First Majestic Silver Corp.

Thank you for standing by. This is the conference operator. Welcome to the first Majestic Silver 2025 Q4 financial results conference call. As a reminder, all participants are in a listen-only mode, and the conference is being recorded. After the presentation, there will be an opportunity to ask questions. To join the question queue, you may press star, then one on your telephone keypad. If you are participating through the webcast, you can submit a question in writing by using the form in the lower section of the webcast frame on your screen. Should you need assistance during the conference, you may reach an operator by pressing star, then zero. I would now like to turn the conference over to Mr. Keith Neumeier, Chief Executive Officer of First Majestic Silver. Keith, please go ahead.

Well, welcome, everyone, to an excellent day for the company. Nice to see our analysts coming out with some good reports today on an update in silver prices, which is obviously nice to come out with fantastic results on an update in mills. So, you know, thanks for everyone for joining us today to discuss our fourth quarter and our year-end financial statements. And I hope that you've all read the news release prior to today's call. We have a full room here in Vancouver. We have Manny Al-Fadaji, President and Chief Corporate Development Officer here with us today. David Shores, our CFO, Steve Holmes, our COO, Samir Patel, our General Counsel and Corporate Secretary. We also have Darren Fernandez, Director of Finance. We also have Dara Rand, Joel Pelzinski at Investor Relations of our team here. So, If there are any questions, we will be passing the questions on to the relative staff that are currently present today in the room. And I'd like to just pass the call over to Samir Patel before we continue.

Thank you. Before we begin today's call, I would like to remind you that we will be referring to certain non-IFRS measures and making certain statements regarding post-majestic siloing. such as statements regarding future estimates and plans or expectations of future performance constitute forward-looking statements that reflect the company's current views with respect to future events. These statements are necessarily based upon a number of assumptions and estimates that, while considered reasonable by the company, are inherently subject to significant business, economic, competitive, political, and social uncertainties and contingencies. We encourage you to refer to the cautionary language included in our news release that was disseminated earlier this morning and the disclosure on non-IFRS measures in our most recently filed Management Discussion Analysis, as well as the risk factors set out in our most recently filed Annual Information Form. As a reminder, these documents, along with all of our continuous disclosure documents, are available on CEDAW Plus and on EDGA. Investors are cautioned against attributing undue certainty or reliance on any forward-looking statements made during today's call. And the company does not intend or assume any obligation to update these forward-looking statements or information other than as required by law. With that, I will turn the call back to Keith.

Thanks, Amir. We do have a presentation that's available, and it will be put on our website. But for those online today, you can see as we go through the presentation, I'm going to pass the call on to Manny,

