(Kitco News) - First Majestic Silver is setting its sights on further growth following its recent acquisition of Gatos Silver for $970 million. In an interview at the 2025 BMO Global Metals, Mining & Critical Minerals Conference, President and CEO Keith Neumeyer discussed the company's strategic moves and future outlook.
The Gatos Silver acquisition, which closed in January, has significantly boosted First Majestic's production capabilities. "The acquisition... 70 percent of the Los Gatos mine... was about 9 million ounces of silver equivalent," Neumeyer stated, increasing First Majestic's total production from 21 million to approximately 32 million ounces per year. "That's 53 percent silver and 35 percent gold and the rest is in lead and zinc. So it really is a transformational transaction for us."
Neumeyer also addressed the dynamics of the silver sector, noting a growing demand driven by electronics, AI, data centers, nuclear power plants, and even military applications. According to Neumeyer, the demand for silver is approaching 1.4 billion ounces of consumption annually.
However, he pointed out that the silver supply has remained relatively flat at 830 to 850 million ounces per year for the last decade.
Amidst these market conditions, Neumeyer expressed a bullish outlook on silver prices. "I'm on record saying triple-digit silver, and every time I say it, people think I'm crazy, but I'm a true believer that that's what it should be." He believes the current gold-to-silver ratio of 90 to 1 is unsustainable, given the mining sector's output.
First Majestic is also actively managing its capital. The company has initiated a share buyback program and is focused on hoarding cash.
"We have almost 400 million in the bank right now, which is the highest treasury we've ever had in the history of the company," Neumeyer said. He emphasized the importance of maintaining a strong treasury for future opportunities. " I just want to hoard cash. We don't have any real big capital expenditure project projects in 2025. I want to see ending 2025 with a very substantial treasury. That's our goal."
Looking ahead, Neumeyer outlined his vision for First Majestic. "My goal... was to have a 50 million ounce producer." While the company is not there yet, it is actively monitoring junior mining companies for potential acquisition targets. "We're invested in some juniors right now... as companies develop or build... all of a sudden they could potentially be targets for us."
Neumeyer also commented on the changing political landscape in Mexico, where First Majestic operates. The new president, Claudia Sheinbaum, "calmed down the tone a lot" compared to her predecessor. Neumeyer noted that mining permits are now being granted, signaling a potentially positive shift for the mining sector in Mexico.
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