AG.TO · 2017-02-22 12:00:00

FR Frankfurt – FMV Mexico ‐ AG First Majestic Announces Financial Results for Q4 and Year End 2016

Financials

FIRST MAJESTIC SILVER CORP.

Suite 1805 – 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 February 22, 2017

Toronto – FR

Frankfurt – FMV

Mexico ‐ AG

First Majestic Announces Financial Results for Q4 and Year End 2016

FIRST MAJESTIC SILVER CORP. (AG: NYSE; FR: TSX) (the "Company" or “First Majestic”) is pleased to announce the

consolidated financial results for the Company’s fourth quarter and year ended December 31, 2016. The full version of the

financial statements and the man agement discussion and analysis can be viewed on the Company's website at

www.firstmajestic.com, on SEDAR at www.sedar.com and EDGAR at www.sec.gov. All amounts are in U.S. dollars unless

stated otherwise.

FULL YEAR 2016 HIGHLIGHTS

 Produced a record 11.9 million ounces of silver, or 18.7 million silver equivalent ounces.

 AISC of $10.79 per payable silver ounce, representing a 20% decrease compared to 2015.

 Record revenues of $278.1 million, representing a 27% increase compared to 2015.

 Mine operating earnings of $49.2 million, representing a 464% increase compared to 2015.

 Earnings per share of $0.05 (basic) compared to a loss per share of ($0.84) in 2015.

 Operating cash flows before working capital and taxes of $107.3 million or $0.67 per share.

 Ended the year with record cash and cash equivalents of $129.0 million, up from $51.0 million in 2015.

Q4 2016 HIGHLIGHTS

 Produced 2.8 million ounces of silver, or 4.4 million silver equivalent ounces.

 All‐in Sustaining costs (“AISC”) of $12.90 per payable silver o unce, representing a 14% increase compared to

Q4 2015.

 Revenues totaled $66.2 million, relatively unchanged compared to Q4 2015.

 Mine operating earnings of $9.9 million, representing a 154% increase compared to Q4 2015.

 Operating cash flows before working capital and taxes of $23.4 million or $0.14 per share (non‐GAAP).

“First Majestic delivered yet another record year of production, realizing the high end of our annual production guidance of

18.7 million silver equivalent oun ces while achieving an all‐in sustaining cost of $10.79 per ounce that came in well below

our cost guidance range of $11.50 to $12.35 per ounce,” said Keith Neumeyer, President and CEO of First Majestic.

“Our operating cash flows were more than sufficient to internally fund our capital expenditures program in addition to

strengthening our treasury to $129.0 million at year end, the highest balance in the Company’s history. The cash flows

currently being generated are being reinvested in our 2017 budget which is expected to result in production growth in 2018.

The key areas of focus in 2017 are the construction of the roas ting system at the La Encantada mine and the exploration

and development programs at both the La Guitarra mine and the Plomosas project.”

2016 ANNUAL AND FOURTH QUARTER HIGHLIGHTS

Key Performance Metrics 2016‐Q4 2015‐Q4 Change 2016 2015 Change

Operational

Ore Processed / Tonnes Milled 844,155 883,377 (4%) 3,270,162 2,852,655 15 %

Silver Ounces Produced

2,819,708

3,055,442 (8%)

11,853,438

11,142,109 6 %

Silver Equivalent Ounces Produced

4,380,477

4,820,408 (9%)

18,669,800

16,086,271 16 %

Cash Costs per Ounce (1) $6.49 $6.04 7 % $5.92 $7.87 (25%)

All‐in Sustaining Cost per Ounce (1) $12.90 $11.28 14 % $10.79 $13.43 (20%)

Total Production Cost per Tonne (1) $42.13 $41.44 2 % $43.22 $43.98 (2%)

Average Realized Silver Price per Ounce (1) $17.10 $15.21 12 % $17.16 $16.06 7 %

Financial (in $millions)

Revenues $66.2 $66.0 0 % $278.1 $219.4 27 %

Mine Operating Earnings (2) $9.9 $3.9 154 % $49.2 $8.7 464 %

Net Earnings (Loss) $1.8 ($103.0) 102 % $8.6 ($108.4) 108 %

Operating Cash Flows before Working Capital and

Taxes (2) $23.4 $17.5 34 % $107.3 $59.7 80 %

Cash and Cash Equivalents $129.0 $51.0 153 % $129.0 $51.0 153 %

Working Capital (1) $130.6 $15.6 737 % $130.6 $15.6 737 %

Shareholders

Earnings (Loss) per Share ("EPS") ‐ Basic $0.01 ($0.66) 102 % $0.05 ($0.84) 106 %

Adjusted EPS (1) ($0.01) ($0.02) 57 % $0.12 ($0.11) 212 %

Cash Flow per Share (1) $0.14 $0.11 26 % $0.67 $0.46 44 %

(1) The Company reports non‐GAAP measures which include cash costs per ounce produced, all‐in sustaining cost per ounce, total production cost per tonne, average realized

silver price per ounce, working capital, adjusted EPS and cash flow per share. These measures are widely used in the mining industry as a benchmark for performance, but

do not have a standardized meaning and may differ from methods used by other companies with similar descriptions.

