First Majestic Silver Corp. (AG) Cash Flow Statement

The OCF/NI ratio has consistently exceeded 1.5 since 2025Q2, reaching 3.67 in 2025Q4, indicating that reported earnings are backed by strong cash generation. The positive working capital changes in recent quarters, such as $20.6M in 2026Q1, suggest efficient collection and inventory management, though the 2025Q1 negative working capital swing of -$26.5M warrants monitoring for volatility.

The FCF trajectory shows a clear inflection in 2025Q1, when FCF turned positive, and has since accelerated, with 2025Q4 FCF of $261.3M representing a 55.5% margin. This performance is likely supported by the Los Gatos acquisition and record silver production, but investors should monitor whether such margins are sustainable if silver prices correct, given the company's high beta.

The absolute CapEx has been volatile, with a peak of $49.3M in 2026Q1, likely related to development at Santa Elena or other growth projects, but the overall trend shows declining capital intensity. This may indicate that the company is in a harvest phase, generating strong FCF from existing assets, though the suspension of Jerritt Canyon could imply that some growth capex was not value-accretive.

The positive working capital contributions in 2026Q1 and Q2 suggest efficient management of receivables and payables, possibly aided by VAT refunds. However, the negative swing in 2025Q1 could indicate inventory build-up or delayed collections, which investors should monitor given the company's retail bullion strategy and Mexican tax disputes.

Dividends have been small but growing, from $1.4M in 2024Q1 to $8.4M in 2026Q2, while buybacks have been sporadic, with $22.7M in 2026Q2. The low debt/equity ratio of 0.10 and high cash position suggest ample financial flexibility, but the lack of aggressive capital returns may indicate management is retaining cash for potential acquisitions or to address the ongoing SAT dispute.

The cumulative gap of over $850M between operating cash flow and net income suggests that reported earnings understate the company's cash-generating ability, likely due to high D&A and one-time tax items. This pattern is typical for capital-intensive miners, but the magnitude here is notable and may indicate conservative accounting or deferred tax benefits that could reverse.