First Majestic Silver Announces Friendly Acquisition of Primero Mining and Restructured Stream with Wheaton Precious Metals

First Majestic Silver Announces Friendly Acquisition of

Primero Mining and Restructured Stream

with Wheaton Precious Metals

January 12, 2018

All amounts are in U.S. dollars unless otherwise stated

VANCOUVER, BRITISH COLUMBIA AND TO RONTO, ONTARIO - First Majest ic Silver Corp.

("First Majestic") (TSX:FR) (NYSE:AG) (Frankfurt:FMV) and Prime ro Mining Corp. ("Primero")

(TSX:P) are pleased to announce that they have entered into a definitive arrangement agreement (the

"Arrangement Agreement") whereby First Majestic will acquire al l of the issued and outstanding

common shares of Primero (the "Arrangement"). Under the terms of the Arrangement Agreement, all

of Primero’s issued and outstandi ng common shares will be excha nged for First Majestic common

shares on the basis of 0.03325 of a First Majestic common share for each Primero common share (the

"Exchange Ratio").

Concurrent with execution of the Arrangement Agreement, First Majestic has entered into agreements

with Wheaton Precious Metals International Ltd., a wholly-owned subsidiary of Wheaton Precious

Metals Corp. ("WPM") whereby, f ollowing closing of the Arrangem ent, the current silver streaming

interest at Primero’s San Dimas silver-gold mine (“San Dimas”) held by WPM will be terminated and

First Majestic and WPM will enter into a new stream arrangement based on 25% of the gold equivalent

production at San Dimas (the "New Stream") with ongoing payment s of $600 per gold equivalent

ounce delivered under the agreement. As part of the transaction , WPM will receive 20,914,590

common shares of First Majestic having an aggregate value of $151 million.

The Exchange Ratio implies consideration of C$0.30 per Primero common share, based on the 20day

volume weighted average price of the First Majestic common shares on the Toronto Stock Exchange

(“TSX”) for the period ending Ja nuary 10, 2018, representing a 200% premium to the weighted

average price of Primero common s hares on the TSX over the same period. The total transaction

value is estimated at approxima tely $320 million, consisting of First Majestic equity to be issued to

Primero shareholders and WPM described above and certain additi onal amounts payable in

connection with the Arrangement, including repayment of all amounts owing under Primero's existing

revolving credit facility, net of Primero cash on hand and the expected repayment of Primero's $75

million of outstanding convertible debentures and various transaction expenses.

Primero operates the 100%-owned San Dimas silver-gold mine in D urango, Mexico, a premier low-

cost asset with more than 100 years of mine production history. Primero has identified more than 120

epithermal veins with exploration potential. Together with Firs t Majestic's existing six operating silver

mines in Mexico, the combined company is expected to be a premier leading Mexican silver producer

with pro forma annualized attributable silver equivalent produc tion of 27-30 million silver equivalent

ounces. With a strong balance sheet and liquidity profile and a diversified portfolio of seven producing

silver mines in Mexico, the co mbined company is expected to con tinue generating strong free cash

flow and industry leading exposure to silver prices.

BENEFITS TO FIRST MAJESTIC SHAREHOLDERS

 Establishes a cornerstone long- lived mine in Durango, Mexico, w ith well-estab lished, low-cost

operations complementary to First Majestic’s existing operations.

 Builds on First Majestic's strengths in Mexico and underground mining expertise.

 Accretive on all key metrics including NAV, cash flow, production, and resources to First Majestic

shareholders, further diversifying production and free cash flow to First Majestic.

 The amendment to the existing WP M stream agreement provides for a number of value creation

opportunities with alignment between silver and gold production and increased post-stream cash

flow at San Dimas.

BENEFITS TO PRIMERO SHAREHOLDERS

 Provides a comprehensive solution for Primero's capital structu re and delivers a significant and

immediate up-front premium to Primero shareholders.

 Provides equity participation in a pro forma company with a str ong balance sheet and diversified

portfolio of seven operating mines with strong internal growth profile.

 Superior financial strength and flexibility to support advancement of various development projects

and silver production growth.

