First Majestic Silver (TSX: AG) (NYSE: AG) has agreed to sell its past producing San Martin silver mine for total cash consideration of US$90 million, offloading an asset that has sat idle for the better part of a decade.
The buyer, private Mexican company Flextronics Supply and Service, will acquire the past producing silver and gold operation in Jalisco state along with the surrounding Jalisco Group of Properties, a 5,245 hectare package of mining concessions. Flextronics is part of Meridian Capital, an investment group with mining and oil and gas interests across Mexico and South America.
Under the terms of the transaction, First Majestic collects US$2.5 million at closing, another US$2.5 million within 180 days, then US$10 million on each of the first five anniversaries. A final US$35 million lands on August 31, 2032.
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San Martin has been under care and maintenance since July 2019, so the agreement converts a non-earning property into a defined stream of cash stretching over the next six years. Closing is expected in the fourth quarter of 2026, pending Mexican antitrust clearance.
The transaction continues a steady pruning of First Majestic’s past producing Mexican portfolio. Last month the company closed the sale of its past producing Del Toro silver mine to Sierra Madre Gold and Silver in a deal worth up to US$60 million, made up of US$20 million in cash, roughly 10.9 million Sierra Madre shares and a series of milestone payments tied to resource growth and a production restart.
That arrangement left First Majestic holding close to a quarter of Sierra Madre, preserving upside should the new owner revive the mine. The San Martin sale is a cleaner exit, trading a past producing operation for cash as First Majestic concentrates on its four producing mines and the Jerritt Canyon restart in Nevada.
First Majestic Silver last traded at $23.33 on the TSX.
