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 and over 15 million for the year, exceeding revised guidance [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 average for the year was $41.52 [9] - Record cash flows were reported, attributed to increased metal prices and production [10] - The company held just under $940 million in cash, with working capital at $733 million [21] 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][19] - The exploration program included over 250 kilometers of drilling, with positive results expected to be reflected in the Annual Information Form [10][24] - The company achieved a silver purity of over 60% in Q4, continuing to improve its position as a pure silver producer [10] Market Data and Key Metrics Changes - The company noted that the silver equivalent ratio collapsed towards the end of the year, impacting production and costs [12] - The market for silver has shown volatility, affecting refineries and retail buyers, but the company remains unaffected due to its financing structure [31] Company Strategy and Development Direction - The company plans to maintain a focus on silver purity while exploring potential acquisitions to enhance its portfolio [51] - There are ongoing investments in plant expansions, particularly at Santa Elena, with a target to increase throughput [17] - The company is also targeting robust production for 2026, with guidance set for 13-14 million pure silver ounces [13] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the future, citing strong cash flow and a favorable market environment for silver prices [21][24] - The company is actively addressing a pending tax issue that has been ongoing since 2012, with hopes to resolve it in 2026 [38] - Management highlighted the importance of safe production and maintaining world-class safety metrics [18] Other Important Information - The company declared an increase in its dividend policy, doubling it from 1% to 2% of top-line revenue effective 2026 [22] - The company is focused on expanding its mint operations, which have shown rapid growth since inception [48] Q&A Session Summary Question: Any quantifiable issues related to costs or shipments this quarter? - Management noted that refineries have suspended financing, impacting retail buyers but not affecting the company directly [30][31] Question: Plans for exploration and availability of rigs? - The company confirmed that it has long-term contracts with drilling contractors, ensuring contained costs and availability of rigs [33] Question: Thoughts on cash allocation and potential returns to investors? - Management indicated that while cash is increasing, there are ongoing discussions regarding a tax issue, and they have not ruled out share buybacks [38] Question: Update on Jerritt Canyon and potential restart? - Management stated that a standalone update on Jerritt Canyon will be provided once plans are finalized, with attention now focused on this operation [52]