First Majestic Silver (AG) - 2025 Q4 - Earnings Call Transcript

Financial Data and Key Metrics Changes - The company produced 4.2 million pure silver ounces in Q4 2025, totaling just over 15 million for the year, exceeding revised guidance [7][8] - Revenues reached nearly $1.3 billion for the year, marking a significant financial milestone [9] - The realized silver price for Q4 was just under $59, while the annual average was $41.52, indicating strong pricing strategies [9][10] - Record cash flows were reported, attributed to operational discipline and improved metal prices [10][22] Business Line Data and Key Metrics Changes - The mint operation generated just under $23 million in revenue for Q4, with profitability of about $24 million for the year [9][20] - The company reported a silver purity of over 60% in Q4, which is a key performance indicator [10][51] Market Data and Key Metrics Changes - The company noted a significant increase in marketable securities, rising by about $140 million for the year [21] - The company is experiencing a tight market with volatility affecting refineries, but it does not impact the company's operations as it does not finance its metal [31] Company Strategy and Development Direction - The company is targeting production of 13-14 million pure silver ounces and 110,000-130,000 ounces of gold for 2026, with a focus on maintaining a stable conversion ratio [13][14] - The integration of the Gatos asset has been successful, providing opportunities for cost reduction and resource growth [15][17] - The company plans to expand its plant capacity at Santa Elena from 3,100-3,200 tons per day to 3,500 tons per day by H2 2026 [18] Management Comments on Operating Environment and Future Outlook - Management expressed optimism about the future, citing improved metal prices and a strong cash position of just under $940 million [22][24] - The company is focused on resolving a pending tax issue that has been ongoing since 2012, with hopes of final resolution in 2026 [38] Other Important Information - The company has doubled its dividend policy effective 2026, increasing from 1% to 2% of top-line revenue [23] - The company is planning to conduct 266 kilometers of drilling across all operations, reflecting confidence in exploration success [24] Q&A Session Summary Question: Any quantifiable issues related to costs or shipments encountered this quarter? - Management noted that refineries have suspended financing, impacting smaller producers but not the company, which does not finance its metal [31] Question: How is the company thinking about cash management and potential capital returns to investors? - Management indicated that while cash is increasing, there are ongoing discussions regarding a tax issue, and they have not conducted share buybacks but have increased dividends [38] Question: Is there any update on Jerritt Canyon? - Management stated that a standalone update on Jerritt Canyon will be provided once plans and numbers are finalized, with a focus on this asset now that Gatos is integrated [53]