(2) The Company reports additional GAAP measures which include mine operating earnings and operating cash flows before movements in working capital and income

taxes. These additional financial measures are intended to provide additional information and do not have a standardized meaning prescribed by IFRS.

FULL YEAR 2016 FINANCIAL RESULTS

Full year revenues achieved a new record of $278.1 million, an increase of $58.7 million or 27% compared to 2015, primarily

due to a 16% increase in total production and the increase in silver prices.

The Company realized an average silver price of $17.16 per ounc e in 2016, slightly beating the COMEX annual silver price

average of $17.10 per ounce and representing a 7% increase compared to 2015.

Annual mine operating earnings totaled $49.2 million, an increase of 464% compared to $8.7 million in 2015. The increase

in mine operating earnings was primarily driven by record‐break ing production, lower production costs and higher silver

prices.

The Company generated net earnings of $8.6 million (earnings per share of $0.05) in 2016 compared to a net loss of $108.4

million (loss per share of $0.84) in 2015. In 2015, the Company recorded an impairment charge of $108.4 million, or $70.2

million net of tax, on certain ope rations and development proje cts due to the decline in mar ket consensus on long‐term

silver price forecasts during 2015 and the consequential impact on the Company's Reserves and Resources. Adjusted EPS

normalized for non‐cash or unusual items, such as impairment of n o n ‐ c u r r e n t a s s e t s , d e f e r r e d i n c o m e t a x e x p e n s e o r

recovery and share‐based payments was $0.12 per share in 2016.

Cash flows before movements in working capital and taxes increased by 80% to $107.3 million ($0.67 per share) compared

to the prior year primarily due record production output and higher silver prices. Cash flows were also more than sufficient

to fully fund the Company’s capital budget program.

The Company ended 2016 with a re cord $129.0 million in cash and cash equivalents compared to $51.0 million at the end

of 2015. In addition, the Compan y ended the year with a surplus in working capital of $130.6 million compared to $15.6

million at the end of 2015.

Q4 2016 FINANCIAL RESULTS

Revenues generated in the fourth quarter of 2016 totaled $66.2 million, representing a slight i ncrease compared to $66.0

million in the fourth quarter of 2015.

The Company realized an average silver price of $17.10 per ounc e, relatively in line with the COMEX quarterly silver price

average of $17.12 per ounce and representing a 12% increase compared with the fourth quarter of 2015.

Mine operating earnings were $9.9 million compared to $3.9 million in the fourth quarter of 2015. The increase was driven

by the increase in silver prices, partially offset by a 9% decrease in production.

The Company generated net earnings of $1.8 million (earnings per share of $0.01) compared to a net loss of $103.0 million

(loss per share of $0.66) in the fourth quarter of 2015. Adjusted for non‐cash or unusual items such as impairment of

non‐current assets, deferred income tax expense or recovery and share‐based payments, the Company reported a loss of

$0.01 per share.

Cash flows before movements in working capital and income taxes were $23.4 million ($0.14 per share), compared to $17.5

million ($0.11 per share) in the fourth quarter of 2015.

FULL YEAR 2016 OPERATIONAL RESULTS

Annual Production Summary Santa Elena La Encantada La Parrilla Del Toro San Martin La Gui tarra Consolidated

Ore Processed / Tonnes Milled 988,060 881,075 610,509 337,020 297,802 155,696 3,270,162

Silver Ounces Produced 2,598,537 2,706,516 2,220,874 1,500,951 1,902,963 923,597 11,853,438

Silver Equivalent Ounces Produced 6,185,945 2,713,372 3,388,434 2,649,326 2,209,035 1,523,688 18,669,800

Cash Costs per Ounce ($2.09) $11.21 $7.58 $5.73 $7.07 $7.23 $5.92

All‐in Sustaining Cost per Ounce $1.75 $12.76 $10.46 $8.62 $9.40 $13.33 $10.79

Total Production Cost per Tonne $42.00 $33.11 $38.85 $51.67 $58.64 $77.43 $43.22

The Company produced a record 11.9 million ounces of silver in 2016, near the high end of the revised guidance and

representing a 6% increase compared to 11.1 million ounces produced in the previous year. The increase was primarily

attributed to the addition of the Santa Elena mine for the full year, partially offset by lower production from Del Toro and

San Martin, both of which lowered throughput to focus on mining profitable ounces.

