First Majestic Silver Corp. Stock

Thank you for standing by. This is the conference operator. Welcome to the First Majestic Silver Q2 2026 Financial Results Conference Call.

The conference is being recorded. [Operator Instructions]

I would now like to turn the conference over to Mr. Keith Neumeyer, Chief Executive Officer of First Majestic Silver. Keith, please go ahead.

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. Mani Alkhafaji, 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 3 months ago; and Samir Patel, General Counsel, Corporate Secretary; Darrell Rae; and Joel Faltinsky from Investor Relations; Darren Fernandez from our financial leadership team and our new CFO, Neil Beaumont, who's just recently joined us a couple of weeks ago.

And we did put a news release out on that and his files there is with Canada Pension Plan and KPMG and BHP and has added a lot of depth to the financial world, which we're quite pleased about.

So I'm just going to pass this on to Samir for comments.

Thanks, Keith. 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, 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 on 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's discussion and 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 SEDAR+ and on EDGAR. 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 to 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, Samir. 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, up 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 10% increase from our guidance that we put out in January. So we're looking forward to a strong H2 going forward. EBITDA of $252 million, up 110%, strong cash flows of $0.50 a share.

Exploration is continuing at a robust pace. We did 94,000 meters across the portfolio in Q2. In the full first 6 months of the year, we did 160,000 meters of drilling.

We're very, very pleased to see the permits coming from Mexico on our Santo Niño and Navidad portals. Those 2 discoveries have been well laid out to the public in the form of several news releases over the last couple of years. These 2 portals, we are actually projecting them to come into development in about 12 to 14 months, we've now started development at Santo Niño the last few weeks we're looking forward to doing first blasting there in the next week or so.

So Santo Niño 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 starting to add ore to the mill at Santo Niño. So those are 2 very exciting things that are developing at Santo Niño, looking for extended mine life there as a result of these 2 new discoveries that were discovered about 2 years ago now.

So we did revise our guidance, as I did say already. We did declare our dividend as well a 270% increase in our dividend year-over-year, which is obviously nice for our 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, I expect that we likely will, but look for further news on that. We ended with a strong treasury at the end of June 30, $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 on Slide 3. So on Slide 4. looking at the all-in sustaining costs, as everyone knows, listening to this webinar, our analysts are quite familiar with this. There is inflation, of course, as a result of quite large bonuses going to the workforce, which is quite nice for them.

And you can -- you probably imagine how happy the workforce is these days because their bonuses are tied to silver prices. So it's really paying off for the communities in the areas that we're active in. So that's really nice to see from our perspective.

We're keeping our costs in line. As you can see on that graph there, our cost per tonne are $107, pretty well compared to the last 4 years. So, we are keeping our costs in line on a daily basis as we on 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 driven. As we all know, what happens in the gold and silver prices, we are affected by those prices as we are completely unhedged at all times as our shareholders virtually demand that we remain unhedged, which I'm a firm believer of that. And -- but still strong cash flows and still adding cash to our treasury, which is obviously very nice to see. Free cash flow, a strong $195 million as well in the quarter.

Moving along. At Los Gatos, we're working to continually reached the 4,000 tonnes per day. We actually exceeded that number. As you can see, we hit a record of 4,070 tonnes per day in June, which is great. We're on track to have continuous throughput. A Los Gatos at 4,000 tonnes a day, which is important for that operation.

Santa Elena continues to perform extremely well. We now have our throughput getting close to 3,500 tonnes a day now. We expect to have daily throughput at 3,500 tonnes a day throughout H2. And again, the permits at Santo Niño and Navidad for that asset going forward.

San Dimas had a pretty good quarter. There was some labor disruptions. It's quite common at that mine as most of our shareholders are aware. But nevertheless, -- the union is getting paid a lot of money these days, and there -- 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.

La Encantada, we had our own fleet now of trucks 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 at La Encantada as we speak, which is really nice to see for that operation. So both La Encantada and Santa Elena are performing above budget, which is quite nice to see.

Jumping to the next slide. Jerritt Canyon, we continually get a bunch of questions on Jerritt. We're pretty excited about it. current gold prices, 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 had 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 next year. A variety of consultants have been hired to initiate production there.

We're on track. We're within budget and all 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 Jerritt Canyon like Q3 of 2027, a pretty exciting event for all of us, including our shareholders.

So, jumping along to future catalysts this page or Slide 8 for those of you who are following us. Exploration is really key for us this year and last year. You can see that we're adding ounces to our resource base. We had 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 Niño and Navidad are continuing.

We continually see nice extensions of the Santo Niño 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 with 101 coming out later this year or early next year.

So look for further news on exploration, look for further news on the Jerritt Canyon restart and look for the continued cash flow and 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.

[Operator Instructions] Our first question is from Heiko Ihle with H.C. Wainwright.

Two quick ones here. Your finished goods inventory, I mean, obviously, over 1 million ounces of silver, close to 5,000 ounces of gold as of the end of last month. Do you want to give a little bit of color on where that stands today and what the new baseline is? And if I want to go out on a live 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?

Yes, sure. The mid 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 up with a little over 600,000 ounces, you're right. This quarter, we're over 1 million.

And the reason really for that is just the precipitous drop in the silver price during a very, 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 I don't want to give you numbers or false expectations, but I would suggest that, that inventory number will drop during the quarter.

Okay. Fair enough. And then a completely different one. I mean, Jerritt Canyon, it seems like things are really starting to happen there. And frankly, they need to, given that 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 spend at the site?

Yes. We haven't put the details out on that yet. We did put the number of $75 million out in February. We're well in line with that number. The standard, for example, the deposits have been made and other key components, deposits we made. There's a couple of other key components that are being ordered in the next 30 days and deposits will be made on those orders as well. So, 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 are some changes currently that potentially we may decide to buy additional equipment or something along those lines. So, nothing currently is anticipated regarding that.

And on the staffing, there was about 40 people that have been there over the last couple of years, and they were there for care and maintenance purposes. We had 45 individual -- 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.

The next question is from Eric Winmill with Scotiabank.

Just wondering here, Cant Nino and Navidad, any comments here in terms of critical path items or sort of sequencing over the next 12 or 18 months as you ramp up the production there?

Let me pass that question on to our Chief Operating Officer, Dave Howe.

No, I don't -- 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 about now revising our mine plan.

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

Yes. Anything you can share there in terms of what we should be looking for here on the works program here through the balance of this year and the next?

I think our first blast should be around 15th of August, and we'll just be pushing ahead. We've got all of our ground control items ordered and then we'll just push down spring down. But I don't see any issues going forward with the development.

Okay. Great. That's helpful. And in terms of San Dimas or any other mines, any major works programs underway beyond the expansions you talked about?

Dave, did you get that?

Right now, we're just pushing ahead with our development, doing very well. As Keith mentioned earlier, our union work is doing very well with the long hauling development. So, we don't see any issues at all.

Okay. Great. That's helpful. 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 were 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 I'd like to see 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.

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 San Dimas, with all our shareholders, and I'm sure you're aware of that or Eric. So, once we get that off our play, which we hope will be resolved by the end of the year.

And then with Jerritt 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 2 big spends out behind us, then we'll look at further capital allocations.

The next question is from Alex Terentiew with National Bank.

I wanted to follow up just on Santo Niño -- sorry, well, Santa Elena rather. Keith, you made a comment, and I think I apologize, I think I may have missed it here, but you're saying Santo Niño targeting to get that first ore from there 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.

Yes. 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 Santo Niño, a lot of stuff you're putting through now, gold recovery is good, but the silver recovery is a little bit lighter. What's the expectation for Santa Nino ore? Is that the same as Ermitaño? Or are we seeing something a bit better there?

Dave, do you want to grab that one?

I do.

The recoveries at Santo Niño.

Santo Niño, this should be very good. I know we're looking at -- I don't have the number.

I'll pass it on to Danny, he's got the numbers.

