AG.TO · 2022-01-18 12:00:00

FR Frankfurt – FMV First Majestic Produces New Quarterly Record of 8.6M Silver Eqv. Oz in Q4 2021 and Achieves FY2021 Guidance with New Annual Production Record of 26.9M Silver Eqv. Oz; Announces 2022 Guidance and Today’s Conference Call Details

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 January 18, 2022

Toronto – FR

Frankfurt – FMV

First Majestic Produces New Quarterly Record of 8.6M Silver Eqv. Oz in Q4 2021 and

Achieves FY2021 Guidance with New Annual Production Record of 26.9M Silver Eqv.

Oz; Announces 2022 Guidance and Today’s Conference Call Details;

Appoints Interim CFO

Vancouver, BC, Canada ‐ First Majestic Silver Corp. ("First Majestic" or the "Company") is pleased to announce

fourth quarter production reached a new quarterly record of 8.6 million silver equivalent ounces, consisting of

3.4 million silver ounces and 67,411 gold ounces, representing a 17% increase compared to the prior quarter.

Additionally, full year 2021 production reached a new Company record of 26.9 million silver equivalent ounces,

consisting of 12.8 million silver ounces and 192,353 gold ounces, or a 32% increase over 2020.

The Company is also pleased to announce its 2022 guidance of producing between 32.2 to 35.8 million silver

equivalent ounces, consisting of 12.2 to 13.5 million ounces of silver and 258,000 to 288,000 ounces of gold, with

AISC cost guidance of between $16.79 to $18.06 per silver equivalent ounce.

Q4 2021 HIGHLIGHTS

 Total production reached 8.6 million silver equivalent ounces, representing a 17% increase over the prior

quarter. Silver production reached 3.4 million ounces, representing a 2% increase over the prior quarter

and the Company’s third highest quarterly silver production. Gold production reached 67,411 ounces,

representing a 24% increase from the prior quarter and the Company’s highest quarterly gold

production.

 San Dimas produced a record 4.0 million silver equivalent ounces, consisting of 2.2 million ounces of

silver and 23,795 ounces of gold, representing a 17% increase in total production from the prior quarter

and the highest quarterly production since acquiring the mine in 2018.

 In November, the Company began test batching surface stockpiles from Ermitaño at the Santa Elena

processing plant and in December declared initial production, ahead of schedule, which resulted in a

new quarterly production record at Santa Elena. A total of 2.0 million silver equivalent ounces were

produced in the quarter consisting of 426,870 ounces of silver and 19,810 ounces of gold. This represents

a significant 84% increase in total production from the prior quarter and the highest quarterly production

since acquiring the mine in 2015.

 At the end of the fourth quarter, 21 exploration drill rigs were active across the Company’s mines

consisting of seven rigs at San Dimas, nine rigs at Jerritt Canyon, three rigs at Santa Elena and two rigs at

La Encantada.

FY 2021 HIGHLIGHTS

 Silver production in 2021 reached 12.8 million ounces (compared to 11.6 million ounces in 2020) which

slightly missed the lower end of the Company’s revised guidance range of producing between 13.0 to

13.8 million ounces of silver.

 Gold production in 2021 reached 192,353 ounces (compared to 100,081 in 2020) achieving the higher

end of the Company’s revised guidance range of producing between 181,000 to 194,000 ounces. This

strong performance was primarily due to the processing of Ermitaño ore at the Santa Elena plant and

strong silver and gold grades at San Dimas in the fourth quarter.

 Successfully completed the acquisition of the Jerritt Canyon Gold Mine in Nevada, USA adding a fourth

operating mine to the Company’s portfolio.

 After six years since its initial discovery, the Company successfully began underground ore production

from the Ermitaño mine near Santa Elena in the fourth quarter of 2021. This important new mine is

expected to significantly increase production and reduce costs at Santa Elena as it ramps up throughout

2022.

 Successfully converted Santa Elena from diesel power to low‐cost liquid natural gas (“LNG”) with the

construction of the new 12.4 MW LNG facility.

 Sold a record 349,278 ounces of silver bullion, or approximately 3% of the Company’s silver production,

on First Majestic’s online bullion store at an average silver price of $31.21 per ounce for total proceeds

of $10.9 million.