Total production in 2016 reached a record of 18.7 million silver equivalent ounces, also near the high end of the 2016

guidance, representing an increase of 16% compared to the previous year. The increase in production was primarily

attributed to incremental production from Santa Elena, partiall y offset by lower by‐product production from Del Toro and

La Parrilla.

Cash cost per ounce in the year was $5.92, a decrease of 25% or $1.95 per ounce compared to the previous year and within

the Company's guidance. The decrease in cash cost per ounce was attributed to

ongoing company‐wide cost reduction efforts and a focus on producing profitable ounces, a decrease in smelting and

refining costs as a result of renegotiated sales agreements that were effective on July 1, 2016, and weakening of the Mexican

pesos against the U.S. dollar.

AISC per ounce in 2016 was $10.79, a decrease of 20% or $2.64 per ounce compared to the previous year and is below the

revised annual guidance of $11.50 to $12.35 per ounce. The decr ease in AISC per ounce was reflective of the Company's

ongoing effort to reduce production costs, weakening of the Mex ican pesos against the U.S. dollar, as well as the addition

of the Santa Elena mine to the Company's portfolio of assets, which became the Company's lowest cost mine.

The Company’s total capital expenditures in 2016 was $65.9 million, an increase of 6% compared to the prior year, primarily

consisting of $15.2 million at Santa Elena, $10.0 million at La Encantada, $11.5 million at Del Toro, $11.1 million at La Parrilla,

$6.4 million at San Martin and $9.0 million at La Guitarra. The investments consisted of underground development,

exploration, construction and expansion projects and acquisitions of new mining equipment.

As previously announced, the Company plans to invest a total of $124.0 million on capital expenditures in 2017 consisting

of $46.2 million for sustaining requirements and $77.8 million for expansionary projects. The Company is preparing for

future production growth by developing additional mine production levels at each of the Company’s operations, preparing

for the upcoming expansion at La Guitarra, completing the roasting circuit and preparing for block caving at La Encantada,

in addition to the exploration work at Plomosas which is expect ed to result in a new Preliminary Economic Assessment in

2018.

Q4 2016 OPERATIONAL RESULTS

Fourth Quarter Production Summary Santa Elena La Encantada La Parrilla Del Toro San Martin La Gui tarra Consolidated

Ore Processed / Tonnes Milled 257,771 235,039 153,309 82,767 76,848 38,422 844,155

Silver Ounces Produced 660,207 567,930 497,466 343,894 510,423 239,788 2,819,708

Silver Equivalent Ounces Produced 1,470,612 569,504 699,497 680,802 573,349 386,713 4,380,477

Cash Costs per Ounce ($1.43) $13.87 $10.22 $2.80 $6.94 $7.74 $6.49

All‐in Sustaining Cost per Ounce $1.64 $16.53 $15.34 $8.43 $10.01 $15.99 $12.90

Total Production Cost per Tonne $37.57 $32.96 $41.92 $52.45 $56.70 $78.31 $42.13

In the fourth quarter, the Company produced 2.8 million ounces of silver, a decrease of 9% compared to the previous

quarter, primarily due to a 9% decrease in average silver grade. Total production reached 4.4 million silver equivalent ounces

in the fourth quarter, representing a decrease of 3% compared t o the previous quarter. The decrease in silver grades is

primarily due to lower grades at Del Toro in the month of October due to limited production at the high grade Dolores mine.

As a result, the Company increased production rates at the San Juan mine to offset the decrease. Beginning in November,

production at the Dolores mine returned to normal operating lev els. Average silver grade at La Encantada also decreased

9% compared to the prior quarter primarily due to the continued blending of ore from old stopes, stockpiles and the

recovery of pillars. Grades are expected to improve towards the end of 2017 following the start of block caving production

within the San Javier Breccia.

Cash cost per ounce in the quarter was $6.49, an increase of 11% or $0.65 per ounce compared to the previous quarter. The

increase in cash cost per ounce was primarily the result of lower silver grades leading to lower silver production and higher

mining contractor costs attributed to ore development activities at the Santa Elena mine.

All‐in sustaining cost per ounce (“AISC”) in the fourth quarter was $12.90, an increase of 23% or $2.38 per ounce compared

to the previous quarter. The increase in AISC was primarily att ributed to an increase in sustai ning capital expenditures to

catch up with program targets in addition to higher cash cost per ounce.

Capital expenditures in the fourth quarter were $25.7 million, an increase of 24% compared to the prior quarter, primarily

consisting of $3.2 million at Santa Elena, $5.6 million at La E ncantada, $4.0 million at Del Toro, $5.0 million at La Parrilla ,

$2.2 million at San Martin and $4.3 million at La Guitarra.

