FR Frankfurt – FMV Mexico ‐ AG First Majestic Produces 16.2M Silver Eqv. Oz in 2017 (4.1M Silver Eqv. Oz in Q4); Announces 2018 Production Outlook and Cost Guidance
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 16, 2018
Toronto – FR
Frankfurt – FMV
Mexico ‐ AG
First Majestic Produces 16.2M Silver Eqv. Oz in 2017 (4.1M Silver Eqv. Oz in Q4);
Announces 2018 Production Outlook and Cost Guidance
First Majestic Silver Corp. ("First Majestic" or the "Company") is pleased to announce the Company’s fourth
quarter and full year 2017 production results, as well as production and cost guidance for 2018. Production costs
are scheduled to be released on February 28, 2018 with the Company’s full‐year and fourth quarter 2017
financial results.
Total production in 2017 reached 16.2 million equivalent ounces of silver, representing a 13% decrease over
2016, and in‐line with the Company’s guidance of 15.7 to 16.6 million silver equivalent ounces. Total production
consisted of 9.7 million ounces of silver, 62,991 ounces of gold, 24.5 million pounds of lead and 3.9 million pounds
of zinc. Annual silver production of 9.7 million ounces was 3% below the Company’s guidance of 10.0 to 10.6
million ounces of silver.
Total production in the fourth quarter of 2017 totaled 4.1 mill ion equivalent ounces of silver consisting of 2.3
million ounces of silver, 17,344 ounces of gold, 4.3 million pounds of lead and 1.3 million pounds of zinc.
As of December 31, 2017, the Company held US$118.1 million of cash in its treasury.
Keith Neumeyer, President & CEO, stated “Santa Elena and San Martin were the star performers in 2017. In 2018,
we expect higher grades, throughputs and recoveries to improve the operations at La Encantada, La Parrilla, La
Guitarra and Del Toro due to the concerted investments in explo ration and development that commenced in
late 2016. In addition, the acquisition of the San Dimas mine comes at a great time with all our other operations
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benefiting simultaneously from increased investments. As a result, the business will benefit from improved
operating margins, increased cash flows and greater economies of scale into the coming quarters.”
Production Details Table:
Quarterly Operational Review:
Total ore processed during the quarter at the Company's six ope rating silver mines: Santa Elena, La Encantada,
La Parrilla, Del Toro, San Martin and La Guitarra, amounted to 736,684 tonnes, representing a 1% increase
compared to the previous quarter. The most significant improvement occurred at the La Guitarra operation
which recorded a 59% increase in mill throughput as new areas in the Coloso mine were brought into production
as well as the processing of economical backfills from the La Guitarra mine.
Consolidated silver grades in the quarter averaged 125 g/t comp ared to 131 g/t in the previous quarter. Higher
silver grades were mined and processed at Santa Elena and San Martin, however, consolidated silver grades were
offset by lower grades at La Encantada and La Parrilla.
Consolidated silver recoveries averaged 79%, relatively consistent with the previous quarter. During the quarter,
the Company continued testing microbubble flotation technology at its Central Lab at La Parrilla. Test work
continues to show successful metallurgical improvements in the treatment of sulphide ore within the silver/lead
and zinc circuits at La Parrilla. The Company has placed orders for two full‐scale microbubble flotation cells and
expects delivery and installation to begin in the second half of 2018.
The Company's underground development in the fourth quarter consisted of 14,279 metres, reflecting a 4%
decrease compared to 14,931 metres completed in the previous quarter. Development remains focused on
opening new production areas, exploring high potential zones and new stope preparation.
During the quarter, up to 24 diamond drill rigs were active acr oss the Company’s properties. A total of 49,832
metres in 210 drill holes were completed on the seven propertie s, representing a 2% increase in drilled metres
compared to the previous quarter. The most significant increase in drilled metres was at La Guitarra where two
additional rigs were added in September to increase drilling in the Nazareno, Nazareno de Ancas and the Coloso
areas.
