First Majestic Silver Corp. closed a $350 million offering of unsecured convertible senior notes on December 8, 2025, exercising a $50 million over‑allotment that brought the total to $400 million in commitments. The notes carry a 0.125 % coupon and can be converted at a rate of 44.7227 shares per $1,000 of principal, setting an initial conversion price of roughly $22.36 per share—about 42 % above the company’s trading price at the time of the offering.
The company earmarked $174.7 million of the proceeds to repurchase its 0.375 % convertible senior notes due 2027, thereby reducing its debt burden and replacing higher‑coupon debt with a lower‑rate instrument. The remaining net proceeds will fund general corporate purposes and strategic opportunities, a move that signals management’s intent to strengthen the balance sheet while keeping capital available for exploration, development, or potential acquisitions.
First Majestic’s Q3 2025 earnings fell short of analyst expectations, with EPS of $0.07 versus an estimate of $0.11 and revenue of $285.1 million versus $311.86 million. The miss was driven by a combination of higher operating costs, a decline in spot silver prices, and a modest slowdown in production at its Los Gatos mine, offset by stronger output from San Dimas and Santa Elena. Despite the earnings miss, the company’s production growth and the premium conversion price suggest management remains confident in the long‑term upside of its asset portfolio.
The company operates four underground mines in Mexico—Los Gatos, Santa Elena, San Dimas, and La Encantada—alongside exploration assets such as the Jerritt Canyon gold project in Nevada. Production from Los Gatos and San Dimas contributed the largest share of the company’s output, while Santa Elena’s gold‑silver blend helped diversify revenue streams. The mix of high‑grade silver and gold production supports the company’s ability to generate cash flow even in periods of lower commodity prices.
Management’s decision to set a conversion price well above the current share price reflects confidence that the company’s share price will rise as it continues to unlock value from its mines and potentially pursue acquisitions. While no direct quotes were available, the premium conversion price and the choice to repurchase higher‑coupon debt indicate a focus on long‑term shareholder value and debt optimization.
Investors reacted negatively to the announcement, citing concerns about potential dilution from the convertible notes and the concurrent decline in silver prices. The market’s cautious stance underscores the sensitivity of the company’s valuation to both its capital structure and commodity price movements.
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