FR Frankfurt – FMV Mexico ‐ AG First Majestic Produces a Record 18.7M Silver Eqv. Oz in 2016 (4.4M Silver Eqv. Oz in Q4); Announces 2017 Production Outlook and Cost Guidance
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 J anuary 17, 2017
Toronto – FR
Frankfurt – FMV
Mexico ‐ AG
First Majestic Produces a Record 18.7M Silver Eqv. Oz in 2016 (4.4M Silver Eqv. Oz in
Q4); Announces 2017 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 2016 production results, as well as production and cost guidance for 2017. Production costs
are scheduled to be released on February 22, 2017 with the Company’s full‐year and fourth quarter 2016
financial results.
Total production in 2016 reached a new record of 18.7 million e quivalent ounces of silver, representing a 16%
increase over 2015, consisting of 11.9 million ounces of silver, 62,436 ounces of gold, 33.2 million pounds of lead
and 10.6 million pounds of zinc.
Production in the fourth quarter of 2016 totaled 4.4 million eq uivalent ounces of silver consisting of 2.8 million
ounces of silver, 14,743 ounces of gold, 7.7 million pounds of lead and 1.2 million pounds of zinc.
As of December 31, 2016, the Company held US$129.0 million of cash in its treasury.
“2016 was an extremely volatile year with silver prices increasing from $13 per ounce in January to $21 per ounce
in July before settling around $16 per ounce at year end,” said Keith Neumeyer, President & CEO. “This extreme
volatility continued to drive our cost reduction strategy by ad opting best practice policies throughout all areas
of the business. Improvements in our operating procedures and t he continuous search and use of new
technologies allowed us to achieve new production records in 20 16. Our record ending balance of cash and our
increased investments in explora tion and development in 2017 is e x p e c t e d t o r e s u l t i n s i g n i f i c a n t s i l v e r
production growth in 2018 and beyond.”
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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 844,155 tonnes which is consistent compared to
the previous quarter.
Silver grades in the quarter averaged 137 g/t compared to 150 g/t in the previous quarter. The slight decrease in
silver grades is primarily due to lower grades at Del Toro in t he month of October due to limited production at
the high grade Dolores mine. As a result, the Company increased production rates at the San Juan mine to offset
the decrease in ore production from Dolores. Beginning in Novem ber, production at the Dolores mine returned
to normal operating levels.
Combined silver recoveries averaged 76%, relatively unchanged c ompared to the previous quarter’s average of
77%.
The Company's underground development in the fourth quarter con sisted of 14,918 metres, reflecting a 17%
increase compared to 12,764 metres completed in the previous qu arter. The Company also completed 36,351
metres of diamond drilling in the quarter, representing a slight increase compared to 36,290 metres in the prior
quarter. A substantial portion of the cu rrent drilling and development i s for the purpose of updating Mineral
Reserves and Resources which the Company expects to release in late March 2017. In addition, updated NI 43‐
101 Technical Reports for San Ma rtin, Del Toro and La Parrilla are expected to be released in the first half of
2017.
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: $17.19 per ounce; Gold: $1,219 per oun ce; Lead: $0.98 per pound;
Zinc $1.13 per pound.
Q4 Q3 Q/Q FY FY Y/Y
2016 2016 Change Consolidated Production Results 2016 2015 Change
844,155 838,233 1% Ore processed/tonnes milled 3,270,162 2,852,655 15%
4,380,477 4,524,619 ‐3% Total production ‐ ounces of silver equivalent 18,669,800 16,086,271 16%
2,819,708 3,114,627 ‐9% Total silver ounces produced 11,853,438 11,142,109 6%
137 150 ‐9% Silver grade (g/t) 149 168 ‐12%
76 77 ‐2% Silver recovery (%) 76 72 5%
14,743 14,452 2% Gold ounces produced 62,436 25,467 145%
7,684,876 8,038,206 ‐4% Pounds of lead produced 33,185,745 40,149,170 ‐17%
1,190,713 1,519,143 ‐22% Pounds of zinc produced 10,577,967 17,524,223 ‐40%
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 257,771 2,802 89 89% 660,207 11,430 ‐ ‐ 1,470,612
La Encantada 235,039 2,555 132 57% 567,930 22 ‐ ‐ 569,504
La Parrilla 153,309 1,666 130 78% 497,466 260 1,856,882 1,190,713 699,497
Del Toro 82,767 900 157 82% 343,894 70 5,827,994 ‐ 680,802
San Martin 76,848 835 254 81% 510,423 888 ‐ ‐ 573,349
La Guitarra 38,422 418 246 79% 239,788 2,073 ‐ ‐ 386,713
Total 844,155 9,176 137 76% 2,819,708 14,743 7,684,876 1,190,713 4,380,477
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At the Santa Elena Silver/Gold Mine:
During the quarter, Santa Elena produced 660,207 ounces of silver and 11,430 ounces of gold for a total
production of 1,470,612 silver equivalent ounces reflecting a 3% increase compared to the prior quarter.
