[music] [music] I'm Charlotte Mloud with investingnews.com and here today with me is Manny Alkapagi, president at First Majestic Silver. Thank you so much for being here. Great to have you. >> Thank you. Good seeing you. >> I think it's a perfect time for us to be catching up. We last spoke back in the summer, so a lot has changed when it comes to silver. and we're here now at VRC and I wonder if you could just start by giving me your rundown of the mood on the show floor. What are you seeing at your booth? I know you're here selling some silver as well. How's it going? >> Oh, it's it's wonderful. You know, it's setting the tone for 2026. Uh you know, our booth has been mobbed from before we open as well. You know, you come in and lineups and is just flying off. Uh you know, we're selling silver obviously and uh it's flying off right now. you know, people are not believing or pinching themselves that, hey, triple digit is here. And, you know, as you can tell, I got a triple digit silver going on here. Um, the mood is fantastic. You know, you can tell it's it's, you know, we are in a bull bull market right now. >> Absolutely. This is this is not even the first triple digit silver shirt that we've had on camera here today. So, I don't know where everyone is getting them, but they certainly have them. And I wonder, so, of course, at a place like this, there would be that strong excitement and demand. you have the first mint as well. Are you seeing that excitement reflected in sales there as well at this point? >> Absolutely. Yeah, we're u you know, we'll be putting out our u financials in uh in February, February 19th. So, I can't speak too much about it, but the sales have been, you know, non-stop. Um you know, hundreds coming in through the day, which is wonderful. We're seeing record day after day. Um it's the retail mentality is is is very different. um you know as you see the sale price goes up everyone wants to get in on it and it's wonderful you know people are making money almost every day you buy it the next day you're already up so uh you know very very unique position right now >> yeah it's very interesting I was talking to somebody else about that today how it seems in the west when the price goes up that's when people want it more which is maybe not quite in line with like the eastern mentality is there anything else you would say about demand trends in that way >> that's part of it uh you know people also compare price in China versus the US and there's always that premium and it just seems you know the the west price is catching up a couple of days later so you're almost fronting uh front front running um yeah so it's uh and you're seeing mints are running out of uh silver in some places so the fact that we are restocking non-stop is is unique and we have our that's our own silver coming from from our minds. So supply is virtually unlimited. Uh so that that also helps. >> Yeah, that's that's very interesting and it's a question that we've gotten from our audience as the price continues to rise and demand increases is all right, at what point is it going to get difficult to get your hands on physical silver? So any any further thoughts on that? >> Absolutely. Look, it's uh we're in a very unique position. you know, we're we're minting our own silver. Other mints have to go and source silver. So, they have to go buy it. They have to, you know, they're they're exposed to the price risk. That's number one. Number two, sourcing that silver is becoming more and more difficult. Um, so, you know, between the industrial demand that's that's ramping up, uh, investment demand generally is is picking up as well. So, it's just putting more constraint on silver. not uh you know not not all silver product can be minted to this form. Uh there's really two two uh products that that the mines produce. There's door production and then there is concentrate production. Concentrate production is difficult. You can't really mint it. It needs to go to a smelter and that's the majority of silver. So just right there you're constrained with how much you can actually turn into these products. Uh we're blessed that most of our production is dory. so that we're able to source uh the raw material to our mint directly from our mines. >> That's pretty interesting. I don't know if people really think about that difference there. So, from your production, how much of it is going to the mint? Can you can you talk about that? >> From the global production, we're um for 2025, we're down about 10% or so. Uh and it's been gradually increasing. So, Q3, Q4, we're were higher than that. Uh we'd like to push that even more in uh in 2026. So, uh, you know, keep in mind we're we're a mining company, so this is a different business, so different strategy. There's a new marketing team that's dedicated on getting the name out there. Everyone knows First Majestic. First Mint is really the new um the new the new part of the business. So, we're getting the name out there and it's uh it's picking up very quickly. You know, like I said, every quarter has been record after record. Uh but we'd like to get more than 10% in 2026. >> Okay. Really interesting. And part of why I ask is as the silver price has been going up, we're hearing more and more about manufacturing companies, solar panel manu manufacturers, etc. trying to do deals with silver companies. Essentially, they're they're more and more of them are looking to secure supplies. So, I