AG — First Majestic Silver Corp.

Summary of First Majestic Silver Q2 2025 Earnings Call

1. Key Financial Results and Metrics

• Silver Production: 3.7 million ounces, up 76% year-over-year; silver equivalent production of 7.9 million ounces, up 48%.
• Revenue: Record quarterly revenue of $268 million, a 94% increase year-over-year; on track for $1 billion in revenue for 2025.
• EBITDA: Record EBITDA of $120 million.
• Cash Flow: Significant cash flows of approximately $115 million; cash position of $510 million.
• Dividends: 1% of revenue paid as dividends, increasing with revenue growth.
• Exploration Spending: Record spending with 255,000 meters expected to be drilled this year.

2. Strategic Updates and Business Highlights

• Integration of Gatos: Smooth integration with operational improvements noted; synergies identified in exploration and operational practices.
• Exploration Success: Notable discoveries at Navidad, Santo Niño, and Santa Elena; ongoing engineering work to expedite ore body development.
• Operational Enhancements: Implementation of SAP at Gatos for better operational control; plans for self-haulage at La Encantada to reduce operational costs.
• Safety Performance: Strong safety metrics reported.

3. Forward Guidance and Outlook

• Production Guidance: On track to meet production guidance of 30-32 million silver equivalent ounces for the year.
• Cost Management: Costs are within guidance, with expectations for improvements in the coming quarters as inflationary pressures stabilize.
• Capital Expenditures: Increased exploration and development budgets to support growth; no changes to current guidance or budget expected for the remainder of the year.

4. Bad News, Challenges, or Points of Concern

• Market Volatility: Silver and gold prices experienced a downturn, impacting stock performance.
• Cost Increases: Noted inflationary pressures affecting operational costs, particularly in Q2 due to union bonuses and tax payments.
• Integration Costs: Some one-time integration costs at Los Gatos noted, although overall integration has been smooth.

5. Notable Q&A Insights

• Synergies from Gatos Integration: Management discussed operational synergies, including improved reconciliation processes and cost savings from exploration contracts.
• Future Ore Body Development: Questions regarding the timeline for new discoveries and their integration into production were addressed, with management indicating ongoing engineering work to expedite this process.
• Debt Management: Clarification on the company's debt structure, with a focus on convertible debt viewed as equity; low carrying costs highlighted.
• First Mint Capacity: Current production at First Mint is below full capacity due to labor constraints, with plans to increase output in the future.

Overall, First Majestic Silver reported a strong quarter with record financial metrics and strategic advancements, despite facing some market and operational challenges. The company remains optimistic about its growth trajectory and operational efficiencies moving forward.