In the fourth quarter of 2016, the Company entered into two opt ion agreements to acquire additional mining concessions

around the Del Toro and Santa Elena mines. In October 2016, the Company entered into an agreement to acquire an

additional 7,205 hectares of mining concessions near Del Toro for the total purchase price of $1.5 million, payable over six

equal payments every six months, with $0.3 million having been paid as of December 31, 2016. In addition, the Company

entered into an option agreement in December 2016 with Compania Minera Dolores, S.A. de C.V., a subsidiary of Pan

American Silver Corp., to acquire 5,802 hectares of mining concessions adjacent to the Santa Elena mine. In exchange, First

Majestic has agreed to incur $1. 6 million in exploration costs on the property over four years, a 2.5% NSR royalty on the

related concessions, and to pay $1.4 million in cash, of which $0.1 million was due on or before the date of agreement

(paid), $0.2 million in December 2017, $0.2 million in December 2018, $0.3 million in December 2019 and $0.7 million in

December 2020, respectively.

CONFERENCE CALL

The Company will be holding a conference call and webcast on Wednesday, February 22, 2017 at 10 am PDT (1 pm EDT).

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

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

Outside of Canada & USA: 1‐604‐638‐5340

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 simultaneous 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: 1118 followed by the # sign

The replay will be available approximately one hour after the c onference and will available for seven 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 company focused on silver production in Mexico and is aggressively pursuing the development of

its existing mineral property assets. The Company presently own s 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 min es is projected to be between 11.1 to 12.4 million ounces

of pure silver or 16.6 to 18.5 million ounces of silver equivalents in 2017.

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

SPECIAL NOTE REGARDING FORWARD‐LOOKING INFORMATION

This news release includes certain "Forward‐Looking Statements" within the meaning of the United States Private Securities Litigation Reform Act of 1995

and applicable Canadian securities laws. When used in this news release, the words “anticipate”, “believe”, “estimate”, “expect”, “target”, “plan”,

“forecast”, “may”, “schedule” and similar words or expressions, identify forward‐looking statements or information. These forward‐looking statements or

information relate to, among other things: the price of silver and other metals; the accuracy of mineral reserve and resource estimates and estimates of

future production and costs of production at our properties; estimated production rates for silver and other payable metals produced by us, the estimated

cost of development of our development projects; the effects of laws, regulations and government policies on our operations, including, without limitation,

the laws in Mexico which currently have significant restrictions related to mining; obtaining or maintaining necessary permits, licences and approvals from

government authorities; and cont inued access to necessary infra structure, including, without lim itation, access to power, land , water and roads to carry

on activities as planned.

These statements reflect the Company’s current views with respect to future events and are necessarily based upon a number of assumptions and

estimates that, while considered reasonable by the Company, are inherently subject to significant business, economic, competit ive, political and social

uncertainties and contingencies. Many factors, both known and unknown, could cause actual results, performance or achievements to be materially

different from the results, performance or achievements that are or may be expressed or implied by such forward‐looking statements or information and

the Company has made assumptions and estimates based on or rela ted to many of these factors. Such factors include, without lim itation: fluctuations in

the spot and forward price of silver, gold, base metals or certain other commodities (such as natural gas, fuel oil and electricity); fluctuations in the currency

markets (such as the Canadian dollar and Mexican peso versus th e U.S. dollar); changes in national and local government, legis lation, taxation, controls,

regulations and political or economic developments in Canada, Mexico; operating or technical difficulties in connection with mining or development

activities; risks and hazards a ssociated with the business of m ineral exploration, development and mining (including environme ntal hazards, industrial

accidents, unusual or unexpected formations, pressures, cave‐ins and flooding); risks relating to the credit worthiness or fin ancial condition of suppliers,

refiners and other parties with whom the Company does business; inability to obtain adequate insurance to cover risks and haza rds; and the presence of

laws and regulations that may impose restrictions on mining, in cluding those currently enacted i n Mexico; employee relations; relationships with and

claims by local communities and indigenous populations; availability and increasing costs associated with mining inputs and labour; the speculative nature

o f m i n e r a l e x p l o r a t i o n a n d d e v e l opment, including the risks of obtaining necessary licenses, permits and approvals from government authorities;

diminishing quantities or grades of mineral reserves as properties are mined; the Company’s title to properties; and the factors identified under the caption

“Risk Factors” in the Company’s Annual Information Form, under the caption “Risks Relating to First Majestic's Business”.

Investors are cautioned against attributing undue certainty to forward‐looking statements or information. Although the Company has attempted to identify

important factors that could cause actual results to differ mat erially, there may be other factors that cause results not to b e anticipated, estimated or

intended. The Company does not intend, and does not assume any obligation, to update these forward‐looking statements or information to reflect

changes in assumptions or changes in circumstances or any other events affecting such statements or information, other than as required by applicable

law.

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