First Majestic Silver: Buyback Kicks Off as Mexico Tax Truce and Output Hit Collide
Published on 10/16/2026 at 02:40 | Editorial boerse-global.de
First Majestic Silver has fired the starting gun on a fresh share repurchase program, a move that management is framing as a vote of confidence even as the miner wrestles with a production setback and a still-unresolved tax dispute south of the border.
The new buyback, launched yesterday, allows the company to acquire up to 10,000,000 of its own shares through October 13, 2027. The prior program saw 1,700,000 shares repurchased.
That show of faith lands against a mixed backdrop. On the macro side, a softer US dollar and retreating US Treasury yields gave the precious metals complex a lift, with the spot silver price climbing 2.1%, according to Reuters. First Majestic's stock rode that wave, advancing 2.5% to EUR 14.01 intraday. Yet the broader mood has been anything but one-directional: AP reported that US inflation rose 3.7% year-on-year in September, up from 3.4% in August and above the 3.6% consensus — a reading that cools the rate-cut narrative on which gold and silver so heavily depend.
A Legal Reprieve in Mexico
Relief arrived earlier this week on the regulatory front. On Tuesday, First Majestic reached a framework agreement in principle with the Mexican government to settle the long-running tax dispute surrounding its subsidiary Primero Empresa Minera. The arbitration tribunal hearing the case under NAFTA rules subsequently suspended proceedings until December 31, 2026, giving both sides time to hammer out and implement the detailed terms.
Should investors sell immediately? Or is it worth buying First Majestic Silver?
The standstill is not a final settlement, and no specific settlement figure has been quantified. Even so, the pause meaningfully reduces the legal overhang that has weighed on the miner.
San Dimas Strike Leaves a Mark
Operationally, the picture is less encouraging. Third-quarter 2026 silver output came in at 3,440,447 ounces, an 11% decline from the year-earlier period. Gold production fared worse, sliding 17% to 29,552 ounces. Silver output reached just 72% of the midpoint of the revised guidance range.
The culprit was a labor stoppage roughly a month ago that halted activity at the key San Dimas site for twelve days. The interruption did not go unnoticed on the Street: about a week ago, analyst Heiko Ihle of HC Wainwright trimmed his price target on the stock to USD 25.50 from USD 27.00, while keeping his Buy rating intact.
Valuation Reflects Deep Skepticism
At EUR 13.72, the shares now trade 52% below their 52-week high of EUR 28.79 — a gap that lays bare how much pessimism the market has already priced in. For contrarian investors, that discount may look tempting, particularly with management actively supporting the stock through the buyback.
Caution still has the upper hand for now. A repurchase program on its own cannot paper over missed production targets or the loose ends in the tax negotiations. Until the ink is dry on a deal with Mexican authorities, residual risk lingers.
November 5 Is the Reckoning
The real test comes on November 5, 2026, when First Majestic reports full third-quarter results before the opening bell and holds a conference call to walk through the numbers. Only then will investors learn how deeply the twelve-day San Dimas halt cut into the cost structure, and what the company expects for the closing quarter. Until that clarity arrives, the stock looks set to remain a test of patience.
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