AG.TO · 2020-02-19 12:00:00

FR Frankfurt – FMV First Majestic Announces Financial Results for Q4 and Year End 2019

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 19, 2020

Toronto – FR

Frankfurt – FMV

First Majestic Announces Financial Results for Q4 and Year End 2019

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

the consolidated financial results for the Company’s fourth quarter and year ended December 31, 2019. The full

version of the financial statements and the management 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.

2019 HIGHLIGHTS

 Total production reached 25.6 m illion silver equivalent ounces, a 15% increase over 2018, reaching

the top end of the Company’s 2019 guidance range of 24.4 million to 26.0 million ounces.

 Silver production reached 13.2 million ounces of silver, a 13% increase over 2018, and inline with

the Company’s guidance range of 12.8 to 13.5 million ounces.

 Generated record revenues of $363.9 million, representing a 21% increase from 2018.

 Generated a record $140.0 million of cash from operating activities.

 Mine operating earnings of $66.2 million compared to ($11.9) million in 2018 primarily due to higher

revenues, metal prices and lower cash costs.

 Operating cash flows before working capital and taxes of $108.9 million or $0.54 per share.

 Adjusted net earnings of $7.3 million, or $0.04 per share, after excluding non‐cash and unusual items.

 All‐in sustaining costs (“AISC”) of $12.64 per payable silver ounce, representing a 15% decrease

compared to 2018, beating the 2019 guidance range of $12.98 to $13.94 per ounce.

 Cash costs of $5.16 per payable silver ounce, representing a 26% decrease compared to 2018, below

the 2019 guidance range of $5.62 to $6.18 per ounce.

 Successfully commissioned the new 3,000 tpd high‐intensity grinding (“HIG”) mill at Santa Elena

making it the only whole‐ore, hard‐rock mining application of this technology in Latin America.

 C o m m e n c e d e a r t h w o r k a n d r a m p d e v e l o p m e n t a c t i v i t i e s a t S a n t a E lena’s Ermitaño project in

advance of initial production scheduled for early 2021.

 Achieved annual consolidated silver recoveries of 86%, a new Company record, due to ongoing

investments in metallurgical processing and innovation.

 Ended 2019 with cash and cash e quivalents of $169.0 million, up from $57.0 million at the end of

2018.

Q4 2019 HIGHLIGHTS

 Produced 3.3 million ounces of silver, 33,176 ounces of gold and 0.9 million pounds of lead for a total

of 6.2 million silver equivalent ounces.

 AISC of $12.25 per payable silver ounce, representing a 5% decrease compared to Q4 2018.

 Cash costs of $3.73 per payable silver ounce, representing a 38% decrease compared to Q4 2018.

 Revenues totaled $96.5 million, representing a 30% increase compared to Q4 2018.

 Mine operating earnings of $23.9 million compared to ($9.0) million in Q4 2018.

 Adjusted net earnings $0.3 million, or $0.00 per share, after excluding non‐cash and unusual items.

 Operating cash flows before working capital and taxes of $32.9 million, or $0.16 per share (non‐

GAAP).

CEO COMMENTS

“First Majestic had another strong year generating record reven ues and ending the year with the highest cash

balance in the Company’s 18‐year history,” said Keith Neumeyer, P r e s i d e n t a n d C E O o f F i r s t M a j e s t i c .

“Production also achieved a new record of 25.6 million silver equivalent ounces following grade and metallurgical

recovery improvements at our Santa Elena and La Encantada operat i o n s . T h e s e o p e r a t i o n a l i m p r o v e m e n t s

helped to drive a 15% reduction in our AISC for the year to $12.64 per ounce, making it our lowest AISC per ounce

since 2016 and a healthy beat to our annual cost guidance range of $12.98 to $13.94 per ounce. We continue to

lead the industry as the purest silver producer and remain focu sed on improving margins through the adoption

of new technologies.”

