FR Frankfurt – FMV Mexico - AG First Majestic Updates Mineral Reserve and Resource Estimates for YE2016 and Files Form 40-F Annual Report
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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 March 31, 2017
Toronto – FR
Frankfurt – FMV
Mexico - AG
First Majestic Updates Mineral Reserve and Resource Estimates for YE2016 and Files
Form 40-F Annual Report
FIRST MAJESTIC SILVER CORP. (the "Company" or “First Majestic”) is pleased to announce its 2016 Mineral Reserve
and Resource estimates for its existing mineral property assets in Mexico as of December 31, 2016. Metal prices used
to estimate the 2016 Reserve estimates were increased slightly compared to previous estimates to: $18.00/oz for
silver, $1,250/oz for gold, $1.00/lb for lead and $1.15/lb for zinc.
“We began 2016 with a small exploration budget of only $9.9 million designed to primarily assist with our mining
activities,” stated Keith Neumeyer, President and CEO. “In the second half of 2016, we increased the exploration
budget by 71% and returned our focus on growing the ounces in the ground. For 2017, we are investing $27.0 million
to complete over 183,000 metres of diamond drilling across our Mexican assets. This renewed investment is expected
to add significant growth to our Reserves and Resources in the years ahead.”
The following table shows the total tonnage mined from each of the Company’s six producing properties during 2016,
including total ounces of silver and silver equivalent ounces produced from each property and the tonnage mined
from delineated Reserves and Resources at each property. A portion of the production from each mine came from
material other than Reserves or Resources, as set out below under the heading “Material Not in Reserves”.
2016 Production Table
LA ENCANTADA LA PARRILLA DEL TORO SAN MARTIN LA GUITARRA SANTA ELENA TOTAL
TONNES OF ORE PROCESSED 881,075 610,509 337,020 297,802 155,696 988,060 3,270,162
OZ OF SILVER PRODUCED 2,706,516 2,220,874 1,500,951 1,902,963 923,597 2,598,537 11,853,438
OZ OF SILVER EQ. PRODUCED
FROM OTHER METALS (1) 6,856 1,167,560 1,148,375 306,072 600,091 3,587,408 6,816,362
TOTAL OZ OF SILVER EQ.
PRODUCED 2,713,372 3,388,434 2,649,326 2,209,035 1,523,688 6,185,945 18,669,800
TONNES MINED FROM
MATERIAL IN RESERVES 47,722 588,624 315,937 213,362 117,414 932,033 2,215,092
TONNES MINED FROM
MATERIAL NOT IN RESERVES 833,353 21,885 21,083 84,440 38,282 56,027 1,055,070
(1) Silver-equivalent ounces are estimated considering: metal price assumptions, metallurgical recovery for the corresponding mineral type/mineral process
and the metal payable of the corresponding contract of each mine. Details as to the method of calculation can be found in the applicable tables within the
remainder of this section.
(2) Totals may not add up due to rounding.
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The Company completed a total of 97,576 metres of diamond drilling at its six operating mines in 2016, representing
a 170% increase in metres drilled compared to the prior year.
For 2017, First Majestic is planning to invest $27.0 million towards exploration to drill approximately 183,000 metres
at its core Mexican assets consisting of approximately 43,000 metres of diamond drilling intended to upgrade
Resources to Reserves at La Parrilla, Del Toro, La Guitarra and Santa Elena; approximately 100,000 metres of diamond
drilling intended to increase or add new Measured & Indicated or Inferred Resources at the six operating mines, with
a focus at Nazareno in La Guitarra and the Ermitaño West project in Santa Elena; and drill approximately 40,000
metres at the Plomosas Silver Project. A combination of surface and underground drill rigs will focus on assisting
mining activities, definition drilling and to support future updates to the Company’s NI43-101 Technical Reports.
