First Majestic Silver: Strong Q1 Production, Restart of Jerritt Canyon and Profitable First Mint

Key Concepts

• Jerritt Canyon: A gold mining asset in Nevada, USA, currently under care and maintenance, slated for a production restart in H2 2027.
• Self-Perform Mining: A strategic shift to internalize mining operations rather than using third-party contractors to improve efficiency and cost management.
• Structural Silver Deficit: The ongoing market imbalance where industrial demand for silver consistently outpaces global supply.
• AI Data Center Demand: A newly identified demand driver where a 50-megawatt AI data center requires approximately 6.4–6.5 tons of silver.
• Solid-State Batteries: Emerging battery technology (supported by Samsung, Toyota, and BMW) that utilizes approximately 1 kilogram of silver per battery.
• First Mint: The company’s internal minting division, which transforms raw silver into bullion products, transitioning from a cost center to a profit center.

---

1. Operational Performance and Production (Q1 2026)

First Majestic Silver reported a strong start to 2026, exceeding production targets despite initial expectations of a "soft" quarter.

• Performance Metrics: The company achieved 26% of its annual silver guidance and 28% of its annual gold guidance in Q1 alone.
• Asset Health: All operating assets are currently performing at or above budgeted rates.

2. Jerritt Canyon Restart Strategy

The company is prioritizing the reactivation of the Jerritt Canyon gold mine in Nevada, a Tier-1 jurisdiction.

• Resource Growth: Through a successful 2025 exploration program, the resource base at Jerritt Canyon has increased from 3.7–3.8 million ounces to 7.8 million ounces of gold.
• Restart Methodology:
  • Feasibility: Stantec is currently conducting a new feasibility study.
  • Infrastructure: $156 million has been invested in care and maintenance to ensure the facility is ready for a rapid restart.
  • Operational Shift: The company will move away from the previous third-party contractor model to an in-house "self-perform" mining model to unlock value.
  • Timeline: Production is scheduled to commence in the second half of 2027.

3. Exploration and Development

First Majestic is executing an aggressive exploration program to expand its reserves.

• Drilling Scope: The company is conducting a record-breaking 300,000 meters of drilling in 2026, consisting of 266,000 meters across operating mines and 42,000 meters at Jerritt Canyon.
• Key Targets: New mineralization has been identified at the Santa Elena and San Dimas mines, as well as the Gatos project.

4. The First Mint Division

The company’s minting arm has successfully transitioned from a cost center to a profit center.

• Business Model: The mint processes silver mined in Mexico, refined in the U.S., and minted into bullion products.
• Future Outlook: While the current focus remains strictly on silver, the company has not ruled out the possibility of minting gold products in the future, particularly as Jerritt Canyon returns to production.

5. Silver Market Dynamics and Demand Drivers

The company highlights a tightening silver market driven by structural deficits and emerging technologies.

• AI Infrastructure: Data centers are identified as a significant, previously underestimated source of silver consumption.
• Automotive Innovation: Solid-state battery technology is expected to become a major demand driver by 2028, with each battery requiring roughly 1 kilogram of silver.
• Supply Constraints: The president noted that there are no significant new silver mines coming online globally, which, combined with rising industrial demand, is expected to exert upward pressure on silver prices.

6. Notable Quotes

• "When you have a gold asset in a tier one jurisdiction, you got to do something with it." — Mani Alafari, regarding the decision to restart Jerritt Canyon.
• "It went from being a market and cost center a few years ago to now being a profit center." — Mani Alafari, regarding the evolution of the First Mint.
• "That’s a new driver of demand that’s not baked into the current deficit." — Mani Alafari, regarding the impact of AI data centers on silver consumption.

Synthesis

First Majestic Silver is positioning itself for growth by optimizing its existing silver operations and preparing for a strategic return to gold production at Jerritt Canyon. By internalizing mining operations and leveraging its profitable minting division, the company aims to capitalize on a structural silver deficit. The company’s outlook is bullish, supported by the realization that new industrial applications—specifically AI data centers and solid-state battery technology—are creating a surge in demand that current global supply cannot meet.