Santo Niño is behaving similarly to the original Santa Elena. So, we're seeing mid-90s. The metallurgical testing for both Navidad and Santino is showing 95% plus for both gold and silver with 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. I think you guys are a little bit light, at least tracking so far for this year, your first half of the year is a bit -- I think it was around 37% of your annual guidance.

I guess that implies, obviously, the second half this year is going to be heavier. But I'm just curious, -- is there any projects maybe falling behind a little bit just from just a timing perspective or permitting or anything like that? Or really just we should expect a lot more spending to pick up in the second half this year?

Yes, it is very much back ended, and there's really no issues anywhere except maybe 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 effect is -- most of the effects are timing. If there's anyone else...

I'll now pass the floor...

Sorry.

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

Okay. Thanks, Jamie. Yes, there's a lot of questions that are very similar, Keith, the ones that you've already answered a lot on capital allocation, the dividend, 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 Silver Storm and Sierra Madre.

Our plans is to continue to help those companies evolve and hopefully much larger businesses, so we could make substantial profits on those investments. That's why we sold those assets to those groups.

We're confident that those groups can continually build. And we have sold some of the Sierra Madre shares over the last few quarters, just 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 on a per share basis anyways or number of share basis.

Silver Storm, we just land them $5 million last week. We did that same structure with Sierra Madre as well about 2 years ago. Sierra Madre just paid the balance of their loan back to us last or 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, Jamie.

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 have listen to it 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. Thanks again.

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

Thank you for standing by. This is the conference operator. Welcome to the First Majestic Silver 2026 Q1 Financial Results Conference Call. [Operator Instructions] I would now like to turn the conference over to Mr. Keith Neumeyer, Chief Executive Officer of First Majestic Silver. Keith, please go ahead.

Well, thank you, and welcome, everyone, to our Q1 highlights conference call with investors and shareholders. Today, with obviously, myself, is President, I'm in Europe right now, Mani Alkhafaji, President and Chief Corporate Development Officer is in Vancouver, David Soares, our Chief Financial Officer, is also in Vancouver; David Howe, Chief Operating Officer, who just was newly appointed on March -- or May 4, which we'll talk about a little bit further in the next couple of slides. But David comes with us after quite a long search for a replacement to Steve.

Steve told me last summer that he would like to retire and we put an effort in place to find his replacement. And we are successful in getting Dave Howe who's a well-known mining executive. So we're happy to have Dave on board.

Steve will be effectively working until June 30, assisting Dave in anything that Dave might request Steve over the next month or so. We also have Samir Patel, General Counsel and Corporate Secretary, present in Vancouver and also Darrell Rae and Jill [indiscernible] sorry about that, Jill, from Investor Relations also present today. Before I go any further, I'll need to pass the call over to Samir for the disclaimer.

Thanks, Keith. 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 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's discussion and 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 SEDAR+ and on EDGAR. Investors are cautioned against attributing new 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.

Okay. Thanks, Samir. Just a couple of things on our management changes. Steve Holmes has been with the company for 6 years and he's been extremely instrumental in positioning the company where it is today. Much of the improvements that the business has experienced over the last few years has been a result of Steve's efforts. And we're sad to see him go, but at the same time, it's time for him to retire. And we wish him best in his future travel experiences with his wife and family. So Obviously, we'll stay in touch with Steve.

But Dave Howe is now the new Chief Operating Officer, and he brings a wealth of experience in the industry and Latin America, held a number of key executive roles and we're really excited for him to help lead the first majestic team to the next phase. Further description is available in today's news release, if you wish to read a little bit about his history.

We're also quite pleased to announce a hiring that took place on April 20. We were able to find a great leader for the Jerritt Canyon restart. We've brought on Alex Thompson. And Alex is a seasoned and strategic planning executive with experience in building and operating mines all over the world and will be a key part of the restart plan for Jerritt Canyon, which we'll be excited about talking further about as developments continue.

So going to Slide 3 of the presentation, which I'm assuming some of you online have access to. Just going back in time, if you go back over the last 20 years, Q1 is generally a kind of a soft quarter. You get everyone coming back from holidays and then you've got to remobilize all the contractors. And usually, you can lose up to 2 or 3 weeks in Q1. It's not that unusual. And we've experienced that many, many times over the life of the business.

But this Q1 was exceptionally good. We didn't experience that same kind of dip, and we ended up producing 3.5 million ounces of silver, which was 26% of 2026 guidance -- midpoint guidance. That's pretty good being ahead of guidance. And gold production was at 28% of midpoint guidance. So both silver and gold are above our current guidance, which is at least midpoint guidance, which is fantastic to start the year off of such a positive note.

The average realized silver price was $86.35 compared to $33.10 last Q1 2025. So pretty impressive there. Revenues were record revenues of $477 million, up 95% compared to a year ago. And we did hold back some silver and gold as well. And so this was not included in revenue. We did hold back 676,000 ounces of silver, also 2,700 ounces of gold held in inventory at the end of the quarter. And the value of that inventory is $63 million. So if we sold it, that obviously would have improved our revenue and also improved our profitability.

But we elected to hold on to it for higher prices, and we're expecting that's going to be a good strategy for us. We've really got our eyes on margins. And as the price of silver goes up, costs also go up, and we'll address that in the next couple of slides. But one thing I think the analysts or the investors should really pay attention to is actually the expanding margins, which is pretty impressive. And I've got a couple of more comments coming up on that topic.

We've really been focused on efficiency and keeping our costs in check and it's really paying off. We've had operating cash flows in Q1 of $311 million, $0.63 a share. And our silver purity is 66%. That compares to 60% in Q4 of 2025. Our dividend is our largest dividend ever, about $0.0171 for shareholders of record on May 15. The dividend is basically 4x the size of last year's dividend with revenue doubling and us changing our policy, increasing our dividend from 1% to 2% effective January 1, 2026, has made a big impact. And so shareholders will be getting the highest dividend that they've ever received in the company's history. So that will be fun to see all those checks arriving in people's mailboxes.

Going on to Slide 4. So the cash cost and all-in sustaining cost per ounce are aligned with plans. There's really no big surprises there. Per ounce cost increased when you compare to Q1 as it shows on this slide there. The main drivers of the increase, as we've mentioned to the analysts before, it is -- we have changed our ratios, which has a big impact, which I'll talk about shortly.

But our production cost did go up a little bit, mostly due to higher throughput because we have reduced the cutoff grades due to price. So we could mine a lot lower grade ore and still get the same ounces, but it does affect your cost. Your cost to go up as a result of that method of mining, but it does improve life of mine as well at the same time. So it has a big benefit. And the revenues that we're getting, even though the grades are slightly lower, far outpaces the increase in costs, which is really nice to see.

Other things, as I said, the price ratio, that had a $3 impact. If we use the same price ratio as we did in 2025 at 9:1, it would -- our all-in sustaining costs will be basically $3 less than what we're showing in Q1 of 2026. But we did fix the ratio at 75:1 due to the volatility of silver and gold, and that 75:1 ratio will be held throughout the quarter -- or pardon me, throughout the year.

Profit sharing is also up and I will comment later on that, but profit sharing was close to $2 an ounce. Smelting and royalties obviously go up with the silver prices going up. So everyone is obviously making a little bit more money, which is great to see. Important to notice, as I said about margins, the margins have increased almost 4x. Our margins a year ago in Q1 were $13 an ounce. Our margins in Q1 of 2026 was $52 an ounce. So quite a game change. So any increase in costs that we're experiencing is easily taken with the increase in margins.

Our cost per tonne, $170, which if you look at that chart on that slide, Slide 4, you'll see that it's the lowest for a while. So that shows you quite clearly that we're having a true impact on keeping our costs in line with our expectations.

On a bit of a side note, we've got calls from analysts and others about our exposure to diesel with the happenings that are going on in the Middle East right now. Most of you probably know that we converted 3 of our mines over to liquid natural gas over the last few years and one of our mines is on the grid. So our total exposure to diesel and our cost is only 5%. So it's -- we rely on diesel very little. Most of the energy is created by renewable sources.