As of December 31, 2016, Proven and Probable Reserves totaled 116.7 million silver equivalent ounces, representing
a 14% decrease or 18.6 million silver equivalent ounces in metal content compared to the prior estimate. This reduction
is primarily due to the production depletion of 14.5 million silver equivalent ounces despite a modest increase of 3%
in the assumed silver and gold prices and higher metal prices for lead and zinc. In addition, the reduction is the effect
of an average increase of 10% in the cut-off grades for most of the mines. The escalation in the cut-off grade is a
reflection of an increase of the mining and sustaining cost per tonne motivated by adopting more selective mining
methods and the re-activation of sustaining development and near-mine exploration.
The Company’s consolidated Measured and Indicated Resources totaled 139.6 million silver equivalent ounces,
representing an 11% decrease from 2015 estimates primarily due to the production depletion and an increase of the
production cost per tonne. In addition, Inferred Resources decreased 15% to 233.2 million silver equivalent ounces
primarily due to the escalation in the cut-off grade as a reflection of an increase of the mining and sustaining cost
per tonne.
The complete 2016 Mineral Reserve and Resource estimates for all metals, tonnage and grades are shown below in
the following tables:
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PROVEN AND PROBABLE MINERAL RESERVES WITH AN EFFECTIVE DATE OF DECEMBER 31, 2016
Mine Category Mineral Type k tonnes Ag (g/t) Au (g/t) Pb (%) Zn (%) Ag-Eq (g/t) Ag (k Oz) Ag-Eq (k Oz)
LA ENCANTADA Proven (UG) Oxides 289 239 — — — 239 2,222 2,222
Probable (UG) Oxides 1,516 213 — — — 213 10,372 10,372
Probable (UG) Oxides - Flotation 809 147 — 2.35 — 196 3,817 5,093
Probable (Tailings) Oxides 4,138 110 — — — 110 14,633 14,633
Total Proven and
Probable (UG) Oxides + Tailings 6,751 143 — 0.28 — 149 31,043 32,319
LA PARRILLA Proven (UG) Oxides 181 200 0.12 — — 210 1,164 1,220
Probable (UG) Oxides 671 161 — — — 164 3,469 3,546
Total Proven and
Probable (UG) Oxides 852 169 0.06 — — 174 4,633 4,766
Proven (UG) Sulphides 410 185 0.01 1.67 1.55 280 2,442 3,687
Probable (UG) Sulphides 649 209 0.04 2.01 2.01 328 4,370 6,853
Total Proven and
Probable (UG) Sulphides 1,059 200 0.02 1.88 1.83 310 6,812 10,539
Total Proven and
Probable (UG) Oxides + Sulphides 1,910 186 0.04 1.04 1.02 249 11,445 15,305
SAN MARTÍN Proven (UG) Oxides 880 246 0.28 — — 267 6,973 7,561
Probable (UG) Oxides 1,311 243 0.16 — — 255 10,220 10,728
Total Proven and
Probable (UG) Oxides 2,191 244 0.21 — — 260 17,193 18,289
DEL TORO Proven (UG)
Transition +
Sulphides 708 211 0.09 4.12 1.87 352 4,800 8,010
Probable (UG)
Transition +
Sulphides 647 233 0.26 4.39 2.94 401 4,846 8,349
Total Proven and
Probable (UG)
Transition +
Sulphides 1,356 221 0.17 4.25 2.38 375 9,646 16,360
LA GUITARRA Proven (UG) Sulphides 88 179 1.47 — — 273 509 775
Probable (UG) Sulphides 1,041 256 1.34 — — 341 8,577 11,423
Total Proven and
Probable (UG) Sulphides 1,129 250 1.35 — — 336 9,086 12,198
SANTA ELENA
Probable (UG
Main) Sulphides 2,597 110 1.63 — — 215 9,208 17,927
Probable (PAD) Oxides Spent Ore 1,882 31 0.62 — — 71 1,857 4,275
Total Probable Oxides + Sulphides 4,479 77 1.21 — — 154 11,065 22,202
Total Proven and
Probable All mineral types 17,977 155 0.42 0.54 0.29 201 89,551 116,384
(1) Mineral Reserves have been classified in accordance with the Canadian Institute of Mining, Metallurgy and Petroleum (“CIM”) Definition Standards on Mineral
Resources and Mineral Reserves, whose definitions are incorporated by reference into NI 43-101.
