AG.TO · 2018-02-28 12:00:00

FR Frankfurt – FMV First Majestic Announces Financial Results for Q4 and Year End 2017

Financials

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 February 28, 2018

Toronto – FR

Frankfurt – FMV

First Majestic Announces Financial Results for Q4 and Year End 2017

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, 2017. 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.

2017 HIGHLIGHTS

 Produced 9.7 million ounces of silver, 62,991 ounces of gold, 24.5 million pounds of lead and 3.9 million pounds

of zinc.

 Total production reached 16.2 million silver equivalent ounces, achieving the 2017 total production guidance

range of 15.7 million to 16.6 million ounces.

 All‐in Sustaining costs (“AISC”) of $13.82 per payable silver o unce, beating the 2017 AISC guidance range of

$14.40 to $15.50 per ounce.

 Revenues totaled $252.3 million, representing a 9% decrease from 2016.

 Mine operating earnings of $16.0 million compared to $49.2 million in 2016.

 Operating cash flows before working capital and taxes of $81.0 million or $0.49 per share (non‐GAAP).

 Started construction and assembly of the new 2,000 tpd roasting facility at La Encantada which is expected to

increase annual silver production to over 4.0 million ounces beginning in Q2 2018.

 Achieved consolidated silver recoveries of 78%, a new annual Company record, due to ongoing investments in

metallurgical processing and innovation.

 Invested $25.0 million in exploration activities and drilled 156,540 metres across seven assets resulting in

numerous significant discoveries that are expected to increase resources and life of mine.

 Subsequent to year end, the Company repurchased 230,000 common shares at an average price of CAD$7.04

per share.

Q4 2017 HIGHLIGHTS

 Produced 2.3 million ounces of silver, or 4.1 million silver equivalent ounces.

 AISC of $14.13 per payable silver ounce, representing a 10% increase compared to Q4 2016.

 Revenues totaled $61.2 million, representing an 8% decrease compared to Q4 2016.

 Mine operating earnings of $1.4 million compared to $9.9 million in Q4 2016.

 Operating cash flows before working capital and taxes of $18.7 million or $0.11 per share (non‐GAAP).

 Ended the year with cash and cash equivalents of $118.1 million, down from $129.0 million in 2016.

“First Majestic delivered another solid year, meeting total production targets and achieving AISC cost guidance,” said Keith

Neumeyer, President and CEO of First Majestic. “2017 remained a catch up year in underground development and

exploration due to the lack of investment over the past three y ears. Nevertheless, we were still able to deliver the second

highest production level in the Company’s 15 year history primarily due to the continued operational strength of the Santa

Elena and San Martin mines.”

“Furthermore, the investments made in 2017 are expected to gene rate double digit growth in silver production in 2018

primarily due to higher underground production rates at Santa Elena and Del Toro, higher silver grades from caving and the

start‐up of the new roasting circuit at La Encantada.”

2017 ANNUAL AND FOURTH QUARTER HIGHLIGHTS

Key Performance Metrics 2017‐Q4 2016‐Q4

Change

Q4 vs Q4 2017 2016

Change

2017 vs 2016

Operational

Ore Processed / Tonnes Milled 736,684 844,155 (13%) 2,981,506 3,270,162 (9%)

Silver Ounces Produced 2,337,463 2,819,708 (17%) 9,749,591 11,853,438 (18%)

Silver Equivalent Ounces Produced 4,065,337 4,380,477 (7%) 16,207,905 18,669,800 (13%)

Cash Costs per Ounce (1) $6.76 $6.49 4% $7.04 $5.92 19%

All‐in Sustaining Cost per Ounce (1) $14.13 $12.90 10% $13.82 $10.79 28%

Total Production Cost per Tonne (1) $50.81 $42.13 21% $50.12 $43.22 16%

Average Realized Silver Price per Ounce (1) $16.61 $17.10 (3%) $17.12 $17.16 0%

Financial (in $millions)

Revenues $61.2 $66.2 (8%) $252.3 $278.1 (9%)

Mine Operating Earnings (2) $1.4 $9.9 (86%) $16.0 $49.2 (68%)

(Loss) Earnings before Income Taxes ($69.9) $1.5 (4,760%) ($75.3) $25.5 (395%)

Net (Loss) Earnings ($56.1) $1.8 (3,192%) ($53.3) $8.6 (719%)

Operating Cash Flows before Working Capital and Taxes (2) $18.7 $23.4 (20%) $81.0 $107.3 (25%)

Cash and Cash Equivalents $118.1 $129.0 (8%) $118.1 $129.0 (8%)

Working Capital (1) $116.3 $130.6 (11%) $116.3 $130.6 (11%)

Shareholders

(Loss) Earnings per Share ("EPS") ‐ Basic ($0.34) $0.01 (3,167%) ($0.32) $0.05 (703%)

Adjusted EPS (1) ($0.04) ($0.01) 344% ($0.04) $0.12 (131%)

Cash Flow per Share (1) $0.11 $0.14 (21%) $0.49 $0.67 (27%)

(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.