“First Majestic ended the year with its strongest production quarter in the Company’s 20‐year history,” said Keith

Neumeyer, President & CEO. “During the fourth quarter, production at our San Dimas and Santa Elena mines

exceeded expectations and reached new records due to a significant improvement in productivity and in silver

and gold grades. Consolidated gold production also reached a new record of 192,353 ounces in 2021 due to the

acquisition of the Jerritt Canyon mine and the start of production and first pour from the Ermitaño mine at Santa

Elena in November.”

Mr. Neumeyer continues, “In 2022, total production is expected to increase between 20% to 33% compared to

2021 primarily due to higher production expected at San Dimas, Santa Elena and a full year of production at

Jerritt Canyon. In addition, we are planning to invest significantly in exploration and underground development

in 2022 in order to prepare a clear path to achieving our goal of producing over 40 million silver equivalent ounces

by 2024.”

FY2021 Mine by Mine Production Table:

Mine

Ore

Processed

Tonnes

per Day

Grade

(g/t)

Grade

(g/t)

Recovery

Ag Oz

Produced

Au Oz

Produced

AgEq Oz

Produced

San Dimas

822,791

2,254

305 3.19 95% 96%

7,646,898

81,237

13,525,049

Jerritt Canyon

633,400

2,575 ‐ 3.84 ‐ 84% ‐

68,567

5,013,999

Santa Elena

879,059

2,408

77 1.58 90% 94%

1,954,491

42,088

5,041,937

La Encantada

1,004,144

2,751

130 0.02 77% 90%

3,241,556

460

3,274,798

Total

3,339,394

9,149

135

1.94 89% 91%

12,842,944

192,353

26,855,783

*Certain amounts shown may not add exactly to the total amount due to rounding differences.

*Jerritt Canyon production was over a 246 day period from April 30, 2021 to December 31, 2021.

*The following prices were used in the calculation of silver equivalent ounces: Silver: $25.14 per ounce; Gold: $1,801 per ounce.

Production Details Table:

Q4 Q3 Q/Q FY FY Y/Y

2021 2021 Change Consolidated Production Results 2021 2020 Change

955,810 943,126 1% Ore processed/tonnes milled 3,339,394 2,213,953 51%

8,561,023 7,319,441 17% Total production ‐ Silver equivalent ounces 26,855,783 20,379,010 32%

3,358,809 3,302,086 2% Silver ounces produced 12,842,944 11,598,380 11%

67,411 54,525 24% Gold ounces produced 192,353 100,081 92%

QUARTERLY REVIEW

Total ore processed during the quarter at the Company's mines amounted to 955,810 tonnes, representing a 1%

increase compared to the previous quarter. The slight increase in tonnes processed was primarily due to Jerritt

Canyon processing higher volumes of lower grade surface material and underground ore partially offset by

slightly lower throughput rates at San Dimas, Santa Elena and La Encantada.

Consolidated silver and gold grades in the quarter averaged 125 g/t and 2.42 g/t, respectively, compared to 122

g/t and 2.00 g/t, respectively, in the previous quarter. The increase in consolidated silver and gold grades were

primarily due to processing higher grade ore within the Jessica vein at San Dimas and the introduction of

Ermitaño’s ore into the Santa Elena plant in November.

Consolidated silver and gold recoveries averaged 88% and 91%, respectively, during the quarter. The Company

continues to work towards optimizing the metallurgical recoveries of Ermitaño’s ore which achieved 61% for

silver and 91% for gold during the fourth quarter. The Company plans to modify the Santa Elena processing plant

to facilitate finer grinding and improve metallurgical recoveries with the commissioning of a new tailing filter‐

press, an additional leaching tank and a fourth CCD thickener in the fourth quarter of 2022.

Quarterly Mine by Mine Production Table:

Mine

Ore

Processed

Tonnes

per Day

Grade

(g/t)

Grade

(g/t)

Recovery

Ag Oz

Produced

Au Oz

Produced

AgEq Oz

Produced

San Dimas

206,738

2,247

347 3.71 94% 96%

2,174,353

23,795

4,015,346

Jerritt Canyon

256,374

2,787 ‐ 3.41 ‐ 84% ‐

23,660

1,821,331

Santa Elena

224,459

2,440

72 2.97 82% 92%

426,870

19,810

1,955,550

La Encantada

268,239

2,916

117 0.02 75% 90%

757,586

146

768,796

Total

955,810

10,389

125

2.42 88% 91%

3,358,809

67,411

8,561,023

*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 equivalent ounces: Silver: $23.33 per ounce; Gold: $1,795 per ounce.