Going on to Slide 5. We produced $311 million in operating cash flow from the 4 operating mines. Each of them, a notable year-over-year improvements in profitability, notably La Encantada, where it had a bang-up quarter. La Encantada actually profited $30 million in Q1. I don't actually remember the last time we made that much money, but it's obviously going quite well there. So it's nice to see that mine finally hitting its stride after some difficulty that it had over the last couple of years.

Corporate-wide, this translates into $224 million in free cash flow, even accounting for a very large tax payment that was made in January as a result of our 2025 income taxes that just simply due to the profitability of the business. The Mexican government paid $95 million, which obviously came out of our cash flow. So the chart shows the increase in cash flow being generated. Operating discipline, of course, over our 4 mines is key, cost efficiencies and obviously, the increase in silver prices is having a huge impact on the business.

We're very flexible for future growth with the size of our treasury over $1.1 billion, obviously, pretty impressive. Our development and exploration programs are very aggressive and on track, and I've got a couple of more comments later on the exploration programs. Operational expansions at both Santa Elena and Los Gatos is coming along quite nicely. I'll address that as well going forward.

And we just keep pushing other permits and the development of the Santa Elena new ore bodies, which we'll discuss as these topics become more relevant, and we'll be discussing those news releases in the coming months as these developments occur.

So going to Slide 6. But we continually have exploration success at San Dimas and Santa Elena and Los Gatos. We're expanding the Santa Elena mill. We're expanding the Los Gatos mine development. At Los Gatos, our work is to mine 4,000 tonnes a day. We have brought in a contractor to assist in getting up to those levels. We're actually pretty close right now. The mill itself can handle that. It's not a bottleneck at the mill. It's always been a bottleneck at the mine, and that's what we're resolving by bringing on some assistance from a third-party contractor, which seems to be working quite well.

We're making good progress at Santa Elena, getting the mill expanded. As I think most of you know, we're expanding that mill to 3,500 tonnes a day from 3,200 tonnes a day, and we should reach that objective by H2 2026. Exploration is just going wonderfully. Navidad and Santo Niño discoveries are obviously really paying off. We put out some numbers on those 2 ore bodies already, but we continually advance studies and then work on those 2 ore bodies because we want to get them into the mill as soon as we can. So that work is underway.

And as we get more information and more time lines associated with getting Santo Niño and Navidad up and running, we'll be putting more additional news out on time lines and how that's going to affect future production at Santa Elena. So always looking for enhancing adjustments, productivity that's always a focus, not just at Santa Elena, but also in all the mines.

La Encantada, I think most of you likely know as well. We decided about a year ago to go to self-hauling. We were having challenges with the contractors that were assisting in getting ore to the mill. And after a couple of contractors, we decided just to do it ourselves. So we bought a dozen trucks, which took almost a year to get delivered, and they're all now on site and they're all now operational. And I would expect you're going to start to see costs come down a little bit as a result of that.

But also, we're already noticing increased throughput at the mill. The mill can handle it. There's no problem with that. This mill ran at 5,000 tonnes a day back years ago. So it's just really the mine, and we're resolving that by having this truck fleet and so on. So it's early days, but it's looking pretty good.

Going to Jerritt Canyon, we're obviously very excited about the announcement of hiring Alex Thompson as our Managing Director. We really needed a leader there to really get a hold of this thing. Alex has 20 years' experience primarily at BHP, but he's really taken control of this operation, and he's very well liked by the team down on site, and we'll be putting obviously a bunch of new people in place to get this operation up and running. We're investing $75 million in 2026 and filling in the talent base, as I've mentioned.

We are preparing a feasibility study or pre-feasibility study, I should say. Hopefully, that will be out in early 2027. We're prepping the underground. We've got people on site right now underground, preparing the area, planning on development. The plant upgrading is not quite started yet. We're just in the order of -- process of ordering a bunch of different equipment. A bunch of POs have gone out and several more POs will be going out over the next 2 weeks as items become obviously required or we identify items that we need.

And some of the items are longer lead than others. And so we're trying to get all those items necessary for the underground and the plant ordered and in the system and get these pieces of equipment on site as soon as possible. And we'll share updates as we progress over the next year. We are still targeting for production to commence in H2 2027. And so far, we're on track.

I did want to bring something up because we had a false news release that went out of Mexico. It was regarding a collapse at Los Gatos. And I looked at the photograph myself, and I read the article myself. And I don't know -- we actually don't even know where that mine is. It was definitely not a commercial operation. There was some little hole in the side of a mountain that was probably just artisanal mining or maybe owned by a Mexican mining company or something I have no idea. But it was definitely not a modern operation.

But we did have a small collapse, and there was a 10-meter section of the ramp that collapsed, and we were down 2.5 days and back on track is very normal. It was not material in any way at all. That's why we didn't say anything about it. We didn't release it because it was just things happened in mining and being down for 2 days is nothing. So we decided not to comment on it, but I know that a number of analysts did phone in the company asked about it and asked about that story. So I just wanted to address it on this call just so everyone is clear that everything is hunky dory and there's no issues that remain.

Going to Slide 7. So the solid balance sheet and cash flows, we are investing in our world-class district scale operations. As you know, these are big, big, chunky land packages, and we're increasing the mining rates at Los Gatos to get that operation up to 4,000 tonnes a day, as we've said already. And we want to get the Santa Elena, obviously, expansion complete as well. So a lot of focus is going on, on those 2 operations.

We have a very, very large exploration program. It's 266,000 meters of exploration over the sites this year. And that does not include an additional 42,000 meters at Jerritt Canyon, which we just recently announced with the opening -- reopening news release on Jerritt Canyon. So we're drilling over 300,000 meters of drilling this year, which is quite obviously a very large program. So pretty exciting.

We've updated our resources and reserves in March. I'm not sure if you've seen the AIF that went out in March, but it's all there for people that want to go look at it. It's on SEDAR and it's also on our website. The Santa Elena, we had a 90 million ounce increase, which is pretty amazing. That was basically due to Santo Niño and Navidad discoveries, and we continue to upgrade those assets. And I think that number is actually going to improve over the next year.

Jerritt Canyon with the -- including some of the underground, we've kind of redeveloped based on the gold prices today, all those open pits that were being mined back in the '80s and '90s are pretty well now economic. So we're going to be -- we're working on a plan to include the underground and open pit in the same mine plan, obviously, blending and so on. But we're now at 7.8 million ounces of gold in Jerritt Canyon, which is pretty, pretty impressive compared to our prior disclosure a couple of years ago.

Restart is still scheduled, as I said, for H2. And I guess that's really about it. Continually strengthen our cash flow, balance sheet, look for continued increase in our treasury. Obviously, we're quite leveraged to the price of silver, as you can see in our share volatility over the last couple of days, but that's something that we've got used to over time. So anyways, I am done with my presentation. We will now go to questions.

[Operator Instructions]

Our first question comes from Heiko Ihle with H.C. Wainwright.

Congratulations to Alex and Dave, who I know quite well from his time back at Endeavour. Keith, you focused quite a bit on the margins earlier on this call. And obviously, it's quite impressive what has been happening and what's been accomplished in the last few quarters. And I assume the answer is no. But do you think there comes a point when and if commodity prices keep rising or even staying at these levels where people are more so trying to get their piece, be it labor, governments, other stakeholders. Have there been any conversations? What have you seen? I mean you're much closer to the pulse than I am. Maybe just a bit of color.

Well, on the government, you can never predict, right? So there's no rumors or there's no discussions that the government is going to be changing anything. You have to remember at these prices and the profitability of the Mexican miners department is getting a windfall right on, their tax income from mining is accelerating quite dramatically. So I'm pretty sure the government is pretty happy. So I'm not sure why they want to kill the goose or whatever.

The unions, again, the same thing. These union members, their bonuses are tied to the silver price. So we've just gone through a couple of negotiations with the national union, and they're very quiet, quite happy, obviously, negotiations went very smoothly. So there's really no issues there. But they are getting paid more. So our all-in sustaining cost has increased as a result of higher taxes and higher bonuses. So that can be expected.

