First Majestic Silver Corp.

Thank you for standing by. This is the conference operator. Welcome to the first Majestic Silver Q2 2026 financial results conference call. As a reminder, all participants are in 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 1 on your telephone keypad. If you're 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 call, 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, thank you, and welcome, everyone, to our Q2 conference call to discuss today's or this morning's news release. Hopefully, you've all read it by now. Before I get into introducing Samir, I'd like to introduce the people in the room with me here today. Danielle Kavagi, our President and Chief Corporate Development Officer. We have Dave Howe, our Chief Operating Officer, who's new to the company. He joined us about three months ago. And Samir Patel, General Counsel, Corporate Secretary. Dara Ray and Joe Daltinsky from Investor Relations. Darren Fernandez from our Financial Leadership Team. And our new CFO, Neil Beaumont, who's just recently joined us a couple weeks ago. And we did put a news release out on that. And his bio's there. He's with Canada Pension Plan and KPMG and BHP and has added a lot of information. depth to the finance role, which we're quite pleased about. So I'm just going to pass this on to Samir for comments.

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 First Majestic Silver and its operations that constitute forward-looking statements in accordance with applicable Canadian and U.S. securities laws. All statements that are not historical facts, such as statements regarding future estimates and plans, We encourage you to refer to the quarterly language included in our news release that was disseminated earlier this morning and the disclosure on non-IFRS measures in our most recent are available on CETA Plus and on EDCA. 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 have a presentation showing on the screen. Some of you hopefully can see it. You've got full control over it. We'll go through it slide by slide on our end. I won't read the entire slides as I'm hoping most people on the call have already gone through our news release, but another strong quarter for us. Big revenue number, $416 million, 53% year over year, 3.8 million ounces of silver produced in the quarter. bringing our H1 production numbers up to 7.3 million ounces, which is basically 50% of our revised guidance that we put out in July, which is obviously, as you probably know, about a 10% increase from our guidance that we put out in January. So we're looking forward to a strong H2 going forward. Yibatog, $152 million, up 110%. Strong cash flow, 50 cents a share. Expiration is continuing at a robust pace. We did 94,000 meters across the portfolio in Q2. For six months of the year, we did 160,000 meters of drilling. We're very, very pleased to see the permits come in from Mexico on our Santo Nino and Navidad portals. Those two discoveries have been well laid out to the public in the form of several news releases over the last couple of years. These two portals, we are actually projecting them to come into development in about the fall of 14 months. We've now started development at San Domingo in the last few weeks. We're looking forward to doing first blasting there in the next week or so. So San Domingo is over a year ahead of schedule, which will hopefully bring ore into the mill towards the end of 2027 from that. And slightly later, probably about 18 months after that, we'll probably see Navidad Sorry to add, or to the mill at Santa Elena. So those are two very exciting things that are developing at Santa Elena. I'm looking for, you know, extended mine life there as a result of these two new discoveries that were discovered about two years ago now. So we did revise our guidance, as I did say already. We did declare our dividend as well. It's a 270% increase in our dividend year over year. which is obviously nice for shareholders. We did do substantial share buybacks in the quarter. We bought 1.2 million shares during the period. That program was there for us to use at any time. Whether or not we do that going forward, expect that we likely will, but look for further news on that. We ended with a strong treasury at the end of June 30th. $1.25 billion in the Treasury, which is obviously a pretty nice place to be. So I'm going to jump to the next slide. That was all slide three. So on slide four, we're going to be on the all-in sustaining costs. And, you know, as everyone knows, listening to this webinar, our analysts are quite familiar with this. There is inflation, of course, you know, as a result of, you know, quite large bonuses going to the workforce, which is quite nice for them. You can't, you know, you'd probably imagine how happy the workforce is these days because, you know, their bonuses are tied to silver prices. So it's really paying off for the communities and the areas that we're active in. So that's really nice to see from our perspective. You know, we're keeping our costs in line. As you can see on that graph there, you know, our costs per ton are 107, you know, pretty well compared to the last four years. So we're We are keeping our costs in line on a daily basis as a result of the efforts that are currently