Investing in quality mining companies offers diversification and exposure to commodities such as gold, silver, nickel, and copper, which reduces overall portfolio risk. With gold and silver prices gaining momentum in the past two years, several TSX mining stocks have already delivered outsized returns to shareholders.
One such TSX stock is First Majestic Silver (TSX:AG), which is up over 80% in the last 12 months. Valued at a market cap of $8 billion, First Majestic Silver is also down 24% from its 52-week high, allowing you to buy the dip.
First Majestic Silver is a Canadian mining company that acquires, explores, develops, and produces silver and gold from mineral properties in Mexico. It operates three primary mines: San Dimas in Durango, Santa Elena in Sonora, and La Encantada in Coahuila, with a focus on precious metal extraction and production across North America.
Silver might be an attractive investment in the upcoming decade, driven by powerful structural trends. Industrial demand is accelerating rapidly as silver proves essential for solar panels, electric vehicles, 5G networks, and AI hardware. The green energy transition will also raise consumption, with photovoltaic installations reaching record highs and requiring more silver per panel to boost efficiency.
Alternatively, global silver markets face supply deficits as mine production struggles to keep pace and may even decline due to maturing ore bodies and regulatory hurdles. Since silver is primarily mined as a by-product of base metals, supply cannot easily respond to rising prices, potentially amplifying upward price movements.
Analysts project silver could surge from around US$48 per ounce in 2025 to US$99 by 2031 and US$150, making First Majestic a top investment right now.
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Is this TSX silver mining stock a good buy?
First Majestic Silver delivered its strongest quarter in company history with record revenue of $268 million, up 94% year over year, putting the miner on track for approximately $1 billion in annual revenue for 2025.
The Canadian silver producer reported silver production of 3.7 million ounces, an increase of 76% year over year, while silver equivalent production rose 48% to 7.9 million ounces.
First Majestic generated record EBITDA (earnings before interest, tax, depreciation, and amortization) of $120 million and strong operating cash flows of $115 million during the quarter. It also ended the second quarter with $510 million in cash, providing it with near-term financial flexibility to invest in organic growth and acquisitions.
First Majestic is working to consistently maintain a 4,000-tonne-per-day throughput at Gatos by accelerating underground development to better match mine capacity with mill capacity. At Santa Elena, recent discoveries at Navidad, Santo Niño and Winter are showing promise that exceeds the original Ermitaño deposit, with Navidad alone containing an initial resource estimate of 30 million ounces.
First Majestic is maintaining its production guidance of 30 to 32 million silver equivalent ounces for 2025 while ramping up exploration with 255,000 meters of drilling planned across 20 active rigs.
The company continues to pay dividends at a rate of 1% of revenue, which increases as revenue grows. Management remains the purest silver producer among its peers, with a 55% silver content, compared to competitors’ content ranging from 24% to 44%.
What is the stock price target for the TSX miner?
Analysts tracking First Majestic stock forecast revenue to increase from $797.44 million in 2024 to $2.2 billion in 2027. In this period, its free cash flow is forecast to grow from $52.3 million to $885 million.
If the TSX stock is priced at 12 times forward earnings, it could gain over 30% within the next 15 months. Analysts remain bullish and expect the TSX stock to gain approximately 40% over the next 12 months, based on consensus price targets.