I'm going to start with the slide with the highlights title. We did have a wonderful year. You know, 2025 was transformational. We set out some key milestones, fresh targets, and we came with wonderful end to the year and a great year overall. 4.2 million pure silver ounces in the quarter, 15, just over 15 million for the year. From an equivalent stance, you know, we came in with 31, just over 31 million silver equivalent ounces. We'll touch on that in the next slide, but that came in higher than our revised guidance, which is great to see. Revenues, big milestones. You know, we broke through 1.2. This year, you know, that gives us obviously a lot of financial strength that we see that trickling down to the bottom line. Again, you would have seen that in the news release. Realized price, we came in for the quarter higher than the average, which, again, is a big assessment to our strategies. Q4 average was just under $59, and for the year it was $41.52. Interesting to see as well our mint. That's our new mint to the business. had record after record, quarters throughout the year and ending the year on a wonderful note. We generated just under $23 million from that operation. Cash flows, again, combined with metal prices and the production, I was surprised to see record cash flows coming into the business and hitting on these milestones. Our exploration program, again, was quite aggressive at the start, and we came in nicely with that, over 250 kilometers of drilling. Great results that we've disclosed throughout the year and will be reflected in our annual information form at the end of this quarter. Just a quick second on that bar that you guys see on the slides. That's a very important KPI. To first suggest it, we are the fewest silver producer among our peers. about 50, you know, for the year it was 58%, but this number continues to improve. The Q4 was actually north of 60%. So as silver price continues to improve, our leverage materializes. Okay, moving on to the next slide. Another big milestone for us is our free cash flow. And you see over the last few quarters, it's been steadily increasing, but in Q4 2025, was a step change for the company. Again, due to the operational discipline, the metal improvements, and cost containment, we're very pleased with the performance. This gives us a lot of flexibility and obviously capital allocation, providing investing back into the business, whether it's exploration, whether it's plant expansion, which we can touch on a bit later. But a wonderful trend to see, and we look forward to continuing this. Moving on to the next slide, our guidance. If you recall, we did update our guidance. You know, we set up the preliminary guidance in January of 2025, and halfway through the year, we've updated it. We revised it upward. We've increased the production targets and improved costs. Nice to see that we came in pretty much at or better than guidance on both silver and gold. Silver equivalent came in right in the middle. You know, we do recognize that it was a miss on the cost side, but that's purely related to the conversion of byproduct metal to silver. The silver equivalent ratio did collapse towards the end, which is wonderful for silver, talking about how silver outperformed gold and base metal. But it did have about a, you know, to put numbers on it, about a million, 1.4 million silver equivalent ounces reduction in our production, as well about $1. increase in our own sustaining so without that our own sustaining would have been in the 20 which would have been right in the middle of the toward the lower end of the guidance had we used the guidance assumptions okay uh moving on to the next slide uh which is our 2026 guidance so similarly we are uh investing heavily and we're we're continuing we're continuing with uh with our robust production for the 14 million pure silver and just 100 cents, 130,000 ounces of gold and the balance is lead and zinc. We did change things a little bit for 2026. We have locked in the conversion ratio to 75 to 1 to avoid the noise that we were seeing pretty much in 2025. So we're going to lock in pretty much the assumption ratios on the metal prices so we're not susceptible to external factors. The next slide. Some operational highlights. This is obviously throughout the year, we have been providing updates, but it's nice to look back on the accomplishments. Gantos was a key highlight for the business. We did close this transaction in January of 2025, and we spent about half the year integrating this asset and it could not have gone any better. Smooth transition, smooth integration, and we're pleased to say that it's fully completed at this point, and it's nice to enjoy the dividends that we're getting from this operation. Beautiful assets, massive land position, and lots of opportunities. We're still targeting a lot of low-hanging fruits in terms of cost reduction, in terms of near-mine reserve and resource growth, so look for more news on that. Santa Elena, it has been the gift that keeps on giving. You know, we say this almost every news release and every now and then we still have exciting stuff to talk about here. Obviously, we've had fantastic discoveries in this district. In the 10 years that First Suggesting has owned Santa Elena, we've had four new discoveries. And these are massive achievements. The map on the right gives you a sense of what they are. So we have We've obviously had the Hermit's annual wine that we're currently producing from Pataluna. But the more recent discoveries is Navidad and Santanino. We have put out a maiden resource at the end of last year on Navidad. Plenty of drilling and results have come through throughout the year and will be reflected in our 2025 annual information form, which will be published before the end of the quarter. We are also investing in plant expansion at Santa Elena. Again, we see a lot of value, a lot of growth opportunities in this operation. It is a massive district. It comes with 102,000 hectares. And again, with the exploration success that we've seen, it gives us confidence in investing. So we're taking the plant from about 3,100, 3,200 tons per day to 3,500 at a sustainable in H2 of 2026. I did fail to touch on Gatos. We're also expanding the throughputs of this operation. So we have a contractor that's been engaged at the end of last year and continuing obviously right now. We're targeting mine throughputs of about 4,000 tons per day at a sustainable level from about 3,500. San Divas, you know, same thing, massive district, plenty of exploration success that we'll be discussing in our annual R&R update. And Lancansada has been, you know, an exciting turnaround for the story, for the portfolio. It is our smallest mine, but it is our purest silver producer, 100% silver. Came in with a beautiful Q4, produced about a million ounces. to the water challenges and the haulage issues that we've experienced. We are internalizing haulage as well over here, so we're anticipating further cost improvements and operational efficiencies. Okay, moving on to the next slide. Just some further consideration. You know, we do obviously focus on safe production, and it's nice to see us coming in with our TRIFR and LTIFR numbers for the year, putting us in really, truly world-class measures. Safe production gives us the production losses that we're getting, so we're continuing with that. Financials, you know, a couple of things to mind. We did hold some inventory. It's either raw material for the MINS or just timing differences that would have gone flushed out in Q1. The MINS, I did touch on that, did have a wonderful year and quarter. For the year, the revenue was just under $50 million, but the profitability was about $24 million for the year. One thing that's not reflected in our income statement, but it's important to recognize, is the marketable securities that we hold. It did have an impressive movement in the year and in the quarter. So for the year, our position has increased by about $140 million. That's not included in our income statement. It is reflected in our balance sheet. So just keep that in mind. And we did recognize the provision that was disclosed at the end of last Q3 results. We did take a provision on that in the income statement. It's important to recognize that this amount has not been paid as we do continue conversation with SAT, and we're cautiously optimistic about where things are going there. A couple of things we want to highlight, again, nothing new. Being in Mexico, there's obviously some cash payments that will be hitting us in Q1 and delivering Q2 related to 2025. We obviously had a wonderful year in 2025. We have some cash true-up payments that will be made before the end of the quarter, so that will be reflected. Moving on to the financial strengths, the slide speaks for itself. The cash flow is trickling to the treasury, which is wonderful to see. We're sitting with just under 940 million in the bank between unrestricted and restricted cash position. Our working capital is $733 million. That is including some marketable securities that you see on the slides. Like I said, we've done very well with those, and we're pleased to be shareholders of these companies. We did close, you know, the best terms in the mining industry when it comes to convertible notes. That was done in December. The coupon rate on this is 1A, which is wonderful. So we're glad to have the supports in the markets. Moving on to our dividends policy. So we did declare dividends for Q4. It's important to recognize we're also seeing a lot of confidence in our balance sheets and our cash flow to the point that we have declared an increase. We effectively doubled our dividend policy effective 2026. So that'll be reflected on revenue earned for Q1 of 2026. So that went from 1% of the top line to 2% of the top line being revenue. And lastly, some of the capitalists, you know, it's... lot of value in the drill bits. So you see we're coming, we have declared a 266 kilometer drilling across all the operations, which we're quite excited about. Plenty of targets that we'll be chasing. Our updated reserve and resource reflect a lot of the success that we've had from 2025. So look for that. That will likely go out before March 31st. And continue strengthening of the balance sheet Metal prices have obviously are better than they were in Q4. Q4 is wonderful. You can imagine what Q1 and hopefully the rest of 2026 will look like for First Majestic. With that, that concludes our prepared slide deck.