underway. So jumping to the next slide, operating cash flows, obviously quite good. You see the Q2 number there of $248 million, slightly down from Q1, and that's all price dripping, as we all know. What happens in the gold and silver prices, you know, we are affected by those prices as we're completely unhedged at all times as our shareholders virtually demand that we remain unhedged, which I'm a firm believer of that. And it's still a bit strong cash flows and still adding cash to our inventory, which is obviously very nice to see. Free cash flow, a strong $195 million as well in the quarter. Moving along. The Atlas Gatos, we're working to continually reach the 4,000 tons per day. We actually exceeded that number, as you can see. We hit a record of 4,070 tons per day in June, which is great. We're on track to have continuous throughput. Atlas Gatos has 4,000 tons a day, which is important for that operation. Santa Elena continues to perform extremely well. We now have our throughput, or we're getting close to 3,500 tons a day. Now, we expect to have daily throughput at 3,500 tons a day throughout H2. And again, this permits at Santanino and Navidad are key for that asset going forward. San Dimas had a pretty good quarter. You know, there was some labor disruptions. It's quite common at that minus. Most of our shareholders are aware, but nevertheless, the union is getting paid a lot of money these days and I can tell you they're quite happy and they're working hard and some of the development rates that we're seeing out of the workforce there are quite good compared to the last couple of years. We had our own fleet now of trucks that are doing our own ore transport to the mill. That's a changeover from What we did over the last several years, we bought our own fleet, and it's really paying off and adding to the throughput, and we're starting to hit record throughput levels out of Lugantata as we speak, which is really nice to see with that operation. So both Lugantata and Santa Elena are performing above budget, which is quite nice to see. Jumping to the next slide, Jarrett Canyon, we continually get it. A bunch of questions on Jared. You know, we're pretty excited about it. You know, our current goal price is it's going to be a big cash flow generator for us. And we have initiated underground development and rehabilitation. Drilling is continuing. I don't have the number in front of me, but we have substantial meters of drilling in the quarter. And we'll continue to do that to prove up the mine plan and get ready for mining operations. Next year, a variety of consultants have been hired to initiate production there. We're on track. We're within budget. And a bunch of the key equipment has now been ordered. There's a couple of components that are still being worked on to get orders in the system. But as I said, we're on track to see production at Jarrett Canyon, like we did through year 2027. It's going to be a pretty exciting event for all of us, including our shareholders. So jumping along to future catalysts on this page or slide eight, for those of you who are following us, you know, exploration is really key for us this year and last year. You can see that we're adding ounces to our resource base. We have a nice increase in our numbers that we put out in March of this year, and we continually discover new structures and new ore bodies and Just recently, we've had some good news on San Dimas, which is really nice to see, and the drilling in Santo Nino and Navidad are continuing. We continually see nice extensions of the Santo Nino ore body, and we will be updating our resources over the coming quarters. We're likely to be putting out a 43-101 on Los Gatos in the next quarter or so, and we'll likely be following that up with Santa Elena 43-1, it's a one-on-one out, and then later this year or early next year. So look for further news on expiration. Look for further news on the Jarrett Canyon restart. And look for the continued cash flow and then cash generation and building our treasury because that's really one of our key focuses right now, really getting ready for the future. And we think we have a very bright future ahead with all the great things going on within the company. And that's it for the presentation. We'll open the call up for questions.

Thank you, Keith. We will now proceed to the question and answer session. To join the question queue, you may press star then one on your telephone keypad. You'll hear a tone acknowledging your request. If you're using a speakerphone, please pick up your handset before pressing any keys. To withdraw your question, please press star then two. And if you're 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. Our first question is from Heiko Ehle with H.C. Wainwright. Please go ahead.

Good morning, Keith and team. How are you? How are you? Hey, two quickie ones here. Your finished goods inventory, I mean, obviously over a million ounces of solar, close to 5,000 ounces of gold as of the end of last month. You want to get a little bit of color of where that stands today and what the new baseline is. And if I want to go out on a limb here, maybe even where you see this at the end of this quarter and maybe even at the end of the year, just so we can incorporate that into our model.