2019 ANNUAL AND FOURTH QUARTER HIGHLIGHTS

Change Change

Key Performance Metrics 2019‐Q4 2018‐Q4 Q4 vs Q4 2019 2018 '19 vs '18

Operational

Ore Processed / Tonnes Milled 626,482 850,272 (26%) 2,831,999 3,375,452 (16%)

Silver Ounces Produced 3,348,424 3,250,816 3% 13,241,118 11,679,452 13%

Silver Equivalent Ounces Produced 6,233,412 6,485,761 (4%) 25,554,288 22,243,071 15%

Cash Costs per Ounce (1) $3.73 $6.06 (38%) $5.16 $6.98 (26%)

All‐in Sustaining Cost per Ounce (1) $12.25 $12.83 (5%) $12.64 $14.95 (15%)

Total Production Cost per Tonne (1) $78.62 $65.31 20% $75.05 $60.71 24%

Average Realized Silver Price per Ounce (1) $17.46 $14.47 21% $16.40 $15.53 6%

Financial (in $millions)

Revenues $96.5 $74.1 30% $363.9 $300.9 21%

Mine Operating Earnings (Loss) $23.9 ($9.0) NM $66.2 ($11.9) NM

Impairment of Non‐current Assets ($44.9) ($168.0) 73% ($58.7) ($199.7) 71%

Net (Loss) Earnings ($39.9) ($164.4) 76% ($40.5) ($204.2) 80%

Operating Cash Flows before Movements in

Working Capital and Taxes $32.9 $11.0 199% $108.9 $61.6 77%

Cash and Cash Equivalents $169.0 $57.0 196% $169.0 $57.0 196%

Working Capital (1) $171.1 $108.1 58% $171.1 $108.1 58%

Shareholders

Earnings (Loss) per Share ("EPS") ‐ Basic ($0.19) ($0.85) 77% ($0.20) ($1.11) 82%

Adjusted EPS (1) $0.00 ($0.05) 103% $0.04 ($0.21) 117%

Cash Flow per Share (1) $0.16 $0.06 182% $0.54 $0.34 61%

"NM" ‐ Not meaningful

(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.

2019 FINANCIAL RESULTS

The Company ended 2019 with $169.0 million in cash and cash equivalents compared to $57.0 million at the end

of 2018. In addition, the Company ended the year with working c apital of $171.1 million compared to $108.1

million at the end of 2018. The increase in cash and cash equivalents was primarily attributed to a record $140.0

million generated from its operating activities, $81.9 million raised through its “at‐the‐market distributions”

equity financing program, proc eeds of $16.7 million from exerci se of stock options, net of $116.9 million spent

on investing activities primarily relating to mining interests and property, plant and equipment.

Full year revenues totaled $363.9 million, a 21% increase compared to 2018, primarily related to San Dimas' full

y e a r o f o p e r a t i o n s u n d e r F i r s t M a j e s t i c , a 9 2 % i n c r e a s e i n p r o duction from La Encantada following a revised

throughput methodology which improved recoveries significantly, as well as increased production at Santa Elena

upon implementation of the HIG mill in the second half of the y e a r . I m p r o v e m e n t i n r e v e n u e s w a s a l s o

attributable to a 6% increase in average realized silver price in 2019, which averaged $16.40 per ounce during

the year but improved significantly from an average of $15.26 per ounce in first half of 2019 to $17.55 per ounce

in the second half of 2019.

Annual mine operating earnings totaled $66.2 million compared to ($11.9) million in 2018. The increase in mine

operating earnings was primarily driven by an increase in reven ues, higher silver and gold prices, as well as a

decrease in cash costs. Shifting a greater proportion of the Co mpany's production to it s larger and lower cost

operations, as well as a decrease in depletion, depreciation an d amortization upon suspension of operations at

La Guitarra, La Parrilla and San Martin mines has contributed t o lower overall average costs and higher mine

operating earnings.

Cash flows before movements in working capital and taxes during the year was $108.9 million ($0.54 per share)

compared to $61.6 million ($0.34 per share) in 2018.

