First Majestic eyes late 2027 restart for Jerritt Canyon

First Majestic Silver (TSX: FR; NYSE: AG) unveiled plans to restart its past-producing Jerritt Canyon gold mine in Nevada by the end of next year to take advantage of elevated prices for the yellow metal.

The restart plan includes a prefeasibility study (PFS) targeted for completion in this year’s fourth quarter, First Majestic said Thursday in a statement. The Vancouver-based miner will invest $75 million (C$104 million) in 2026 to advance technical work, underground development, exploration and plant upgrades required for a restart.

“In our view, the restart plan highlights a key growth driver for the company,” BMO Capital Markets mining analyst Kevin O’Halloran wrote in a note. The announcement “indicates open pit mining will be a key contributor to the production restart.”

His counterpart at TD Cowen, Wayne Lam, values Jerritt Canyon at about $582 million.

Jerritt Canyon has been mothballed since March 2023, when First Majestic halted mining and processing activities due to high contractor costs and multiple extreme weather events. It bought the asset in April 2021 as part of a strategy to diversify into gold, operating it as an underground mine. In the months leading up to the shutdown, gold ranged from about $1,600 to $1,900 per ounce.

Exploration success

Recent drilling successes and stronger long-term gold price assumptions are key drivers behind the restart decision, First Majestic says.

After carrying out an 18,000-metre exploration campaign in 2025 aimed at expanding mineralization and testing new targets, the company this week upgraded its resource estimate for the property.

Jerritt Canyon held 54.3 million measured and indicated tonnes grading 2.35 grams gold per tonne for 4.1 million oz. of contained metal as of Dec. 31, First Majestic said Tuesday. Inferred resources were pegged at 46.6 million tonnes grading 2.44 grams gold for contained metal of 3.66 million ounces.

“In the current favourable metal price environment, Jerritt Canyon represents a rare and compelling opportunity to generate meaningful shareholder value,” CEO Keith Neumeyer said. “This fully permitted gold mine is located in a premier, tier-one mining jurisdiction with all critical infrastructure in place and is underpinned by a new expanded mineral resource base.”

Revamped operation

First Majestic envisions a revamped operation combining underground mining with optimized processing infrastructure and potential open-pit opportunities identified through recent exploration. The PFS will focus on defining the “optimal path to sustained, long term, production” by leveraging the mine’s open‑pit potential, First Majestic said.

Assuming a second-half restart in 2027, Jerritt Canyon could produce about 86,000 oz. of gold annually at an all-in sustaining cost of about $1,990 per oz., BMO’s O’Halloran said.

Located about 640 km north of Las Vegas, Jerritt Canyon was discovered in 1972. It produced about 9.85 million oz. of gold at an average grade of 6.6 grams gold between 1981 and 2023. Most of the production since 2010 has come from the SSX and Smith gold deposits.

First Majestic’s land package for Jerritt Canyon covers about 308 sq. km. Some 42,000 metres will be drilled on the property this year, the company said Thursday.

Shares of First Majestic dropped 0.8% to C$30.51 Thursday afternoon in Toronto, giving the company a market value of about C$15 billion ($11 billion). The stock has ranged between C$7.40 and C$43.69 in the past year.