Yeah, sure. The mint needs around 400,000 ounces in the vault at all times to keep that business operating sufficiently. So that should be kind of, I think, your base. Last quarter we ended off a little over 600,000 ounces. You're right, this quarter we're over a million. And the reason really for that is just the precipitous drop in the silver price during a very short period of time. And we didn't want to be caught selling silver in the low $50 range. And I felt that there was going to be a bounce. And we are seeing that now. And, you know, I don't want to give you numbers or false expectations, but I would suggest that that inventory number will drop during the quarter.

Fair enough. And then completely different one. I mean, Jared Canyon, it seems like things are really starting to happen there. And frankly, they need to have given that, you know, we're at this point with 17 months away at the very longest of the timeline here with the second half of next year. How many people are working there now? And maybe if you would like a little bit of an inkling of a clue of quarter by quarter capital spent at the site.

Yeah, we haven't put the details out on that yet. You know, we did put the number of $75 million out in February. We're well in line with that number. You know, the Sandvik Fleet, for example, you know, the deposits have been made and other key components, deposits have been made. There's a couple other key components that are being ordered in the next, you know, 30 days, and deposits will be made on those orders as well. So, you know, a lot of that money is back-ended. We will be putting out additional capital requirements likely in January of 2027 once we get through the 2027 budget. But we don't really expect that $75 million is going to change in 2026 unless there's some changes currently that potentially we may decide to buy additional equipment or something along those lines. But nothing currently is anticipated regarding that. And on the staffing, there was about 40 people that had been there over the last couple of years, and they were there for care and maintenance purposes. We had 45 positions that we needed to fill from the time we decided to start to when we started building out the workforce. Of those 45 individuals, 80% of those positions have now been filled.

Okay. That's good. Very helpful. I'll get back to you. Thank you, guys. Thank you.

The next question is from Eric Windmill with Scotiabank. Please go ahead.

Great. Hi, Keith and team. Thanks for taking my question. Just wondering here, Centinino and Navidad, any comments here in terms of critical path items or, you know, sort of sequencing over the next 12 or 18 months as you ramp up to production there?

Let me pass that question on to our chief operating officer, Dave Howell.

No, I really don't see any. Good morning. I really don't see any issues. I think we're actually trying to speed some of the ore access up. So we're looking at about now, Revising our mine plan.

Does that answer your question, Eric, or would you like more specifics?

Yeah, anything you can share there in terms of what we should be looking for here, you know, in the works program here through the balance of this year and the next?

Well, I think the, you know, our first block should be around 15 to all this, and then we'll just be pushing ahead. We've got all of our ground control items ordered, and then we'll just push down spiraling down, but I don't see any issues going forward with the development.

Okay, great. That's helpful. Thank you very much. And in terms of, you know, San Dimas or any other mines, any major works programs underway beyond the expansion you talked about?

Well, right now, no. We're just pushing ahead with our development. Doing very well, as Keith mentioned earlier. Our union workers are doing very well with the long hauling and development, so we don't see any issues at all.

Okay, great. That's helpful. Thank you. And maybe just more of a strategy question, but obviously cash balance is building. Any thoughts here on capital allocation when it comes to M&A or dividends and buybacks? Any thoughts for the rest of this year?

Well, in the quarter, we spent $22 million on share buybacks, which is, I think, the most we've ever spent in the history of the company on share buybacks. I can't commit to you on what we're going to be doing for the rest of the year, but it obviously is on our list of things to do with our cash. The dividends are upgraded, doubled in January for 2026, and that was really nice to see. It's still a relatively low dividend. I'd like to see it increase further, but You know, I'd like to see, you know, the Treasury build even more. I know it's a lot of money, $1.25 billion, and it's a lot, and it is growing, which is really nice to see. You know, there is a couple of cash items that are on our list that could be large, and that's the tax settlement in Mexico with Primero sent to DEMIS. All our shareholders, and I'm sure you're aware about, so, or Erica, and so, Once we get that off our plate, which we hope will be resolved by the end of the year, and then with Chair Canyon also, we don't know what the spend is going to be in 2027. We've got some numbers that we're expecting to make public, as I said, in January 27, to get that finally up and running by the third quarter. But once we get those two big spends out behind us, then... We'll look at further capital allocations.