2017 FINANCIAL RESULTS

Full year revenues totaled $252.3 million, a decrease of $25.8 million or 9% compared to 2016, primarily due lower

production from all mines except for San Martin which increased 5% compared to 2016.

The Company realized an average silver price of $17.12 per ounce in 2017, in line with the COMEX annual silver price average

of $17.15 per ounce and consistent compared to the 2016 realized average silver price of $17.16.

Annual mine operating earnings totaled $16.0 million compared t o $49.2 million in 2016. The d ecrease in mine operating

earnings were attributed to lower production, higher labour cos ts, as well as higher inflation in Mexico resulting from the

energy reforms which came into effect in early 2017.

Adjusted EPS (non‐GAAP), normalized for non‐cash or unusual items such as impairment of non‐current assets, share‐based

p a y m e n t s a n d 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 r e c o v e r y f o r t h e y ear ended December 31, 2017 was a loss of $0.04,

compared to earnings of $0.12 in 2016. The Company was required to take an impairment charge on the Del Toro Silver

Mine due to the recently updated NI 43‐101 Technical Report. Th is charge amounted to $65.5 million, or $42.4 million net

of tax, resulting in a total net loss of $53.3 million (loss per share of $0.32) in 2017 compared to net earnings of $8.6 million

(earnings per share of $0.05) in 2016.

Cash flows before movements in working capital and taxes during the year was $81.0 million ($0.49 per share) compared to

$107.3 million ($0.67 per share) in 2016.

The Company ended 2017 with $118.1 million in cash and cash equivalents compared to $129.0 million at the end of 2016.

In addition, the Company ended the year with a working capital surplus of $116.3 million compared to $130.6 million at the

end of 2016.

Since December 31, 2017, First Majestic repurchased and cancelled 230,000 common shares at an average price of CAD$7.04

per share for a total considerat ion of CAD$1.6 million through a normal course issuer bid in the open market as approved

by the Toronto Stock Exchange.

Also, after year end, the Company filed before the Mexican Nati onal Banking and Securities Commission for the delisting

from the Mexican Stock Exchange due to low trading volumes and high costs associated with regulatory compliance. On

February 21, 2018, the delisting authorization was obtained and the Company was officially delisted.

Q4 2017 FINANCIAL RESULTS

Revenues generated in the fourth quarter of 2017 totaled $61.2 million, representing an 8% decrease compared to

$66.2 million in the fourth quarter of 2016.

The Company realized an average silver price of $16.61 per ounc e, relatively in line with the COMEX quarterly silver price

average of $16.66 per ounce and representing a 3% decrease compared with the fourth quarter of 2016.

Mine operating earnings were $1.4 million compared to $9.9 million in the fourth quarter of 2016. The decrease was driven

by a 7% decrease in production.

After non‐cash write‐downs, the Company generated a net loss of $56.1 million (loss per share of $0.34) compared to net

earnings of $1.8 million (EPS of $0.01) in the fourth quarter of 2016. The decrease of $57.9 million in net earnings was

primarily attributed to a $65.5 million non‐cash impairment charge, or $42.4 million net of tax, on the Del Toro Silver Mine

and the decrease in mine operating earnings.

Cash flows before movements in working capital and income taxes were $18.7 million ($0.11 per share), compared to $23.4

million ($0.14 per share) in the fourth quarter of 2016.

FULL YEAR 2017 OPERATIONAL RESULTS

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

Ore Processed / Tonnes Milled 927,737 825,486 543,985 278,204 278,252 127,842 2,981,506

Silver Ounces Produced 2,282,182 2,178,032 1,730,383 1,124,992 1,822,297 611,705 9,749,591

Silver Equivalent Ounces Produced 5,927,132 2,183,899 2,517,199 2,237,730 2,322,835 1,019,111 16,207,905

Cash Costs per Ounce ($1.54) $12.74 $11.11 $5.49 $6.69 $11.53 $7.04

All‐in Sustaining Cost per Ounce $2.22 $15.49 $16.22 $11.87 $9.06 $18.98 $13.82

Total Production Cost per Tonne $52.53 $32.76 $46.59 $61.94 $70.18 $90.35 $50.12

Total production in 2017 was 16,207,905 silver equivalent ounce s, in line with our 2017 guida nce of 15.7 to 16.6 million

silver equivalent ounces and represents a decrease of 13% compared to the previous year. The decrease in metal production

can be attributed to lack of investment in underground development over the previous three years, which has had a direct

impact on throughputs and grades. This trend is expected to beg in to reverse as a result of 2017 and 2018 investments in

development and exploration. The increase in development and exploration investments represent 43% over 2015 and 31%

over 2016. Production was also affected this year by one‐off illegal work stoppages at three operations, including the illegal

strike at La Encantada which resulted in 42 lost days in the second quarter, as well as two seismic events near La Guitarra in

the third quarter.

