First Majestic Silver Corp. (AG) has recently completed a strategic merger with Gatos Silver, Inc. This partnership is poised to elevate its annual production to an impressive 30-32 million silver equivalent ounces while adding the valuable asset, Cerro Los Gatos, to First Majestic’s portfolio. Moreover, the company’s 2024 exploration program at the San Dimas Silver and Gold Mine in Durango, Mexico, has uncovered significant silver and gold mineralization across various veins, hinting at positive growth ahead.
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Although possible trade tariffs may pose challenges, Mexico remains a favorable mining jurisdiction for 2025. Supported by the positive outlook for silver and the merger’s potential, AG might be an appealing choice for investors looking for precious metals mining stocks.
Growing Mineral Reserves
First Majestic Silver is a mining firm focused on acquiring, developing, and producing mineral properties in North America, specifically silver and gold. This organization’s principal projects encompass the San Dimas mine, which is approximately 71,867 hectares and is located in Durango State, Mexico. Another significant project is the Santa Elena, covering about 102,244 hectares in Sonora State, Mexico. Additionally, the La Encantada project, situated in Coahuila State, Mexico, spans an area of around 4,076 hectares.
The company recently announced promising drilling results from its 2024 exploration program at the San Dimas Silver and Gold Mine in Durango, Mexico. The program encountered significant silver and gold mineralization in various veins throughout the mine, enhancing reported Mineral Reserves. These findings establish a strong foundation for mining operations in 2025 and 2026.
In addition to its exploration achievements, First Majestic announced the successful completion of the acquisition of Gatos Silver. According to the terms of the Merger Agreement, all issued and outstanding shares of Gatos Silver have been acquired. Gatos Silver is now operating as a wholly-owned subsidiary of First Majestic. The acquisition is anticipated to enhance First Majestic’s portfolio of active mines in Mexico, strengthening its position as a leading silver producer.
Production of Silver Increasing
The company recently released results for Q4 2024, reporting total silver equivalent production increased by 4% to 5.7 million AgEq ounces compared to the previous quarter, primarily due to a 20% rise in silver production across all three operating mines. The company produced 2.4 million silver ounces in Q4 2024, a significant increase from the 2.0 million silver ounces produced in the prior quarter. The La Encantada mine achieved its highest quarterly output since Q2 2023, producing 755,963 silver ounces.
Santa Elena set a new record for the year, producing 10.3 million AgEq ounces, a 7% increase from 2023. The company also revealed a high-grade gold and silver vein—the Navidad system—at Santa Elena.
First Majestic also commissioned First Mint, a minting facility in Nevada, USA. The Mint allows First Majestic to sell more of its silver production directly to consumers and offers manufacturing capacity for third-party demand.
Mergers and Acquisitions to Continue Across Industry
The stock has enjoyed a solid year, with shares climbing 22.71%. It trades near the middle of its 52-week price range of $4.17 – $8.44, though it currently shows negative price momentum as it trades below major moving averages. Its P/B of 1.23x suggests it trades at a discount to the Materials sector, where the average P/B is 1.70x.
Analysts following the company have taken a cautious stance on AG stock. For instance, Scotiabank’s Ovais Habib, a four-star analyst according to Tipranks’ ratings, recently reiterated a Sector Perform rating on the shares while lowering the price target to $6 (from $6.50), noting an expectation for consolidation to continue across the precious metals market in 2025.
First Majestic Silver is rated a Hold overall, based on the recent recommendations of 4 analysts. The average price target for AG stock is $7.68, representing a potential upside of 41.70% from current levels.
Final Analysis of AG
First Majestic Silver has demonstrated its strength and potential for growth through its recent merger with Gatos Silver and promising findings from its 2024 exploration program—both of which contribute to an optimistic outlook for investors. The merger has increased its projected annual production and added valuable assets to its portfolio. The exploration program has uncovered considerable silver and gold mineralization across various veins at the San Dimas Mine, setting the stage for a robust mining operation in the years ahead.