Q4 Q3 Q/ Q FY FY Y/Y
2017 2017 Change Consolidated Production Results 2017 2016 Change
736,684 730,652 1% Ore processed/tonnes milled 2,981,506 3,270,162 ‐9%
4,065,337 3,986,274 2% Total production ‐ ounces of silver equivalent 16,207,905 18,669,800 ‐13%
2,337,463 2,415,962 ‐3% Total silver ounces produced 9,749,591 11,853,438 ‐18%
125 131 ‐5% Silver grade (g/t) 131 149 ‐12%
79 78 1% Silver recovery (%) 78 76 3%
17,344 15,414 13% Gold ounces produced 62,991 62,436 1%
4,271,970 5,171,533 ‐17% Pounds of lead produced 24,522,803 33,185,745 ‐26%
1,289,031 922,666 40% Pounds of zinc produced 3,944,232 10,577,967 ‐63%
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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: $16.73 per ounce; Gold: $1,275 per oun ce; Lead: $1.13 per pound;
Zinc $1.48 per pound.
At the Santa Elena Silver/Gold Mine:
During the quarter, Santa Elena produced 582,789 ounces of silver and 14,005 ounces of gold for a total
production of 1,653,941 silver equivalent ounces, reflecting a 10% increase compared to the prior
quarter and the highest quarterly production rate of 2017.
The mill processed a total of 232,575 tonnes, consisting of 133,042 tonnes of underground ore and
99,533 tonnes from the above ground heap leach pad.
Silver and gold grades of underground ore increased 12% and 21%, respectively, during the quarter
averaging 125 g/t and 2.9 g/t, respectively. The increase in grades are due to higher tonnage of ore being
sourced from the high‐grade Alejandra vein. Silver and gold gra des from the above ground heap leach
pad averaged 39 g/t and 0.7 g/t, respectively.
A total of 2,698 metres of underground development was completed in the fourth quarter compared to
2,724 metres of development in the previous quarter.
A total of 7,463 metres of exploration drilling was completed i n the fourth quarter compared to 7,406
metres of drilling in the previous quarter.
At the La Encantada Silver Mine:
For the quarter, silver production reached 486,514 ounces representing a 20% decrease over the
previous quarter. The decrease in silver production was due to a 6% decrease in tonnes milled and an
18% decrease in silver grades compared to the prior quarter.
Silver recoveries averaged 68% during the quarter, a 3% increase compared with the prior quarter.
Mine production was temporarily halted on October 1 st due to the previously reported fatal accident
involving four underground miners. Following inspections by the Company and federal authorities, the
mine was given clearance to resume operations on October 6th.
The roasting project advanced in the fourth quarter with approx imately 95% of the major components
now manufactured. At the end of December, approximately 61% of the major component equipment
modules had successfully arrived on site and the remaining modu le deliveries are expected on site by
the end of February. The Company began installation of the dust collectors and rotary dryer in early
January and anticipates the main drive, roasting furnace and cooling system to begin installation in early
March.
Vertical ventilation raises in the San Javier area were complet ed in the fourth quarter. The Company
anticipates initial production from the San Javier breccia to c ommence in March with ramp up to full
production of approximately 600 tp d by the end of June. The San Javier area is known to contain silver
grades ranging between 150 to 200 g/t.
Mine
Ore
Processed
Tonnes
per Day
Silver Grade
(g/t)
Silver
Recovery (%)
Silver Oz
Produced
Gold Oz
Produced
Pounds of
Lead
Pounds of
Zinc
Equivalent
Silver Ounces
Santa Elena 232,575 2,528 88 89% 582,789 14,005 ‐ ‐ 1,653,941
La Encantada 198,845 2,161 112 68% 486,514 33 ‐ ‐ 489,071
La Parrilla 138,124 1,501 118 76% 401,090 270 1,609,303 1,289,031 643,799
Del Toro 56,753 617 138 74% 185,695 60 2,662,667 ‐ 369,992
San Martin 72,503 788 257 86% 514,678 1,354 ‐ ‐ 617,879
La Guitarra 37,885 412 173 79% 166,698 1,622 ‐ ‐ 290,654
Total 736,684 8,007 125 79% 2,337,463 17,344 4,271,970 1,289,031 4,065,337
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A total of 742 metres of underground development were completed in the fourth quarter compared to
1,173 metres of development in the previous quarter.