Other things, if we go back to the last bull market, 2011, when silver hit $50, we saw the Sandviks of the world increased prices by 15% to 25%. We've not seen that. We're just in the process of signing an agreement with Sandvik, and we're looking -- it's looking like we're going to get pretty reasonable pricing on this new purchase that were being put in. We haven't seen big increases in cyanide or ammonia. We don't rely on diesel that much. So no, we haven't really seen the inflation that maybe some would be expecting.

Moving on to Jerritt Canyon. I mean, obviously, I'm excited to see the site reenter production, and I know we got Alex on board now, but on a grander scale, I mean, I went through your April 2 release again this morning, you mentioned the $75 million of spend this year. $7.5 million of that is workforce staffing. When do you think hiring for the site should really start ramping up? I assume this is like second half or even fourth quarter kind of thing. And then building on all of that, once Jerritt is in full operations, I don't think you'll have any issues getting workers to site given the proximity of talent. What are you seeing with the labor pool? Because I mean you're probably going to take up a decent amount of the workforce in the local area?

Well, I think all of it will come from the local area. And maybe some of the turmoil at Newmont right now might assist. Hopefully, we don't know for a fact. But we have a list of Canada -- or pardon me, a list of positions that need to be filled. It's very extensive and detailed. And I think I don't have the exact number in front of me, but we've hired a handful of people just in the last couple of weeks and for key management positions, and we're looking to hire several more key people over the next week or 2. And then at that point, we'll start going down into the business deeper and targeting more labor-intensive type individuals.

And we should be well manned by fall and having to look at adding the underground workforce and so on in the early part of 2027. But don't forget, Jerritt is only 45 minutes away from town, Elko. And so it's the closest mine to Elko. So if you're -- rather than having to drive to one of the other neighboring mines, it will take you 1.5 hours both ways. You're on the road for 3 hours a day, working in Jerritt, you're only on the road for 1.5 hours on the day. So it's a big, big difference. It's a well-known site. And I think the community at Elko is pretty excited about it, and we're getting approached by people regularly to come on as employees.

And someone who's been on the ground at Jerritt Canyon, I mean the site is just gigantic and it's huge. So -- on that note, I will get back in queue.

[Operator Instructions] The next question comes from Eric Winmill with Scotiabank.

Maybe just continuing on Jerritt Canyon. So in addition to the hiring plans, any other critical path items or milestones beyond the PFS we should be looking for throughout this year and next year?

Well, the 2 most critical things is the oxygen plant and the underground fleet. So we're working right now on defining all of that and defining costs and defining time lines. And we're still a little bit early, but we will be putting an order in for some of the underground fleet in the next couple of weeks, which have 10- to 12-month lead times. We're just working with the group on the oxygen plant right now. And I can't really give you a whole bunch of details because it's just kind of a moving thing. But once we know more, we'll be putting more information out to the market.

Appreciate that. And maybe just some of the other expansions you're working on Los Gatos or Santa Elena, any critical items that we should be keeping an eye on?

No, no, just time and money. There's nothing critical.

Just one more for me, if you don't mind. In terms of M&A, what are you guiding to the market? Are you happy with the size of the portfolio? Or any changes you want to make or assets you might look to add down the road?

Well, we're always looking for ways to grow. I can't talk too much about it. But yes, we have -- our group continually scours the planet and looking for good silver projects, and they're kind of a rare animal and they're hard to find and -- but we continue to look.

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

Okay. Thanks, Ashiya. Yes, just a few here. One is just getting a general First Mint update. I'd say there are a few questions in here, what percentage of your total revenue came from First Mint business? And just talk about the first quarter.

Yes, I'm going to pass this question over to Mani.

Yes. Thanks, Keith. Yes, the mint continues to operate quite nicely. Q1 was another record for us. It is very, very retail driven. So obviously, when we see the metal prices are riding up, the orders are coming in nicely. So we had a nice uptick throughout the quarter, which was great to see. The -- operationally, it is going quite well. We worked out quite nicely, and we do have plans for further expansion. We'll be pulling the trigger on this in due course. But all in all, it is going quite nicely and building on the momentum that we had from last year.

And the last one we have in the queue is just, picking up on Keith, your comments and elaborating on the strategy about the lower cutoff grade and that seemingly increasing mine life. Just a little clarification question.

Yes. I would maybe use 20%. I should talk to our QP before I throw that number out, but that's kind of my guess is, yes, mine life does increase as a result of the lower cutoff grade. We historically -- well, previously, I should say, you're in an underground and you're mining 3, 4 meters of rock, and you're leaving behind the low-grade material on the walls of that tunnel because it's deemed uneconomic. So you just leave it behind, and that's just common mining practice. Today, we can widen those mining stopes by a couple of meters and then still pull all this rock out and still make money even though the grade is lower. So yes, it does -- so you're mining slower or you're advancing slower and you're mining wider. So that has an impact on your life of mine, and it's obviously a positive impact.

And that's it from the webcast, Ashiya.

This concludes the question-and-answer session. I would like to turn the conference back over to Keith for any closing remarks. Please go ahead.

I think I covered everything. Obviously, impressive quarter. Q2 is looking pretty darn good as well. So we hope to have another great quarter back to back, but we'll have much more things to talk about as we advance through this year. It's an exciting year with a large capital expenditure going into exploration and development and mill and mine expansion. So we're pretty excited about what we're seeing in the company. And also with metal prices the way they are today, assuming they stay in these levels, it's just going to be a bang up record year again. And I just want to -- Mani, is there anything that you would like to add before we go?

No. Just be on the lookout for more updates throughout the year, but a lot of exciting stuff.

Okay. Very good. Well, thanks, everyone, for joining us.

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

Okay. Well, welcome, everyone. Thanks for taking the time to join me in this corporate update. I see some familiar faces in the audience this morning. So when it comes to silver, First Majestic and silver go hand in hand. We are the purest silver company of our size. We published our financials for 2025 not so long ago, and we average about 60% of our revenue coming from silver, 30% is gold, and the balance is lead and zinc.

We've had a dividend policy for a number of years, and we've just updated that. So we're quite excited about the update that I will be touching base on that. Historically, we've had a very correlated beta to silver, 2x to 3x. So we're quite leveraged to the commodity. And we're the only mining company that owns and operates the mint. And it's been quite exciting, and I look forward to give you an update on that.

I'm not going to spend too much time talking about the macro, but the supply deficit is real, and it's been the case for a number of years. We've learned recently, this -- one of the key takeaway here is the recent deficit is 150 million ounces of silver. To put that in perspective, that's about 10 First Majestics.

And I just told you, we spent 23 years putting this company together. We know there's no significant silver coming -- and that def is going to prevail for quite some time. There are new industries that are coming in the market that's not being talked about. We just came from a recent conference, and there's discussion about the AI data centers. On average, a data center consumes 6.6 tonnes of silver. And that's a significant number that's not being replaced by any new supply hitting the market.

From a company perspective, so we are a silver company. Like I mentioned, we're focused on silver. We own and operate 4 underground mines in Mexico. We also have a gold asset in Nevada in a Tier 1 jurisdiction that I'll be touching base on in a bit. And we have a significant land package around these assets, and that's a key component that gives us the ability to expand and extend these mine lives of these assets.

We put out our production updates a few weeks ago, and we've just reported in Q1. We're tracking quite nice against this. We're guiding for about 13 million to just under 15 million ounces of pure silver, 110,000 to 130,000 ounces of gold. And as I mentioned, the balance is lead and zinc. The cost portfolio is quite healthy and robust. So you can imagine the margins that we're generating at these prices.

Our capital spend, we're targeting again between $200 million to $235 million, $236 million. This excludes a $75 million announcement that we just made right now for our gold asset in Nevada. But nevertheless, for the operating sites, the key takeaway from here is we're investing a lot back in the business. We're putting a lot of money back in exploration, over 266 kilometers of drilling across the portfolio.