The mill processed a total of 257,771 tonnes, consisting of 172,061 tonnes of underground ore and
85,710 tonnes from the above ground heap leach pad, representing an increase of 7% compared to the
prior quarter.
Silver and gold grades of underground ore averaged 111 g/t and 1.9 g/t, respectively. Whereas silver and
gold grades from the above ground heap leach pad averaged 45 g/t and 0.6 g/t, respectively.
At the end of the quarter, total development of the new San Sal vador ramp reached 1,486 metres, or
65% of a 2,300 metre development plan. The new ramp will connect to the Main Vein along level 575 by
April 2017. Once the ramp is completed, it is expected to improve underground productivity by reducing
trucking bottlenecks.
A total of 3,029 metres of underground development were complet ed in the fourth quarter compared
to 2,444 metres of development in the previous quarter.
A total of 6,493 metres of exploration drilling was completed i n the fourth quarter compared to 3,520
metres of drilling in the previous quarter. The Company receive d assay results from the first four holes
o f a t e n h o l e d i a m o n d d r i l l p r o g r a m a t t h e E r m i t a ñ o W e s t p r o p e rt y d u r i n g t h e q u a r t e r . T h e r e s u l t s
confirm the target structure was intersected in all four holes. Highlights include: Hole 16‐04 intersected
17.9 metres averaging 11.4 g/t gold and 86 g/t silver, includin g 3.3 metres of 34.6 g/t gold and 242 g/t
silver, at a depth of 194 metres below surface. True thickness is estimated to be 70% ‐ 90% of reported
intervals. This new discovery is located only 3.5 kilometres southeast of the Santa Elena mine. The
Company anticipates the results from the next four drill holes by the end of January 2017.
At the La Encantada Silver Mine:
For the quarter, silver production reached 567,930 ounces representing a 17% decrease over the
previous quarter. The decrease i n production was primarily due to a 9% decrease in grades and a 5%
decrease in tonnes milled.
Silver grades averaged 132 g/t during the quarter, or a 9% decre a s e c o m p a r e d t o t h e p r i o r q u a r t e r
primarily due to the continued blending of ore from old stopes, stockpiles and the recovery of pillars.
Grades are expected to improve towards the end of 2017 following the start of block caving production
within the San Javier Breccia.
The roasting project advanced in the fourth quarter with the co mpletion of site preparations and civil
works. The excavation work for the installation of the foundations is expected to begin in February 2017.
Manufacturing of the new roasting kiln is now 32% complete and initial equipment shipments to site for
assembly are expected to begin before the end of March 2017. The Company continues to anticipate the
completion of this circuit by the fourth quarter of 2017. Once in full production, the Company expects
to recover an additional 1.5 million ounces of silver per year from the reprocessing of above ground
tailings.
A total of 1,015 metres of underground development were complet ed in the fourth quarter compared
to 519 metres of development in the previous quarter. The incre ase in development was primarily due
to block caving preparation at the San Javier Breccia.
A total of 4,197 metres were drilled in the fourth quarter comp ared to 3,681 metres of drilling in the
previous quarter.
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At the La Parrilla Silver Mine:
During the quarter, the flotation circuit processed 98,546 tonnes (1,071 tpd) with an average silver grade
of 138 g/t and an 83% recovery while the cyanidation circuit processed 54,762 tonnes (595 tpd) with an
average silver grade of 114 g/t and a 68% recovery for total production of 699,497 silver equivalent
ounces.