wonder what kind of conversations you're having on that note. Are people coming to you trying to lock that in? >> We've had we've had a couple of uh uh in or industrial consumers reach out directly to us. Um, you know, we we don't we don't do deals directly with that. Uh, at least not yet. We're you know, we're limited with who the customers can be and at this point it's uh, you know, if if it's if it's our retail, that's the mint uh part, but for everything else that goes to the banks. Uh, that might change in the future. I I I can't speak to that, but uh, we are constrained of who who the customer is, and that that goes for most of the mining companies. So, >> yeah. Yeah, it's another good one to go into. I don't know if when prices were lower, we're thinking about it in this way. And speaking about the price, I know I know you don't like to focus too much on the price, but I think we have to talk about what's going on because we've got the the triple digit milestone. How how are you feeling getting to this level? Do you have any sense of what could come next? >> Oh man, it's uh you know, you pinch yourself in the like as a silver company having tripledigit silver is wonderful. You can imagine the margins that we're getting. Uh the balance sheet is uh is strengthening cash flowing nicely. Uh we're looking you know for different ways of doing capital allocation. We've doubled our dividends. U you know we're investing heavily in the business. It just obviously makes the business run much smoother. Uh we we start thinking uh more long-term strategic investments. Um so it's uh and you can imagine smiles all around. Uh it's it's a new um you know it's a new position obviously for a lot of companies and uh we're we're taking it all in. >> Yeah, I think it's got to be very very good for morale and I wonder if maybe you can talk a little bit more about how having the higher price maybe influences or changes what you do as a company. >> We stay focused on what we can control. You know you started by saying uh talking about the price but we are a mining company. So our commitment is we got to meet production, we got to control cost, external factors. Yes, obviously we pay a lot of attention to whether it's price, whether it's foreign exchange, but these are items that we can control. So we don't let that, you know, influence us too much. Uh now from a business perspective, higher prices allows us to maybe process material that wasn't economic in the past. Uh which is something that we've touched on in our 2026 guidance. um we're making more money, but we're able to mine, you know, maybe high or lower grade material that otherwise would would uh would not hit the mill. So, we're able to optimize that. Uh but our focus is obviously, you know, keep improving the economics, keep improving cash flows, extending life of mines. Um so, yeah. >> Yeah. I wonder if you could talk a little bit more then about what we should what we should watch for from First Majestic in 2026. What highlights would you would you pull out? Well, production milestones, right? So, we put the we put the guidance uh last year. We put the guidance and we've updated guidance and we beat guidance. We want to keep beating these guidances or at least me meeting them. And uh so operational discipline is going to be key. Uh maintaining cost controls as well. We have a pretty significant exploration program that obviously has yielded wonderful dividend to us in the last couple of years. So, we see a lot of value in the drill bit. So we're putting another robust program over 260 kilometers of drilling. So we'll be we'll be put providing more updates and uh we did touch on uh potential or you know we're looking to put a a separate updates on a standalone basis for Jer Canyon. Uh that will be coming out sometime you know hopefully before uh end of Q1. >> Okay. So, we've got a number of of points that we can be watching for. And I know that a question investors have is when it comes to M&A activity in the space, is this an environment where you would expect to see more? We don't have to talk about what the company is doing because I'm sure that is is not able to be discussed, but is it is it an environment where you'd expect to see that? >> Absolutely. I mean, I can speak uh to First Majestic. We're always looking, you know, we we Keith put the company together 22 years ago with the focus on growth and we've done a number of accreative acquisitions. The company was built on acquisitions. We're very blessed with the last acquisition that we did that was Gatau Silver. It closed uh January of 2025. We're not stopping there, but we can afford being selective. Uh we don't want to go buy a junior company just for the sake of buying something. We want to buy something that's deer that fits the portfolio, something that's uh latest stage development, early stage uh producer. So, uh like I said, we're looking, but it's it's just a testament that it's very hard finding good silver deposits. Now, Gats was a wonderful one, but there's just not that many gate out there. We're again we're we're we're lucky to have big land packages around the assets that we have so we can uh grow them organically. But yeah, we we keep looking until the right one comes. We're not going to jump on it. >> Well, I think investors have that problem as well where the universe of silver companies is just so small, it's hard to find something high quality to put money in. So, that makes