(2) Metal prices considered for Mineral Reserves estimates were $18.00 /oz Ag, $1,250 /oz Au, $1.00 /lb Pb, and $1.15 /lb Zn.
(3) The Mineral Reserves information provided above for La Encantada, La Parrilla, Del Toro, San Martín, La Guitarra and Santa Elena is based on internal estimates
prepared as of December 31, 2016. The information provided was reviewed and validated by the Company’s internal Qualified Person, Mr. Ramon Mendoza
Reyes, P.Eng., who has the appropriate relevant qualifications, and experience in mining and reserves estimation practices.
(4) Silver-equivalent grade is estimated considering: metal price assumptions, metallurgical recovery for the corresponding mineral type/mineral process and
the metal payable of the corresponding contract of each mine. Estimation details are listed in each mine section of the 2016 Annual Information Form.
(5) The cut-off grades and modifying factors used to convert Mineral Reserves from Mineral Resources are different for all mines. The cut-off grades and factors
are listed in each mine section of the 2016 Annual Information Form.
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MEASURED AND INDICATED MINERAL RESOURCES WITH AN EFFECTIVE DATE OF DECEMBER 31, 2016
Mine / Project Category Mineral Type k tonnes Ag (g/t) Au (g/t) Pb (%) Zn (%) Ag-Eq (g/t) Ag (k Oz) Ag-Eq (k Oz)
LA ENCANTADA Measured (UG) Oxides 305 269 — — — 269 2,637 2,637
Indicated (UG) Oxides 894 297 — — — 297 8,518 8,518
Indicated (UG) Oxides - Flotation 734 246 — 4.07 — 325 5,795 7,662
Indicated (Tailings) Oxides 4,222 110 — — — 110 14,931 14,931
Total Measured and
Indicated (UG) Oxides + Tailings 6,154 161 — 0.49 — 171 31,881 33,748
LA PARRILLA Measured (UG) Oxides 207 225 — — — 235 1,497 1,564
Indicated (UG) Oxides 674 180 0.06 — — 185 3,900 4,003
Total Measured and
Indicated (UG) Oxides 881 191 0.08 — — 197 5,397 5,567
Measured (UG) Sulphides 420 224 — 1.99 1.88 337 3,024 4,553
Indicated (UG) Sulphides 596 240 — 2.31 2.32 378 4,600 7,229
Total Measured and
Indicated (UG) Sulphides 1,016 233 — 2.18 2.14 361 7,624 11,782
Total Measured and
Indicated (UG) Oxides + Sulphides 1,897 213 0.05 1.17 1.14 284 13,021 17,349
SAN MARTÍN Measured (UG) Oxides 1,009 266 0.27 — — 285 8,632 9,254
Indicated (UG) Oxides 1,631 254 0.14 — — 264 13,292 13,822
Total Measured and
Indicated (UG) Oxides 2,639 258 0.19 — — 272 21,923 23,075
DEL TORO Measured (UG)
Transition +
Sulphides 980 220 0.07 4.13 1.97 361 6,925 11,362
Indicated (UG)
Transition +
Sulphides 1,321 205 0.25 3.63 3.07 350 8,690 14,884
Total Measured and
Indicated (UG)
Transition +
Sulphides 2,301 211 0.17 3.84 2.60 355 15,616 26,246
LA GUITARRA Measured (UG) Sulphides 83 204 1.61 — — 305 547 818
Indicated (UG) Sulphides 992 291 1.51 — — 385 9,273 12,289
Total Measured and
Indicated (UG) Sulphides 1,075 284 1.52 — — 379 9,821 13,107
SANTA ELENA Indicated (UG) Sulphides 2,629 131 2.03 — — 259 11,083 21,859
Indicated (Pad) Oxides 1,882 31 0.62 — — 70 1,857 4,230
Total Indicated Oxides + Sulphides 4,511 89 1.44 — — 180 12,940 26,089
Total Measured
and Indicated All mineral types 18,577 176 0.49 0.76 0.44 234 105,202 139,614
(1) Mineral Resources have been classified in accordance with the CIM Definition Standards on Mineral Resources and Mineral Reserves, whose definitions
are incorporated by reference into NI 43-101.
