First Majestic Silver Posts 38% Revenue Rise Amid Strikes and Tax Talks

First Majestic Silver (NYSE:AG) reported third-quarter revenue of $394 million, up about 38% from a year earlier, and EBITDA of $228 million, up 78% — numbers the company delivered while losing 12 days of production at San Dimas and working through a 30-step Mexican tax settlement.

CEO Keith Neumeyer said on the earnings call that cash flow reached $0.43 per share. Revenue for the first nine months exceeded $1.2 billion, up 62% from the prior-year period. The company produced 3.4 million ounces of silver and 30,000 ounces of gold in the quarter, at an average silver price of $61.52 per ounce — $70.22 year to date. Neumeyer said cash flows stayed robust even as silver and gold prices fell over the year.

What is blocking San Dimas?

A labor disruption at the Durango mine began in mid-September and continued at the time of the call, with discussions and court proceedings underway. New union leadership wants First Majestic to pay 100% of income taxes on worker bonuses. Previous owners had periodically paid all or part of those taxes; First Majestic has refused as profitability and bonus amounts rose. "We've said no, and we're firm on that point," Neumeyer said, adding that the government has joined the process.

The stance has a price: 12 days of lost production last quarter, and counting.

Why did costs rise?

Neumeyer said the company deliberately began lowering cutoff grades about a year ago, processing more rock with less metal. The approach raises costs but stays economic at current prices — and can be reversed if prices underperform. That is a conditional promise, not a guarantee.

President and Chief Corporate Development Officer Mani Alkhafaji attributed higher all-in sustaining costs to a changed metal equivalency ratio in the calculation, price-linked bonuses, Mexican profit sharing, and inflation in diesel and other inputs. He said expanding margins were outpacing the cost increase, and that the company had renegotiated contracts and cut energy costs to offset inflation.

Where do the growth projects stand?

• Santa Elena: the plant exceeded its 3,500-tons-per-day expansion target several times during the quarter; permits for the Santo Niño portal arrived in August, ahead of schedule, with ore to reach the mill at the end of 2027.
• Santo Niño: COO Dave Howe said development runs ahead of plan, with first development ore targeted for the first quarter; the long-term mine plan is still being built.
• Los Gatos: underground development advances toward 4,000 tons per day, though ground-control issues forced sequencing changes and pushed higher-grade material into the fourth quarter.
• Jerritt Canyon: the company spent $42 million in the quarter; the underground fleet and mill refurbishment components are ordered, with mining to start in the third quarter and first gold in the fourth. A detailed update, possibly including a resource estimate, could come in February or March.

How close is the tax settlement?

Neumeyer said the company dropped its NAFTA case against Mexico during the quarter and is roughly five or six steps into a 30-step process. Settlement requires multiple payments over several months, and the timing of the first payment remains uncertain. "Settlement requires all steps to be completed in its entirety," he said.

The company declared what Neumeyer called a record dividend and repurchased 1.3 million shares to date. Exploration stayed active, with 78,000 meters drilled across four assets during the quarter.

Every promise here — the settlement, the San Dimas resolution, the Jerritt Canyon restart — carries a date that has not yet arrived.