We'd like to open it up for Q&A if there's any. Well, thanks, Manny, for doing that. And if anyone wants to ask any questions, we're available.

Thank you, Keith. We will now proceed to the question and answer session. Once again, to join the question queue, you may press star, then 1 on your telephone keypad. You will hear a tone acknowledging your request. If you are using a speakerphone, please pick up your handset before pressing any keys. To withdraw your question, please press star, then 2. If you are participating today through the webcast, you can submit a question in writing by using the form in the lower section of the webcast frame on your screen. And the first question today will come from Heiko Ehle with HC Wainwright. Please go ahead.

Hey, Keith and team. Congratulations on a good quarter here. Thanks, Heiko. Hey, we're close to two-thirds through Q1 right now, or at least we're in the second half of the quarter. Metal prices have obviously been extremely volatile, a bit of unprecedented times here. I've heard that some of the refineries have been putting off, you know, taking products from some sellers for capacity reasons. Cost-wise, obviously, there are some changes. I guess the question is, is there anything quantifiable that you're willing to, you know, point out on this call that you encountered this quarter related to costs or shipments or anything unexpected that maybe we don't yet account for in our models?

Well, the refineries have suspended financing, and that's really the biggest issue. So, you know, I think it's, you know, If you're a small retail store, you know, in Miami, for example, and you're used to, you know, your people are walking in their front door and selling you silver, you know, that small retail store would collect, you know, X amount of ounces over a period of a few days. And, you know, it's a cash flow issue, right? So they would then phone up the refinery that they would normally use for, you know, that would buy that metal from them to melt it into other products. And they would get financing for that. So that would keep that business operating and, you know, cashflow coming in. What's happened is because of the tightness in the market and the volatility in the market, the refineries have told everyone they're no longer financing. So... it's really hurt the retail buyers of metal because they just simply can't buy the metal anymore because they have to wait 30, 45 days and sometimes even longer than that, depending on the quality of the metal that they're buying. For us, it doesn't affect us in any way. We don't finance our metal. If you're a smaller producer, you may be affected because you need the cash flow to finance your business. For us, we don't have to do that. So, you know, we wait for our turn. And so, yeah, it doesn't affect us.

Fair enough. And then just to clarify, you got 266,000 meters of exploration plant this year. Just the costs that you're seeing and availability of rigs, I assume, is no issue?

Yeah, the beauty thing with that, sorry, this is Matty. We have a contractor who basically does most of our drilling with long-term contracts, so our costs are relatively contained. With that being obviously, you know, first majestic with a big footprint in Mexico, we're able to have access to resources, so the number of rigs are available to us, so no concerns. Very good.

I'll get back to you. Thank you.

The next question will come from Alex Tarantio with National Bank. Please go ahead.

