First Majestic Silver Corp. has entered into a definitive agreement to sell its 100%-owned San Martin Silver Mine in Jalisco, Mexico, for total cash proceeds of US$90 million. The transaction marks a portfolio reshaping move for the silver and gold producer, which has kept San Martin under care and maintenance since July 2019.
The buyer is Flextronics Supply and Service, S. de R.L. de C.V., a private Mexican company that is part of Meridian Capital, a diversified investment group focused on mining and oil and gas. The transaction includes the San Martin mine as well as the Jalisco Group of Properties, which consists of 5,245 hectares of mining concessions in the municipalities of Etzatlán and Tototlán, Jalisco.
First Majestic expects the transaction to close in the fourth quarter of 2026, subject to customary closing conditions and Mexican antitrust approval. While the total headline value is US$90 million, only US$2.5 million is due at closing, with most of the proceeds structured as future payments through 2032.
First Majestic Moves to Monetize a Non-Core Asset
The sale of San Martin gives First Majestic a way to extract value from an asset that has not been producing for several years. The mine was placed under care and maintenance in July 2019, meaning it has not been contributing operating production to the company’s current silver and gold output.
For mining companies, care-and-maintenance assets can become strategic questions. They may still hold geological value, infrastructure, permits and optionality, but they also require management attention and ongoing holding costs. If the asset is not part of the near-term production plan, selling it can free capital and simplify the portfolio.
In this case, First Majestic is receiving a structured cash package while transferring ownership of the Mexican subsidiary that holds the San Martin assets. The deal allows the company to focus more directly on its producing mines and development projects.
Transaction Valued at US$90 Million
The agreement values the transaction at total cash consideration of US$90 million. However, the payment structure is staged over several years.
Flextronics will pay US$2.5 million in cash at closing. Of that amount, US$500,000 has already been placed into escrow as a deposit. The buyer will then pay another US$2.5 million within 180 days of closing.
After that, Flextronics is required to make annual payments of US$10 million on each anniversary of closing, beginning on the first anniversary and continuing through the fifth anniversary. By that point, First Majestic would have received US$50 million in anniversary payments.
The final payment is US$35 million due on August 31, 2032.
This structure means the transaction’s full value depends on the buyer’s ability to meet the payment schedule over time. For investors, the headline proceeds are important, but the timing and collectability of those proceeds are equally relevant.
Upfront Cash Is Modest Relative to the Total Value
One key feature of the deal is that the upfront cash component is small compared with the total transaction value. First Majestic will receive US$2.5 million at closing and another US$2.5 million within 180 days, totaling US$5 million in the near term.
The remaining US$85 million is deferred. That includes US$50 million in anniversary payments and a final US$35 million payment in 2032.
This payment schedule gives First Majestic long-dated cash inflows if the transaction proceeds as planned. But it also means that the deal is not equivalent to an immediate US$90 million cash injection.
Investors will likely assess the quality of the payment structure, the buyer’s financial capacity and any protections First Majestic has under the agreement. Deferred consideration can be valuable, but it carries execution and counterparty risk.
San Martin Has Been on Care and Maintenance Since 2019
San Martin is described as a past-producing silver and gold operation located about 250 kilometers north of Guadalajara in the San Martin de Bolaños mining district of Jalisco State.
First Majestic placed the mine under care and maintenance in July 2019. That means the mine has remained preserved but inactive, rather than operating as a current production contributor.
Past-producing mines can be attractive to buyers because they may already have certain infrastructure, known mineralization and historical operating data. However, restarting a mine can still require meaningful capital, technical work, permitting, community engagement and updated economic studies.
For First Majestic, the sale suggests that San Martin was not central to the company’s current operating strategy. The company’s producing mine portfolio is now concentrated elsewhere in Mexico and the United States.
The Deal Includes the Jalisco Group of Properties
The transaction is not limited to the San Martin mine itself. It also includes the Jalisco Group of Properties, made up of 5,245 hectares of mining concessions owned by Minera El Pilon, S.A. de C.V.
These concessions are located in the municipalities of Etzatlán and Tototlán in Jalisco. The acquisition will occur through the purchase of all issued and outstanding shares of El Pilon, the wholly owned Mexican subsidiary of First Majestic that holds the San Martin assets.
This structure is common in mining transactions. Instead of transferring each asset individually, the buyer acquires the subsidiary that owns the mining rights and related properties.
For Flextronics, the land package may offer additional exploration or development optionality beyond the past-producing San Martin operation.
Flextronics and Meridian Capital Enter the Mexican Mining Picture
Flextronics Supply and Service is described as a private Mexican company and part of Meridian Capital. Meridian Capital is a diversified investment group focused on mining and oil and gas, with development projects in Mexico, including Sonora and Sinaloa, as well as in Venezuela and Uruguay.
The buyer profile matters because San Martin is not currently operating. A new owner may have a different development strategy, capital plan or regional view.
If Flextronics intends to revive or reposition the asset, it would likely need to assess restart economics, infrastructure condition, local permitting, labor, environmental obligations and silver and gold price assumptions.
The sale gives First Majestic an exit, while giving Flextronics exposure to a past-producing Mexican silver and gold district.
Closing Expected in Fourth Quarter 2026
First Majestic expects the transaction to close in the fourth quarter of 2026. Closing remains subject to customary conditions and Mexican antitrust approval.
