First Majestic Silver, Lahontan Gold, Pan American Silver: The Next Phase Has Begun

First Majestic Silver: Los Gatos Takes Center Stage

First Majestic Silver is accelerating the integration of its key growth driver. The company recently filed a new NI 43-101 Technical Report for the Los Gatos Mine in Mexico. The underground mine is considered a high-grade, low-cost primary silver producer and holds approximately 103,000 hectares of mineral rights. First Majestic owns 70%, with the remaining 30% held by Dowa Metals & Mining.

The acquisition has significantly transformed First Majestic. In addition to Los Gatos, the production portfolio includes San Dimas, Santa Elena, and La Encantada. This gives the Group several operational pillars in Mexico.

The strength of First Majestic’s current position was already evident in the Q2 production figures. The Group produced approximately 3.8 million ounces of silver and subsequently raised its production forecast for the full year.

The timing could be favourable. The Silver Institute expects another supply deficit of approximately 46 million ounces in 2026, while physical investment demand is projected to rise. For First Majestic, a sustained high silver price means that additional production can have a disproportionately large impact on revenue and cash flow. Los Gatos could become the key driver of growth in this regard.

Lahontan Gold: Resource Leap Opens Up New Valuation Potential

At Lahontan Gold, the revaluation story is taking shape. Midway through the month, the gold developer significantly increased the resource estimate for its Santa Fe project in Nevada. 1.195 million ounces of gold equivalent are now classified as “indicated”, with an additional 1.190 million ounces classified as “inferred”. This brings the total to 2.385 million ounces—435,000 ounces, or 22% more than in 2024. The near-surface oxide resources at Slab and York showed particularly strong growth, increasing by over 37%. These deposits are of interest because they are suitable for relatively low-cost processing via heap leaching.

This lends additional weight to the upcoming revised preliminary economic assessment. The previous PEA already calculated, at a gold price of just USD 1,950, an after-tax net present value of USD 200 million and an internal rate of return of 34.2%. Now, the larger resource, current drilling data, and new metallurgical insights are being incorporated into the planning.

Lahontan continues to aim for construction to begin in 2027. As a former production site, Santa Fe also benefits from existing infrastructure, potentially reducing development risks compared to a greenfield project.

Exploration work is providing additional upside potential. In early August, Lahontan intersected 12.2 m grading 1.25 g/t gold in the oxide zone at Calvada East. Previously, 9.9 m grading 2.40 g/t gold and 50.7 g/t silver at the historic tailings piles caused quite a stir. If the quantity and recovery rate are sufficient, the material already mined could provide particularly cost-effective feed for future processing.

Growth is by no means exhausted. Lahontan aims to complete an initial resource estimate for West Santa Fe by the end of the year. If, at the same time, the revised PEA succeeds in demonstrating attractive economic viability, the perception of Lahontan Gold could increasingly shift from that of an explorer to that of a budding producer. The resource, which has grown by 22%, provides a strong foundation for this.

Pan American Silver: USD 344 Million in Free Cash Flow

Pan American Silver impressively demonstrates the impact of high precious metal prices on an established producer. In the second quarter, attributable silver production reached 6.47 million ounces, placing it at the upper end of the company’s own quarterly forecast. Cash flow showed even more impressive growth. Attributable free cash flow reached USD 344 million, even though USD 205 million in taxes were paid during the quarter.

The company owns a broadly diversified portfolio of mines and is one of the world’s leading publicly traded silver producers. At the same time, its strong balance sheet provides additional flexibility. As of mid-August, Pan American had approximately USD 1.7 billion in cash and investments.

Shareholders are set to benefit increasingly from this. Pan American has shifted its capital allocation more heavily toward dividends and share buybacks. As a result, unlike an explorer such as Lahontan, the stock is increasingly becoming a cash flow story.

This is precisely where the appeal of rising silver prices becomes evident. Large portions of an existing mine’s costs do not change to the same extent as the metal price. As a result, additional revenues can contribute disproportionately to cash flow.

Pan American combines two worlds: direct exposure to rising gold and silver prices and the financial strength to support both investments and distributions. If the silver market remains structurally tight, this combination could provide further momentum.

The structurally tight silver market presents investors with various opportunities. First Majestic Silver is banking on additional production growth at Los Gatos, while Pan American Silver is already generating enormous cash flows. Lahontan Gold, on the other hand, is still at the beginning of the value chain. However, nearly 2.4 million ounces of gold equivalent, along with attractive silver grades, form a strong foundation. If the further development of Santa Fe is successful, the small explorer could benefit disproportionately if precious metal prices remain high.

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