 Enhances capital markets presenc e, increased analyst coverage a nd trading liquidity through

equity participation in First Majestic.

 Ability to leverage First Maje stic's long-term good standing wi th the local unions, community and

Mexico's tax authority.

Keith Neumeyer, CEO of First Maj estic, said, "The acquisition o f Primero is a highly compelling

transformative transaction that further enhances First Majestic's operating platform, adding a very high

quality, long-lived asset in San Di mas, all in First Majestic's backyard in Durango, Mexico. Most

importantly, the New Stream and related amendments with WPM repositions the asset by maximizing

silver exposure for our shareholders, while significantly increasing the free cash flow from San Dimas.

We look forward to working with the operating team at San Dimas and with WPM. We also welcome

WPM as a significant business partner and shareholder in First Majestic going forward."

Joseph Conway, Interim President and CEO of Primero, stated, "O ver the last year Primero has

conducted a formal strategic review process and evaluated numerous strategic alternatives to address

our debt maturity obligations. We are pleased with the business combination with First Majestic as it

provides our shareholders an attractive immediate premium as we ll as the opportunity to retain

exposure to the high quality, long-lived San Dimas asset that t hey invested in, with a significantly

reduced stream. This transaction also provides our shareholders with exposure to First Majestic’s

enhanced capital markets presenc e, liquidity and balance sheet, as well as leveraging their local

Mexican expertise and history of operations. I want to thank th e San Dimas operating team for their

dedication and wish them well in their future with First Majest ic, we believe together they have the

opportunity to generate significant value for our shareholders."

Randy Smallwood, President and CEO of WPM, said, "With the New Stream being linked to a

combination of gold and silver production, we believe San Dimas will continue to deliver significant

value to WPM for many years to come while also providing econom ic and social opportunities to the

community of Tayoltita. First M ajestic has a long history of op erating in Mexico and an expertise in

mining narrow vein underground deposits similar to San Dimas. Given their experience and renewed

focus on mining the entire deposi t, including the silver rich a reas, we are excited to welcome First

Majestic as a partner."

BOARD OF DIRECTORS' RECOMMENDATION

The Arrangement Agreement has be en unanimously approved by the board of directors of each of

First Majestic and Primero. The Primero board of directors reco mmends that Primero shareholders

vote in favour of the Arrangement. Rothschild (Canada) Inc. has provided an opinion to the board of

directors of Primero, stating, as of the date of the opinion an d based upon and subject to the

assumptions, limitations, and qualifications set forth therein, the Exchange Ratio to be received by the

holders of Primero common shares pursuant to the Arrangement is fair, from a financial point of view,

to such holders.

All executive officers and directors of Primero have entered into lockup agreements and have agreed

to vote their Primero securities in favour of the Arrangement a nd, if applicable, the debentureholder

resolution approving amendments to the debenture indenture (as discussed below).

TRANSACTION SUMMARY

Under the terms of the Arrangement Agreement, Primero shareholders will receive 0.03325 common

shares of First Majestic for eac h Primero common share held as of the effective date of the

Arrangement. Pursuant to the trans action, First Majestic will i ssue an aggregate of approximately

6,418,774 common shares to Primer o shareholders. Upon completio n of the Arrangement and the

restructuring of the New Stream, WPM and current Primero shareholders will own approximately 11%

and 3%, respectively, of the issued and outstanding common shares of First Majestic.

The Arrangement will be effected by way of a plan of arrangemen t under the Business Corporations

Act (British Columbia). The Arrangement will require approval by 66 2/3 percent of the votes cast at a

special meeting of Primero s hareholders and any additional shar eholder approvals which may be

required under Multilateral Instrument 61-101 - Protection of Minority Secu rity Holders in Special

Transactions. In addition to shareholder and court approvals, the Arrangement is subject to applicable

regulatory approvals (including Mexican anti-trust clearance) a nd the satisfaction of certain other

closing conditions customary in transactions of this nature.