Regulatory approval is important in mining transactions because ownership transfers can involve national, regional and sector-specific oversight. While the company expects the deal to close in Q4, there is no guarantee that all conditions will be satisfied on the expected timeline.
The company’s forward-looking statement emphasizes this point. Completion of the transaction, receipt of approvals and timing of closing are all subject to risk and uncertainty.
For investors, the closing timeline is the first milestone. The next will be whether the deferred payments are made according to schedule after closing.
Portfolio Focus Remains on Producing Underground Mines
First Majestic remains focused on silver and gold production in Mexico and the United States. The company currently owns and operates four producing underground mines in Mexico.
These include the Santa Elena Silver/Gold Mine, the San Dimas Silver/Gold Mine, the La Encantada Silver Mine and the Los Gatos Silver Mine, where First Majestic holds a 70% interest in the Los Gatos Joint Venture that owns and operates the mine.
The company also holds development and exploration assets, including the Jerritt Canyon Gold project in northeastern Nevada.
Against that portfolio, San Martin appears to have been a non-producing asset outside the immediate operating base. Selling it can help sharpen the company’s focus on mines that are active or strategically prioritized.
Why the Sale Matters for First Majestic Investors
For First Majestic shareholders, the transaction matters for several reasons. First, it monetizes an idle asset. Second, it provides a potential long-term cash stream. Third, it may reduce holding costs and management complexity. Fourth, it signals continued portfolio discipline.
Mining investors often value companies more clearly when the asset base is focused and operating plans are straightforward. Idle assets can create optionality, but they can also create uncertainty if the market does not know whether they will be restarted, sold or held indefinitely.
By agreeing to sell San Martin, First Majestic removes some of that uncertainty. The company can now focus investor attention on its operating mines, production performance, cost structure, exploration plans and balance sheet.
However, because most of the transaction value is deferred, the market may not value the full US$90 million immediately.
Deferred Payments Create Execution Risk
The most important risk in the transaction is the deferred payment structure. Future payments include US$2.5 million within 180 days of closing, US$10 million annually through the fifth anniversary and US$35 million on August 31, 2032.
Any long-term payment schedule depends on buyer performance and the legal protections in the agreement. If the buyer encounters financial, operational or regulatory issues, payment timing could become a concern.
The press release does not provide full details on security arrangements, guarantees or remedies tied to the deferred payments. Therefore, investors may want more clarity on how First Majestic is protected if payments are delayed or disputed.
The transaction still gives the company a path to monetize San Martin, but the value is spread over time rather than realized immediately.
The Silver Market Backdrop Remains Important
The sale comes at a time when silver remains a closely watched commodity. Silver has both precious-metal and industrial characteristics. It can respond to inflation expectations, real yields, currency movements, solar demand, electronics demand and broader risk appetite.
For mining companies, silver prices directly influence margins, project economics and investor sentiment. A rising silver market can make past-producing assets more attractive to buyers, because higher prices can improve restart economics.
If silver prices strengthen over the coming years, Flextronics may see additional value in San Martin and the broader Jalisco concession package. If prices weaken, restart or development plans could become more challenging.
First Majestic’s decision to sell now suggests that management sees greater value in monetizing the asset than retaining exposure to its longer-term optionality.
First Majestic Still Keeps Direct Exposure to Silver
Although the company is selling San Martin, First Majestic remains heavily exposed to silver through its active mine portfolio and its broader corporate strategy. The company continues to present itself as a silver and gold producer with operations in Mexico and the United States.
It also owns and operates First Mint, LLC, a minting facility that allows the company to sell a portion of its silver production directly to the public in the form of bars, ingots, coins and medallions.
That vertical connection to physical silver gives First Majestic a distinct profile compared with many other miners. The company is not only mining silver; it also participates in the retail market for physical silver products.
The San Martin sale does not change that broader identity. It is better understood as a portfolio rationalization rather than a retreat from silver.
What Investors Should Watch Next
The first item to watch is Mexican antitrust approval. The transaction cannot close until required approvals and other closing conditions are satisfied.
The second item is the expected fourth-quarter 2026 closing timeline. Any delay could affect investor confidence in the deal.
The third item is the structure of the deferred payments. Investors may look for additional disclosure on protections, guarantees or collateral tied to the long-term payment schedule.
The fourth item is how First Majestic uses the proceeds. Even though the upfront amount is modest, future cash inflows could support operations, exploration, debt management or other corporate priorities.
The fifth item is the company’s broader portfolio strategy. Selling San Martin may indicate a continued focus on core producing assets and higher-priority development opportunities.
First Majestic has entered into a definitive agreement to sell its 100%-owned San Martin Silver Mine in Jalisco, Mexico, to Flextronics Supply and Service for total cash consideration of US$90 million. The sale includes the past-producing San Martin mine and the Jalisco Group of Properties, covering 5,245 hectares of mining concessions.
The transaction is structured with US$2.5 million due at closing, another US$2.5 million within 180 days, US$10 million annual payments through the fifth anniversary of closing and a final US$35 million payment due on August 31, 2032. Closing is expected in the fourth quarter of 2026, subject to customary conditions and Mexican antitrust approval.
The San Martin sale helps First Majestic monetize a non-producing Mexican silver and gold asset while sharpening its focus on core operating mines. The headline value of US$90 million is meaningful, but most of the proceeds are deferred, making execution, buyer credit quality and closing conditions central to how investors assess the deal. For now, the transaction signals portfolio discipline rather than a change in First Majestic’s broader silver-focused strategy.