And we're expanding our operations. Santa Elena, we're expanding the plant. Los Gatos. We're also expanding the mine from there. So this gives us a lot -- the cash flow, the free cash flow that we're generating, we're putting a decent chunk of that back in the business to ensure the future stability and the growth of these operations.

Some of the highlights for Q1. We -- Q1, we guided for it to be our softest quarter. We came in nice and hot off the gates. We're tracking above the -- from silver, over 25% achieved so far for gold, just under 30%. So that gives us a lot of comfort and confidence in the trajectory of the year, a lot more excitement going on. I mentioned the expansion that's coming in, in the second half of the year at both Gatos and Santa Elena. Exploration kicked off heavily as well at the start of the year and on track to achieve or probably do a bit more drilling in some of these areas.

And the key highlight as well is we put out a reserve and resource update. And our strategy generally is to replace depletion. We've done that and then some, which is quite nice to see. And with these improved metal prices, we're able to expand our resource base across all operations, but mostly at our Jerritt Canyon operation. And we also, with that, with the metal prices with the new resource, we announced the restart of Jerritt Canyon, which I know we've been getting a lot of questions over time. So we're quite excited to be putting that out there at these gold prices and in a Tier 1 jurisdiction, it puts a very compelling story and for us.

The assets are all spread around in Mexico. There -- we have -- I mentioned 4 assets. They're in 4 adjacent states in Mexico. So we're in Sonora, we're in Coahuila, we're in Durango and in Chihuahua. This gives us a lot of hidden synergies. We're able to move people around. We're able to move equipment around. So that gives us a bit of an edge as well compared to our peers. In Nevada is where we have Jerritt Canyon, and we also have First Mint, the minting facility that we inaugurated about 18 months ago. And head office is in Vancouver, Canada.

Getting into the operations. So Gatos is, we closed this asset in January of last year, and this was the real deal. When the process was run, there's about 13 companies that was involved, very heavily competitive, very exciting assets. And we're pleased to have obviously have been the winning bids. When we did the analysis on this asset, we used $23.50 silver and it was accretive at that front. So you can only imagine what this asset is doing. It's pretty much on track to pay back in the next 18 months or so, what we paid for it 18 months ago.

What we like about this asset is what it is right now has a 10-year life of mine, but the exploration upside here. This comes with 103,000 hectares. This is what we call a world-class district scale asset. I don't think I have a laser here, but the 10-year life of mine is really just that tiny box in the map that you see where it says CLG. That's the only exploration that's been done. That was a discovery hole and all the drilling has been done surrounding it.

There is virtually 0 exploration done across this -- so over time, we'll take our time drilling and expanding. We're already expanding this operation. It's currently doing about 3,500 tonnes per day. We plan on taking it to 4,000. We are on track for that. We plan on getting there in June, July of this year. So look for more updates on this. But this asset is here for decades to go.

The mill, if you go back here, this mill right here is one of the most modern mills in Mexico, arguably overbuilt. It was designed for 2,500 tonnes per day. We've been able to debottleneck this. We've tested it at 4,100 tonnes per day. So again, plenty of upside and plenty of opportunities for growth in the future.

Our next asset is Santa Elena. This asset is really an example of what First Majestic can do to these assets. We bought this 10 years ago. It was producing about 1/3 of what it's currently doing, and it had a 6.5 life of mine 10 years ago. Today, it's producing 3x the production profile, and it has 11-year life of mine. What we love about Gatos is pretty much what we love about Santa Elena, land package.

This is 102,000 hectares. And really, the only exploration that's been done is around the middle of the map where we see that red thing. We've done -- we've been able to find 4 or 5 different discoveries since acquisition. You see them laid out on the map right there.

Our 2 most recent discoveries are Navidad and Santo Niño -- and these have proven to be the largest discoveries made in this district. We just updated the resource base for those 2, and we're sitting at over 90 million ounces silver equivalent resource. So part of the 2026 program is continue converting resource into reserve here. But we are quite excited about the results that we're seeing.

We're currently mining from Ermitaño. So that's the pink crosscut rate here. Navidad is just a little bit deeper, but the hole -- the drill holes that you see right here are quite substantial, higher on gold, higher on silver, but most importantly, higher on metallurgical recovery, which also helps improve the cost of this production going in when it comes online. We're expecting to get into Navidad in about 3, 4 years from now. So we've just opened up the portal. So we're starting the ramp development. That's part of the 2026 and 2027 CapEx.

We're also expanding the operation here. So the mill was designed for 3,100 tonnes per day. We're on track to take it to 3,500 tonnes per day. That's also the plan for H2 of this year. Similarly, to Gatos, we do have further expansion programs here depending on how large really those deposits are and really how many more deposits we'll be able to find in this ramp profile. We know Coeur Mining, Chispas mine is just up there. There's clearly mineralization in that area, but we've done virtual discovery or virtual exploration surrounding that black box. So plenty of time. We're in no rush, but we'll take our time doing that.

San Dimas is probably one of the most known assets in Mexico. It's been in the portfolio since 2018. It's a doré producer, 50% gold, 50% silver. And this has been a robust producer for us. It is our largest mine. But with this mine, we see the biggest potential, a big land package as well, 72,000 hectares. We think this mine is probably about 30% to 40% upside that's going to come down from the drill bit. We've been able to increase throughput over the last 18 months. So 2025 was really a turnaround year for this asset.

We're putting a lot of exploration meters and dollars back into this operation, about 117 kilometers. So that's pretty serious meters going into one of the most prolific part of Mexico. So look for updates on this. We've done some updates in 2025, obviously, but a lot more coming in, in this year.

La Encantada is our smallest mine, but arguably the most improved mine so far in the portfolio. In Q4, we've done almost 1 million ounces from this operation. It's a pure silver play, which is rare. You don't really see any byproduct coming in here. Doré producer, and we've had some water issues about a couple of years ago.

Over time, we've been able to resolve that. So you see throughput has normalized, and we're back at or above budgeted rates. We're also internalizing haulage over here. So that's going to help improve our cost going forward and improve optimization. That's on track right now. Our last truck was delivered a few weeks ago. So look for further updates and improvement performance over the next couple of quarters.

Jerritt Canyon, so over time, we have been getting a lot of questions. We did suspend operations here in '23 for a number of reasons. But mostly, we've always known that this asset needed to be capitalized appropriately and also needed to be a self-perform operation versus the third-party contractor that was operating it. So we took our time getting there. We got distracted, obviously, with Gatos in '24 and '25. But now we'll shift the focus back on it. Timing worked out quite well. When we shut it down, gold was at $1,600, $1,700.

At today's prices. It's a game changer. The new resource that we put up here a few weeks ago gives us 7.8 million ounces -- that's not even taking in the 2025 drilling program. So more updates will be coming into the resource base. The focus here is converting resource into reserve. We've committed $75 million for this year. A lot of that money will go to equipment purchases, plant updates or upgrades to make sure that it can withstand winter in Northern Nevada, it's pretty severe, but quite exciting option for us to have right now. So we'll be providing updates throughout the year.

And our minting facility, it's quite unique. It's quite exciting part of the business. As I mentioned, we are the only mining company that does this. This really started off as a marketing gimmick about maybe 10 or 15 years ago. We give our coins in these conferences. And over time, our shareholders, mostly who are the customers started requesting purchasing our silver. This is our own silver. So we started selling it online on our website.

Over time, demand grew, and we've not been able to get the supply from the third-party mints. So we decided to go full on vertical integration, build our own facility, state-of-the-art in Vegas, and it's done remarkably. So it's nice to go from a cost center to a profit center. It's contributed meaningly or meaningfully. With a facility like this, we're able -- in Q4, we diverted about 12% of our silver production through this. In Q4, the COMEX average for silver was $55. This facility captured just under $70 -- so imagine the additional margin that's going directly to the bottom line with something like this.

So we're quite excited. We do have room and plans to grow this. But if anyone is ever in Vegas and want to check this out, do let us know, happy to do tours. Probably similar to most of the other mining companies here, it's wonderful seeing these prices, and it's reflecting in our balance sheet. The balance sheet has never been stronger. Our treasury has never been bigger than what it is right now.