Adjusted earnings per share (“EPS”)(non‐GAAP), normalized for n on‐cash or unusual items such as impairment

of non‐current assets, share‐based payments and deferred income taxes for the year ended December 31, 2019

was $0.04, compared to ($0.21) in 2018.

FULL YEAR 2019 OPERATIONAL RESULTS

Annual Production Summary San Dimas Santa Elena La Encantada San Martin La Parrilla Del T oro Consolidated

Ore Processed / Tonnes Milled 691,576 875,435 890,008 101,362 167,535 106,083 2,831,999

Silver Ounces Produced 6,305,672 2,435,604 3,083,410 555,595 557,603 303,234 13,241,118

Silver Equivalent Ounces Produced 13,831,627 6,316,277 3,099,717 692,541 1,120,490 493,636 25,554,288

Cash Costs per Ounce $1.41 ($0.51) $11.89 $13.45 $15.59 $28.26 $5.16

All‐in Sustaining Cost per Ounce $7.26 $3.02 $13.90 $18.73 $26.29 $37.77 $12.64

Total Production Cost per Tonne $131.90 $60.23 $40.06 $91.65 $78.99 $98.29 $75.05

(1) The San Martin operation was placed on temporary suspension as previously announced on July 15, 2019.

(2) The La Parrilla operation was placed on temporary suspension as previously announced on August 7, 2019.

Total production in 2019 reached 25.6 million equivalent ounces of silver, representing a 15% increase over 2018,

and at the upper end of the Company’s guidance of 24.4 to 26.0 million silver equivalent ounces. Total production

consisted of 13.2 million ounces of silver, 134,580 ounces of gold, 7.9 million pounds of lead and 3.7 million

pounds of zinc. The increase in production was primarily attrib uted to the San Dimas mine, which contributed

13.8 million silver equivalent ounces of production during its first full year of operation under First Majestic, and

a 92% increase in production from the La Encantada mine.

Cash cost per ounce in the year was $5.16, a decrease of $1.82 per ounce compared to the previous year and

below the range of the Company's 2019 guidance of $5.62 to $6.18 per ounce. The decrease in cash cost

compared to the prior year was primarily due to the addition of the San Dimas mine since May 2018, which had

a low cash cost of $1.41 per ounce, and the suspension of operat i o n s a t t h e C o m p a n y ' s h i g h e r c o s t m i n e s ,

including the La Guitarra, La Parrilla and San Martin mines, over the past two years.

AISC per ounce in 2019 was $12.64, a decrease of $2.31 per ounce compared to the previous year and below the

annual guidance of $12.98 to $13.94 per ounce. The decrease in AISC per ounce was attributed to lower cash

costs as well as reduction in sustaining capital expenditures a s the Company shifts its focus towards its most

profitable operations.

The Company’s total capital expenditures in 2019 was $124.2 million, an increase of 16% or $17.0 million

compared to the prior year, co nsisting of $46.5 million for und erground development, $30.5 million in

exploration and $23.0 million in property, plant and equipment, and $24.2 million in innovation projects. Total

investments in 2019, on a mine‐by‐mine basis, primarily consisted of $42.5 million at San Dimas, $23.0 million at

Santa Elena, $13.2 million at La Encantada, $10.5 million at La Parrilla, $4.9 million at Del Toro and $4.9 million

at San Martin.

Q4 2019 FINANCIAL RESULTS

Revenues generated in the fourth quarter of 2019 totaled $96.5 million, representing a 30% increase compared

to $74.1 million in the fourth quarter of 2018, primarily due t o a 21% increase in average realized silver price

compared to the same quarter of the prior year, plus a 6% increase in silver equivalent ounces sold compared to

the same quarter of 2018.

Mine operating earnings were $23.9 million compared to ($9.0) million in the fourth quarter of 2018. The

increase in mine operating earnings in the quarter was attribut ed to a combination of higher revenues and the

costs reductions due to the temp orary suspension of activities at the La Parrilla and San Martin mines which

incurred operating losses in the same quarter of the prior year.

