First Majestic Announces Temporary Suspension of NAFTA Arbitration Proceedings as Settlement Framework Agreed to with Mexico

First Majestic suspends NAFTA arbitration as Mexico settlement talks advance toward year-end deadline.

What the company is saying

First Majestic Silver Corp. (NYSE:AG, TSX:AG, FSE:FMV) has agreed to suspend its NAFTA arbitration proceedings against the Government of Mexico, citing significant progress in settling a legacy tax issue involving its subsidiary, Primero Empresa Minera, S.A. de C.V. The company frames this as a constructive and cordial negotiation, emphasizing an agreement in principle on a settlement framework. The tribunal has formally ordered a temporary suspension of proceedings until December 31, 2026, with the possibility to extend into the first quarter of 2027 if needed. The company expresses optimism that a final settlement will be reached by the end of 2026 but acknowledges the process could be extended or, if unsuccessful, arbitration could resume. Operationally, First Majestic highlights its four producing underground mines in Mexico, including a 70% interest in the Los Gatos Joint Venture, and ongoing efforts to restart the Jerritt Canyon Gold Mine in the United States. CEO Keith Neumeyer is the named executive behind the announcement. The tone is measured, focusing on procedural progress and asset status rather than financial or operational performance.

What the data suggests

The announcement confirms that the NAFTA arbitration proceedings between First Majestic and the Government of Mexico are now suspended until December 31, 2026, following a tribunal order. Both parties have agreed in principle to a settlement framework for the legacy tax dispute, but no financial terms or settlement details are disclosed. The company holds a 70% interest in the Los Gatos Joint Venture, which operates the Los Gatos Silver Mine, and owns three other producing underground mines in Mexico. The Jerritt Canyon Gold Mine in the United States is in the process of being restarted, but no timeline or production targets are provided. The only quantified figure is the 70% joint venture interest; there are no revenue, cost, or production numbers. The procedural update is clear, but the absence of settlement terms or quantified financial impact means the actual benefit or risk remains undefined. The company's optimism about a year-end 2026 settlement is forward-looking and not yet realised.

Analysis

The announcement is a factual update on the procedural status of NAFTA arbitration between First Majestic Silver Corp. and the Government of Mexico. The language is measured, with no exaggerated claims about financial or operational impact. Most statements are realised facts: the suspension of arbitration, the tribunal's order, and the operational status of the company's mines and minting facility. The only forward-looking elements concern the potential extension of the suspension and the possibility of resuming arbitration if a settlement is not reached. There are no claims of imminent financial benefit or operational transformation, and no large capital outlay is disclosed in connection with the arbitration update. The phrase 'significant progress' is not quantified, but it is not used to overstate the situation. Overall, the narrative closely matches the evidence provided.

Risk flags

• ●Settlement risk remains high, as the agreement in principle does not guarantee a final deal or specify financial terms. If negotiations stall or fail, arbitration will resume, prolonging uncertainty and potential liability.
• ●Disclosure risk is present, as the company provides no quantitative details about the tax issue's magnitude, possible settlement amounts, or financial impact. Investors cannot assess the materiality or downside exposure from the information given.
• ●Operational risk is ongoing, with the Jerritt Canyon Gold Mine still in the process of being restarted and no timeline or production targets disclosed. The success and timing of this restart could affect future cash flows.
• ●Legal process risk persists, since the tribunal's suspension order is temporary and contingent on continued progress. Any breakdown in negotiations could quickly reactivate the arbitration process, with associated costs and uncertainties.

Bottom line

First Majestic's suspension of NAFTA arbitration signals progress in resolving a long-running tax dispute with Mexico, but no settlement terms or financial impacts are disclosed. The process is at a late negotiation stage, with a formal suspension order in place until December 31, 2026, and a possible extension into early 2027 if needed. Investors have no visibility on the size of the potential liability or benefit, making it impossible to quantify the outcome's impact on valuation. The company's operational profile remains unchanged, with four producing mines in Mexico, a 70% stake in the Los Gatos Joint Venture, and a U.S. gold mine being restarted. The most important takeaway is that a settlement could remove a major legal overhang, but until terms are finalised and disclosed, the risk and upside remain speculative. The next key event will be either a binding settlement announcement or a decision to resume arbitration if talks fail.

Announcement summary

(NYSE: AG) (TSX: AG) (FSE: FMV) First Majestic Silver Corp. has agreed to suspend its NAFTA arbitration proceedings (the "APA Arbitration") against the Government of Mexico regarding the legacy tax issue involving its subsidiary, Primero Empresa Minera, S.A. de C.V. ("PEM"). The suspension is pursuant to Chapter 11 of the North American Free Trade Agreement. The company and the Government of Mexico have been engaged in discussions and negotiations to resolve PEM's legacy tax issue for several years, with significant progress made in 2026. Both parties have agreed in principle to a framework to settle the tax issue and have jointly requested the tribunal overseeing the APA Arbitration to temporarily suspend proceedings while they work to finalize and implement the settlement. The tribunal has issued an order temporarily suspending the proceedings until December 31, 2026. If additional time is needed to conclude the settlement, the parties may request the tribunal to extend the suspension into the first quarter of 2027. If a final settlement cannot be reached by the end of 2026 and further time is not expected to result in a settlement, First Majestic will request that the tribunal lift the suspension and the APA Arbitration proceedings will resume. First Majestic currently owns and operates four producing underground mines in Mexico: the Santa Elena Silver/Gold Mine, the Los Gatos Silver Mine (in which the company holds a 70% interest in the Los Gatos Joint Venture), the San Dimas Silver/Gold Mine, and the La Encantada Silver Mine. The company also holds a portfolio of development and exploration assets, including the Jerritt Canyon Gold Mine in the United States, which is in the process of being re-started. First Majestic owns and operates its own minting facility, First Mint, LLC, and offers a portion of its silver production for sale to the public in the form of bars, ingots, coins, and medallions. Keith Neumeyer is the CEO of First Majestic Silver Corp.

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