FR Frankfurt – FMV First Majestic Produces a Record 22.2M Silver Eqv. Oz in 2018; Announces Higher 2019 Production Outlook & Conference Call Details
FIRST MAJESTIC SILVER CORP.
Suite 1800 – 925 West Georgia Street
Vancouver, B.C., Canada V6C 3L2
Telephone: (604) 688-3033 Fax: (604) 639-8873
Toll Free: 1-866-529-2807
Web site: www.firstmajestic.com; E-mail: [email protected]
NEWS RELEASE
New York – AG J anuary 14, 2019
Toronto – FR
Frankfurt – FMV
First Majestic Produces a Record 22.2M Silver Eqv. Oz in 2018;
Announces Higher 2019 Production Outlook & Conference Call Details
Vancouver, BC, Canada ‐ First Majestic Silver Corp. ("First Maj estic" or the "Company") is pleased to announce
the Company’s fourth quarter and full year 2018 production results, as well as production and cost guidance for
2019. The Company’s fourth quarter and full year 2018 financial r e s u l t s a r e s c h e d u l e d t o b e r e l e a s e d o n
February 25, 2019.
Total production in 2018 reached 22.2 million equivalent ounces of silver, representing a 37% increase over 2017,
and at the upper end of the Company’s guidance of 20.5 to 22.6 million silver equivalent ounces. Total production
consisted of 11.7 million ounces of silver, 111,084 ounces of g old, 16.1 million pounds of lead and 5.7 million
pounds of zinc. Annual silver production was slightly below the Company’s guidance of 12.0 to 13.2 million
ounces primarily due to lower than expected silver production a t La Encantada in 2018. Total production in the
fourth quarter of 2018 totaled 6.5 million silver equivalent ounces consisting of 3.3 million ounces of silver,
34,487 ounces of gold, 3.3 million pounds of lead and 1.5 million pounds of zinc.
The Company anticipates 2019 total production (including gold, lead and zinc by‐products) will range between
24.7 to 27.5 million silver equivalent ounces including 14.2 to 15.8 million ounces of pure silver. Based on the
midpoint of the guidance range the Company expects a 28% increase in silver production and an 18% increase
in total production when compared to 2018.
“First Majestic had a record year in 2018 producing 22.2 million silver equivalent ounces following the successful
acquisition and integration of the San Dimas Silver/Gold mine,” said Keith Neumeyer, President & CEO. “The
addition of San Dimas effectively doubled our production profil e and total Mexican workforce overnight.
Unfortunately, due to falling silver prices in the second half of 2018, we needed to implement various cost cutting
measures including placing the La Guitarra mine on care and mai ntenance, reducing our workforce by
approximately 15%, and scaling back capital investments by appr oximately 20%. These cost cutting measures
have been successful and we remain focused on improving margins and will continue to react further if
necessary.”
“Looking ahead for 2019, we expect to reach another new product ion record of between 24.5 and 27.5 million
silver equivalent ounces along with a much leaner cost profile primarily due to a full year of production from San
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Dimas, the start‐up of the roaster at La Encantada and the inst allation of high‐intensity grinding (“HIG”) mills at
the Santa Elena and La Encantada operations. The combination of the HIG mill and roaster at La Encantada is
extremely encouraging as it has the potential to re‐establish the operation as a significant silver producer of 4 to
5 million ounces per year once these mill upgrades are completed.”
Production Details Table:
Quarterly Operational Review:
Total ore processed during the quarter at the Company's silver mines amounted to 850,272 tonnes, representing
a 2% decrease compared to the previous quarter. The slight decrease in tonnes processed compared to the prior
quarter was primarily due to placing the La Guitarra mine on care and maintenance on August 3, 2018.
Consolidated silver grades in the quarter averaged 144 g/t compared to 152 g/t in the previous quarter. This 5%
d e c r e a s e w a s p r i m a r i l y t h e r e s u l t o f l o w e r g r a d e s a t L a P a r r i l la. Consolidated gold grades were relatively
unchanged in the quarter averaging 1.31 g/t compared to 1.33 g/t in the prior quarter.
Consolidated silver and gold recoveries averaged 83% and 96% in the fourth quarter of 2018 and consistent with
the previous quarter. The Company continues to expect further improvements in recoveries associated with the
installation of the microbubble flotation cells and the HIG mil ls in 2019. The microbubble flotation cells at La
Parrilla are expected to be delivered and installed in the firs t quarter and commissioning to commercial
production in the second quarter. In addition, the HIG mill at Santa Elena is expected to be delivered in the first
quarter and installed and commissioned in the second quarter of 2019. The Company has also redirected its
second HIG mill to La Encantada following very positive metallurgical test results on mineral samples which
indicate that grinding ore to sub‐50 microns significantly impr oved silver recoveries even with the presence of
high‐grade manganese that has historically limited the recovery of silver through the Merrill Crowe process. The
La Encantada HIG mill is expected to be installed in the third quarter followed by commissioning in the fourth
quarter of 2019.