It's obviously giving us a lot of comfort in capital allocation. We're putting a lot of money back in the business, as I mentioned. We have increased our dividends, and we've been active on the share buyback recently. So do look for further updates on this. We're putting out our financial statements in a few weeks on May 12. So you can see what Q1 looks like with obviously much improved silver and gold prices.

Our capital structure, I think one of the key takeaways here is how liquid First Majestic stock is. We're averaging about $400 million to $500 million a day. 100% of the float is traded every month. And that's a great attribute that a lot of institutions, a lot of ETFs love about First Majestic is, easy to come in, build a position. So we're quite proud of that, a list of our top shareholders. We do have a number of passive investors, but you can see some sticky institutions are starting to get into the stock, which is great to see.

And our analyst coverage, most of them right now have a buy rating on the company, which is great to see. It tells you that there's plenty of upside in the stock going forward with all the catalysts that I've touched on and we're targeting over the next 18 to 20 months.

Speaking of the catalysts, we're obviously focusing on Jerritt Canyon right now. It is pretty key to us. So all the focus is going there. A robust exploration program across the board, about 260 kilometers in Mexico. But just as important in Jerritt Canyon, we're putting 42,000 kilometers or 42,000 meters. So over 300 kilometers of drilling is a pretty serious substantial program across the portfolio and further updates of results of this program.

So Keith will be providing more exploration updates and keep paying attention to the balance sheet and the financial statements which hopefully will keep improving quarter-over-quarter. And that pretty much wraps up my presentation for today. I figure we'll leave a couple of minutes for any questions if anyone might have some.

Yes, exactly. Mani, we do have one at the back.

Two questions. Are you utilizing your roaster, the only one, I think, in the area? I mean this project has been a dog for 30 years, has gone bankrupt. I don't know how many times.

Four times.

Four times. Okay. What was the great game changer? Just the change of the underlying product price? Or did one find significant more ore?

Yes, it's a good question. Thanks for that. When we shut down Jerritt Canyon, the biggest issue there was managing the plant. So it was -- basically, the mine was farmed out to a third-party contractor that with a pretty one-sided contract that we couldn't really get out of. So when we -- and we've always known that there was a heavy profit margin that was built in there, which made the cost quite high.

So when we shut it down, our goal was always to turn it back on with self-perform mining. And that was really the case. That was going to be a big solver or a big key in unlocking the value there as well as we did get hit with a winter storm that really crippled the plant. So we knew that the plants needed to be modernized a little bit and winterized properly. So those 2 things had to come together.

Now it took us longer to get there. The upside with that is the metal price has improved. So the metal price improving has opened up a much larger resource base, mainly on the open pit segment. So Jerritt Canyon has been for the last couple of decades, underground. They used to be open pit, but changed underground. Now our view is it will be a combination of open pit and underground, reducing the cost quite a bit and allowing us to really get bulk production into the roaster.

So the roaster will be utilized. In fact, we're also getting a lot of calls from neighboring mines because a lot of that mine area is double refractory, and they would need a roaster. Jerritt Canyon is the only idle roaster that has capacity in the region. There's 3 roasters in the states, 2 of which are owned by Nevada Gold Mines. So that puts Jerritt in a pretty strategic and quite interesting position right now.

Please join me in thanking Mani for his presentation.

Thank you.

Thank you for standing by. This is the conference operator. Welcome to the First Majestic Silver 2025 Q4 Financial Results Conference Call. [Operator Instructions] The conference is being recorded. [Operator Instructions]

I would now like to turn the conference over to Mr. Keith Neumeyer, Chief Executive Officer of First Majestic Silver. Keith, please go ahead.

Well, welcome, everyone, to an excellent day for the company, and 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 updated in metals. So thanks 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 Mani Alkhafaji, President and Chief Corporate Development Officer, here with us today; David Soares, our CFO; Steve Holmes, our COO; Samir Patel, our General Counsel and Corporate Secretary. We also have Darren Fernandes, Director of Finance. We also have Darrell Rae and Joel Faltinsky 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 pass the call over to Samir Patel before we continue.

Thanks, Keith. Before we begin today's call, I would like to remind you that we will be referring to certain non-IFRS measures when 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 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's discussion and 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 SEDAR+ and on EDGAR. 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, Samir. We do have a presentation that's available. It will be put on our website. But for those online today, you can see it as we go through the presentation. I'm going to pass the call on to Mani, who will be going through the presentation. So take it away.

Great. Thanks, Keith. Again, good morning, everyone. I appreciate you guys taking the time to join us.

I'm going to start with the slide with the highlights titled. We did have a wonderful year. 2025 was transformational. We set out some key milestone, stretch targets, and we came with wonderful end to the year and a great year overall. We produced 4.2 million pure silver ounces in the quarter, just over 15 million for the year. From an equivalent stance, we came in with just over 31 million silver equivalent ounces. That's -- 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. We broke to $1.2 billion, almost $1.3 billion this year. That gives us obviously a lot of financial strengths that we see that trickling down to the bottom line. Again, you would have seen that in the news release. Our realized price, we came in for the quarter higher than the average, which, again, is a big testament to our strategies. Q4 average was just under $59 and for the year was $41.52.

Interesting to see as well, our Mint, that's our new [ update ] 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 the metal prices and the production, no surprise 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 slide. That's a very important KPI to First Majestic. We are the purest silver producer among our peers. About 50 -- for the year, it was 58%, but this number continues to improve, in Q4, was actually north of 60%. So as silver price continue 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 improvement 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. We set up the preliminary guidance in January of 2025. And in 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.

One thing I do want to highlight that's impacted our silver equivalent as well as our all-in sustaining costs, which 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, telling us that silver outperformed gold and base metal, but it did have about -- to put numbers on it, about 1 million -- 1.4 million silver equivalent ounces reduction in our production as well about a $1 increase in our all-in sustaining. So without that, our all-in sustaining would have been in the $20, which would have been right in the middle towards the lower end of the guidance, had we used the guidance assumptions.

Okay. Moving on to the next slide, which is our 2026 guidance. So similarly, we are investing heavily, and we're continuing with our robust production for the year. We're targeting about 13 million to 14 million pure silver and just 110,000 to 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 75:1 to avoids the noise that we were seeing pretty much in 2025. So that should -- 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 look back on the accomplishments. Gatos 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. 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 Majestic has owned Santa Elena, we've had 4 new discoveries, and these are massive achievements. The map on the right gives you a sense of what they are. So we've obviously had the Ermitaño mine that we're currently producing from. We've had Luna, but the more recent discoveries is Navidad and Santo Niño. 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 that 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 tonnes per day to 3,500 at a sustainable level. we're expecting to get to this level in H2 of 2026.

I did touch on Gatos. We're also expanding the throughputs at 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 throughput of about 4,000 tonnes per day at a sustainable level from about 3,500. San Dimas, same thing, massive districts, plenty of exploration success that we'll be discussing in our annual R&R updates. And La Encantada has been an exciting turnaround for the story or 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 1 million ounces, which is nice to see this operation turning around after 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. We do obviously focus on safe production, and it's nice to see us coming in with our TRIFR and LTIFR for numbers for the year, putting us in really truly world-class measures. Safe production gives us the production milestones that we're getting. So we're continuing with that.

Financials, a couple of things to mind. We did hold some inventory at end that wasn't reflected in our revenue. That becomes part of -- it's either raw material for the Mint or just timing differences that would have gone flushed out in Q1. The Mint, 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 we don't -- 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. 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 is obviously some cash payments that will be hitting us in Q1 and delivered in 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 the best terms in the mining industry when it comes to convertible notes that we've done in December. The coupon rate on this is 0.125%, which is wonderful. So we're glad to have the support in the market.