Okay, fantastic. Appreciate the added color. I'll hop back in the queue. Thank you. Cheers. Thank you.

Once again, if you have a question, please press star, then 1. The next question is from Alex Tarantew with National Bank. Please go ahead.

Hey, guys. Thanks for taking my questions here. I wanted to follow up just on Santanino, sorry, well, Santalina, rather. Keith, you made a comment, and I think I apologize if I think I may have missed it here, but you're saying Santanino targeting to get that first ore from their end of 2027, was that right? And then Navidad, maybe about 18 months after? I just wanted to confirm that's kind of what you're targeting at the moment. Yeah, no, that's exactly right, Alex. Okay. All right, good. And then I know... Maybe just can you remind me, actually, when it comes to metallurgy, I know that Hermitania or a lot of the stuff you're putting through now, you know, gold recovery is good, but, you know, silver recovery is a little bit lighter. What's the expectation for Santanino? Is that, you know, the same as Hermitania, or are we seeing something a bit better there? Dave, you want to grab that one?

The recovery is at Santanino. Oh, Santanino, this should be very good. I don't know, we're looking at...

I'll pass it on to Danny. He's got the numbers. Yeah, no, Santanino is behaving similarly to the original Santa Elena, so we're seeing mid-'90s. The metallurgical testing for both Navidad and Santanino is showing 95-plus for both gold and silver with a higher silver grade as well, so we're expecting more contribution of silver in both of them. Perfect. That's what I was looking to hear.

Okay, great. And just my last question on capital spending. You know, I think you guys are a little bit light, well, at least tracking so far for this year. Your first half of the year is a bit, I think it was about 37% of your annual guidance. I guess that implies, obviously, the second half this year is going to be, you know, heavier. But I'm just curious, is there any, you know, any projects maybe falling behind a little bit just from just timing perspective or permitting or anything like that? Or Or really just we should expect a lot more spending to pick up in the second half this year?

Yeah, it is very much back-ended. And, you know, there's really no issues anywhere there, except, you know, maybe the status is a little bit behind on development. It's not materially behind, but it is slightly behind budget. The other mines are well within budget, but most of the effects are timing.

All right, that's it for me.

Thank you. I was just going to say I'll now pass the floor over to Mr. Darrell Ray, Investor Relations at First Majestic Silver, to take us through questions submitted through the webcast.

Okay, thanks, Gaylene. Yeah, there's a lot of questions that are very similar, Keith, to ones that you've already answered a lot on capital allocation, the dividends, stock buybacks. We'll do that. Maybe a little bit that we haven't talked about is our holdings in other junior mining companies. There's a question here on what are your thoughts and what are your plans for the holdings in these companies such as Silverstorm and Sierra Madre? Okay.

Our plan is to continually help those companies evolve and hopefully much larger businesses, you know, so we could, you know, make substantial profits on those investments. That's why we, you know, sold those assets to those groups. You know, we're confident that those groups can, you know, continually build. And, you know, we have sold some of the Sierra Madre shares over the last – A few quarters, just to take a little bit of money off the table, but we've now added a larger position as a result of the sale of Del Toro, so we're actually up on that for share basis anyways, or number of share basis. Silver Storm, we just lent them $5 million last week. We did that same structure with Sierra Madre as well about two years ago. Sierra Madre just paid the balance of their loan back to us in Q2, which was really nice to see. So Sierra Madre came through with their commitment and paid back the loan. So the loan to Silver Storm is the same structure, and we're working with them to build out their team in Mexico, and we're very supportive shareholders of both those companies.

Okay, thanks, Keith. That's it from the queue for us, Gaylene.

All right. I'd like to hand the call back to Keith for any closing remarks.

Okay. Well, thanks, everyone, for your time today and dialing into our call. I understand this will be also on the website for people to listen to a little bit later. If there are any other questions or comments that anyone on the call or anyone going to be listening to the webcast after the call, please contact our Investor Relations Department for any further answers to any queries that you may have.

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