Q4 Q4 Q/Q FY FY Y/Y
2018 2017 Change Consolidated Production Results 2018 2017 Change
850,272 736,684 15% Ore processed/tonnes milled 3,375,452 2,981,506 13%
6,485,761 4,065,337 60% Total production ‐ ounces of silver equivalent 22,243,071 16,207,905 37%
3,250,816 2,337,463 39% Silver ounces produced 11,679,452 9,749,591 20%
34,487 17,344 99% Gold ounces produced 111,084 62,991 76%
3,294,360 4,271,970 ‐23% Pounds of lead produced 16,135,438 24,522,803 ‐34%
1,466,812 1,289,031 14% Pounds of zinc produced 5,695,657 3,944,232 44%
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Mine by Mine Quarterly Production Table:
*Certain amounts shown may not add exactly to the total amount due to rounding differences.
*The following prices were used in the calculation of silver eq uivalent ounces: Silver: $14.54 per ounce; Gold: $1,226 per oun ce; Lead: $0.89 per pound;
Zinc $1.19 per pound.
At the San Dimas Silver/Gold Mine:
During the quarter, San Dimas produced 1,367,028 ounces of silver and 20,839 ounces of gold for a total
production of 3,127,871 silver equivalent ounces, reflecting a 3% decrease compared to the prior
quarter.
The mill processed a total of 172,641 tonnes with average silve r and gold grades of 262 g/t and 3.9 g/t,
respectively. The operation continued to process higher volumes from lower grade stopes left behind as
they were deemed uneconomical under the old streaming agreement and have now become economical
under the new streaming agreement.
At the Santa Elena Silver/Gold Mine:
During the quarter, Santa Elena produced 567,754 ounces of silver and 12,081 ounces of gold for a total
production of 1,587,396 silver equivalent ounces, reflecting an 8 % i n c r e a s e c o m p a r e d t o t h e p r i o r
quarter.
The mill processed a total of 221,945 tonnes, consisting of 142,534 tonnes of underground ore and
79,410 tonnes from the above ground heap leach pad.
Silver and gold grades from underground ore averaged 120 g/t an d 2.4 g/t, respectively. Silver and gold
grades from the above ground heap leach pad averaged 36 g/t and 0.6 g/t, respectively.
Silver and gold recoveries averaged 88% and 96%, respectively, during the quarter.
At the La Encantada Silver Mine:
During the quarter, silver production reached 449,632 ounces representing a 19% increase from the
previous quarter. The increase in silver production was primarily due to a 9% increase in silver recoveries
and a 6% increase in tonnes milled compared to the previous quarter.
Silver grades and recoveries during the quarter averaged 110 g/ t and 61%, respectively. The increase in
silver grades was the result of higher tonnage from the San Javier and La Prieta breccias which produced
104,651 tonnes with an average silver grade of 125 g/t.
Mine
Ore
Processed
Tonnes
per Day
Silver Oz
Produced
Gold Oz
Produced
Pounds of
Lead
Pounds of
Zinc
Equivalent
Silver Ounces
San Dimas 172,641 1,877 1,367,028 20,839 ‐ ‐ 3,127,871
Santa Elena 221,945 2,412 567,754 12,081 ‐ ‐ 1,587,396
La Encantada 206,812 2,248 449,632 19 ‐ ‐ 451,244
San Martin 66,924 727 404,523 1,272 ‐ ‐ 511,911
La Parrilla 125,751 1,367 312,144 238 1, 816,180 1,466,812 5 6 3 , 7 0 3
Del Toro 56,200 611 149,734 38 1, 478,180 ‐ 243,637
Total 850,272 9,242 3,250,816 34,487 3, 294,360 1,466,812 6,485,761
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Commissioning activities for the roaster continued throughout t he quarter including several test
campaigns rated at 30 tonnes of tailings material per hour bein g fed into the roaster. In December, the
furnace successfully completed all commissioning procedures having reached sustainable coal injection
levels with the use of natural gas during ignition procedures. Commissioning activities are continuing
into the first quarter with some modifications to the dryer lif t system to reduce the generation of fine
material reporting to the dust collectors. The final stage of c ommissioning remains to streamline the
roasted tailings pumping system. The roaster is now expected to be operating at 2,000 tpd by the end of
the first quarter.
