First Majestic Silver Corp. · TSX:AG

First Majestic Silver — Investor Presentation (March 2015)

33 slides from First Majestic Silver's investor presentation, March 2015

  1. Slide 1: First Majestic Silver Corp.

    FIRST MAJESTIC SILVER CORP. TSX: FR | NYSE: AG | FWB: FMV | BMV:AG

  2. Slide 2: Forward-looking statements

    Certain statements contained herein regarding First Majestic Silver Corp. (the “Company”) and its operations constitute “forward-looking statements” within the meaning of the United States Private Securities Litigation Reform Act of 1995 and applicable Canadian securities legislation. All statements

  3. Slide 3: Market emotion cycle

    EUPHORIA ANXIETY THRILL DENIAL EXCITEMENT FEAR OPTIMISM OPTIMISM DESPERATION RELIEF PANIC DESPONDENCY HOPE DEPRESSION

  4. Slide 4: Pure silver producer in Mexico

    Pure Silver Producer 77% Ag in 2014 (5% Au, 13% Pb, 5% Zn) One Country: Mexico World’s largest silver producing country Five producing silver mines; 100% owned Multi-Asset Producer Projecting 11.8M – 13.2M Ag oz in 2015 Future Growth Two advanced stage silver projects Goal Achieve annual production

  5. Slide 5: Market capitalization and liquidity

    Market Capitalization: US$750M Shares Outstanding: 117.5M (FD 119.9M w/ in the money options) Avg. Daily Volume: 3.9M shares ~ US$23M in daily liquidity Cash & Cash Equiv1: US$40.3M (1) As of December 31, 2014 3

  6. Slide 6: Broad depth of people

    BROAD DEPTH OF PEOPLE • 100% Mexican operating talent - No Expats • Internally design, develop and construct 100% of our silver projects • ~ 3,800 employees • Awarded ‘Socially Responsible Company’ for six consecutive years, 2008 to 2013, from the Centro Mexicano para la Filantropia (CEMEFI) 4

  7. Slide 7: Q4 and full year 2014 results

    Quarter End Full Year (All shown in $USD) Q4 2014 Q3 2014 Q4 2013 2014 Revenue 72.5M 40.8M 59.0M 245.5M Mine Operating Earnings 5.8M (1.8M) 14.3M 30.2M Net Earnings after taxes (64.6M) (10.5M) (81.2)M (61.4M) Earnings per share - Adjusted1 0.04 (0.04) 0.05 0.07 Operating Cash Flows, before movements

  8. Slide 8: Mines in production and permitting

    IN PRODUCTION 1 La Encantada 2 La Parrilla 1 3 San Martin 4 La Guitarra 5 Del Toro 2 6 5 7 3 PERMITTING 4 6 Plomosas 7 La Luz 6 7

  9. Slide 9: Strong production growth

    TSX: FR | NYSE: AG | FWB: FMV | BMV: AG FIRST MAJESTIC SILVER CORP. STRONG PRODUCTION GROWTH 25 5 Production Target 20 ~ lm Plomosas* 15 - mLaLuz* Silver Ounces m La Guitarra (Millions) 10 - @ Del Toro : ] ft La Encantada - | @ La Parrilla 5 4 1 J f u : mSan Martin =) *Pending permits 2006 2007 2008

  10. Slide 10: Silver reserves increased over 135% since 2010

    Silver Reserves have increased by over 135% since 2010 Silver price will be reduced to $20/oz for 2014 Reserves Silver Ounces (M) Silver Price Historical Silver Price Silver Ounes (Millions) (3, 5 and 10-Year Avg.) Ag Grade 223 163 166 174 (g/t): as of Dec. 31, 2014 250 Measured & Indicated Resource

  11. Slide 11: 2015 production and AISC guidance by mine

    Mine Ag Oz (M) Eqv. Ag Oz (M) AISC/Oz ($USD)* La Encantada 4.0 – 4.5 4.0 – 4.5 $12.19 – $12.78 La Parrilla 2.6 – 2.9 4.3 – 4.8 $12.51 – $13.93 Del Toro 2.6 – 2.9 3.7 – 4.2 $13.70 – $14.77 San Martin 1.8 – 2.0 2.1 – 2.3 $13.73 – $14.96 La Guitarra 0.8 – 0.9 1.2 – 1.3 $15.74 – $18.07 Total: 11.8 – 13.

