First Majestic Agrees to Sell San Martin Silver Mine in Jalisco

First Majestic Silver has agreed to sell its idle San Martin silver-gold mine in Jalisco to private Mexican firm Flextronics Supply and Service for US$90 million, structured as a small upfront payment plus deferred installments running through 2032. The deal, still pending Mexican antitrust clearance, extends First Majestic's 2026 strategy of shedding non-core, security-affected assets following its earlier Del Toro divestiture, while its four producing Mexican mines drive record output and raised annual guidance. The transaction affects First Majestic Silver, buyer Flextronics/Meridian Capital, and Mexico's broader silver mining and foreign investment landscape amid an ongoing wave of sector consolidation.

First Majestic Silver has signed a definitive agreement to divest its dormant San Martin silver-gold mine in Jalisco to Mexican private company Flextronics Supply and Service, S. de R.L. de C.V., in a deal worth a total of US$90 million in cash. The agreement, dated July 6, 2026, marks the miner's second major non-core asset sale in Mexico this year, following the June closing of its Del Toro divestiture in Zacatecas.

Under the terms, Flextronics will pay US$2.5 million at closing, of which US$500,000 has already been placed in escrow as a deposit, with the balance of US$87.5 million structured across a series of deferred payments. A further US$2.5 million comes due within 180 days of closing, followed by five consecutive annual installments of US$10 million beginning on the first anniversary of closing, totaling US$50 million. A final lump sum of US$35 million is scheduled for August 31, 2032.

The transaction is structured as a share sale: Flextronics is acquiring all outstanding shares of Minera El Pilon, S.A. de C.V., the First Majestic subsidiary that holds San Martin along with the broader Jalisco Group of Properties. That package adds up to 5,245ha of mining concessions spread across the municipalities of Etzatlán and Tototlán.

The transaction still requires clearance from Mexico's antitrust regulator and satisfaction of other standard closing conditions. First Majestic expects the deal to close in the 4Q26.

The buyer, Flextronics, operates under Meridian Capital, a private investment group with mining and oil-and-gas holdings across Mexico, including projects in Sonora and Sinaloa, as well as in Venezuela and Uruguay.

San Martin

San Martin sits roughly 250km north of Guadalajara in the historic San Martín de Bolaños mining district, where First Majestic holds the mine 100%. Per the company's own asset disclosures, the operation comprises 33 contiguous mining concessions covering mineral rights across 38,51ha, alongside separate surface land rights totaling roughly 1,456ha, split between 1,296ha supporting mine access, installations and portions of the access roads, and a further 160ha housing the processing plant, camp, offices, maintenance shops and tailings dams. The mill itself was expanded from 950tpd to 1,300tpd in a project completed in October 2013.

First Majestic has held the operation idle since July 2019, when it temporarily suspended all mining and processing activity there. The company has attributed the shutdown to escalating insecurity in the area and safety concerns for its workforce, stating it has since worked with authorities toward securing the district ahead of an eventual restart, without specifying a timeline.

Part of a Broader Portfolio Cleanup

The San Martin sale extends a pattern First Majestic set earlier this year when it exited the Del Toro silver mine in Zacatecas. That deal, closed in June, handed the asset to junior miner Sierra Madre Gold and Silver for up to US$60 million, split between an upfront cash-and-share payment and contingent milestone payments, and left First Majestic holding roughly a quarter of Sierra Madre's equity. 

Both transactions follow a similar logic: trade the ongoing holding costs of suspended mines for guaranteed near-term cash plus deferred consideration, while narrowing the portfolio to producing assets.

That narrower footprint has been paying off operationally. First Majestic's four active Mexican mine, Santa Elena in Sonora, Los Gatos in Chihuahua, San Dimas in Durango and La Encantada in Coahuila, produced 3.8Moz of silver and 34,660oz of gold in the 2Q26, prompting the company to raise its full-year 2026 guidance for a second consecutive year, to between 14.6Moz and 15.5Moz of silver. The company has also been directing fresh capital toward its remaining assets, recently committing an additional US$12 million toward underground access at exploration targets within the Santa Elena mine in Sonora after securing the necessary construction permits.

A Consolidating Silver Sector

The divestment lands amid a broader wave of consolidation moving through Mexico's silver industry, as record prices and a widening structural supply deficit push producers to reshuffle assets. Pan American Silver's multibillion-dollar acquisition of MAG Silver and a steady run of junior-miner transactions chasing mid-tier scale have accompanied First Majestic's own moves to shed non-core, security-challenged properties in favor of its producing core.

For Flextronics and Meridian Capital, the acquisition adds a project with reactivation potential in one of Jalisco's traditional mining districts to a portfolio already spanning mining and energy assets in multiple Mexican states as well as South America. Whether San Martin returns to production will likely hinge on the same security conditions that forced its shutdown in 2019, alongside the antitrust review still pending before the deal can close.

First Majestic did not disclose additional details on Flextronics' plans for the site. The company's other Mexican assets, including San Dimas, Santa Elena and La Encantada, remain unaffected by the transaction, and its Jerritt Canyon gold project in Nevada continues to operate outside the scope of the sale.

The deferred structure lowers the initial capital outlay Flextronics needs to take on a mine that would still require significant investment, and improved security conditions, before it could return to production, while giving First Majestic a long-dated but largely guaranteed revenue stream in place of ongoing care-and-maintenance costs.

Neither company has indicated a restart timeline for San Martin. Pending the outcome of the antitrust review, the deal is expected to close before year-end, closing out one of the last idle assets on First Majestic's balance sheet following the Del Toro sale.