At the San Martin Silver Mine:
During the quarter, San Martin produced 404,523 ounces of silve r and 1,272 ounces of gold for a total
production of 511,911 silver equivalent ounces, reflecting an 8% decrease compared to the prior quarter.
T h e d e c r e a s e i n p r o d u c t i o n w a s p r i m a r i l y a t t r i b u t e d t o l o w e r s il v e r a n d g o l d g r a d e s o f 5 % a n d 1 6 % ,
respectively.
Silver grades and recoveries averaged 212 g/t and 89%, respectively, during the quarter. In addition, gold
grades and recoveries averaged 0.6 g/t and 93%, respectively.
At the La Parrilla Silver Mine:
During the quarter, the flotation circuit processed 74,910 tonn es (814 tpd) with an average silver grade
of 94 g/t and a 74% recovery whil e the cyanidation circuit proc essed 50,841 tonnes (553 tpd) with an
average silver grade of 114 g/t and a 77% recovery for total production of 563,703 silver equivalent
ounces.
The lead circuit processed an average lead grade of 1.5% with recoveries of 72% for total lead production
of 1.8 million pounds, representing a 23% increase compared to the previous quarter.
The zinc circuit processed an average zinc grade of 1.7% with recoveries of 53% for total zinc production
of 1.5 million pounds, representing a 19% increase compared to the previous quarter.
At the Del Toro Silver Mine:
During the quarter, Del Toro produced a total of 243,637 silver equivalent ounces reflecting a 43%
decrease compared to the prior quarter primarily due to a 50% d ecrease in lead production and a 35%
decrease in silver production. The decrease in production was primarily related to lower silver and lead
recoveries due to processing higher volumes of low‐grade transitional ore from the San Juan ore body.
Silver grades and recoveries during the quarter averaged 132 g/t and 63%, respectively.
Lead grades and recoveries averaged 2.6% and 46%, respectively, producing a total of 1.5 million pounds
of lead representing a 50% decrease compared to the previous quarter.
Del Toro will reduce mill throughputs in 2019 to 270 tpd to sel ectively mine and process higher quality
sulphides in order to improve head grades and recoveries while the Company continues to drill and
develop new Resources. Mill upgrades have been postponed until 2020 as part of the Company’s overall
cost cutting measures. The Company has also initiated a staff reduction of approximately 250 employees
at Del Toro as a result of the lower production rate and reduced investments.
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2019 Production Outlook and Cost Guidance:
The Company anticipates 2019 silver production will range between 14.2 to 15.8 million ounces with total
production (including gold, lead and zinc by‐products) between 24.7 to 27.5 million silver equivalent ounces.
Based on the midpoint of the guidance range the Company expects a 28% increase in silver production and an
18% increase in total productio n when compared to 2018. The inc reases are primarily due to having a full year
of production from San Dimas, the start‐up of the new roasting circuit at La Encantada offset by lower production
at Del Toro and La Parrilla.
A mine‐by‐mine breakdown of the 2019 production guidance is included in the table below. Cash cost and all‐in
sustaining cost per ounce (“AISC”) guidance is shown per payable silver ounce. Metal price and foreign currency
assumptions for calculating equivalents are: silver: $15.00/oz, gold: $1,250/oz, lead: $1.00/lb, zinc: $1.10/lb,
MXN:USD 19:1.
Mine Silver Oz (M) Silver Eqv O z (M) Cash Costs ($) AISC ($)
San Dimas 5.5 ‐ 6.1 11.9 ‐ 13. 2 0.89 ‐ 1.81 7.58 – 9.27
Santa Elena 2.3 ‐ 2.6 5.2 ‐ 5.8 5.33 ‐ 6.59 8.99 – 10.66
La Encantada 3.2 ‐ 3.6 3.2 ‐ 3.6 12.41 ‐ 13.22 13.87 – 14.85
San Martin 1.9 ‐ 2.1 2.2 ‐ 2.4 9.81 ‐ 10.60 12.39 – 13.47
La Parrilla 0.9 ‐ 1.0 1.6 ‐ 1.8 9.97 ‐ 11.14 14.76 – 16.49
Del Toro 0.4 0.6 ‐ 0.7 17.43 ‐ 19.51 23.87 – 26.69
Totals: 14.2 ‐ 15.8 24.7 ‐ 27.5 $6.39 ‐ $7.37 $12.55 ‐ $14.23
*Certain amounts shown may not add exactly to the total amount due to rounding differences.