Moving on to our dividend policy. So we did declare dividends for Q4, but it's important to recognize we're also seeing a lot of confidence in our balance sheet and our cash flow to the point that we have declared an increase. We've effectively doubled our dividend policy effective 2026. So that will 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 catalysts it's -- we're blessed to have 3 world-class districts in our portfolio, and we see a lot of value in the drill bits. So you see we're coming -- we have declared 266 kilometers of drilling across all the operations, which we're quite excited about, plenty of targets that we'll be chasing. Our updated reserve and resource will reflect a lot of the success that we've had from 2025. So look for that, that will likely go out before March 31. And continued 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, Mani, for doing that. And anyone who wants to ask any questions, we're available.

Thank you, Keith. [Operator Instructions] And the first question today will come from Heiko Ihle with HC Wainwright.

Keith and team, congratulations on a good quarter here.

Thanks, Heiko.

We're close to 2/3 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 heard that some of the refineries have been putting off 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 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 I think it's if you're a small retail store in Miami, for example, and you're used to -- people are walking in their front door and selling you silver, that small retail store would collect x amount of ounces over a period of a few days. And it's a cash flow issue, right? So they would then phone up the refinery that they would normally use for -- 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 cash flow 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. We -- 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 we wait for outturn. And so yes, it doesn't affect us.

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

Yes. The beauty thing with that, sorry, this is Mani. 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, First Majestic with a big footprint in Mexico, we have -- we're able to have access to resources. So the number of rigs are available to us. So no concerns.

The next question will come from Alex Terentiew with National Bank.

Nice quarter. Nice to see your cash jump as much as it did there, which kind of leads me to my question. It's a nice problem to have or you can debate whether it's a problem or not, but cash is going up. I know you guys are spending a bit more on development this year and bumping your exploration or keeping your exploration 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 is going to be -- should be strong again in 2026. Is there other thoughts for additional capital returns to investors? Or -- and obviously, Jerritt Canyon might play into this as well. So maybe just kind of wrapping a question on your thoughts on Jerritt Canyon in there as well here.

Sure, Alex, and thanks for your report today. It was quite good to see. Yes, capital allocation there is a tax issue that is still pending. And the market is well aware of that issue. And it's something that the team is actively in discussions with to solve. And we hope that 2026 is going to be the final year that, that issue will be behind us after that starting back in 2012 that we inherited in 2018. [ So that's one issue that we hope to see. ]

We haven't done any share 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 on Jerritt Canyon over the next couple of months. So I would suggest people wait for that. And being the CEO for 20 some, 23 years, it's kind of nice to see $1 billion [ in cash ]. So we're not about to spend it anytime soon.

Okay. Fair enough. And just one little accounting question. Realized silver price came at $59,, average price in the quarter, I think it was $54. So is that -- I'm guessing part of that could be just timing of sales, but it's also -- do you guys factor in final sale on provisional pricing settlements into that? So if there's a positive adjustment, you kind of factor that into the quarter's realized price. Is that how your accounting works?

Yes. That's one part of it, Alex, due to the concentrate sales. But also we do have a weapon that not many -- no one else really has. We have the Mint. The Mint's recognized $69 average price [ result and that accounts for the overall number ] -- that's about 12% of our production that went to the Mint in Q4, of the doré production, I should say.

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

Yes. We just have a few more, team. One relates to 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?

Yes. So keep in mind, the Mint is less than a year, is about a year old. So the ramp-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 obviously a marketing strategy to get the name out there, and it's been quite effective. So we'll keep working on that.

Okay. Then we had a few questions on -- along the lines of congrats on the strong average selling price versus the COMEX in the quarter. Are you hedging prices? And would you consider a direct-to-market selling in the future?

We have interestingly enough, been contacted by our direct buyers over the last month or so. We did assist one U.S. buyer with some ounces in Q4. 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, our shareholders who own First Majestic would not quite appreciate us hedging. So 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 Mani 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. Gold is a very stable, more stable than silver, as I'm sure all the listeners are aware of. But the -- we're always going to maintain as much purity in silver as we possibly can. But 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 Jerritt Canyon, when a restart may happen or any general update on Jerritt?

Yes. So we'll -- Keith touch on that. We're going to be putting a stand-alone update on Jerritt 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 First Majestic, our management team is focused on Jerritt Canyon now, 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 Q, Nick.

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 you are and how to contract us. So we're always available. So Darrell and Joel and Mani and myself, 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 [ an important ] 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.

Thank you for standing by. This is the conference operator. Welcome to the First Majestic Silver 2025 Q3 Financial Results Conference Call. [Operator Instructions] The conference is being recorded. [Operator Instructions] I would now like to turn the conference over to Mr. Keith Neumeyer, President and Chief Executive Officer, First Majestic Silver. Keith, please go ahead.

Okay. Well, thanks, operator, and welcome, everyone, that's dialed in today, and we'll likely be listening to this recorded over the next few hours or next few days. But what's turned out to be what we thought was going to be a fantastic day for us, putting out record Q3 numbers. I think we used the word record 18 times in our news release, yet obviously, the focus today is on this tax issue that came up or has been there for years, which I'll address a little bit.

But as the market was opening this morning, I saw a headline come out of Silversea was -- I'm not sure who wrote that headline, but that guy is obviously an idiot. I then saw, unfortunately, TD put out a statement as well and -- nothing against TD. TD has been a great financial partner of First Majestic for quite some time, a decade, and their analysts unfortunately, came out with the most bonehead headline that I've probably received from an analyst in my career.

I'll read it to you. So it's, Q3 results in line. Which is good. Focus on ongoing tax reassessment, which is completely bu******. Wayne, you should know better than that. Management is not focused on taxes. First Majestic is a mining company. Our job is to get silver out of the ground in an economical fashion that's following the environment and our social responsibilities on site at the different operations that we do. We look for ongoing efficiencies on trying to reduce our costs and create wealth for our investors, and that's our job. The tax dispute that seemingly some people are focused on today has been with the company for 13 years. There's no change.

We continually work with the Mexican government to resolve the issue. I can tell you there's at least weekly meetings that occur in discussions on this particular item. I can also tell you that the Canadian government is now involved in discussions with the Mexican government, which is quite nice to see. And I can tell you our team of experts over several law firms and consultants and inside staff pay a lot of attention to this, obviously, but it's not what we view as a material issue for the company.

Whenever the issue does get resolved, we will put out disclosure to discuss further these items. We do, do disclosure and over the last decade -- or the last 8 years, pardon me, we've had disclosure in our financial statements in regards to any potential liability in the business, including this tax issue. It's fully out there in the public. We do get questions from institutional investors from now -- from time to time, and we answer those questions. And we're completely and always very, very transparent.

We did update our language in our financial statements in our MD&A, and we put out some language in our news release today just to bring shareholders up to date or investors up to date. And that's where we are. We'll continually work with the Mexican government and to further resolve the issue at hand. But timing, who knows? It could be another year, it could be another 2 years. We have no idea. It's been going on for 13 years.

So there's obviously some focus on this. By going back to my earlier comment, I can tell you, it's definitely not a focus of management because we don't look at this tax issue as material to the business in any way. And interestingly enough, for those who actually want to dig a little bit deeper, the President of Mexico actually had a news conference on Friday, one of our regular news conferences.

And one of the reporters asked her about this particular issue because as you can tell by some of the press, you've got these -- in these sensational headlines showing up they're trying to sell newspapers or whatever they're trying to do, that have completely misrepresented the situation.

The President of Mexico has said that the issue still remains outstanding and negotiations are still underway. And I think that's probably the most accurate statement that's been made public from the Mexican government. Unfortunately, the press didn't pick that up. But nevertheless, that's the facts. And also being in Mexico for 22 years, I think we're probably one of the most well-positioned companies in Mexico to handle such issues. So we need to focus on getting the ounces out of the ground, and that's what we do.

And we came out with one of the best quarterly -- well, actually the best quarterly financial statement we've ever had in the company's history, and the analysts are focusing on completely the wrong thing. I should have introduced the people that are on this line with me. As you can probably tell, I'm slightly irritated. But we do have Steve Holmes, our Chief Operating Officer online. We've also got David Soares, our CFO, online. We also do have Samir Patel, our Corporate Counsel there; and Mani Alkhafaji, who many of you probably know, our VP, Corporate Development. Darrell Rae, Manager of Investor Relations, is also online.