At the San Dimas Silver/Gold Mine:

 San Dimas produced 2,174,353 ounces of silver and 23,795 ounces of gold, representing an increase of

15% in each metal when compared to the prior quarter, for a total of 4,015,346 silver equivalent ounces

and representing the highest quarterly production since acquiring the mine in 2018.

 The mill processed a total of 206,738 tonnes of ore with average silver and gold grades of 347 g/t and

3.71 g/t, respectively. Silver and gold grades increased in the fourth quarter as a major high‐grade area

within the Jessica vein of the Central Block was brought into production at the end of the third quarter.

 Silver and gold recoveries during the quarter averaged 94% and 96%, respectively.

 The Central Block and Sinaloa Graben areas contributed approximately 62% and 35%, respectively, of

the total production during the quarter. In addition, the Tayoltita, El Cristo and West Block areas

contributed approximately 3% of total production in the quarter.

 A total of seven underground drill rigs were active on the property at the end of the quarter.

At the Jerritt Canyon Gold Mine:

 During the quarter, Jerritt Canyon produced 23,660 ounces of gold, representing a 10% decrease

compared to the prior quarter. The decrease was primarily due to harsh winter weather in December

which significantly reduced production for a period of two weeks.

 The mill processed a total of 256,374 tonnes of ore with an average gold grade and recovery of 3.41 g/t

and 84%, respectively. Increased ore development rates and processing of lower ore grade from surface

material continued during the quarter which resulted in higher tonnage with lower average ore grades

processed in the plant.

 The SSX and Smith mines contributed approximately 33% and 50%, respectively, of the total production

during the quarter. In addition, several surface areas contributed approximately 17% of total production

during the quarter.

 During the quarter, the tailings lift at TSF2 and the underground connection drift between the SSX and

Smith mines were both completed on‐time and under budget.

 A total of nine drill rigs, consisting of four surface rigs and five underground rigs, were active at the end

of the quarter.

At the Santa Elena Silver/Gold Mine:

 Santa Elena produced 426,870 ounces of silver and 19,810 ounces of gold representing a 16% decrease

in silver and a 164% increase in gold production when compared to the prior quarter for a new quarterly

record of 1,955,550 silver equivalent ounces. Production was significantly higher than budget due to the

introduction of surface stockpiles from Ermitaño into the processing plant in November compared to

previous estimates for the first quarter of 2022.

 The mill processed a total of 224,459 tonnes of ore consisting of 120,717 tonnes of ore from Santa Elena

(including the existing heap leach pad) and 103,742 tonnes of ore from Ermitaño.

 Silver and gold grades from Santa Elena averaged 89 g/t and 1.36 g/t, respectively, while silver and gold

grades from Ermitaño averaged 54g/t and 4.84 g/t, respectively.

 Consolidated silver and gold recoveries averaged 82% and 92%, respectively, during the quarter. The

Company continues to optimize the batch processing and metallurgical recoveries of Ermitaño’s ore. The

Company is planning to modify the Santa Elena processing plant with the commissioning of a new filter‐

press, an additional leaching tank and a fourth CCD thickener in the fourth quarter of 2022 in order to

facilitate finer grinding, improve metallurgical recoveries and reduce operating costs.

 A total of three drill rigs, consisting of two surface rigs and one underground rig, were active at the end

of the quarter.

At the La Encantada Silver Mine:

 During the quarter, La Encantada produced 757,586 ounces of silver, representing a 16% decrease in

ounces compared to the prior quarter. The decrease was primarily due to a 13% decrease in silver grade.

 The mill processed a total of 268,239 tonnes of ore with an average silver grade and recovery of 117 g/t

and 75%, respectively. The decrease in grade and recoveries were the result of low‐grade material being

sourced from previously mined areas. During the quarter, the Company began to establish new draw‐

points within the 660 area in an effort to increase silver grades in the upcoming quarters.

 During the quarter, the Company completed 77 metres of an underground ramp in order to access the

Ojuelas orebody which is known to contain higher silver grades. The Company is planning to prepare the

area for initial ore extraction in the second half of 2022.

 A total of two underground drill rigs were active on the property at the end of the quarter.

2022 GUIDANCE

The Company expects 2022 total production from its four operating mines to range between 32.2 to 35.8 million

silver equivalent ounces consisting of 12.2 to 13.5 million ounces of silver and 258,000 to 288,000 ounces of gold.