  12. Slide 12: Lowest capital investment in five years

    Lowest capital investment in five years following aggressive growth period (Growth was funded by reinvesting operating profits; non-dilutive growth!) 10

  13. Slide 13: Projecting AISC cost reductions of over 15% in 2015

    Projecting AISC cost reductions of >15% in 2015 Excluding non-cash items: 2015E AISC $13.50 - $14.96 1) AISC is a non-GAAP measure and was calculated based on guidance provided by the World Gold Council (“WGC”) 11

  14. Slide 14: First Majestic Silver Corp.

    TSX: FR | NYSE: AG | FWB: FMV | BMV: AG FIRST MAJESTIC SILVER CORP.

  15. Slide 15: Del Toro operations

    Plant Operations Mill Throughput: 2,000 tpd 2015E Production: 2.6 – 2.9M Ag oz (3.7 – 4.2M Ag Eq oz) Reserves & Resources Proven & Probable: 25.8M Ag oz Measured & Indicated: 11.7M Ag oz Inferred: 38.1M Ag oz • Connected to National Power Grid in Quarter End September 2014 Full Year Q4 2014 Q3 2014

  16. Slide 16: La Encantada operations

    Plant Operations Mill Throughput: 2,100 tpd 2015E Production: 4.0 – 4.5M Ag oz Reserves & Resources Proven & Probable: 37.2M Ag oz Measured & Indicated: 21.9M Ag oz Inferred: 21.8M Ag oz • Significant cash flow generator and Quarter End Full Year consistent low cost operation Q4 2014 Q3 2014 Q4 2013

  17. Slide 17: La Parrilla operations

    Plant Operations Mill Throughput: 2,000 tpd 2015E Production: 2.6 – 2.9M Ag oz (4.3 – 4.8M Ag Eq oz) Reserves & Resources Proven & Probable: 23.1M Ag oz Measured & Indicated: 7.9M Ag oz Inferred: 73.4M Ag oz • Connecting the mines with a 5 kilometre Quarter End Full Year modern underground ore haula

  18. Slide 18: San Martin operations

    Plant Operations Mill Throughput: 1,300 tpd 2015E Production: 1.8 – 2.0M Ag oz (2.1 – 2.3M Ag Eq oz) Reserves & Resources Proven & Probable: 22.4M Ag oz Measured & Indicated: 3.8M Ag oz Inferred: 57.0M Ag oz • Increasing silver production and reducing Quarter End Full Year costs following recent pla

  19. Slide 19: La Guitarra operations

    Plant Operations Mill Throughput: 500 tpd 2015E Production: 0.8 – 0.9M Ag oz (1.2 – 1.3M Ag Eq oz) Reserves & Resources Under Review Proven & Probable: Measured & Indicated: New 43-101 expected in Q2 Inferred: Quarter End Full Year Q4 2014 Q3 2014 Q4 2013 2014 Silver production (oz) 229,463 163,696

  20. Slide 20: First Majestic (AG) 5 year chart

    FIRST MAJESTIC (AG) (5 year chart) AG SLV GDX Source: Yahoo 17

  21. Slide 21: Share performance: 1, 3 and 5 year

    1 Year 3 Year 5 Year Source: Bloomberg (as of February 17, 2015) 18

  22. Slide 22: Silver has underperformed other commodities

    Silver has underperformed other commodities causing pain for silver companies Source: Bloomberg 19

  23. Slide 23: Attractive value relative to peer group

    P / CF 2015E EV / EBITDA 2015E Attractive value relative to peer group Source: Bloomberg analyst consensus (as of February 17, 2015) 20

