First Majestic Silver Corp. (NYSE: AG) has announced a $300 million offering of unsecured convertible senior notes due 2031, with an option for initial purchasers to buy an additional $45 million, allowing the company to raise up to $345 million in total.
The net proceeds will be used to repurchase a portion of the company’s 0.375 % convertible senior notes due 2027 and for general corporate purposes, including strategic opportunities. Repurchasing the older notes shortens the debt maturity profile and reduces interest expense, while the new notes provide a lower‑cost financing vehicle that can be converted into common shares if the share price rises.
First Majestic operates four producing underground mines in Mexico—Los Gatos, Santa Elena, San Dimas, and La Encantada—and holds development and exploration assets such as the Jerritt Canyon Gold project in Nevada. The company’s most recent quarterly earnings showed a miss: earnings per share of $0.07 fell short of the $0.11 consensus, and revenue of $285.1 million was below the $311.86 million expected. The miss was driven by higher operating costs and a weaker silver price environment, even though the company reported a 45 % increase in payable AgEq ounces sold and a 31 % rise in the average realized silver price.
By strengthening its balance sheet, the new notes give First Majestic the flexibility to fund growth initiatives—such as exploration, mine development, and potential acquisitions—while maintaining a lower debt burden. The convertible feature also offers upside potential for shareholders if the company’s share price appreciates, providing a strategic blend of debt and equity financing.
Shares of First Majestic have surged 191 % year‑to‑date and are trading near their 52‑week high, reflecting investor confidence in the company’s mining operations and the perceived benefit of the new financing structure. The offering is expected to improve liquidity and support the company’s long‑term growth strategy.
Management views the financing as a key step in optimizing capital structure and positioning the company for future expansion, underscoring confidence in its operational performance and market outlook.
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