The Company produced 9.7 million ounces of silver in 2017, representing an 18% decrease compared to 11.9 million ounces

produced in the previous year. The decrease in production was primarily attributed to lower throughput as a result of the

work stoppages and lower head grades.

Cash cost per ounce in the year was $7.04, an increase of $1.12 per ounce compared to the previous year and at the low

range of the Company's 2017 guidance of $7.00 to $7.75 per ounc e. The increase in cash cost compared to the prior year

w a s p r i m a r i l y d u e t o l o w e r p r o d u c t i o n a n d h i g h e r e n e r g y c o s t s attributed to the Mexican government's oil and gas

deregulation policies that came into effect in the first quarter of 2017, partially offset by a decrease in smelting and refining

costs as a result of favourable contract negotiations and higher by‐product credits per ounce.

AISC per ounce in 2017 was $13.82, an increase of $3.03 per oun ce compared to the previous year and below the 2017

annual guidance of $14.40 to $15.50 per ounce. The increase in AISC per ounce was attributed to higher cash costs and

higher sustaining capital expenditures as the Company began re‐investing in development and exploration at each unit.

The Company’s total capital expenditures in 2017 was $81.4 milli o n , a n i n c r e a s e o f 2 4 % c o m p a r e d t o t h e p r i o r y e a r ,

consisting of $32.7 million for underground development, $25.0 million in exploration and $23.7 million in property, plant

and equipment. Total investments , on a mine‐by‐mine basis, prim arily consisted of $18.0 million at Santa Elena,

$12.5 million at La Encantada, $8.6 million at Del Toro, $15.3 million at La Parrilla, $10.8 million at San Martin and

$9.8 million at La Guitarra.

As previously announced, the Company plans to invest a total of $125.4 million on capital expenditures in 2018 consisting

of $51.0 million for sustaining requirements and $74.4 million for expansionary projects. The Company is preparing for

future production growth by developing additional mine productio n l e v e l s a t e a c h o f t h e m i n i n g u n i t s , c o m p l e t i n g t h e

roasting circuit and commencing block caving production at La Encantada, in addition to the exploration work at Plomosas

which is expected to result in an initial resource estimate by the end of 2018. First Majestic will remain nimble and ensure

its capital investments are flexible to account for changing commodity prices.

Q4 2017 OPERATIONAL RESULTS

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

Ore Processed / Tonnes Milled 232,575 198,845 138,124 56,753 72,503 37,885 736,684

Silver Ounces Produced 582,789 486,514 401,090 185,695 514,678 166,698 2,337,463

Silver Equivalent Ounces Produced 1,653,941 489,071 643,799 369,992 617,879 290,654 4,065,337

Cash Costs per Ounce ($6.93) $15.23 $11.21 $12.53 $7.55 $11.21 $6.76

All‐in Sustaining Cost per Ounce ($2.01) $19.20 $15.28 $25.48 $9.73 $17.77 $14.13

Total Production Cost per Tonne $47.13 $36.42 $48.00 $72.77 $73.14 $83.61 $50.81

Total production reached 4.1 m illion silver equivalent ounces i n the fourth quarter, representing a 2% increase compared

to the previous quarter, 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. The most significant production increase occurred at the La Guitarra operation which recorded a 59%

increase in total silver equivalents as the mine recovered from seismic issues in the previous quarter along with new areas

in the Coloso mine that were brought into production.

Cash cost per ounce in the quarter was $6.76, a decrease of $1.39 per ounce compared to the previous quarter. The decrease

i n c a s h c o s t p e r o u n c e w a s p r i m a r i l y a t t r i b u t e d t o h i g h e r b y‐ p roduct credits from gold and zinc production as well as a

weaker Mexican peso which depreciated 6% against the U.S. dollar.

All‐in sustaining cost per ounce (“AISC”) in the fourth quarter was $14.13, a decrease of $1.23 per ounce compared to the

previous quarter, primarily due to lower cash costs.

Capital expenditures in the fou rth quarter were $23.4 million, an increase of 3% compared to the prior quarter, primarily

consisting of $4.6 million at Santa Elena, $3.9 million at La E ncantada, $2.6 million at Del Toro, $4.6 million at La Parrilla ,

$3.0 million at San Martin and $2.8 million at La Guitarra.

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 betwee n 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

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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