Based on the midpoint of the guidance range the Company expects silver equivalent ounces to increase 27%

when compared to 2021. Silver production is expected to remain consistent with 2021 rates whereas gold

production is expected to increase by 42% year‐over‐year. The increase in gold production is primarily due to the

ramp up of production at Ermitaño which is known to contain higher amounts of gold and a full year worth of

production from Jerritt Canyon.

A mine‐by‐mine breakdown of the 2022 production guidance is included in the table below. The Company

reports cost guidance to reflect cash costs and all‐in sustaining cost per ounce (“AISC”) on a per silver equivalent

payable ounces. For 2022, the Company is using a 78:1 silver to gold ratio compared to a 72:1 silver to gold ratio

in its revised 2021 guidance. Metal price and foreign currency assumptions for calculating equivalents are silver:

$22.50/oz, gold: $1,750/oz, MXN:USD 20:1.

GUIDANCE FOR FULL YEAR 2022

Silver Oz (M) Gold Oz (k) Silver Eqv Oz (M) Cash Cost AISC

Silver: ($ per AgEq oz) ($ per AgEq oz)

San Dimas, Mexico 7.4 – 8.2 81 – 91 13.7 – 15.2 8.59 – 9.13 11.75 – 12.65

Santa Elena, Mexico 1.9 – 2.1 61 – 68 6.6 – 7.4 13.06 – 13.86 15.58 – 16.66

La Encantada, Mexico 2.9 – 3.2 – 2.9 – 3.2 14.82 – 15.74 17.89 – 19.15

Mexico Total: 12.2 – 13.5 142 – 159 23.2 – 25.8 10.65 – 11.31 15.18 – 16.35

Gold: ($ per AuEq oz) ($ per AuEq oz)

Jerritt Canyon, USA – 116 – 129 9.0 – 10.0 1,259 – 1,334 1,503 – 1,607

Total Production

($ per AgEq oz) ($ per AgEq oz)

Consolidated 12.2 – 13.5 258 – 288 32.2 – 35.8 12.20 – 12.94 16.79 – 18.06

* Certain amounts shown may not add exactly to the total amount due to rounding differences.

* Cash Costs and AISC are non‐GAAP measures and are not standardized financial measures under the Company's financial reporting

framework. The Company calculates cash costs and consolidated AISC in the manner set out in the table below. These measures have

been calculated on a basis consistent with historical periods.

The Company is projecting its 2022 AISC to be within a range of $16.79 to $18.06 on a per consolidated payable

silver equivalent ounce basis. Excluding non‐cash items, the Company anticipates its 2022 AISC to be within a

range of $16.34 to $17.56 per payable silver equivalent ounce. An itemized AISC cost table is provided below:

All‐In Sustaining Cost Calculation FY 2022 ($ /AgEq oz)

Total Cash Costs per Payable Silver Ounce 12.20 – 12.94

General and Administrative Costs 1.04 – 1.16

Sustaining Development Costs 1.29 – 1.44

Sustaining Property, Plant and Equipment Costs 0.86 – 0.96

Sustaining Exploration Costs 0.13 – 0.15

Profit Sharing 0.49 – 0.54

Share‐based Payments (non‐cash) 0.34 – 0.38

Lease Payments 0.33 – 0.37

Accretion of Reclamation Costs (non‐cash) 0.11 – 0.13

All‐In Sustaining Costs: (Ag Eq Oz) 16.79 – 18.06

All‐In Sustaining Costs: (Ag Eq Oz excluding non‐cash items) 16.34 – 17.56

1. AISC is a non‐GAAP measure and is calculated based on the Company’s consolidated operating performance. 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 equivalent ounce includes estimated royalties and 0.5% Mexico mining

environmental fee of $0.15 to $0.17 per payable silver equivalent ounce.

INVESTING FOR FUTURE GROWTH

In 2022, the Company plans to invest a total of $207.8 million on capital expenditures consisting of $86.3 million

for sustaining investments and $121.5 million for expansionary projects. This represents a 1% increase compared

to the revised 2021 capital budget and is aligned with the Company’s future growth strategy of investments in

fine grinding technology, processing plant modernizations (including the dual‐circuit project installation and

expansion of the LNG generation plant at Santa Elena), and to increase underground and plant processing rates

at Jerritt Canyon and Santa Elena’s Ermitaño mine.

