Will Falling Silver Production Weigh on First Majestic's FY26 Performance?

First Majestic Silver Corp. AG witnessed lower production for silver and gold in the first quarter of 2026. The company’s total production comprised 3.5 million ounces of silver and 34,341 gold ounces. It also included 15.4 million pounds of zinc, 262,913 pounds of copper and 8.7 million pounds of lead. However, the quarterly production of silver and gold ounces reflected a year-over-year decline of 4% and 6%, respectively. The decline was primarily attributable to the reduced head grade milled, indicating a lower cut-off grade.

Also, the company has been experiencing long-running issues in Mexico, primarily related to a major tax conflict with the Mexican government. AG currently owns four operating mines in the country, including the likes of Santa Elena Silver/Gold mine, Los Gatos Silver mine, San Dimas Silver/Gold mine and La Encantada Silver mine. The ongoing legal and regulatory issues present a financial and operational risk to these sites despite their healthy production performances.

Nevertheless, AG gained a 70% interest in the high-quality and long-life Cerro Los Gatos Silver underground mine with the acquisition of Gatos Silver in January 2025. This transaction strengthened the company’s position as an intermediate primary silver producer. In the first quarter, the asset (on a 70% attributable basis) contributed 1.18 million ounces of silver, significantly enhancing First Majestic’s production base. It also produced 656 gold ounces, 15.4 million pounds of zinc, 8.7 million pounds of lead and 235,886 pounds of copper.

First Majestic remains focused on increasing mining rates at Los Gatos and achieving increased mill throughput. The company plans to increase development rates and has a target to sustainably increase ore throughput to 4,000 tpd in the second half of the year.

Performance of AG’s Peers

Among its major peers, Pan American Silver Corp.’s PAAS 2025 silver production totaled 22.8 million ounces, an increase of 8.5% compared with the prior-year period. The increase in output was driven by the strong performance from its stake in the Juanicipio mine, which was acquired last year.

Its another peer, Avino Silver & Gold Mines ASM, is strengthening its position as a leading silver producer. In 2025, the company produced 2,606,155 silver-equivalent (AgEq) ounces, within its guidance of 2.5-2.8 million AgEq ounces. Also, in the fourth quarter, Avino produced 345,298 AgEq ounces, reflecting a significant increase on a year-over-year basis.

First Majestic's Price Performance, Valuation and Estimates

Shares of First Majestic have gained 50.9% in the past six months compared with the industry’s growth of 45.9%.

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From a valuation standpoint, First Majestic is trading at a forward price-to-earnings ratio of 28.05X, above the industry’s average of 14.90X. AG carries a Value Score of D.

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The Zacks Consensus Estimate for AG’s 2026 earnings has been on the rise over the past 60 days.

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First Majestic currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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