First Majestic Rides Silver's Surge to Record Margins

First Majestic Silver's Q1 2026 results were nothing short of spectacular. Revenue nearly doubled to $477 million, and the company's realized silver price hit $86.35 an ounce, up from $33.10 a year ago. But the more telling number is the margin expansion: from $13 per ounce to $52 per ounce.

Our margins a year ago in Q1 were $13 an ounce. Our margins in 2026 was $52 an ounce. So quite a game change.

A Record Quarter

The quarter was marked by a 95% revenue increase, record operating cash flow of $311 million, and free cash flow of $224 million even after a $95 million tax payment. Dividend was raised fourfold, and silver purity improved to 66%. The company's Los Gatos operation had a "bang-up quarter," as CEO Keith Neumeyer put it: “La Encantada actually profited $30 million in Q1. I do not actually remember the last time we made that much money” — Keith N. Neumeyer, President and CEO · 2026-05-12, demonstrating the leverage to the silver price.

Cost Discipline in a Rising Market

Cost per ounce rose, but Neumeyer argued this is more than offset by margins. A key driver is the lower cutoff grade strategy, which extends mine life. “my life does increase as a result of the lower cutoff grade” — Keith N. Neumeyer, President and CEO · 2026-05-12. The company also locked in a silver-to-gold price ratio of 75:1 for cost reporting, adding ~$3 per ounce to all-in sustaining costs, but the focus on efficiency is evident in the $170 cost per ton, the lowest in a while. Diesel exposure is only 5%, with most energy from renewables and LNG.

Expansions and Management Refresh

The restart of Jerritt Canyon is a major catalyst. The company hired Alexander Thompson as managing director and is investing $75 million in 2026, targeting production to commence in H2 2027. Neumeyer said: “We are still targeting for production to commence in H2 27.” — Keith N. Neumeyer, President and CEO · 2026-05-12 The company also brought in a new COO, David Howe, as Steven Holmes retires. This management refresh comes at an opportune time.

The prior call in February had hinted at "some news coming on Jerritt Canyon," which has materialized. “We haven't done any share buybacks in Q4, but we always have that option to do that as well. We did increase the dividend. There will be some news coming on Jerritt Canyon over the next couple of months.” — Keith Neumeyer, Chief Executive Officer · 2026-02-19 And the integration of Los Gatos continues to deliver synergies, as noted in the August 2025 call: “Right. So on the synergies, we've identified many synergies...” — Steven C. Holmes, Chief Operating Officer · 2025-08-14

Beyond Jerritt, the company is expanding Santa Elena's mill to 3,500 t/d and ramping Los Gatos to 4,000 t/d. Exploration is aggressive at 300,000+ meters across the portfolio. The company also addressed a false news story about a collapse at Los Gatos, clarifying it was not a modern operation and that a small ramp collapse was quickly resolved.

With a treasury over $1.1 billion, First Majestic is well-funded for its growth ambitions. The combination of higher silver prices, expanding margins, and a clear reinvestment plan makes this a name to watch.