First Majestic Lifts Silver Guidance on Record Mexican Output

First Majestic Silver raised its 2026 production guidance for a second straight year after its four Mexican mines produced 3.8Moz silver and 34,660oz of gold in the second quarter, led by record throughput at La Encantada in Coahuila and Santa Elena in Sonora. The results matter for Mexico's mining sector because they signal disciplined expansion against record silver prices and a widening structural supply deficit. Rising costs from a stronger peso underscore the margin pressures facing established producers in the world's top silver-producing country.

First Majestic Silver leaned on its four Mexican underground mines to deliver a stronger 2Q26, a performance solid enough for the Vancouver-based producer to raise its full-year targets for a second consecutive year. Across Santa Elena in Sonora, Los Gatos in Chihuahua, San Dimas in Durango and La Encantada in Coahuila, the company turned out 3.8Moz of silver and 34,660oz of gold between April and June, up 3% and 2% year-on-year, alongside zinc, lead and copper by-products drawn largely from the Los Gatos joint venture.

Mexican Mines Power a Stronger Quarter

The quarter's standout was La Encantada, where silver output jumped 65% from a year earlier to just over 1Moz, lifted by a record 320,852t of ore milled, sharply higher grades and improved recoveries following a series of management-led process fixes. Santa Elena set a milling record of its own at 305,369t, pushing silver production up 38% and gold up 4% as optimized ore blends sharpened metal recoveries.

Those gains cushioned softer results elsewhere. San Dimas saw silver slip 15% after now-resolved labour negotiations disrupted ore haulage and an equipment failure slowed processing, while Los Gatos, 70% held by First Majestic, absorbed a rockfall on its main ramp in early April that briefly halted mining. 

Even so, the Chihuahua operation reached a record 4,078tpod in June, a marker on its path toward a sustained 4,000t rate in the second half of the year. Los Gatos, run jointly with Japan's Dowa Metals & Mining, also supplied the bulk of the quarter's base-metal by-products, including 16.5M pounds of zinc and 9M pounds of lead, on higher grades and strong recoveries.

Sonora Expansion Gathers Pace

Santa Elena remains the clearest growth engine. Its mill is being enlarged toward 3,500tpd, and during the quarter the company secured the regulatory clearances needed to break ground on two new access portals at the Santo Niño and Navidad vein systems. 

That milestone, paired with a fresh US$12 million commitment to accelerate underground development in Sonora, sets up the Santo Niño portal for near-term mining and reinforces the district-scale ambitions around the asset. Infill drilling at both targets returned high-grade silver and gold intercepts, and CEO Keith Neumeyer pointed to the permits arriving ahead of schedule as a defining moment of a quarter marked by operational outperformance against the original plan.

A Reshaped Mexican Portfolio

The period also confirmed a leaner footprint. In June, First Majestic closed the sale of its idle Del Toro mine in Zacatecas to Sierra Madre Gold and Silver, a deal worth up to US$60 million with US$30 million paid upfront and the remainder tied to contingent milestones. The divestment leaves First Majestic holding a roughly one-quarter equity stake in the buyer and slots into a broader wave of consolidation sweeping Mexico's silver sector, from Pan American Silver's multibillion-dollar takeover of MAG Silver to a run of junior transactions chasing mid-tier scale.

Higher Targets, Higher Costs

With first-half output running ahead of plan, First Majestic lifted its 2026 attributable guidance to 14.6-15.5Moz of silver, a 10% increase at the midpoint, and to 128,000-135,000oz of gold. Every Mexican operation fed the upgrade: San Dimas and La Encantada carry double-digit percentage increases on stronger throughput, La Encantada's forecast alone rising 19%, while Santa Elena's gold forecast rose 10%.

The revised plan also stretches underground development and exploration drilling well beyond the original budget across the Mexican portfolio. The capital budget, meanwhile, climbed 47% to between US$318 million and US$344 million, funding development across the Mexican mines, additional haulage equipment at Los Gatos, and the separate restart of the Jerritt Canyon gold mine in Nevada targeted for 2027.

The trade-off is cost inflation. The company now expects all-in sustaining costs of US$27.69-28.77 per silver-equivalent oz, up about 4% at the midpoint, largely because a stronger Mexican peso and higher-than-assumed silver prices inflated variable expenses through the first half. 

That backdrop cuts both ways for producers in the country: silver has been trading near record highs amid a structural supply deficit now stretching into its sixth straight year, a dynamic that swells revenue even as it pushes royalties and input costs higher. First Majestic anchored its guidance on assumptions of US$52 silver and US$3,900 gold.

For a nation that remains the world's leading silver producer, the results land amid record foreign investment and tighter regulatory enforcement reshaping mining strategy. Established operators with permitted assets and disciplined capital allocation, precisely the profile First Majestic is working to occupy, are best positioned to convert elevated prices into durable margins as the 2H26 unfolds.