(2) In all cases, metal prices considered for Mineral Resource estimates were $19.00/oz Ag, $1,300/oz Au, $1.00/lb Pb, and $1.20/lb Zn.
(3) The Mineral Resources information provided above for La Parrilla, Del Toro and San Martín is based on internal estimates prepared as of December 31, 2016.
The information provided was reviewed and validated by the Company’s internal Qualified Person, Mr. Jesus M. Velador Beltran, MMSA, QP Geology, who
has the appropriate relevant qualifications, and experience in geology and resource estimation.
(4) Mineral Resource estimates for La Guitarra are based on information contained in the 2015 Technical Report compiled by First Majestic with contribution
of Amec Foster Wheeler Americas Ltd. which were updated by First Majestic with information to December 31, 2016.
(5) Mineral Resource estimates for La Encantada are based on information contained in the 2016 Technical Report compiled by First Majestic with contribution
of Amec Foster Wheeler Americas Ltd. which were updated by First Majestic with information to 31 December, 2016.
(6) Mineral Resource estimates for Santa Elena are internal estimates based on the 2014 Update to Santa Elena Pre-Feasibility Study Technical Report compiled
by SilverCrest and re-addressed to First Majestic in October, 2015. These estimates were reviewed and validated by the Company’s internal Qualified Person,
Mr. Jesus M. Velador Beltran, MMSA, QP Geology.
(7) Silver-equivalent grade is estimated considering: metal price assumptions, metallurgical recovery for the corresponding mineral type/mineral process and
the metal payable of the corresponding contract of each mine. Estimation details are listed in each mine section below.
(8) The cut-off grades for Mineral Resources are different for all mines. The cut-off grades are listed in each mine section below.
(9) Measured and Indicated Mineral Resources are reported inclusive of Mineral Reserves.
(10) The technical reports from which the above-mentioned information is derived are cited under the heading "Current Technical Reports for Material Properties".
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INFERRED MINERAL RESOURCES WITH AN EFFECTIVE DATE OF DECEMBER 31, 2016
Mine / Project Category Mineral Type k tonnes Ag (g/t) Au (g/t) Pb (%) Zn (%) Cu (%) Ag-Eq (g/t) Ag (k Oz) Ag-Eq (k Oz)
LA ENCANTADA
Inferred Ojuelas
(UG)
Oxides -
Flotation 35 292 — 0.78 — — 305 325 340
Inferred other
deposits (UG) Oxides 728 232 — — — — 232 5,430 5,430
Inferred Total
(UG) Oxides 762 235 — 0.04 — — 235 5,756 5,770
LA PARRILLA Inferred (UG) Oxides 1,478 229 0.04 — — — 232 10,868 11,001
Inferred (UG) Sulphides 2,967 224 — 2.32 2.42 — 362 21,415 34,520
Inferred Total
(UG)
Oxides +
Sulphides 4,445 226 0.01 1.55 1.62 — 319 32,282 45,521
SAN MARTÍN
Inferred Total
(UG) Oxides 3,918 259 — — — — 259 32,592 32,592
DEL TORO
Inferred Total
(UG)
Transition +
Sulphides 4,637 164 0.12 3.30 3.37 — 293 24,397 43,753
LA GUITARRA
Inferred Total
(UG) Sulphides 679 290 1.44 — — — 380 6,322 8,285
SANTA ELENA
Inferred Total
(UG) Sulphides 591 103 2.04 — — — 232 1,966 4,408
LA JOYA
Inferred Total
(OP) Sulphides 27,927 58 0.28 — — 0.47 103 51,646 92,907
Total Inferred
All mineral
types 42,960 112 0.25 0.52 0.53 0.31 169 154,961 233,237
(1) Mineral Resources have been classified in accordance with the CIM Definition Standards on Mineral Resources and Mineral Reserves, whose definitions are
incorporated by reference into NI 43-101.