The Company recorded net earnings of ($39.9) million, or EPS of ($0.19), during the fourth quarter of 2019

primarily attributed to a $58.7 million non‐cash impairment charge, or $52.4 million net of tax, in relation to the

La Encantada mine primarily as the economics of the mine does not support its carrying value.

Adjusted net earnings for the fourth quarter was $0.3 million, or EPS of $0.00, after excluding non‐cash and non‐

recurring items.

C a s h f l o w s b e f o r e m o v e m e n t s i n w o r k i n g c a p i t a l a n d i n c o m e t a x e s were $32.9 million ($0.16 per share),

compared to $11.0 million ($0.06 per share) in the fourth quarter of 2018.

Q4 2019 OPERATIONAL RESULTS

Fourth Quarter

Production Summary San Dimas Santa Elena La Encantada Del Toro Consolidated

Ore Processed / Tonnes Milled 182,265 196,640 221,049 26,528 626,482

Silver Ounces Produced 1,658,721 619,321 987,630 82,752 3,348,424

Silver Equivalent Ounces Produced 3,516,117 1,592,397 991,856 133,042 6,233,412

Cash Costs per Ounce $0.74 ($1.40) $10.12 $28.62 $3.73

All‐in Sustaining Cost per Ounce $7.41 $3.66 $12.67 $38.84 $12.25

Total Production Cost per Tonne $127.19 $68.77 $43.92 $106.99 $78.62

Total production in the fourth quarter of 2019 reached 6.2 million silver equivalent ounces, representing a slight

decrease compared to the previous quarter, consisting of 3.3 million ounces of silver, 33,176 ounces of gold and

0.9 million pounds of lead. The slight decrease was primarily d ue to lower gold grades and reduction in tonnes

milled at Santa Elena in the month of December due to heavy rai ns impacting ore and waste haulage and the

ability to produce from the heap leach pads.

Cash cost per ounce in the fourth quarter was $3.73 compared to $3.83 in the previous quarter. The decrease in

cash cost was primarily attributed to a reduction of $3.8 million in operating costs due to the temporary

suspension of operating activities at the higher cost La Parrilla mine.

AISC in the fourth quarter was $12.25 per ounce compared to $10 .76 per ounce in the previous quarter. The

increase was attributed to higher sustaining capital expenditur es at San Dimas for mine infrastructure

improvements and advancement of sustaining development activities at Santa Elena.

Capital expenditures in the fourth quarter were $37.2 million, an increase of 30% compared to the prior quarter,

primarily consisting of $14.1 million at San Dimas, $7.8 million at Santa Elena, $3.3 million at La Encantada, $1.8

million at La Parrilla, $1.7 million at Del Toro, $0.1 million at San Martin and $8.4 million for innovation projects.

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 Compan y presently owns and operates the San Dimas

Silver/Gold Mine, the Santa Elena Silver/Gold Mine and the La E ncantada Silver Mine. Production from these

mines are projected to be between 11.8 to 13.2 million silver o unces or 21.5 to 24.0 million silver equivalent

ounces in 2020.

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

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, estimates 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 of 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 results may differ materially from those 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 mineral reserves and mineral resource estimates may also be deemed to constitute

forward‐looking statements to th e 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”, “estimate”, “expect”, “may”, “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”.

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 such 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 with local communities; changes in national or local governments; changes

in applicable legislation or application thereof; delays in obt aining approvals or financing or in the completion of developme nt or construction activities;

exchange rate fluctuations; requirements for additional capital; government regulation; environmental risks; reclamation expenses; outcomes of pending

litigation; limitations on insura nce coverage as well as those factors discussed in the section entitled "Description of the B usiness ‐ 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 Securi ties and Exchange

Commission in Washington, D.C. Al though First Majestic has att empted to identify important factors that could cause actual re sults 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.

The Company believes that the expectations reflected in these forward‐looking statements are reasonable, but no assurance can be giv e n th a t th ese

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.

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