First Majestic Silver Corp.

First Majestic Silver Corp. (NYSE: AG) is a precious metals mining company focused on silver and gold production across Mexico and the United States. The company operates major mines including San Dimas, Santa Elena, La Encantada, and holds a 70% joint venture stake in the Cerro Los Gatos Silver Mine. It also manages a broad portfolio of development and exploration projects, notably the Jerritt Canyon Gold project in Nevada, spanning a total land package of about 350,000 hectares.

As per previous Kalkine’s Global Tariff Report published on ‘AG’ on Sep 29, 2025, Kalkine provided an ‘Buy’ stance on the stock at USD 12.43 based on fundamental analysis and the stock price has now moved up by ~ 17.30% since then.

Noted below are the details of support and resistance levels provided in our previous report:

Rationale:

• Rising Operating and Maintenance Costs: Despite achieving record revenues and production growth, First Majestic Silver Corp. faced mounting operational expenses during Q2 2025. The company reported higher contractor and energy costs, particularly at its flagship San Dimas mine, as it worked to sustain and improve production output. Additionally, maintenance expenditures increased due to weather-related power outages affecting multiple sites, including San Dimas, La Encantada, and Los Gatos. These unplanned costs exerted pressure on margins, partially offsetting the gains from increased production volumes and elevated silver prices.
• Elevated Depletion and Depreciation Charges: The quarter’s profitability was also impacted by significantly higher non-cash depletion and depreciation expenses, which rose to USD 73.7 million compared to USD 31.6 million a year earlier. This sharp increase was primarily tied to the integration of the Los Gatos Silver Mine and overall higher production levels. While these non-cash items do not directly affect liquidity, they indicate a faster consumption of mineral resources and capital assets, suggesting that sustaining current output levels may require continuous reinvestment in exploration and mine development.
• Pressure from Integration and Administrative Costs: The ongoing integration of the Los Gatos Silver Mine led to a temporary surge in general and administrative expenses, including legal, consulting, travel, and system implementation costs. These expenditures weighed on profitability and reflect the near-term financial strain of assimilating a major acquisition. Although management anticipates realizing future synergies and cost efficiencies from the integration, the short-term cost burden has diluted some of the operational gains achieved during the quarter.
• Increasing All-In Costs and Capital Expenditures: While cash costs and all-in sustaining costs (AISC) improved modestly year over year, both metrics rose sequentially compared to Q1 2025, indicating growing cost pressures as production expanded. The AISC climbed 9% quarter-over-quarter to USD 21.02 per silver equivalent ounce, largely due to increased capital and sustaining expenditures. Capital spending itself nearly doubled year-over-year to USD 56 million, reflecting heavy reinvestment in exploration and mine development. Although these investments are aimed at long-term growth, they highlight the company’s near-term exposure to rising production costs and the need to maintain high metal prices to sustain profitability.

Valuation (Using Price/Earnings Per Share Multiple)

Share Price Chart  

Conclusion

First Majestic Silver Corp.’s Q2 2025 performance, while strong on paper, was tempered by rising operational and cost pressures. Higher contractor, energy, and maintenance expenses—exacerbated by weather-related outages—eroded margin gains. The company also faced significantly elevated depletion and depreciation charges following the Los Gatos acquisition, alongside increased administrative costs tied to its integration. Moreover, sequential increases in all-in sustaining costs and capital expenditures signal growing financial strain, suggesting that sustaining profitability may depend heavily on maintaining elevated silver prices and achieving the expected post-integration efficiencies.

Based on the notional gains, potential downside and price action stance, a "Sell" recommendation on First Majestic Silver Corp. (NYSE: AG) has been given at the current market price of USD 14.58 as on 09 October 2025 at 7:05 am PDT.

Note 1: Past performance is not a reliable indicator of future performance.

Note 2: The reference date for all price data, currency, technical indicators, support, and resistance level is 09 October 2025. The reference data in this report has been partly sourced from REFINITIV.

Note 3: Investment decisions should be made depending on an individual's appetite for upside potential, risks, holding duration, and any previous holdings. An 'Exit' from the stock can be considered if the Target Price mentioned as per the Valuation and or the technical levels provided has been achieved and is subject to the factors discussed above.

Note 4: Target Price refers to a price level which the stock is expected to reach as per the relative valuation method and/or technical analysis taking into consideration both short-term and long-term scenario.

Note 5: ‘Kalkine reports are prepared based on the stock prices captured either from the London Stock Exchange (LSE) and or REFINITIV. Typically, both sources (LSE and or REFINITIV) may reflect stock prices with a delay which could be a lag of 15-20 minutes. There can be no assurance that future results or events will be consistent with the information provided in the report. The information is subject to change without any prior notice.’

Note 6: Dividend Yield may vary as per the stock price movement.