2022 Capital Budget ($millions) Sustaining Expansionary Total

Underground Development 46.2 41.8 88.0

Exploration 9.2 36.0 45.2

Property, Plant and Equipment 27.4 24.5 51.9

Corporate Projects 3.4 19.3 22.7

Total $86.2 $121.6 $207.8

The 2022 annual budget includes total capital investments of $88.0 million to be spent on underground

development; $51.9 million towards property, plant and equipment; $45.2 million in exploration; and $22.7

million towards corporate innovation 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 plans to increase underground development in 2022 to approximately 53,700 metres compared

to 50,559 metres completed in 2021. The 2022 development program consists of approximately 29,100 metres

at San Dimas; 4,950 metres at Jerritt Canyon; 14,900 metres at Santa Elena (including Ermitaño) and 4,750 metres

at La Encantada. At San Dimas, the Company is planning to bring the Perez and San Jose Veins, located in the

Sinaloa Graben block, into production in the second half of 2022. At Santa Elena, underground development is

expected to continue to focus on the Ermitaño mine to continue ramp up procedures to achieve approximately

1,000 tonnes per day of underground ore extraction throughout all of 2022 and further increasing to 2,000

tonnes per day in 2023. At Jerritt Canyon, higher development rates are planned to prepare the SSX/Smith mines

for increased ore extraction over the next two years. In addition, the Company is planning to begin underground

production in the West Generator mine at the end of 2022. At La Encantada, the Company is continuing to

develop towards the Ojuelas orebody to prepare for initial production in the second half of 2022.

The Company is planning to significantly increase exploration drilling in 2022 by 41% to approximately 320,200

metres compared to 227,845 metres which were completed in 2021. The 2022 drilling program is expected to

consist of:

 At San Dimas, approximately 98,000 metres of exploration drilling are planned with infill, step‐out and

exploratory holes focused on near mine and brownfield targets including major ore controlling

structures in the West, Central, Sinaloa and Tayoltita blocks.

 At Jerritt Canyon, approximately 135,100 metres are planned and consisting of a mixture of surface and

underground infill, step‐out and exploratory holes to support the life of mine and test the presence of

a new ore body target at Waterpipe II, Wheeler Fault Zone, and Northeast Starvation Canyon. In

addition, eight near mine targets located adjacent to historic underground and open pit mines are

planned to be drilled from surface. Underground drilling is planned for the Saval 2 mine located north

of the main SSX/Smith mine operations and in the West Generator underground mine which is

scheduled to be re‐opened by the end of 2022.

 At Santa Elena, approximately 68,100 metres are planned with infill and near mine drilling to continue

testing the Santa Elena Main, Alejandra del Bajo, America, Fenix and Ermitaño veins. Brownfield drilling

is expected to focus on several targets around the mine areas (both Santa Elena and Ermitaño) and

greenfield exploration and to continue to test key projects around this very large property.

 Finally, at La Encantada the Company has planned approximately 19,000 metres consisting of near mine

drilling to continue adding resources on several existing areas and brownfield drilling to test several high

potential targets. The Company recently completed a land access agreement with the Tenochtitlan

Ejido which has opened a significant amount of new land that is planned to be explored for the

first time in 2022.

APPOINTMENT OF INTERIM CFO

The Company has appointed Andrew Poon, Vice‐President of Finance to be the Interim Chief Financial Officer

following the retirement of Raymond Polman on December 31, 2021. Mr. Poon has over 30 years of progressive

financial experience and has been a valued member of the leadership team at First Majestic for 13 years and will

provide a seamless transition for the business while the Company continues to advance candidates in its search

for a permanent replacement. Mr. Poon will assume full leadership of the finance team and will work closely

with Keith Neumeyer, President and CEO, and Steve Holmes, COO, to ensure the Company’s business plan is

supported.

Q4 2021 EARNINGS AND DIVIDEND ANNOUNCEMENT

The Company is planning to release its fourth quarter 2021 unaudited financial results, and to announce the

fourth quarter dividend payment, and shareholder record and payable dates on March 10, 2022.

CONFERENCE CALL

The Company will be holding a conference call and webcast today, January 18, 2022 at 8:00 am PT (11:00 am ET)

to discuss the quarterly production results as well as its 2022 production, cost and capital guidance. 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.

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