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AI Is Making Silver’s Six-Year Deficit Worse | Mani Alkhafaji - First Majestic Silver

The Deep Dive Sep 25, 2026 6:43

Summary

Silver has run a structural supply deficit for six years, and AI/data-center buildouts are now widening it beyond current forecasts.

A 50 MW data center alone consumes about 6.5 tons of silver — a single demand source not yet matched by new mine supply.

First Majestic's $75M Jerritt Canyon restart is running ahead of schedule, with a formal study expected by Q1 2027 ahead of H2 2027 production.

First Majestic is divesting sub-2 Moz (million ounce) producers so management can refocus on district-scale assets like Santa Elena, San Dimas, and Los Gatos.

Retail silver demand softens when prices pull back — historically June through August are the seasonal lows before Q4 and Q1 recover.

Key points on First Majestic Silver

  • Jerritt Canyon restart is the headline update: $75M committed earlier in 2026, the guest says execution is ahead of schedule with purchase orders issued for a brand new fleet and managerial/supervisory recruitment tracking ahead of plan; a formal study is targeted by end of 2026 with publication in Q1 2027, and the stated goal is an H2 2027 production restart.
  • Santa Elena expansion is described as the next leg of growth at that operation, with two portals currently underway.
  • A substantial exploration program is ongoing at San Dimas and Los Gatos, with the guest flagging more updates to be released over the coming months.
  • Portfolio strategy is to focus on district-scale silver assets and divest smaller past-producing mines to juniors — the La Preciosa assets were sold to Silver Storm — while retaining an equity position to keep upside exposure.
  • The interview frames First Majestic against Mani's structural-deficit silver thesis: consumption has exceeded mine supply for six straight years, and AI/data-center demand (he cites ~6.5 tons of silver per 50 MW data center) plus resurgent solid-state-battery and solar-panel consumption are adding further pressure on top of the current deficit.

Key points on Silver Storm Mining

  • Cited by the guest as the junior that bought First Majestic's La Preciosa assets as part of the larger producer's divestment of smaller mines.

Steve Hyland's takeaways

  • Top takeaway Hosts The Deep Dive interview at the Beaver Creek Precious Metal Summit and steers it through investor-relevant questions on silver-market fundamentals, Jerritt Canyon restart progress, growth levers (Santa Elena, San Dimas, Los Gatos), divestment rationale, and the 12-month outlook.

Mani Alkhafaji's takeaways

  • Top takeaway Argues the silver market remains in a structural deficit in its sixth year, with AI and data-center demand (he cites roughly 6.5 tons of silver per 50 MW data center) plus resurgent solid-state-battery and solar-panel consumption adding pressure that is not matched by supply.
  • Frames the post-January pullback as 'footing' rather than a thesis break, says investor sentiment at the conference is improving, and expects Q4 2026 and Q1 2027 to revisit the prior-year silver price levels; he adds that retail demand at First Mint weakens on price pullbacks but is starting to pick back up.
  • Reports Jerritt Canyon restart is ahead of schedule with $75M committed earlier in 2026, a new fleet on order, and management recruitment tracking ahead of plan; targets a study by end of 2026, publication in Q1 2027, and an H2 2027 production restart.
  • Frames First Majestic's strategy as continued growth through district-scale silver assets, with disciplined divestment of smaller producers to juniors (e.g., La Preciosa to Silver Storm) while retaining an equity stake for upside.
  • Highlights Santa Elena's two-portal expansion as the next leg of growth at that operation, alongside ongoing substantial exploration at San Dimas and Los Gatos.