A total of 2,874 metres of exploration drilling was completed i n the fourth quarter compared to 6,793
metres of drilling in the previous quarter.
At the La Parrilla Silver Mine:
During the quarter, the flotation circuit processed 74,750 tonn es (812 tpd) with an average silver grade
of 112 g/t and a 80% recovery while the cyanidation circuit pro cessed 63,374 tonnes (689 tpd) with an
average silver grade of 125 g/t and a 73% recovery for total production of 643,799 silver equivalent
ounces.
The lead circuit processed an average lead grade of 1.3% with recoveries of 75% for total lead production
of 1.6 million pounds, representing a 9% increase compared to the previous quarter.
The zinc circuit processed an average zinc grade of 1.4% with recoveries of 55% for total zinc production
of 1.3 million pounds, representing a 40% increase compared to the previous quarter.
Underground development complet ed in the quarter totaled 3,067 metres compared to 3,186 metres
developed in the previous quarter.
A total of 8,467 metres of exploration drilling was completed i n the fourth quarter compared to 9,138
metres of drilling in the previous quarter.
At the Del Toro Silver Mine:
During the quarter, Del Toro produced a total of 369,992 silver equivalent ounces reflecting a 22%
decrease compared to the prior quarter primarily due to a 6% de crease in throughput, 8% decrease in
silver grades and a 15% decrease in lead grades.
Silver grades and recoveries during the quarter averaged 138 g/t and 74%, respectively.
Lead grades and recoveries averaged 3.4% and 62%, respectively, producing a total of 2.7 million pounds
of lead representing a 28% decrease compared to the previous quarter.
Underground development complet ed in the quarter totaled 2,741 metres compared to 2,989 metres
developed in the previous quarter.
Total exploration metres drilled in the quarter amounted to 5,215 metres compared to 6,673 metres of
drilling in the previous quarter.
At the San Martin Silver Mine:
During the quarter, San Martin produced 514,678 ounces of silve r and 1,354 ounces of gold for a total
production of 617,879 silver equi valent ounces, reflecting a 2% increase compared to the prior quarter
and the highest quarterly produc tion rate of 2017. The increase in production was attributed to higher
tonnage and silver grades.
Silver grades and recoveries averaged 257 g/t and 86%, respectively, during the quarter. In addition, gold
grades and recoveries averaged 0.6 g/t and 91%, respectively.
Underground development completed in the quarter totaled 3,211 metres compared with 2,781 metres
of development in the previous quarter.
Total exploration metres drilled in the quarter amounted to 6,8 28 metres compared to 7,763 metres of
drilling in the previous quarter.
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At the La Guitarra Silver Mine:
During the quarter, La Guitarra produced 166,698 ounces of silv er and 1,622 ounces of gold for a total
production of 290,654 silver equivalent ounces reflecting a 59% increase compared to the prior quarter.
The increase in production was primarily due to a 59% increase in throughput as new areas in the Coloso
mine were brought into production as well as the processing of economical backfills from the La Guitarra
mine.
Silver grades and recoveries averaged 173 g/t and 79%, respectively, during the quarter. In addition, gold
grades and recoveries averaged 1.7 g/t and 79%, respectively.
A total of 1,818 metres of development were completed in the fourth quarter compared to 1,976 metres
of development in the previous quarter.
Total exploration metres drilled in the quarter amounted to 11, 030 metres compared to 6,345 metres
drilled in the previous quarter. This significant 74% increase was due to two additional rigs arriving on
site in September to increase drilling in the Nazareno, Nazareno de Ancas and the Coloso areas.