(2) In all cases, metal prices considered for Mineral Resource estimates were $19.00/oz Ag, $1,300/oz Au, $1.00/lb Pb, and $1.20/lb Zn.
(3) The Mineral Resources information provided above for La Parrilla, Del Toro and San Martín is based on internal estimates prepared as of December 31, 2016.
The information provided was reviewed and validated by the Company’s internal Qualified Person, Mr. Jesus M. Velador Beltran, MMSA, QP Geology, who
has the appropriate relevant qualifications, and experience in geology and resource estimation.
(4) Mineral Resource estimates for La Guitarra are based on information contained in the 2015 Technical Report compiled by First Majestic with contribution
of Amec Foster Wheeler Americas Ltd. which were updated by First Majestic with information to December 31, 2016.
(5) Mineral Resource estimates for La Encantada are based on information contained in the 2016 Technical Report compiled by First Majestic with contribution
of Amec Foster Wheeler Americas Ltd. which were updated by First Majestic with information to December 31, 2016.
(6) Mineral Resource estimates for Santa Elena are internal estimates based on the 2014 Update to Santa Elena Pre-Feasibility Study Technical Report compiled
by SilverCrest and re-addressed to First Majestic in October 2015. These estimates were reviewed and validated by the Company’s internal Qualified Person,
Mr. Jesus M. Velador Beltran, MMSA, QP Geology
(7) Silver-equivalent grade is estimated considering: metal price assumptions, metallurgical recovery for the corresponding mineral type/mineral process and
the metal payable of the corresponding contract of each mine. Estimation details are listed in each mine section below.
(8) The cut-off grades for Mineral Resources are different for all mines. The cut-off grades are listed in each mine section below.
(9) Inferred Mineral Resource estimates for La Joya Project are based on the 2013 Preliminary Economic Assessment Technical Report compiled for SilverCrest.
(10) The technical reports from which the above-mentioned information is derived are cited under the heading "Current Technical Reports for Material Properties".
The Company also announces that its 2016 Annual Information Form has been filed on SEDAR. In addition, a Form
40-F report has been filed with the United States Securities and Exchange Commission and is available on EDGAR.
Both documents are also available on the Company’s website at www.firstmajestic.com.
Shareholders may also receive a copy of First Majestic’s Annual Report which includes the audited financial statements,
without charge, upon request to First Majestic, Suite 1805 - 925 West Georgia Street Vancouver, B.C., Canada, V6C 3L2
or to [email protected].
Mr. Ramon Mendoza Reyes, Vice President Technical Services for First Majestic, is a "Qualified Person" as such term
is defined under National Instrument 43-101, and has reviewed and approved the technical information disclosed in
this news release.
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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 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 Elena Silver/Gold Mine. Production from these six mines 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 continued
access to necessary infrastructure, including, without limitation, 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, competitive, 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 related to many of these factors. Such factors include, without limitation: 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 the U.S. dollar); changes in national and local government, legislation, 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 associated with the business of
mineral exploration, development and mining (including environmental hazards, industrial accidents, unusual or unexpected formations, pressures, cave-ins and
flooding); risks relating to the credit worthiness or financial condition of suppliers, refiners and other parties with whom the Company does business; inability
to obtain adequate insurance to cover risks and hazards; and the presence of laws and regulations that may impose restrictions on mining, including those
currently enacted in 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 of mineral exploration and development, 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 materially, there may be other factors that cause results not to be 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.