Hey, guys. Yeah, nice quarter. I didn't see your cash jump as much as it did there, which kind of leads me to my question. You know, it's a nice problem to have or you can debate whether it's a problem or not, but, you know, cash is going up. I know you guys are spending this a bit more on development this year and bumping your expiration or keeping your expiration nice and strong, but How are you guys thinking about the cash and what to do with it at these silver prices? Your free cash flow should be strong again in 2026. Is there other thoughts for additional capital returns to investors? Obviously, Jarrett Canyon might play into this as well, so maybe just wrapping a question on your thoughts on Jarrett Canyon in there as well here.

Yeah, sure, Alex, and thanks for your report today. It was quite good to see. Yeah, you know, capital allocation, there is a tax issue that is still pending. You know, we've got the market. The market is well aware of that issue, and it's something that the team is actively in discussions with to final year that IDQ will be behind us, you know, after, you know, that just means, you know, starting back in 2012 that we inherited in 2018. So, you know, that's one issue that we hope to see. You know, we haven't done any shared buybacks in Q4, but we always have that option to do that as well. We did increase the dividend. There will be some news coming up on Jarrett Canyon over the next couple of months. So I would suggest people wait for that. But look, being the CEO for 20-some-odd, 23 years, it's kind of nice to see a billion dollars involved.

So we're not about to spend it anytime soon. Okay, fair enough. And just one little accounting question. You know, Real Life Silver Price, came in 59 bucks average price of the quarter it was 54 so is that you know I guess saying part of that could be just you know timing of sales but it's also you guys do you guys factor in final sale on you know provisional pricing settlements into that so you know if there's a positive adjustment you kind of factor that into the quarters realized price is that how your accounting works yeah that

trade bills, but also keep in mind, you have a, I'm laughing at the nominee, but no one else really has. We have the Mint. The Mint recognized $69 average price as well. That's about 12% of our production that went to the Mint. Thank you for, of the Dorian production, I should say.

Okay, that's a good point. Thanks. That's it for me.

I will now pass the floor over to Mr. Darrell Ray, Investor Relations at First Majestic Silver, to take us through questions submitted through the webcast.

Yeah, we just have a few more, team. One relates a couple of questions on this, but congrats on the solid results at the Mint. Do you have any plans to expand First Mint? And do you want to elaborate on that for us?

Yeah, so keep in mind the Mint is less than a year old. It's about a year old. So the wrap-up has been pretty exciting, pretty quick. The answer is yes, we do plan on expanding. The facility is capable of further expansion. We're working diligently on marketing strategy to get the name out there, and it's been quite effective, so we'll keep working on that.

Okay, and then we have a few questions on Along the line, congrats on the strong average selling price versus the COMEX in the quarter. Are you hedging prices and would you consider direct-to-market selling in the future?

We have, interestingly enough, been contacted by direct buyers over the last month or so. We did assist one U.S. buyer with some ounces in 2004. It's not a strategy that we normally follow. It doesn't really make a lot of sense for us to do that, and we don't hedge. We're fully exposed. I think our investors or shareholders who own First Majestic, you know, not quite appreciate us hedging. So, you know, we just simply don't do that.

Okay. And probably the last question, just kind of looking through these, is around silver purity. Nice to see your silver purity at 60%. Do you have any plans to buy a late-stage developer, or what are your plans to maintain your focus on silver?

Well, as Manny said in the presentation, our silver purity is very important to us. It's a major KPI for us. So it's nice to have gold. You know, gold is very stable, you know, But, you know, we're always going to maintain as much purity of silver as we possibly can. But, you know, silver mines are hard to come by. They're pretty rare animals. So we're always looking around for the next big acquisition. So stay tuned.

That's great. Okay. And I know we're getting close to the top of the hour. Maybe one last one. Any update on Jarrett Canyon when a restart may happen or any general update on Jarrett?

Yeah, so we'll keep in touch on that. We're going to be putting a standalone update on Deer Canyon once we have the plans and numbers finalized. We're hoping for the end of the quarter. That's still the plan. You can imagine management's team is focused on Deer Canyon now that Gatos is integrated and closed. So we're putting a lot of attention and we'll be sharing that once ready.

Okay, that's it from the queue, Nick.

Okay. Thank you. Showing no further audio questions, this will conclude our question and answer session. I would like to turn the conference back over to Keith for any closing remarks.

Thanks for everyone to join us today. And if there are additional questions, please feel free to contact us. I think you know who we are and how to contact us. So we're always available. So Daryl and Joel and Manny and myself are Feel free to reach out. We'll be at the PDAC coming up in the next few weeks as well. We hope to see you at our aquarium event on the Monday evening for further contact or questions.

This brings today's conference call to a close. You may now disconnect your lines. Thank you for participating and have a pleasant day.