2018 Production Outlook and Cost Guidance:
The following 2018 outlook and cost guidance excludes the proposed acquisition of Primero Mining Corp. as
announced on January 12, 2018. First Majestic is expected to incorporate the San Dimas operation into its annual
guidance following the closing of the transaction which is expected by the end of March.
The Company anticipates 2018 silv er production will range betwe en 10.6 to 11.8 million ounces. Based on the
midpoint of the guidance range the Company expects a 15% increa se in silver production compared to 2017,
primarily due to higher silver grades from caving and the start‐up of the new roasting circuit at La Encantada. In
addition, total production in 2018 is estimated to range betwee n 15.7 to 17.5 million silver equivalent ounces,
representing a slight increase from 2017, primarily due to higher silver production at La Encantada offset by less
gold by‐product credits at Santa Elena.
A mine‐by‐mine breakdown of the 2018 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: $16.50/oz, gold: $1,250/oz, lead: $1.10/lb, zinc: $1.40/lb,
MXN:USD 19:1.
Mine Silver Oz (M) Silver Eqv Oz (M) Cash Costs ($) AISC ($)
Santa Elena 2.2 – 2.4 4.9 – 5.5 2.08 – 2.96 6.58 – 7.66
La Encantada 3.0 – 3.3 3.0 – 3.3 11.58 – 12.39 14.89 – 15.98
La Parrilla 1.5 – 1.7 2.3 – 2.6 9.78 – 10.40 15.02 – 16.01
Del Toro 1.1 – 1.3 2.2 – 2.4 7.11 – 8.04 14.31 – 15.54
San Martin 2.0 – 2.2 2.2 – 2.5 8.52 – 9.14 11.08 – 11.92
La Guitarra 0.8 – 0.9 1.1 – 1.2 11.86 – 12.81 18.30 – 19.52
Totals: 10.6 – 11.8 15.7 – 17.5 $8.30 – $9.09 $15.21 – $16.56
*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 $2.43 to $2.70 per payable silver
ounce.
The Company is projecting its 2018 AISC, as defined by the World Gold Council, to be within a range of $15.21 to
$16.56 on a per payable silver ounce consolidated basis. Exclud ing non‐cash items, the Company anticipates its
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2018 AISC to be within a range of $14.40 to $15.66 per payable silver ounce. An itemized AISC cost table is
provided below:
All‐In Sustaining Cost Calculation (1) FY 2018
($ /Ag oz)
Total Cash Costs per Payable Silver Ounce (2) 8.30 – 9.09
General and Administrative Costs 1.64 – 1.81
Sustaining Development Costs 1.99 – 2.01
Sustaining Property, Plant and Equipment Costs 2.17 – 2.42
Sustaining Exploration Costs 0.16 – 0.18
Profit sharing 0.13 – 0.15
Share‐based Payments (non‐cash) 0.73 – 0.81
Accretion of Reclamation Costs (non‐cash) 0.08 – 0.08
All‐In Sustaining Costs: (WGC definition) $15.21 – $16.56
All‐In Sustaining Costs: (WGC excluding non‐cash items) $14.40 – $15.66
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 $0.10 per ounce.
In 2018, the Company plans to invest a total of $125.4 million on capital expenditures consisting of $51.0 million
for sustaining investments and $74.4 million for expansionary p r o j e c t s . T h i s r e p r e s e n t s a n 1 8 % i n c r e a s e
compared to the revised 2017 capital budget and is aligned with the Company’s future growth strategy of
developing additional mine production levels at each of the Company’s operations, completing the roasting
circuit and block caving at La Encantada, investments in microbubble and fine‐grinding technologies, in addition
to the exploration work at Plomosas which is expected to result in an initial resource estimate by the end of
2018.
The Company is planning to complete a total of 72,477 metres of underground development in 2018,
representing a 25% increase compared to 57,902 metres completed in 2017. In addition, the Company is planning
to complete a total of 183,000 metres of exploration drilling i n 2018, representing a 17% increase compared to
156,539 metres completed in 2017 which consisted of 823 drill holes.