*Consolidated AISC includes Corporate General & Administrative cost estimates and non‐cash costs of $1.84 to $2.05 per payable silver
ounce.
The Company is projecting its 2019 AISC, as defined by the World Gold Council, to be within a range of $12.55 to
$14.23 on a per consolidated payable silver ounce basis. Exclud ing non‐cash items, the Company anticipates its
2019 AISC to be within a range of $11.97 to $13.59 per payable silver ounce. An itemized AISC cost table is
provided below:
All‐In Sustaining Cost Calculation (1) FY 2019
($ /Ag oz)
Total Cash Costs per Payable Silver Ounce (2) 6.39 – 7.37
General and Administrative Costs 1.26 – 1.40
Sustaining Development Costs 2.41 – 2.69
Sustaining Property, Plant and Equipment Costs 1.39 – 1.55
Sustaining Exploration Costs 0.06 – 0.07
Profit sharing 0.46 – 0.51
Share‐based Payments (non‐cash) 0.48 – 0.54
Accretion of Reclamation Costs (non‐cash) 0.09 – 0.11
All‐In Sustaining Costs: (WGC definition) $12.55 – $14.23
All‐In Sustaining Costs: (WGC excluding non‐cash items) $11.97 – $13.59
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1. AISC is a non‐GAAP measure and is calculated based on guidance provided by the World Gold Council
(“WGC”) in June 2013. AISC is use d as a comprehensive measure f or the Company’s consolidated
operating performance. WGC is a not a regulatory industry organization and does not have the
authority to develop accounting standards for disclosure requirements. Other mining companies
may calculate AISC differently as a result of differences in underlying accounting principles, the
definition of “sustaining costs” and the distinction between sustaining and expansionary capital costs.
2. Total cash cost per payable silver ounce includes estimated royalties and 0.5% mining environmental
fee of $0.11 per ounce.
In 2019, the Company plans to invest a total of $137.4 million on capital expenditures consisting of $61.1 million
for sustaining investments and $76.3 million for expansionary projects. This represents a 20% increase compared
to the revised 2018 capital budget and is aligned with the Company’s future growth strategy of developing
additional mine production levels at each of the Company’s oper ations, investments in high‐intensity grinding
mills and microbubble flotation cells, in addition to the explo ration work at the Ermitaño West project in order
to advance the project towards a production decision.
The 2019 annual budget includes total capital investments of $6 4.5 million to be spent on underground
development, $23.8 million towards property, plant and equipment, $26.2 million in exploration and $22.9
million towards corporate automation and efficiency projects. Management may revise the guidance and budget
during the year to reflect actual and anticipated changes in metal prices or to the business.
The Company is planning to complete a total of 64,610 metres of underground development in 2019,
representing a 5% decrease compared to 68,307 metres completed in 2018. In addition, the Company is planning
to complete a total of 188,000 metres of exploration drilling in 2019, representing a 12% decrease compared to
211,697 metres completed in 2018.
The 2019 drilling program will consist of approximately 11,600 metres of sustaining diamond drilling intended to
support the conversion of Resources to Reserves at the six oper ating mines; approximately 168,000 metres of
expansionary diamond drilling intended to increase confidence a nd add new Measured & Indicated or Inferred
Resources with a focus on the Santa Elena Main Vein, the Ermitaño West project near Santa Elena and the Central
Block at San Dimas; and drill approximately 8,400 metres intend ed to test greenfield targets at Santa Elena and
Del Toro.
Mr. Ramon Mendoza Reyes, Vice President Technical Services for First Majestic, is a "Qualified Person" as such
term is defined under National Instrument 43‐101, and has revie wed and approved the technical information
disclosed in this news release.
Conference Call
The Company will be holding a conference call and webcast today, Monday, January 14, 2019 at 10 am PT (1 pm
ET).
To participate in the conference call, please dial the following:
Toll Free Canada & USA: 1‐800‐319‐4610
Outside of Canada & USA: 1‐604‐638‐5340
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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 Majestic homepage as a simultaneo us audio webcast of the conference call will
be posted at www.firstmajestic.com.
The conference call will be recorded and you can listen to an archive of the conference by calling:
Canada & USA Toll Free: 1‐800‐319‐6413
Outside Canada & USA: 1‐604‐638‐9010
Access Code: 2864 followed by the # sign
The replay will be available approximately one hour after the c onference and will available for 7 days following
the conference. The replay will also be available on the Company’s website for one month.