If questions do come up that I will -- that I'd elect to pass on to them, I may elect to do that. But we will not be taking questions on the tax issue because I don't think it's appropriate in a call like this to have those types of discussions. There's several moving parts and things going on behind the scenes that are constantly occurring and have been occurring over the last 8 years, and our disclosure is our disclosure. And we're not willing to go beyond the disclosure that we currently have in our financial statements, our MD&A and our news release.

So let's talk about some positive stuff, the stuff that we've really been doing as a company that the investors should really be caring about. And I've got a presentation in front of me, and I'm on Slide 2 of the presentation. And we had a record silver quarter -- silver producing quarter, 3.9 million ounces, 11.3 million ounces year-to-date. The revenues in the quarter were another record quarter. As I said, we said record 18x in our news release. So this is just record after record after record.

Cash flow is record $140 million. We've got a record cash position. We've got over $560 million in the bank. Our Mint has had a record quarter as well. So the money is coming in, and the business is doing extremely well. There's always -- we're dealing with mining, of course, but it just -- it's hard to knock the third quarter. And I'm very positive that we're going to end 2025 on a very positive note, having a very good Q4 as well.

So without getting into details and reading everything on the slide, the slide presentation that I've got in front of me is on the company's website. And for those interested parties, feel free to have a look at it. And if you do have additional questions, feel free to call the company, and we can get into further details. But going on to Slide 3, you see the growth in silver ounces. As I said already, our record silver production. Our costs have come down, which is fantastic.

You're seeing a lot of cost creep within the mining sector, which I've noticed through other companies putting their financials out. So for our cost to come down, it was really nice to see. Jumping to Slide 4. We're hitting all the metrics in our guidance. We're 3/4 of the way in or as of September 30. We're 3/4 of the way into the year, and we're right on track with all the metrics that we put out in our guidance that we released in July of this year. So we're on track to meet all of our guidance, north of 30 million silver equivalent ounces.

And I think all of you probably know the breakdown of 55% silver 35% gold and 10% in the form of lead and zinc. So our purity is there, and we remain the purest silver company in the space of the silver players that all of you are very familiar with. So jumping along to Slide 5. Los Gatos was a big acquisition for us. That closed in January, bringing all the systems in place, bringing the First Majestic way of doing business, took some time, but SAP and other systems that we brought over from corporate from First Majestic have now all been implemented now.

It's nice to see. And we have a plan to get throughput up to 4,000 tons a day, and that plan is being put together now. Look for our guidance in January 2026, and you'll see more color on our budgeting to achieve this. But Los Gatos has been a great asset for us and a super great addition to our portfolio.

So jumping to Santa Elena, everyone know, I'm sure most of you who are listening today have watched our news releases, great exploration results, two major discoveries in the last 12 months, which is pretty unusual. You don't normally see two discoveries that close to back, but the Navidad and the Santo Niño discoveries are huge and will add multiple years to the life of mine of this operation.

Look, again, look for guidance in January on some costs that we're going to be implementing over the next couple of years to get into those areas of the property, to bring that ore into the mill and maintain or potentially even increase production at Santa Elena over the next 3, 4, 5 years. So that's pretty exciting. At San Dimas, it goes without saying that we've seen some pretty substantial improvements quarter-over-quarter there. Costs are now coming down, production is going up. It's now within budget after a challenging previously couple of years, which have -- all those issues are now behind us.

So it's really nice to see San Dimas back on track. And we've got some plans there to continue to expand that operation and look for further guidance in the quarters to come. And La Encantada, our smallest mine, which is less important of the top 3, but we're changing the mining operation there to self haulage and it's pretty interesting, and it's going to reduce costs and help that operation out quite a lot. And that's being implemented now and we'll be fully up and running by Q1 of 2026.

So look for improvements in La Encantada in 2026. So jumping to Slide 6. I've already covered the revenue -- record revenue. We did -- I saw one of the analysts come out and say there was a miss on revenue, which is I'm not sure what analysts had said. But anyway, it's -- the 758,000 ounces of silver that we kept in inventory and the 3,900 or almost 4,000 ounces of gold, that's $50 million in revenue that we held over the quarter. Our shareholders want to see that.

And it's a lot of embedded revenue. Some of that revenue will show up in Q4. But I think the analysts that follow the company should take note of our inventory levels because it is something that we have focus on as a silver, gold company, I think that our input from our investors and shareholders worldwide want us to see inventory levels at these types of rates. So it's very positive.

We could -- obviously, it's our choice. It's like cash. So if we do want to convert those ounces into revenue at any time, we could do it quite easily just on a phone call. So there's really $55 million in net earnings that wouldn't -- that would have showed up -- or pardon me, that's in relationship to the securities that we've been monetizing. Another bullet point. We do treat our portfolio, I gather maybe in an unique way. We don't put it on our balance sheet.

We have virtually our entire portfolio in other comprehensive income. And we do monetize that, and we have been monetizing that. So if the analysts would like to look at that, maybe they want to focus on that number as well because I think it's a quite important number, and there's a lot of cash sitting in our reserves in the form of marketable securities that I don't think people take into consideration.

There is a slide coming up, which I'll point out again that shows that value. Our safety performance has been very good and our sustainability has improved as well. We're one of the best producing mining companies in the space and recognized by the different agencies, which is obviously nice to see. So jumping along to Slide 7, and this points to my previous comment of marketable securities, of which is $140 million sitting there. That's as of September 30, and the market has improved even further since then.

So who knows what that number is going to be as of December 30, but it is a significant amount of our liquidity. And as a result of our deals we've done on the M&A front over the last couple of years, which I think is pretty helpful for the business overall. Going -- jumping along to Slide 8. Again, another record. I've already touched on records, but $98 million in operating cash flow. obviously pretty significant. Los Gatos was not -- or pardon me, Los Gatos was a significant contributor to that, which is obviously fantastic. It's great to see. And going to the next slide, Slide 9, our EBITDA, another record, $128 million in EBITDA. And I'm not going to go over each of these items because if you're looking for further details on all the bars here, I'm not going to bother covering them. But if you do have further questions, feel free to talk to Darrell or Mani at any time you wish to.

And jumping to our next slide, the dividend policy. As all of you know, the dividend is intact and obviously, will be with our significant cash balances and our significant portfolio. Actually, I'd like to see that dividend increase, but we'll see how that transpires over time. So looking at Slide 11. The integration is pretty well done. There's a couple of items that we're still working on, but look for increased balance sheet improvement in Q4. I would expect to see that as a result of our production and obviously, metal prices.

We are still aggressively doing exploration. We're likely not going to get a chance to talk about Jerritt Canyon today, but we do have some interesting exploration things happening there. We do hope to put out an update news release on Jerritt Canyon at the end of the year, if not end of the year, early 2026, but our objective is to hopefully have some news out on a go-forward plan at Jerritt Canyon by the end of this year. And I don't want to talk too much about it on today's call.

I know we do get a lot of questions about Jerritt Canyon, but I'd rather wait until we do come out with some further disclosure just to talk about the whole picture. We will be updating our resource estimates at the Navidad project as well in March of next year, which is obviously pretty exciting. And as I've touched on already, the Los Gatos input increase to 4,000 tons and the Santa Elena mill increased to 3,500 tons is all coming into our budget in 2026.

So we hope to talk further about that when we come out with our guidance for 2026. So that was really the end of the presentation. I know the guys in Vancouver are watching for questions. So I'll pass it on to Mani and the team in Vancouver.

Yes. I think, Keith, you've probably addressed a couple of the questions on Jerritt. The one question that is coming up here is, are you doing any share buyback at these prices?

We did some today. We did some yesterday.

Okay. That concludes the web questions that we have.

Okay. Well, that's good. Okay. Well, thanks for everyone's time. And for those who are listening to this after the fact, I encourage you to call into the office or send us an e-mail. And if you have further questions, we're always happy and willing to answer any queries that come in from interested investors and shareholders.

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