The 2018 drilling program will consist of approximately 25,000 metres of diamond drilling intended to upgrade
Resources to Reserves at the six operating mines; approximately 136,000 metres of diamond drilling intended to
increase or add new Measured & Indicated or Inferred Resources at the six operating mines, with a focus at Cerro
de Santiago in La Parrilla, Nazareno in La Guitarra and the Ermi t a ñ o W e s t p r o j e c t i n S a n t a E l e n a ; a n d d r i l l
approximately 22,000 metres at the Plomosas Silver Project.
The 2018 annual budget includes cap ital investments totaling $4 9.0 million to be spent on underground
development, $38.1 million towards property, plant and equipment, $27.4 million in exploration and $11.0
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.
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About the Company
First Majestic is a mining company focused on growing primary s ilver production in Mexico and is aggressively
pursuing the development of its existing mineral property assets. The Company 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 Ele na Silver/Gold Mine. Production from these six
mines is projected to be between 10.6 to 11.8 million ounces of pure silver or 15.7 to 17.5 million ounces of silver
equivalents in 2018.
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 statements", within the meaning of the United States Private Securities Litigatio n Reform Act of
1995 and applicable Canadian securit ies legislation, concerning the business, operations and financial performance and conditi on of First
Majestic Silver Corp. Forward-looking statements include, but are not limited to, statements with respect to the future price of silver and other
metals, the estimation of mineral reserves and resources, the r ealization of mineral reserve e stimates, the timing and amount of estimated
future production, costs of pr oduction, capital expenditures, c osts and timing of the development of new deposits, success of exploration
activities, permitting time li nes, hedging practices, currency exchange rate fluctuations, requi rements for additional capital , government
regulation of mining operations , environmental risks, unanticip ated reclamation expenses, timing and possible outcome of pendi ng litigation,
title disputes or cl aims and limitations on insurance coverage. Generally, these forward-look ing statements can be identified by the use of
forward-looking terminology such as "plans", "expects" or "does not expect", "is expected", " budget", "scheduled", "estimates" , "forecasts",
"intends", "anticipates" or "does not anticipate", or "believes", or variations of such words and phrases or state that certai n actions, events or
results "may", "could", "would", "might" or "will be taken", "o ccur" or "be achieved". Forward- looking statements are subject to known and
unknown risks, uncertainties and other factors that may cause the actual results, level of activity, performance or achievements of First Majestic
Silver Corp. to be materially di fferent from those expressed or implied by such forward-looking statements, including but not limited to: risks
related to the integration of acquisitions; risks related to in ternational operations; risks related to joint venture operatio ns; actual results of
current exploration activities; actual results of current recla mation activities; conclusions of economic evaluations; changes in project
parameters as plans continue to be refined; future prices of metals; possible variations in ore reserves, grade or recovery rates; failure of plant,
equipment or processes to operate as anticipated; accidents, la bour disputes and other risks of the mining industry; delays in obtaining
governmental approvals or financing or in the completion of dev elopment or construction activiti es, as well as those factors d iscussed in the
section entitled "Description of the Business - Risk Factors" i n First Majestic Silver Corp.'s Annual Information Form for the year ended
December 31, 2016, available on www.sedar.com, and Form 40-F on file with the United States Securities and E xchange Commission in
Washington, D.C. Although First Majestic Silver Corp. has atte mpted to identify important facto rs that could cause actual res ults to differ
materially from those contained in forward-looking statements, there may be other factors that cause results not to be as anticipated, estimated
or intended. There can be no assurance that such statements wi ll prove to be accurate, as actual results and future events co uld differ
materially from those anticipated in such statements. Accordin gly, readers should not place undue reliance on forward-looking
statements. First Majestic Silver Corp. does not undertake to update any forward-looking statements that are incorporated by reference herein,
except in accordance with applicable securities laws.