Silver is a strange beast. One day it’s a boring industrial metal used in solar panels, and the next, it’s a "store of value" that retail investors pile into during a mid-week panic. If you’ve been watching first majestic silver stock (NYSE: AG) lately, you know exactly how that feels. The stock has been on a tear, hitting new 52-week highs near $20.61 in early January 2026.
But here’s the thing: most people just look at the ticker and the silver spot price. They miss the actual machinery—both literal and financial—that makes this company tick.
First Majestic isn't just a bet on metal. It's a bet on Keith Neumeyer’s aggressive, sometimes polarizing, vision of a "pure-play" silver producer. Honestly, it’s a bit of a rollercoaster. You’ve got record production numbers on one hand and the constant hum of share dilution on the other.
Let's break down what’s actually happening behind the scenes.
The Gatos Acquisition Was a Massive Pivot
For a long time, the bear case against First Majestic was simple: their costs were too high. It’s hard to get excited about a silver miner when it costs them more to dig the stuff up than they can sell it for.
Everything changed on January 16, 2025. That’s when First Majestic closed the acquisition of Gatos Silver.
Suddenly, they weren't just relying on their legacy Mexican mines like San Dimas. They added a 70% interest in the Cerro Los Gatos mine. The impact was immediate. By Q3 2025, the company reported a staggering 96% year-over-year increase in silver production, churning out 3.9 million ounces in just three months.
- Production Surge: Total silver equivalent (AgEq) production hit 7.9 million ounces in Q2 2025.
- The "Zinc" Factor: Cerro Los Gatos also brings lead and zinc into the mix, which helps offset costs through "by-product credits."
- The Bottom Line: For the first time in what feels like forever, the company reported record EBITDA of $128.6 million in Q3 2025.
If you’re holding first majestic silver stock, this was the "turnaround" moment. Analysts who used to call the stock overvalued are now looking at an EPS (earnings per share) that is finally trending toward positive territory.
The Love-Hate Relationship with Dilution
You can’t talk about AG without talking about the "ATM" (at-the-market) offerings. Keith Neumeyer is famous for using the company’s stock as a piggy bank to fund growth.
In late 2025, they did it again. The company completed a $350 million offering of convertible senior notes due in 2031.
Markets usually hate this. When more shares enter the pool, your slice of the pie gets smaller. That’s why you’ll often see the stock price gap down 4% or 5% on a random Tuesday when a new offering is announced.
However, there’s a method to the madness. That $350 million wasn't just for "keeping the lights on." It’s being funneled into a massive 2026 drilling program. We’re talking about 15,000 meters of step-out drilling at San Marcial and another 18,000 meters at Jerritt Canyon in Nevada.
They are essentially betting that they can find more silver in the ground than they are losing in share value today. It’s a high-stakes game.
Mexico vs. Nevada: Where the Real Risk Lives
Most of First Majestic’s "meat" is in Mexico. San Dimas, Santa Elena, and now Los Gatos.
Mexico is world-class for silver, but it’s not exactly a "set it and forget it" jurisdiction. You have to deal with shifting tax laws, labor strikes, and the occasional power outage. Just this past June, weather-related power issues clipped production at several mines.
That’s why Jerritt Canyon in Nevada is so critical.
After some rough patches where Jerritt was suspended due to high costs, the company has been working on a "revitalization" project. In 2025 and heading into 2026, they’ve been targeting consistent gold output of over 100,000 ounces from this site. It’s their insurance policy. If something goes sideways in Mexico, Nevada keeps the heart beating.
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Key Operational Stats for 2026
- Consolidated AISC (All-In Sustaining Cost): Expected to hover between $19.35 and $21.27 per silver equivalent ounce.
- Capital Spending: A massive $182 million planned for 2025-2026, with over $100 million of that going purely toward expansion, not just maintenance.
- The "Santo Niño" Discovery: This new high-grade vein at Santa Elena is a potential game-changer. Initial results showed silver equivalent grades as high as 743 g/t.
What the Analysts Aren't Telling You
If you look at the 2026 price targets, you’ll see a wide range. Some analysts have a "Strong Buy" with a target of $22.01, while others are cautious at $12.80.
Why the gap? Because First Majestic is a high-beta stock.
When silver prices move up 1%, AG often moves up 2% or 3%. It’s a levered play. If silver hits $35/oz, First Majestic becomes a literal cash machine. But if silver stalls at $24/oz, those high All-In Sustaining Costs start to look scary again.
There’s also the First Mint. First Majestic is one of the only miners that sells its own silver directly to customers as bullion. It’s a small part of the business, but it gives them a "direct-to-consumer" margin that other miners lack. They’ve even been talking about expanding the mint with more machinery in 2026 to keep up with the demand from retail "stackers."
Actionable Strategy for Investors
So, how do you actually trade or invest in this?
First, stop chasing the green candles. First majestic silver stock is notoriously volatile. In January 2026, we saw index rebalancing trigger nearly $3.8 billion in mechanical silver futures selling. This creates "tactical entry points"—basically, the stock drops because of math and algorithms, not because the mines stopped working.
Second, watch the $18.11 support level. Technical analysts are obsessed with this number right now. If the stock holds above that during a silver dip, it’s a sign that the "new" First Majestic (with Gatos integrated) is being valued differently than the "old" one.
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Finally, keep an eye on the February 19, 2026 earnings report. This will be the first full look at how the Santa Elena expansion and the Los Gatos integration are playing together. Consensus estimates are calling for an EPS of $0.16, which would be a massive jump from the previous year.
If you're looking for a boring, stable dividend stock, this isn't it. But if you want a seat on the silver rocket and you can stomach the 6% daily swings, the 2026 outlook is the strongest it's been in a decade.
Next Steps for Your Portfolio:
- Check the "Silver-to-Gold" Ratio: If silver is historically cheap compared to gold, First Majestic is often the best way to play the "catch-up" trade.
- Verify the AISC: Every quarter, look at the All-In Sustaining Cost. If it’s dropping toward $18/oz, the company is becoming a value play, not just a momentum play.
- Monitor the 2031 Convertible Notes: Watch if the company starts buying these back or if they continue to issue new debt, as this will dictate the "ceiling" on the stock price.
- Watch the Mexico Regulatory Landscape: Any news regarding "Open Pit" mining bans in Mexico can cause industry-wide jitters, even though First Majestic is primarily an underground operator.