About the Company
First Majestic is a mining compan y f o c u s e d o n s i l v e r p r o d u c t i o n in Mexico and is aggressively pursuing the
development of its existing mineral property assets. The Compan y presently owns and operates the San Dimas
Silver/Gold Mine, the Santa Elena Silver/Gold Mine, the La Encantada Silver Mine, the La Parrilla Silver Mine, the
San Martin Silver Mine and the Del Toro Silver Mine. Production from these mines are projected to be between
14.2 to 15.8 million silver ounces or 24.7 to 27.5 million silver equivalent ounces in 2019.
FOR FURTHER INFORMATION contact [email protected], visit our website at www.firstmajestic.com or call
our toll free number 1.866.529.2807.
FIRST MAJESTIC SILVER CORP.
"signed"
Keith Neumeyer, President & CEO
Cautionary Note Regarding Forward Looking Statements
This press release contains “forward‐looking information” and " forward‐looking statements” under applicable Canadian and U.S. securities laws
(collectively, “forward‐looking statements”). These statements r e l a t e t o f u t u r e e v e n t s o r t h e Company's future performance, business prospects or
opportunities that are based on forecasts of future results, es timates of amounts not yet determinable and assumptions of management made in light of
management's experience and perception of historical trends, current conditions and expected future developments. Forward‐looking statements include,
but are not limited to, statements with respect to: the Company’s business strategy; future planning processes; commercial mining operations; cash flow;
budgets; the timing and amount of estimated future production; recovery rates; mine plans and mine life; the future price of silver and other metals; costs
of production; costs and timing o f the development of new depos its; capital projects and explor ation activities and the possib le results
thereof. Assumptions may prove to be incorrect and actual result s m a y d i f f e r m a t e r i a l l y f r o m t hose anticipated. Consequently, guidance cannot be
guaranteed. As such, investors are cautioned not to place undue reliance upon guidance and forwar d‐looking statements as there can be no assurance
that the plans, assumptions or expectations upon which they are placed will occur. All statements other than statements of historical fact may be forward‐
looking statements. Statements concerning proven and probable min era l r e s er v e s a n d m in e r a l re s o ur c e e s tim a te s m a y a ls o be d ee med to constitute
forward‐looking statements to the extent that they involve esti mates of the mineralization that will be encountered as and if the property is developed,
and in the case of measured and indicated mineral resources or proven and probable mineral reserves, such statements reflect t he conclusion based on
certain assumptions that the mineral deposit can be economically exploited. Any statements that express or involve discussions with respect to predictions,
expectations, beliefs, plans, projections, objectives or future e v e n t s o r p e r f o r m a n c e ( o f t e n , b u t n o t a l w a y s , u s i n g w o r d s o r phrases such as “seek”,
“anticipate”, “plan”, “continue”, “ e s t i m a t e ” , “ e x p e c t ” , “ m a y ” , “will”, “project”, “predict”, “forecast”, “potential”, “target”, “intend”, “could”, “might”,
“should”, “believe” and similar expressions) are not statements of historical fact and may be “forward‐looking statements”.
8
Actual results may vary from for ward‐looking statements. Forward‐looking statements are subject to known and unknown risks, un certainties and other
factors that may cause actual results to materially differ from those expressed or implied by suc h forward‐looking statements, including but not limited
to: risks related to the integration of acquisitions; actual results of exploration activities; conclusions of economic evaluations; changes in project
parameters as plans continue to be refined; commodity prices; variations in ore reserves, grade or recovery rates; actual performance of plant, equipment
or processes relative to specifications and expectations; accidents; labour relations; relations w i t h l o c a l c o m m u n i t i e s ; c h a n ges in national or local
governments; changes in applicable legislation or application t hereof; delays in obtaining approvals or financing or in the co mpletion of development or
construction activities; exchange rate fluctuations; requirements for additional capital; government regulation; environmental risks; reclamation expenses;
outcomes of pending litigation; limitations on insurance covera ge as well as those factors discussed in the section entitled " Description of the Business ‐
Risk Factors" in the Company's most recent Annual Information Form, available on www.sedar.com, and Form 40‐F on file with the United States Securities
and Exchange Commission in Washington, D.C. Although First Majestic has attempted to identify important factors that could cause actual results to differ
materially from those contained i n f o r w a r d ‐ l o o k i n g s t a t e m e n t s , there may be other factors that cause results not to be as anticipated, estimated or
intended.
The Company believes that the expectations reflected in these forward‐looking statements are reasonable, but no assurance can be given that these
expectations will prove to be correct and such forward‐looking statements included herein should not be unduly relied upon. These statements speak only
as of the date hereof. The Company does not intend, and does not assume any obligation, to update these forward‐looking statements, except as required
by applicable laws.