The Arrangement will also provide for the issuance by First Majestic of an aggregate of approximately

226,476 replacement stock options (the "Replacement Options") ( assuming no exercise of existing

Primero options) to Primero optio nholders who do not exercise t heir Primero options prior to the

effective time of the Arrangemen t, at exercise pr ices adjusted by the Exchange Ratio. Under the

Arrangement all existing warrant s of Primero will become exerci sable to acquire First Majestic

common shares at exercise prices adjusted by the Exchange Ratio. The Arrangement will also provide

that upon the Arrangem ent becoming effective all existing defer red share units and phantom share

units of Primero will be paid out in cash in an amount equal to C$0.30 per deferred share unit or

phantom share unit.

Holders of Primero’s $75 milli on 2020 convertible debentures (t he "Debentures") will be asked to

approve an amendment to the terms of their governing indenture pursuant to which the maturity date

of the Debentures will be accele rated to the next business day following the effective date of the

Arrangement and the Debentures will then be paid in full in accordance with the terms of the indenture.

The debentureholder a mendment will require approval by debentur eholders holding 2/3 of the

outstanding principal amount of the Debentures at a special mee ting of Primero debentureholders

which will be held immediately a fter the Primero shareholder me eting. Approval by the

debentureholders is not a condition to closing of the Arrangeme nt. If the approval of the

debentureholders is not obtained, then under the terms of the indenture, First Majestic will be required

to assume the obligations of Primero under the indenture and wi ll be required to offer to repurchase

all of the Debentures following closing of the Arrangement.

The Arrangement Agreement incl udes customary provisions includi ng non-solicitation of alternative

transactions, right to match s uperior proposals and fiduciary-out provisions. In addition, Primero has

agreed to pay a termination fee to First Majestic of $10 million upon the occurrence of certain events.

First Majestic and Primero have each agreed to pay a C$2 million expense reimbursement fee to the

other party as reimbursement for certain expenses upon terminat ion of the Arrangement Agreement

due to the occurrence of certain other events.

Over the last number of months, Primero and First Majestic have held high level discussions with

Mexico’s tax authority, the Serv icio de Administracion Tributar ia ("SAT"), in an effort to find a

favourable resolution to the SAT litigation and the tax situation related to San Dimas’s silver production

for the years 2010 to 2014. First Majestic and Primero are continuing to advance discussions with SAT

although there can be no certainty on the timing or outcome of such discussions.

SAN DIMAS STREAM RESTRUCTURING

In connection with the Arrangement, First Majestic and WPM have entered into agreements concurrent

with execution of the Arrangement Agreement whereby, following closing of the Arrangement, the

current silver streaming interest at San Dimas held by WPM will be terminated in exchange for a $371

million termination payment to WP M by First Majestic consisting of 20,914,590 common shares of

First Majestic and $220 million in cash. Under the New Stream WPM will be entitled to receive 25% of

the gold production and 25% of t he silver production converted to gold at a fixed exchange ratio of

70:1 at San Dimas in exchange for an upfront deposit of $220 million and ongoing payments equal to

the lesser of $600 subject to a 1% annual inflation adjustment and the prevailing market price for each

gold ounce delivered under the agreement.

The New Stream will provide for a significant reduction in the amount of payable metal compared to

the current stream which is expected to allow for greater free cash flow generation at San Dimas. By

basing the New Stream on gold eq uivalent production at San Dimas, the New Stream is expected to

maximize First Majestic's exposur e to silver. First Majestic an d WPM have agreed to fix the gold to

silver ratio that will be used to calculate the gold equivalent production at 70:1, with provisions to adjust

the gold to silver ratio if the average gold to silver ratio mo ves above or below 90:1 or 50:1,

respectively, for a period of 6 months.

In exchange for agreeing to terminate the existing stream on Sa n Dimas, First Majestic will issue

20,914,590 common shares of First Majestic to WPM with an aggre gate value of $151 million based

on the 20-day volume weighted average price of the First Majestic common shares on the TSX for the

period ending January 10, 2018. The common shares to be issued to WPM will be subject to a 6 month

hold period (subject to certain exceptions), with volume selling restrictions thereafter.

