First Majestic Silver Sheds Mine and 18% of Market Cap in Turbulent Week

The macro winds have shifted sharply against silver, and First Majestic Silver is feeling the full force. The miner’s stock has plunged more than 18% in a single week, hitting €14.66, as a surprisingly strong US jobs report crushed expectations for near-term rate cuts. The May payrolls data showed 172,000 new positions—enough for the FedWatch tool to now price in better than a 50% probability of a rate hike by December 2026. That sent the dollar surging to a two-month high, pushing COMEX silver down to around $67.39 an ounce and triggering a 6% rout in silver ETFs on Monday alone.

Yet beneath the selling pressure, First Majestic is executing a clear portfolio rethink. The company has agreed to offload its Del Toro mine in Mexico to Sierra Madre Gold and Silver for US$60 million. The deal transfers a fully permitted 3,000-tonne-per-day processing plant and 62 kilometres of underground infrastructure. The move frees up resources to concentrate on higher-margin core assets—primarily the San Dimas and Santa Elena operations—and marks a deliberate pivot away from non-core holdings.

Record quarterly numbers, but the market wanted more

Operationally, the first quarter of 2026 was a standout. Revenue surged 95% year-on-year to a record US$476.67 million, and net income hit a robust US$128 million. Free cash flow came in at US$223.5 million, while the company ended the period with over US$1.1 billion in cash. Realised margins on silver leapt from US$13 per ounce a year earlier to US$52, underscoring the benefit of elevated precious-metals prices.

But analysts had pencilled in US$522 million in revenue and earnings per share of US$0.33. First Majestic delivered US$0.31. That shortfall, combined with the macro headwinds, has been enough to knock the stock back from its March all-time high of €28.79—meaning the shares have now roughly halved from that peak.

Should investors sell immediately? Or is it worth buying First Majestic Silver?

Headwinds beyond interest rates

The company faces additional pressures. Geopolitical tensions between Israel and Iran have pushed Brent crude above US$95 a barrel, raising operating costs for a miner heavily exposed to Mexican energy markets. Meanwhile, a long-running tax dispute with Mexican authorities over US$1.01 billion remains unresolved, with US$113.4 million in assets frozen. That overhang has kept some investors on edge despite the broader trend of rising foreign direct investment in Mexican mining—inflows jumped nearly 40% to about US$3 billion, even as the country’s overall economy contracted slightly.

Technically, the stock is approaching oversold territory. The 30-day relative strength index sits at 33.4, just above the classic oversold threshold of 30, while annualised volatility stands at 77.81%. The 200-day moving average at €15.53 is now key resistance; a swift reclaim of that level could open the path to a recovery. If the sell-off persists, a retest of recent lows is likely.

Shareholder meeting and structural deficit

First Majestic holds its annual general meeting this week, which may draw renewed attention to the company’s strategy. Beyond the near-term noise, the fundamental backdrop for silver remains supportive. Analysts project a supply deficit of 190 to 200 million ounces for 2026, fuelled by industrial demand from electronics and photovoltaic manufacturing. Price forecasts for silver in the second half range from US$55 to US$85 per ounce—a wide band that leaves plenty of room for both upside and downside.

For now, the direction of the stock hinges largely on whether rate expectations shift again. If the labour market cools and the dollar eases, silver could regain its footing. Until then, First Majestic’s operational strength and strategic refocusing may not be enough to lift the shares out of the current correction.