What happened

Shares of silver and gold miner First Majestic Silver (AG -1.02%) rose as much as 10% or so on Jan. 20. By roughly 2 p.m. EST the stock was still holding on to a nearly 9% gain. Investor enthusiasm was likely driven by the obvious and a more news-driven reason.

So what

As a precious metals miner, First Majestic Silver's top and bottom lines are tied to the price of the commodities it produces. With both gold and silver prices up today, it's not shocking that investors would give a boost to the stock. Silver was up just a touch more than gold, which isn't shocking given the metal's history of being a more volatile commodity. But this probably wasn't the only factor at play.

A miner holding up a silver nugget.

Image source: Getty Images.

First Majestic also released a business update that was pretty impressive, given the coronavirus pandemic backdrop that ended up shutting some of its mines in 2020. Total silver production of 11.6 million ounces was at the high end of the miner's revised full-year guidance range. Production in the fourth quarter increased 9% sequentially, with multi-year production highs from two of its key mining assets (San Dimas and La Encantada). Although gold production wasn't quite as inspiring, the company ended 2020 with nearly $240 million of cash that it can put to good use on development projects it has in the works.  

Now what

All in, it makes sense that investors would lift First Majestic's shares today given rising precious metals prices and a pretty solid business update. That said, investors shouldn't get too excited about one day's move here. Precious metals are volatile, particularly silver, so today's big gain could disappear tomorrow. However, the production numbers do suggest that fourth-quarter 2020 and full-year earnings will be pretty good reading when they get released on Feb. 18.