TRANSACTION FINANCING

The proposed repayment of the Debentures, amounts outstanding under Primero's existing revolving

credit facility and other costs re lated to the closing of the A rrangement, totaling approximately $120

million will be funded with a combination of:

 First Majestic's cu rrent cash on hand ($118 million as of December 31, 2017);

 $150 million in new credit facilities committed by Scotiabank which will replace First Majestic's

existing credit facility; plus

 Cash on hand at Primero.

TIMING

Full details of the proposed transaction will be included in Primero's proxy statement and information

circular, which is expected to be mailed to shareholders in mid to late February 2018. It is anticipated

that the Primero shareholder and debentureholder meetings and closing of the proposed transactions

will take place in mid to late March 2018.

In order to facilitate the clos ing of the Arrangement, WPM has agreed to extend the guarantee

previously provided by WPM and certain of its subsidiaries unde r Primero’s existing revolving credit

facility to April 30, 2018.

ADVISORS AND COUNSEL

TD Securities Inc. acted as exclusive financial advisor and McC ullough O'Connor Irwin LLP and

Dorsey and Whitney LLP acted as legal counsel to First Majestic.

Scotia Capital Inc. and Rothschild (Canada) Inc. acted as finan cial advisors to Primero. Stikeman

Elliott LLP and Millbank, Tweed, Hadley and McCloy LLP acted as Primero's legal advisors.

CONFERENCE CALL

First Majestic will be holding a conference call and webcast on Friday, January 12, 2018 at 8 am PDT

(11 am EDT).

To participate in the conference call, please dial the following:

Toll Free Canada & USA: 1-800-319-4610

Outside of Canada & USA: 1-604-638-5430

Toll Free Germany: 0800 180 1954

Toll Free UK: 0808 101 2791

Participants should dial in 10 minutes prior to the conference.

Click on WEBCAST on the First Ma jestic homepage as a simultaneo us audio webcast of the

conference call at www.firstmajestic.com.

The conference call will be recorded and you can listen to an archive of the conference by calling:

Toll Free Canada & USA: 1-800-319-6413

Outside of Canada & USA: 1-604-638-9010

Access Code: 1991 followed by the # sign

An archived webcast of the conference call will also be available at www.firstmajestic.com.

ABOUT FIRST MAJESTIC

First Majestic is a mining com pany focused on growing primary s ilver production in Mexico and is

aggressively pursuing the development of its existing mineral property assets. First Majestic presently

owns and operates six producing silver mines; the La Parrilla Silver Mine, the San Martin Silver Mine,

the La Encantada Silver Mine, the La Guitarra Silver Mine, Del Toro Silver Mine and the Santa Elena

Silver/Gold Mine. Production from these six mines is projected to be between 10.0 to 10.6 million

ounces of pure silver or 15.7 to 16.6 million ounces of silver equivalents for 2017.

For further information, contact i [email protected], visit our website at www.firstmajestic.com or

Investor Relations at 1.866.529.2807.

ABOUT PRIMERO

Primero Mining Corp. is a Canadi an-based precious metals produc er that owns 100% of the San

Dimas silver-gold mine in Mexico.

For further information, contact Investor Relations at 1.416.814.3160.

SPECIAL NOTE REGARDING FORWARD LOOKING STATEMENTS

This news release includes certain "Forward ‐Looking Statements" wit hin the meaning of t he United States Pri vate

Securities Litigation Reform Act of 1995 and “forward ‐looking information” under applicable Canadian securities laws.

When used in this news release, the words "anticipate", "believ e", "estimate", "expect", "t arget", "plan", "forecast",

"may", “would”, “could”, "schedule" and similar words or expressions, identify forward‐looking statements or information.

These forward‐looking statements or information relate to, among other things: closing of the Arrangement; termination

of the current stream and adoption of the New Stream; anticipated benefits of the Arrangement to First Majestic, Primero

and their respective shareholders; the timing and receipt of required shareholder, court, stock exchange and regulatory

approvals for the Arrangement; the ability of First Majestic an d Primero to satisfy the other conditions to, and to

complete, the Arrangement; the timing and receipt of debentureholder approval, the anticipated timing of the mailing of

Primero’s proxy statements and information circular regarding the Arrangement; the development of San Dimas; future

mineral production; liquidity, enhanced value and capital marke ts profile of First Majestic ; future growth potential for

First Majestic, Primero and their respective businesses; estima tes regarding future production and future profitability;

estimates of production costs; and completion of financing.

