First Majestic wins permits for Santa Elena expansion

First Majestic Silver (TSX, NYSE: AG) has secured construction permits for two new underground portals at its Santa Elena mine in Mexico and will spend an additional $12 million (C$17 million) this year to advance the high-grade Santo Niño and Navidad discoveries towards production.

The permits allow the company to begin underground development in the second half of 2026, including about 800 metres of decline development at Santo Niño and 1,300 metres of underground development at Navidad, First Majestic said on Thursday. The deposits are expected to become future sources of higher-grade feed for the Santa Elena processing plant and could materially extend the operation’s mine life.

Santa Elena, about 1,600 km northwest of Mexico City, together with the nearby Ermitaño deposit, is a key source of First Majestic’s silver and gold production. That is expected to total 13-14.4 million oz. of silver and 127,000 to 140,000 oz. of gold in 2026 across its four producing mines in Mexico. The permitting milestone marks the next stage of the company’s strategy to grow the operation through exploration after transforming the mine with the discovery and development of Ermitaño.

“The development of Santo Niño and Navidad builds on the company’s track record of success at Santa Elena, where exploration led to the discovery and development of the Ermitaño deposit,” BMO Capital Markets mining analyst Kevin O’Halloran said in a note. “Ermitaño has made the operation a strong performer within the company’s portfolio, and we see potential for the development of these additional deposits to replicate that success.”

Drill results

Shares in First Majestic Silver rose 4.3% to $24.42 Friday morning in Toronto, valuing the company at C$11.9 billion. The stock has more than doubled over the past 12 months as the silver price rose.

The company also released infill drilling results designed to upgrade inferred resources and improve mine planning confidence. At Santo Niño, highlights included 10.87 metres grading 77 grams silver per tonne and 1.52 grams gold. At Navidad, drilling returned 14.89 metres grading 28 grams silver and 3.5 grams gold.

“Infill drilling continues to return significant silver and gold intercepts at both targets,” CEO Keith Neumeyer said in a release. “Together, Santo Niño and Navidad are expected to become important contributors to the future mine plan and have the potential to materially extend Santa Elena’s mine life.”

First Majestic has completed 26,904 metres of drilling at Santo Niño and 7,704 metres at Navidad this year.

A scoping-level study concluded that dedicated underground access is the preferred development option for the deposits. Santo Niño will be accessed through a new portal near the processing plant linked by a haul road to existing infrastructure, while Navidad will be reached both through its own portal and from the Ermitaño underground workings.