a lot of sense. And maybe on that note, we can talk about the supply side for the silver sector because of course you would think with the prices going up so high, there's going to be a supply response, but of course that's easier said than done. So any comments from you on that note? >> We just hit triple digits now. You need to have triple digits for quite some time, sustainable levels in order to really entice management to go and make these commitments. We saw a stat uh you know recently that it takes on average 18 years to get a silver production or silver asset in production since discovery. That's a long time. Um we're seeing obviously with these prices it is starting to entice maybe restart of some of the smaller mines. Uh but at the same time other mines are being depleted. So supply I don't think is going to change significantly. uh maybe we'll start seeing a bit of an uptick in recycling here and there, but again, recycling is getting more and more complicated. We're thrifting uh in all these new technology that we're using. So, it's it's getting more challenging and more expensive to to really recycle them. Uh so, I I don't see supply changing significantly. Demand on the on the other hand, it just keeps going up. You know, there's there's new technologies hitting, new industries that are entering that weren't part of the the the pool in the past. So, it'll be interesting to see how that's going to play out. >> Yeah, I've been talking a lot the last couple of days about the demand side for silver because of course we've got silver PL panels as a huge source of demand, but I'm also hearing about well the prices are higher. They want to cut the amount of silver that they use. Maybe they want to substitute in copper, but overall you would see the demand picture looking strong. >> Absolutely. Yeah. Again, the amount of silver that gets used in a cell phone or or or a TV is is tiny and it's not, you know, between 50 to$100 to $200, it's not going to change the overall price of a $2,000 Apple. So, that's u you know, if it goes up 500, 600, who who knows? Maybe they'll start thinking twice, but you can't you can't really substitute it uh in electronics. Silver is is high conductive for electricity and heat and you know copper is not is not going to replace silver. >> Yeah, I think I think that's fair enough. And I want to mention silver stock performance as well because with this milestone price level I think a big topic at this conference has been all right when are the silver stocks going to outperform and I remember when the gold price first started going people were asking that about the gold stocks and we had to wait a while kind of like you were saying it it's not just that we get there we have to maintain that so any thoughts on as a group when we might see outperformance from the sector >> you know I was chatting with someone about this earlier and it's u the last the last set of financial statements that's in the market right now for for most of the producers was back from Q3. So that's as of September 30th that got published a couple of months ago and then silver price average was $ 38 $39 and that's all what the what the market has seen. People can you know you can forecast you can estimate what P&Ls look like what balance sheet looks like but until you see that it's going to be tough to believe. we're putting out, you know, well, I guess the next set of financials will come out will be related to Q4. Q4 silver average again mid50s. We're talking 110 $120 silver right now. So, you got to wait until you got to see these quarters coming in quarter after quarter for really the generalists to start coming in. You know, I think the retail guys do do understand and have been buying, but the generalists who are heavily invested in Nvidia and the tech companies are not really grasping how much cash flow these miners are producing right now. And I think you got to give that a couple more quarters, but when it comes in, it's going to come in pretty quick. >> Yeah, I can see that. And just just a note on that at this conference, it's really busy as we were saying, but do you still feel like this is people who've been in the sector for a while? It's not those generalists right now. >> Not here. No. No. We're starting to get some generalist meetings here and there. You know, they'll call, they're having questions. They want to learn about the the sector. They want to learn about the industry. They want to learn about silver. Uh but they haven't come in to the way that we've seen in the past. Some are starting to get on the registry, which is nice. Uh but, you know, I think uh there's still some uh you know, lots of room to come from that end. Yeah, I think it's helpful to to know what you're hearing on that end. Well, it's been it's been great going through what's going on in silver with you. I think I need to send you back out onto the show floor now, but before I do, any final thoughts you'd leave investors with? >> Yeah, look uh look for updates 2026. Uh exciting year, big production numbers, lots of exploration, lots of updates, and we'll be uh we'll be telling uh we'll be providing lots of updates throughout the year. >> Well, we'll keep an eye on what's happening. Thank you so much for coming on to talk. This was great. >> Thank you very much. >> Of course. And once again, I'm Charlotte Mloud with investingnews.com and this is Manny Alkapagi with First Majestic Silver. [music] >> [music]