The lead circuit processed an average lead grade of 1.2% with recoveries of 74% for total lead production
of 1.9 million pounds, representing a 13% decrease compared to the previous quarter. The decrease in
lead production was primarily attributed to a 13% decrease in lead grades.
The zinc circuit processed an average zinc grade of 1.0% with recoveries of 54% for total zinc production
of 1.2 million pounds, representing a 22% decrease compared to the previous quarter. The decrease in
zinc production was primarily due to the lower circuit throughput and a 27% decrease in zinc grades.
Underground development complet ed in the quarter totaled 3,181 metres compared to 2,612 metres
developed in the previous quarter.
A total of 5,665 metres were drilled in the fourth quarter comp ared to 5,115 metres of drilling in the
previous quarter.
At the Del Toro Silver Mine:
For the quarter, Del Toro produced a total of 680,802 silver equivalent ounces representing a 4%
decrease in production compared to the prior quarter primarily due to lower silver grades.
Silver grades and recoveries during the quarter averaged 157 g/t and 82%, respectively. The lower silver
grade was primarily due to temporarily lower production of high grade ore from the Dolores mine in
October.
Lead grades and recoveries averaged 4.6% and 70%, respectively, producing a total of 5.8 million pounds
of lead, consistent with the previous quarter.
Underground development completed in the quarter totaled 2,377 metres consistent with 2,328 metres
developed in the previous quarter.
Total exploration metres drilled in the quarter amounted to 3,614 metres compared to 6,643 metres of
drilling in the previous quarter. The 46% decrease is due to the early completion of the 2016 drill program
at Del Toro.
At the San Martin Silver Mine:
During the quarter, San Martin produced 510,423 ounces of silve r and 888 ounces of gold for a total
production of 573,349 silver equivalent ounces. Silver producti on increased 2% compared to the prior
quarter primarily due to higher silver grades.
Silver grades and recoveries averaged 254 g/t and 81%, respectively, during the quarter. In addition, gold
grades and recoveries averaged 0.4 g/t and 87%, respectively.
The construction project for the dry stack filter press install ation continued during the quarter with the
completion of the foundations. At of the end of 2016, the project was 33% complete. The filter presses,
which are designed to recover and re‐use tailings solution and to save on water consumption, are
expected to be installed and undergo testing in late March 2017.
Underground development completed in the fourth quarter totaled 2,696 metres compared with 2,807
metres of development in the previous quarter.
Total metres drilled in the fourth quarter amounted to 7,069 metres compared to 7,817 metres of drilling
in the previous quarter.
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At the La Guitarra Silver Mine:
During the quarter, La Guitarra produced 239,788 ounces of silv er and 2,073 ounces of gold for a total
production of 386,713 silver equivalent ounces. Silver producti on decreased 9% compared to the
previous quarter primarily due to a 5% decrease in silver recoveries and a 2% decrease in silver grade.
Silver grades and recoveries averaged 246 g/t and 79%, respectively, during the quarter. In addition, gold
grades and recoveries averaged 2.3 g/t and 72%, respectively.
During the quarter, the 800 metre drift connecting the Soledad 1 and 2 veins, Nazareno vein and Coloso
was completed. This newly completed drift will allow for furthe r exploration drilling and development
along these structures.
A total of 2,620 metres of development were completed in the fourth quarter compared to 2,055 metres
of development in the previous quarter.
Total metres drilled in the quarter amounted to 9,315 metres co mpared to 9,515 metres drilled in the
previous quarter.
2017 Production Outlook and Cost Guidance:
The Company anticipates 2017 silver production will range between 11.1 to 12.4 million ounces (or 16.6 to 18.5
million silver equivalent ounces) representing consistent silver production compared to 2016 and a slightly lower
production of silver equivalent ounces primarily due to less by ‐product credits expected at Santa Elena and La
Parrilla.
A mine‐by‐mine breakdown of the 2017 production guidance is included in the table below. Cash cost and AISC
guidance is shown per payable silver ounce. Metal price and foreign currency assumptions for calculating
equivalents are: silver: $16.50/oz, gold: $1,200/oz, lead: $1.00/lb, zinc: $1.20/lb, MXN:USD 20:1.
