Economy Weakening, Silver Breaking Out,

First Majestic AG

I have been commenting that Trump's policies will be disruptive and there will be short term pain. And how the longer term comes out, it is too early to say. With recent economic news more cracks are appearing or should I say the cracks are getting wider. The U.S. is headed to or already in a recession with Canada the recession will be much deeper, but Canadian numbers could continue to be padded by immigration, refugees and temporary residents that are not seeing a decline yet as I pointed out yesterday but we can see a decline in the U.S.

On Friday it was reported that U.S. retail sales dropped by the most in nearly two years in January, suggesting a sharp slowdown in economic growth early in the first quarter. Retail sales drop 0.9% in January. However December sales growth revised up to 0.7% from 0.4%. Economists polled by Reuters had forecast a dip of 0.1%.

Maybe consumers are confused on tariffs, perhaps tapped out succumbed by the record debt levels they have. All said, one month does not make a trend so February and March numbers will be very telling.

The cost of imports has been pretty tame for the past few years, but they could play a bigger role in U.S. inflation with Trump's threat of stiff tariffs on a broad array of foreign goods. Import prices rose 0.3% in January, marking the biggest increase in nine months. But most of the increase was tied to higher oil prices.

I highlighted falling new rent prices and now today it was announced that home-builder confidence plunged to the lowest level in five months as concerns over tariffs and how they could raise the cost of housing weighed on the industry. Sentiment fell in February, mainly because of a sharp drop in builders’ expectations for sales of newly built homes over the next six months. The National Association of Home Builders’ monthly confidence index fell five points to 42 in February. And as the norm the analysts were too optimistic as the February figure fell short of expectations on Wall Street. The decline in confidence is a significant change in sentiment among home builders.

The good news for us is gold has bounced back from Friday's sell off and silver after a failed attempt to break out on the chart Friday, appears to be doing so today. Natural Gas is also breaking to new 2 year highs today.

First Majestic Silver - - TSX/NYSE: AG - - Recent Price - C$7.75

Entry Price- C$6.45 - - - - - Opinion - buy

Last week First Majestic announced the Company's consolidated 2025 production and cost guidance for the Company's four producing underground mines in Mexico, namely the Cerro Los Gatos Silver Mine (the Company holds a 70% interest in the Los Gatos Joint Venture that owns the mine), the Santa Elena Silver/Gold Mine, the San Dimas Silver/Gold Mine, and the La Encantada Silver Mine.

2025 PRODUCTION GUIDANCE

In 2025, the Company expects to achieve total attributable production from its four operating mines in Mexico of between 27.8 to 31.2 million silver equivalent ("AgEq") ounces, including 13.6 to 15.3 million ounces of silver. The increase in forecasted silver production compared to 2024 is due to the addition of attributable production from the Cerro Los Gatos Silver Mine as a result of the Company's acquisition of Gatos Silver, Inc. on January 16, 2025, as well as an increase in silver production from Santa Elena, and from La Encantada, following a return to normal operations at La Encantada in the fourth quarter of 2024.

The stock has come down quite a bit from the October high, but not quite down to our original buy level. Given the improving silver prices and the stock down at a support level, I see it as a buy here.

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All forecasts and recommendations are based on opinion. Markets change direction with consensus beliefs, which may change at any time and without notice. The author/publisher of this publication has taken every precaution to provide the most accurate information possible. The information & data were obtained from sources believed to be reliable, but because the information & data source are beyond the author's control, no representation or guarantee is made that it is complete or accurate. The reader accepts information on the condition that errors or omissions shall not be made the basis for any claim, demand or cause for action. Because of the ever-changing nature of information & statistics the author/publisher strongly encourages the reader to communicate directly with the company and/or with their personal investment adviser to obtain up to date information. Past results are not necessarily indicative of future results. Any statements non-factual in nature constitute only current opinions, which are subject to change. The author/publisher may or may not have a position in the securities and/or options relating thereto, & may make purchases and/or sales of these securities relating thereto from time to time in the open market or otherwise. Neither the information, nor opinions expressed, shall be construed as a solicitation to buy or sell any stock, futures or options contract mentioned herein. The author/publisher of this letter is not a qualified financial adviser & is not acting as such in this publication.