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First Majestic Silver (AG): The honest skeptic's read.

Published April 2026 · FY 2025 data · ~8-minute read

First Majestic is the hardest of our three watchlist names to own honestly, and that is exactly why it is on the desk. Silver is a narrative metal. The company has had more operational resets than closes at a new high. The 2025 revenue print was spectacular and the stock responded, but the interesting question — the Halvren question — is not whether the metal went up. It is whether per-share value was actually created, or whether we have simply watched a torque-machine do its thing while the share count quietly tells a different story. That question has a real answer, and it is uncomfortable for both bulls and bears.

By the numbers — FY 2025
Revenue
US$1,257M (+124% YoY)
AISC / AgEq oz
US$21.17 (≈ flat vs FY24)
Realized AgEq price
US$41.52 (+47% YoY)
Payable AgEq sold
+50% YoY
CEO
Keith Neumeyer (co-founder)
Key jurisdictions
Mexico · Nevada
Listings
NYSE: AG · TSX: AG

The business, in one paragraph

First Majestic is a silver-focused primary producer with a portfolio concentrated in Mexico (San Dimas, Santa Elena, La Encantada, La Parrilla legacy, and the Los Gatos JV interest via the 2024 Gatos Silver acquisition) and Nevada via the Jerritt Canyon gold operation acquired in 2021. The company was founded by Keith Neumeyer in 2002 and has been built through a long string of acquisitions aimed at scaling primary silver production — a deliberately counter-positioned strategy in a metal that most majors have de-emphasized. The business proposition is torque: when silver moves, revenues move more than linearly. The business challenge is that the torque works symmetrically, and primary silver is a structurally difficult place to create per-share value.

What FY 2025 actually said

Record revenue of US$1.26B (+124%) was driven by two things in roughly equal measure: a 50% increase in payable silver-equivalent ounces sold, and a 47% increase in the realized average selling price to US$41.52/AgEq oz. Those are real numbers against a real tape. The per-share story is more nuanced: the 2024 Gatos acquisition was equity-funded, so the ounce growth is substantially inorganic, and the share count is materially higher coming into 2026 than it was in 2023.

AISC of US$21.17 per AgEq ounce is essentially flat year-over-year, which, in a year when realized prices rose 47%, is a revealing data point. The cost curve does not reward you for a strong year; it only punishes you for a weak one. FY 2025's AISC leaves First Majestic comfortably profitable at realized prices, uncomfortably close to breakeven at a US$22–24 environment, and in real trouble at anything approaching US$18. That asymmetry is what Pillar I question 2 asks about, and it is not solved by a good year.

Three things we are reading carefully

1. The real cost curve, not the guidance print

First Majestic's reported AISC is an accounting number. The more honest read is the all-in cash operating cost per ounce after by-product credits from gold, lead, and zinc at mid-cycle assumptions — which is what a real cost curve looks like to a silver investor. On that basis, First Majestic sits in the second quartile of primary silver producers globally, and the differential between reported AISC and "real" AISC can be several dollars depending on metal price assumptions. The guidance language around metal-price assumptions and the gold-to-silver ratio in 2025 disclosure is particularly worth reading slowly; the company's explanation of how AgEq ounces are calculated when the ratio compresses is, in plain English, an admission that "ounces produced" moves around meaningfully depending on which metal is the denominator.

2. The Mexico tax and royalty overhang

First Majestic has been in an ongoing tax dispute with the Mexican government (Servicio de Administración Tributaria) for several years regarding transfer pricing on historical San Dimas production. The company has accrued a substantial liability in the range of US$200M+ depending on how the dispute resolves, and the broader Mexican fiscal environment for mining — including recent royalty and water-permit changes under the Sheinbaum administration — has been trending less friendly to foreign operators. This is a Pillar III question that the sell-side often footnotes. It is not a footnote. A worst-case resolution of the historical dispute meaningfully reshapes the balance sheet. We track the Mexican legal and fiscal headlines weekly because, on this one, the headlines are the data.

3. Per-share value versus production growth

This is the single most important question on First Majestic, and it is the one most silver bulls skip. Over the last eight years, production has roughly tripled while the share count has roughly doubled, and the relevant per-share metric — silver-equivalent ounces per share, reserves per share, cash flow per share at a constant silver deck — has moved far less than production has. Acquisitions financed with equity work when the acquired asset is acquired below the acquirer's own intrinsic value per share; they destroy per-share value when it is the other way around. We have not yet convinced ourselves that Gatos was accretive on per-share metrics ex the silver tailwind. We are withholding judgment for two more quarters of integration data and a consolidated reserve and resource update.

Applying the Halvren Checklist

Pillar I — The business. FCF through the full cycle: marginal. 2020 was difficult; 2022–2023 were operationally rough even with reasonable prices. Unit economics at worst price (silver in the mid-teens): uncomfortable. Balance sheet at trough: the combination of the Mexico liability contingency and a silver-low environment is the stress test to have ready. ROIC on incremental capital: this is the Gatos question, and it is unresolved.

Pillar II — The people. Keith Neumeyer is a founder and long-tenured capital allocator with a genuine conviction about silver's place in the monetary system. That conviction has driven both the best and the hardest decisions in the company's history. Insider ownership exists but is not the defining feature it is at a Dundee or a Franco-Nevada. Compensation has historically been tilted toward production and scale rather than per-share value, which is Pillar II question 7 speaking. Behaviour in 2020: held through; no capital destruction but no counter-cyclical buybacks of the kind CNQ would have done. Succession is not clearly visible.

Pillar III — The cycle. First Majestic is a levered bet on silver with a jurisdictional tax overhang. Where we are in the cycle matters more here than it does in Cameco or CNQ. A normal-decade read at US$25–28 silver keeps the business profitable but not exceptional. A normal-decade read at US$35+ makes the torque work for shareholders; a normal-decade read at US$18–22 is a genuinely hard business to own.

What we are watching into FY 2026

Sometimes the most useful output of research is "not yet." First Majestic is on the desk, not in the book. That distinction is the whole job.

This writeup is for informational and educational purposes only and is not a recommendation, solicitation, or price call. The author may or may not hold a position in First Majestic Silver Corp. and may transact at any time without notice. Figures are sourced from First Majestic's FY 2025 earnings release (February 2026) and corporate disclosure. Discussion of the Mexican tax dispute reflects publicly disclosed company statements and Canadian media reporting; it is not legal advice and should not be treated as a forecast of any outcome. See the Terms of Use for the full disclaimer. Halvren's companion writeup of First Majestic may appear on Substack at greater length.

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