving higher what specific inflation hit inputs are pushing this higher?
Keith N. Neumeyer: Mani, you want to take that?
Mani Alkhafaji: Yes. So a couple of things. You look at our AISC, it is high compared to last year. A couple of non specific inflation driving that Our equivalency ratio has changed. So if we are comparing it to 2025, we are using 75 to 1 versus 87 to 1. So that gives us a lower denominator. The other direct inflation is related to labor, as Keith mentioned. So we have price linked bonuses at the union level and profit sharing. As the company makes more money, the payouts in Mexico is 10% of the profit is shared with the labor. That hits our all in sustaining cost.
But again, if you look at the slide that we showed earlier, the margins are expanding higher and faster than the incremental increase in all in sustaining. Besides that, no real direct inflation we are seeing. You know, we see some in diesel as a raw material or as an input material in other reagents that we use. But we offset that with renegotiating contracts, you know, reducing our energy costs with the Burdens LNG as an example.
Darrell Rae: Okay. We have another question here. With operations going so well at La Encantada, would you increase the exploration budget to prove out more ounces and increase the life of mine of that operation?
Keith N. Neumeyer: Well, the life of mine at La Encantada has been 3 years for 30 years. And, you know, those of you who have met me or met Mani, you know, in 1-on-1 meetings, you know, we have always you know, said that the best way of exploring there is through underground development. Know, it is it is. Drilling from surface is difficult. Ore recovery is very poor it is a very brecciated oxide type material that breaks up very easily with normal surface, you know, drilling.
So we generally we use drilling just for, you know, general type work, but, you know, really, the GM is spending most of his time drifting into new areas you know, within that mine, and it is worked well for the last 10 years. And I do not expect the life of mine at La Encantada increase much. I do not. At the same time, I expect it to drop at all. So You know, we are very enthusiastic there. there is a number of new areas that we are developing into and grades have come, you know, better than budgeted, and I think that is going to continue into 2027.
Darrell Rae: Okay. Thanks, Keith. The next 1 is about Jerritt Canyon. Of course, you are planning to spend $75 million at Jerritt Canyon this year. After investing $42 million this quarter. How much more capital will you have to invest in 2027 before you get Jerritt Canyon up and running?
Keith N. Neumeyer: We will be putting out more guidance on Jerritt. Over the next couple of months. As I said earlier, there will be a news release coming in the next few weeks, more focus on exploration, but we will put a update in there at the same time talking a little bit about what we have been doing in some of our short term plans. We will put out a more thorough update, and we are hoping to put a resource estimate out in some numbers out to the market in February or March. But we are still well on our way of meeting our objective of first gold pour in Q4, mining activity starting in Q3.
And unless that changes, of course, we will put out the appropriate announcement. But everyone's pretty excited. The team's engaged. And everything's going very, very well.
Darrell Rae: Okay. And 1 more here from the web. How will bringing Santo Niño ore online in the future affect the production profile What is the outlook at your Santa Elena operations?
Keith N. Neumeyer: David, do you want to do that 1?
David J. Howe: Well, I think I will start off with-- we start off right now in August. From the ramp, right, this currently had a plan. Our team has done very well, happy with that. Our first ore from development will be planned for sort of Q1. So we have got, you know, 500 meters or so of ramp to go there. Then we will start getting into some ore. We are still working on our long term plan. But in terms of ore grades and mine planning, we are looking at, say, probably July around 1.5 thousand tons a day in terms of ore. Our long term plan, but we are still working on it really.
Darrell Rae: Okay. Thanks, David. Okay. that is it from me. Nick, are there any more from the dial in?
Operator: There are showing no audio questions at this time.
Darrell Rae: Okay. Okay.
Keith N. Neumeyer: Well, thanks everyone for listening in today and any further questions that come in as a result of our numbers that were released, please contact us and happy to answer any further. Have a great day.
Operator: This brings today's conference call to a close. You may now disconnect your lines. Thank you for participating, and have a pleasant day.
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