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Gold Mine Restarts Accelerate as $4,900 Prices Revive Dead Assets
First Majestic Silver is targeting a late 2027 restart of Nevada’s Jerritt Canyon gold mine - a project that was uneconomic just three years ago - in a sign that near-$5,000 gold is fundamentally reshaping the supply landscape.
What to know
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First Majestic plans to invest roughly $200 million to restart the Jerritt Canyon gold mine in Nevada by late 2027, with the project now viable at current gold prices near $4,900/oz.
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The mine hosts an estimated 4.4 million ounces of gold resources, and analysts have assigned a net asset value of around $1.2 billion to the project.
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Gold has surged over 8% in the past week alone, reinforcing the economic case for restarting mothballed operations across the sector.
What happened
First Majestic Silver - traditionally a silver-focused miner - is pressing ahead with plans to restart the Jerritt Canyon gold operation in northeastern Nevada, targeting initial production by late 2027. The company is committing approximately $200 million in capital to bring the mine back online, a figure that looked prohibitive when gold traded below $2,000 but now represents a relatively modest outlay against a resource base estimated at 4.4 million ounces.
Jerritt Canyon has been on care and maintenance since 2022, when processing costs and metallurgical challenges made it uneconomic at prevailing gold prices. With gold currently trading at $4,910 per ounce - up over 8% in just the past week - the project’s economics have flipped from marginal to compelling.
Analyst valuations now peg Jerritt Canyon’s net asset value at roughly $1.2 billion, a figure that dwarfs the restart investment and suggests significant upside if the company can execute on schedule.
Who’s involved
First Majestic acquired Jerritt Canyon through its 2021 takeover of Jerritt Canyon Gold. The company has historically been one of the largest primary silver producers globally, but this move signals a strategic pivot toward gold exposure at a time when the gold-silver ratio sits at 65.4 - still elevated enough to make gold the more attractive allocation for miners with optionality.
Nevada remains the most mining-friendly jurisdiction in the United States, offering permitting advantages and established infrastructure that reduce execution risk. The state already hosts operations from Barrick, Newmont, and Nevada Gold Mines, meaning labour pools and supply chains are well-developed.
Several mothballed gold projects across North America and Australia are undergoing similar feasibility reassessments as sustained high prices make previously uneconomic deposits viable again.
Why it matters
The Jerritt Canyon restart is a bellwether for a broader supply response that has been conspicuously slow despite gold’s extraordinary run. Prices have roughly doubled from their 2022 levels, yet new mine supply has barely budged. The lag is structural - permitting timelines, capital discipline imposed by shareholders, and the sheer time required to develop new deposits all constrain the industry’s ability to respond quickly.
Restarts of existing operations like Jerritt Canyon represent the fastest path to incremental supply. The infrastructure already exists. The geology is understood. The permitting pathway is shorter. Yet even here, First Majestic is looking at an 18-month timeline before first pour.
If the supply response continues to lag demand - particularly from central banks and physical buyers - the structural deficit that has supported gold’s rally remains intact. The $200 million restart cost against a $1.2 billion valuation illustrates just how profitable gold mining has become, and margin compression is nowhere in sight.
For silver investors, there is a secondary angle. First Majestic’s capital allocation toward gold rather than expanding its silver operations speaks volumes about where management sees the better risk-adjusted return right now.
What to watch
The key milestones are the completion of the updated feasibility study and the formal construction decision, both expected in the coming months. Any slippage on the late 2027 production target would signal technical or permitting complications.
If gold holds above $4,500, at least half a dozen mothballed projects globally become economically viable. Today’s US nonfarm payrolls data could influence the near-term direction - a weak print would reinforce rate cut expectations, a strong number might cool momentum temporarily - but the structural case for restarts at these price levels holds regardless of short-term macro noise.
This article is for informational purposes only and does not constitute financial advice. Always do your own research before making investment decisions.