Mine Silver Oz (M) Silver Eqv Oz (M) Cash Costs ($) AISC ($)
Santa Elena 2.6 – 2.9 5.4 – 6.0 0.90 – 1.46 6.22 – 7.24
La Encantada 2.6 – 2.9 2.6 – 2.9 9.83 – 10.17 12.35 – 12.90
La Parrilla 1.9 – 2.1 2.9 – 3.2 6.45 – 6.84 10.79 – 11.55
Del Toro 1.3 – 1.4 2.3 – 2.6 4.90 – 5.35 10.38 – 11.30
San Martin 1.8 – 2.0 2.0 – 2.2 8.31 – 8.66 11.77 – 12.41
La Guitarra 0.9 – 1.1 1.4 – 1.6 6.35 – 6.75 14.37 – 15.45
Totals: 11.1 – 12.4 16.6 – 18.5 $6.06 – $6.48 $11.96 – $12.88
*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 $1.99 to $2.20 per payable silver
ounce.
The Company is projecting its 2017 All‐In Sustaining Cost per Ounce (“AISC”), as defined by the World Gold
Council, to be within a range of $11.96 to $12.88 consolidated on a per payable silver ounce basis. Excluding non‐
cash items, the Company antici pates its 2017 AISC to be within a range of $11.36 to $12.21 per payable silver
ounce. An itemized AISC cost table is provided below:
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All‐In Sustaining Cost Calculation (1) FY 2017
($ /Ag oz)
Total Cash Costs per Payable Silver Ounce (2) 6.06 – 6.48
General and Administrative Costs 1.38 – 1.53
Sustaining Development Costs 1.94 – 2.10
Sustaining Property, Plant and Equipment Costs 1.53 – 1.66
Sustaining Exploration Costs 0.45 – 0.48
Share‐based Payments (non‐cash) 0.53 – 0.59
Accretion of Reclamation Costs (non‐cash) 0.07 – 0.08
All‐In Sustaining Costs: (WGC definition) $11.96 – $12.88
All‐In Sustaining Costs: (WGC excluding non‐cash items) $11.36 – $12.21
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 $0.12 per ounce.
In 2017, the Company plans to invest a total of $124.0 million on capital expenditures consisting of $46.2 million
for sustaining requirements and $77.8 million for expansionary projects. This represents a 40% increase
compared to the 2016 capital budge t and is aligned with the Com pany’s future growth strategy of developing
additional mine production levels at each of the Company’s oper ations, preparing for the upcoming expansion
at La Guitarra, completing the roasting circuit and preparing f or block caving at La Encantada, in addition to the
exploration work at Plomosas which is expected to result in a new Preliminary Economic Assessment in 2018.
The Company is planning to complete a total of 74,850 metres of underground development in 2017,
representing a 51% increase compared to 49,428 metres completed in 2016. In addition, the Company is planning
to complete a total of 183,000 metres of exploration drilling in 2017, representing an 85% increase compared to
98,678 metres completed in 2016.
The 2017 drilling program will consist 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 & Indi c a t e d o r I n f e r r e d R e s o u r c e s a t t h e s i x
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.
The 2017 annual budget includes cap ital investments totaling $5 3.3 million to be spent on underground
development, $33.2 million towards property, plant and equipment, $27.0 million in exploration and $10.5
million towards corporate automation and efficiency projects. Management has the option to make adjustments
to the budget should metal prices have any dramatic price changes throughout 2017.
Conference Call
The Company will be holding a conference call and webcast on We dnesday, February 22, 2017 at 10 am PDT
(1 pm EDT).
To participate in the conference call, please dial the following:
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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.
Click on WEBCAST on the First Majestic homepage as a simultaneo us audio webcast of the conference call will
be posted at www.firstmajestic.com.
The conference call will be recorded and you can listen to an archive of the conference by calling:
Canada & USA Toll Free: 1‐800‐319‐6413
Outside Canada & USA: 1‐604‐638‐9010
Access Code: 1118 followed by the # sign
The replay will be available approximately one hour after the c onference and will available for 7 days following
the conference. The replay will also be available on the Company’s website for one month.
First Majestic is a mining compan y f o c u s e d o n s i l v e r p r o d u c t i o n in México and is aggressively pursuing the
development of its existing mineral property assets and the pur suit through acquisition of additional mineral
assets which contribute to the Company achieving its corporate growth objectives.
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, 2015, 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
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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.