  24. Slide 24: 2015 catalysts

     Crushing/grinding upgrade at La Encantada expected to be completed by mid-2015 – production rates anticipated to increase > 30%  Updated technical reports for La Guitarra and La Encantada expected in 1H 2015  Expansion decision pending at La Guitarra which could increase production capacity to 1

  25. Slide 25: Our Strategy

    Our Strategy… One Metal One Country Continue to Acquire the Best Talent in Mexico Build through Development and Acquisitions Become a 20 Million Ounce Producer

  26. Slide 26: As we become more reliant on technology, we become more reliant on silver

    “AS WE BECOME MORE RELIANT ON TECHNOLOGY... WE BECOME MORE RELIANT ON SILVER’ FIRST MAJESTIC SILVER CORP. NYSE: AG | TSX: FR

  27. Slide 27: Appendix

    TSX: FR | NYSE: AG | FWB: FMV | BMV: AG FIRST MAJESTIC SILVER CORP. APPENDIX

  28. Slide 28: Research coverage and institutional holders

    Research Coverage Institution % S/O David Forster - Bank of America Van Eck (GDXJ ETF) 9.3% Andrew Kaip - Bank of Montreal Van Eck (GDX ETF) 7.1% Graeme Jennings - Cormark Resolute Funds 4.3% Matthew O'Keefe - Dundee M&G Investment Mgmt 3.8% Adam Graf - Cowen Sprott Asset Mgmt 3.4% Mike Parkin - Des

  29. Slide 29: Beta versus peers

    1 Year 3 Years 5 Years First Majestic 1.64 1.32 1.25 Silver Standard 1.64 1.33 1.01 Coeur 1.27 1.05 0.99 Silver Wheaton 1.21 1.11 1.01 Pan American 1.17 0.88 0.75 Fresnillo 1.06 0.97 0.83 GDX ETF 1.05 0.94 0.73 Hecla 0.93 0.91 0.94 Spot Silver 0.53 0.53 0.41 Spot Gold 1.64 1.32 1.25 Source: Bloomber

  30. Slide 30: Total cash costs breakdown

    Share-based Reclamation Payments Costs G&A PTU's 2% 1% 9% 0% Transport and other selling costs Indirect 3% 11% Smelting & Milling Refining Total Cash Costs 24% 14% 59% Environmental Sustaining Costs duty 29% By-product Mining 1% Revenues 19% -28% Shown as % of Total Cash Costs 27

  31. Slide 31: Proven and probable reserves

    Mine/ProjectCategory Mineral type Tonnes Ag (g/t) Au (g/t) Pb (%) Zn (%) Ag (Oz) AgEq (Oz) Proven (UG) Oxides 1,023,409 316 - 2.9 1.6 10,410,996 10,410,996 Proven (tailings) Oxides 5,304,946 105 - 0.6 0.2 17,903,993 17,903,993 LA ENCANTADA Probable (UG) Oxides 1,030,341 269 - 2.6 1.2 8,916,063 8,916

  32. Slide 32: Measured and indicated resources

    Mine/projectCategory Mineral type Tonnes Ag (g/t) Au (g/t) Pb (%) Zn (%) Ag (Oz) AgEq (Oz) in situ Measured (UG) Oxides 1,380,065 199 - 1.6 3.3 8,830,896 8,830,896 LA ENCANTADA Indicated (UG) Oxides 1,805,358 225 - 1.6 5.3 13,032,801 13,032,801 Total Measured & Indicated (UG) Oxides 3,185,423 213 -

  33. Slide 33: Inferred resources

    Mine/Project Category Mineral type Tonnes Ag (g/t) Au (g/t) Pb (%) Zn (%) Ag (Oz) AgEq (Oz) in situ LA ENCANTADA Total Inferred (UG) Oxides + Sulphides 4,348,724 156 - 1.1 1.5 21,822,446 21,822,446 Inferred (UG) Oxides 4,928,449 178 0.06 0.4 0.3 28,251,697 28,795,192 LA PARRILLA Inferred (UG) Sulphi

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