In respect of the forward‐looking statements and forward-looking information concerning the anticipated completion of

the proposed Arrangement and the anticipated timing for complet ion of the Arrangement, the parties have provided

such statements in reliance on certain assumptions that they believe are reasonable at this time, including assumptions

as to the time required to prepare and mail shareholder meeting materials, including the required information circular

and proxy statement; the ability of the parties to receive, in a timely manner, the necessary shareholder, court, stock

exchange and regulatory approvals; the timing and receipt of Debentureholder approval and the ability of the parties to

satisfy, in a timely manner, the other conditions to the closin g of the Arrangement. These dates may change for a

number of reasons, including, but not limited to, unforeseen delays in preparing meeting materials; inability to secure

necessary shareholder, court, stock exchange and regulatory approvals in the time assumed or the need for additional

time to satisfy the other conditions to the completion of the Arrangement. Accordingly, readers should not place undue

reliance on the forward‐looking statements and forward-looking information contained in this news release concerning

these times and dates.

Forward‐looking statements and forward ‐looking information relating to any future mineral production, liquidity,

enhanced value and capital markets profile of First Majestic, future growth potential for First Majestic, Primero and their

respective businesses, future mine development plans, estimates regarding the life of and recovery of minerals at San

Dimas and estimates of production costs is based on management of the applicable parties’ reasonable assumptions,

estimates, expectations, analyses and opinions, which are based on such management’s experience and perception

of trends, current conditions and expected developments, and ot her factors that the applicable parties’ management

believes are relevant and reasonable in the circumstances, but which may prove to be incorrect. Assumptions have

been made regarding, among other t hings, the price of silver, g old and other metals; c osts of development and

production; termination of the current stream and adoption of the New Stream; estimated production rates for silver and

other metals produced by the parties; the estimated costs of development of development projects; First Majestic and/or

Primero’s ability to operate in a safe and effective manner and their ability to obtain financing on reasonable terms.

These statements reflect the parties’ respective current views with respect to future events and are necessarily based

upon a number of other assumptions and estimates that, while co nsidered reasonable by the respective parties, are

inherently subject to significant business, economic, competitive, political and social uncertainties and contingencies.

Many factors, both known and unknown, could cause actual result s, performance or achievements to be materially

different from the results, perfo rmance or achievements that ar e or may be expressed or implied by such forward ‐

looking statements or forward-looking information and the parties have made assumptions and estimates based on or

related to many of these factor s. Such factors include, without limitation: satisfaction or waiver of all applicable

conditions to closing of the Arrangement including, without limitation, receipt of all necessary shareholder, court, stock

exchange and regulatory approvals or consents and lack of material changes with respect to First Majestic and Primero

and their respective businesses, all as more particularly set f orth in the Arrangement Agreement; the synergies

expected from the Arrangement not being realized; business integration risks; fluctuations in general macro‐economic

conditions; fluctuations in securities markets and the market p rice of First Majestic’s common shares; and the factors

identified under the caption "Ri sk Factors" in First Majestic’s annual information form and under the caption "Risk

Factors" in Primero’s annual information form. In addition, the failure of a party to comply with the terms of the

Arrangement Agreement may result in that party being required to pay a fee to the other party, the result of which could

have a material adverse effect on the paying party’s financial position and results of operations and its ability to fund

growth prospects and current operations. Readers are cautioned against attributing undue certainty to forward‐looking

statements or forward-looking information. Although the parties have attempted to identify important factors that could

cause actual results to differ materially, there may be other f actors that cause results not to be anticipated, estimated

or intended. The parties do not intend, and do not assume any obligation, to update these forward‐looking statements

or forward-looking information to reflect changes in assumption s or changes in circumstances or any other events

affecting such statements or information, other than as required by applicable law.