First Majestic Silver Corp. (AG) entered into a definitive agreement on December 17, 2025 to sell its 100‑percent owned Del Toro Silver Mine in Chalchihuites, Zacatecas, Mexico, to Sierra Madre Gold & Silver Ltd. (SM). The transaction is valued at up to US$60 million, comprising an upfront consideration of US$30 million—US$20 million in cash and US$10 million in Sierra Madre shares at closing—plus an additional US$30 million in contingent payments. The contingent portion is structured around three milestones: a US$10 million payment within 18 months of closing, a US$10 million payment contingent on a NI 43‑101 resource disclosure of at least 100 million ounces of silver equivalent within 48 months, and a final US$10 million payment tied to achieving commercial production of at least 4,000 tonnes per day for 30 consecutive days within 60 months.
The Del Toro mine, which began production in 2013, was placed under care and maintenance by First Majestic in January 2020 as the company focused on improving cash flow and profitability across its portfolio. Sierra Madre’s acquisition marks the second production‑ready asset it has added after restarting La Guitarra in January 2025. The deal aligns with Sierra Madre’s strategy of acquiring mines with existing infrastructure in under‑explored districts and expanding its mid‑tier silver production profile.
First Majestic’s decision to divest Del Toro reflects a broader portfolio optimization plan that prioritizes higher‑producing assets and reduces operational complexity. The company’s Q3 2025 earnings, which missed analyst expectations with an EPS of US$0.07 versus a consensus of US$0.11, were driven by higher operating costs and a modest decline in silver prices, offset by strong cash generation from its other Mexican mines. By selling Del Toro, First Majestic frees capital that can be redeployed into its Navidad and Santo Niño projects, which are expected to deliver higher returns as they move closer to production.
Sierra Madre’s financing conditions are a key factor for closing. The company must complete a private placement of at least CAD$40 million, with a subscription offering of up to CAD$50 million expected to close in January 2026. The transaction is also subject to regulatory approvals, including TSXV acceptance and Mexican antitrust clearance, and shareholder consent from Sierra Madre. The contingent payments provide a strong incentive for Sierra Madre to meet resource and production targets, aligning the interests of both parties and ensuring that First Majestic can capture additional value if Del Toro’s development proceeds as planned.
The deal is expected to close in the first half of 2026, contingent on the fulfillment of the outlined conditions. Analysts view the transaction as a win for both companies: First Majestic gains liquidity and a leaner asset base, while Sierra Madre expands its production capacity and resource base in a high‑grade silver district.
The transaction underscores the continued attractiveness of silver mining assets in Mexico, where favorable regulatory frameworks and abundant resources support long‑term growth prospects for companies that can execute efficiently.
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