First Majestic Silver Corp. · TSX:AG
First Majestic Silver — Investor Presentation (September 2019)
39 slides from First Majestic Silver's investor presentation, September 2019
Slide 1: First Majestic Silver Corp.
FIRST MAJESTIC SILVER CORP. TSX: FR | NYSE: AG | FWB: FMV
Slide 2: Forward-looking statements
2 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 concerning th
Slide 3: Silver market fundamentals
3 ▪ Annual silver consumption is ~1.0B ounces ▪ 80% sourced from mining, 20% sourced from recycling and hedging ▪ Over past 10 years, the silver industry has been in a 500M ounce physical deficit ▪ Silver is one of the world’s most reflective and best conductors of electricity ▪ 55% of silver consum
Slide 4: Image from Alternative Energy News
4 Image from Alternative Energy News
Slide 5: Solar carports and EV charging
5 • Solar carports are one of the most viable options for refueling EV’s • Currently in use at a number of Walmart’s, Federal & State offices and colleges across the United States • US Department of Energy’s National Renewable Energy Laboratory (NRLE) says about 8,000 solar carport stations would be
Slide 6: Silver needed for nuclear-plant-equivalent solar
6 Equal to ~200 nuclear plants and requiring an estimated ~200 million ounces of silver!
Slide 7: Silver Usage
SILVER USAGE yarn You Tube f Degree
Slide 8: Silver and gold price performance
8 AG +36% AG -41% AG +182% AG -36% AG +407% AG -71% AU -24% AU +34% AU +69% AU +19% AU +105% AU -38% Source: Bloomberg
Slide 9: Company overview
9 Primary Ag Producer ~60% of revenue from Silver (33% Au, 5% Pb, 2% Zn) One Country: Mexico World’s largest silver producing country Multi-Asset Producer Six producing silver mines; 4,950 direct employees Future Growth Three advanced stage silver projects Goal Become World’s largest primary silver
Slide 10: Capitalization and production
10 Market Capitalization: US$1.3B Shareholders: Shares Outstanding: 196.6M (FD 207.0M) 3M Avg. Daily Volume: 4.0M shares ~ US$23M (NYSE & TSX) Cash & Cash Eqv: US $57.0M Silver Equivalent Production Silver Production 31% 7.0 Production Ounces (Millions) -4% 6.0 32% 5.0 -3% -9% 3% 2% -5% 4.0 3.0 2.0
Slide 11: Mines and projects in Mexico
11 IN PRODUCTION 1 San Dimas 2 Santa Elena 2 3 La Encantada 3 4 La Parrilla 5 Del Toro 6 San Martin 10 1 4 8 5 9 PROJECTS 6 7 La Guitarra 8 Plomosas 7 9 La Luz EXPLORATION 10 La Joya
Slide 12: Strong production growth
NYSE: AG EWB: FMV STRONG PRODUCTION GROWTH == Silver Ounces Only = =s nv a eo < s ° > > ire] . o 2 a 2009 2010 2011 012.2013 2014 2015S 2016 = 2017'S 2018 = 2019E FIRST MAJESTIC
Slide 13: 2019 production and cost guidance
13 Mine Silver Oz Silver Eqv Oz Cash Costs ($) AISC ($) San Dimas 5.5 – 6.1 11.9 – 13.2 0.89 – 1.81 7.58 –9.27 Santa Elena 2.3 – 2.6 5.2 – 5.8 5.33 – 6.59 8.99 – 10.66 La Encantada 3.2 – 3.6 3.2 – 3.6 12.41 – 13.22 13.87 – 14.85 San Martin 1.9 – 2.1 2.2 – 2.4 9.81 – 10.60 12.39 – 13.47 La Parrilla 0
Slide 14: 2019 capital expenditures
14 Expansionary $76M Sustaining $61M $64M - U/G Development 2019 CAPEX include: $26M - Exploration $24M - PP&E $23M - Corporate Projects
Slide 15: Exploration metres and San Dimas reserves
15 Our largest drill program ever! 150 Proven & Probable Reserves San Dimas Reserves 250,000 Metres of Exploration 200,000 2P Silver Ounces (M) Exploration Metres 100 150,000 100,000 50 50,000 0 0 2011 2012 2013 2014 2015 2016 2017 2018E Also produced 82M oz of Silver over this period
Slide 16: San Dimas plant operations
16 Plant Operations Mill Throughput: 2,000 tpd 2019E Production: 5.5M – 6.1M Ag oz (11.9M – 13.2M AgEq oz) 2019E AISC: $7.58 - $9.27 Reserves & Resources Proven & Probable: 39.7M Ag + 495K Au oz Measured & Indicated: 60.9M Ag + 811K Au oz Inferred: 70.9M Ag + 782K Au oz *M&I Resources are inclusive
Slide 17: San Dimas district
• First reported mining in the San Dimas district in 1757– over 250 years ago • Considered to be one of the most significant precious metal mining Active on only districts in Mexico 130 hectares • Historic production estimated at 11M Au oz & 580M Ag oz • Over 500 km of underground Typical Vein at Sa
Slide 18: San Dimas plant improvements
18 ❑ Implementation of High Intensity Grinding technology (HIG Mill) and conversion of ball mill #3 into autogenous mill ❑ Lime automation and pH control ❑ Upgrading of tailings filtration plant ❑ Modernization of the Merrill Crowe and smelting operations ❑ Installation of the third counter-current
Slide 19: First Majestic
19 FIRST MAJESTIC
Slide 20: Roaster project
20 ROASTER PROJECT LOM Operating Metrics* Throughput 2,000 tpd LOM Avg. Ag Grade 110 g/t LOM Avg. Recovery 64% LOM Avg. Production 1.5M Ag oz/yr LOM Total Production 9.3M Ag oz LOM of Tailings 6.2 years Status: Commissioning phase *Based on Reserves of 4.1 M tonnes above ground stockpiles
Slide 21: Ermitaño drilling and resource
21 • 4km away from our Santa Elena mill • Drilling 16,000 metres in 2019 • Not subject to Sandstorm stream • Mining permit expected in March 2019 ➢ Hole 16-04: 17.9 metres grading 11.4 g/t Au & 86 g/t Ag ➢ Hole 16-06: 12.9 metres grading 4.7 g/t Au & 277 g/t Ag ➢ Hole 16-09: 37.0 metres grading 3.0
Slide 22: Fine grinding technology
22 • With recent advances in science and technology, we are now able to design processes that can grind and treat particles the size of a human red blood cell ~ 5 microns • The smaller the particle size, typically more metal can be recovered which increases production and reduces unit costs
Slide 23: HIG Mill
23 HIG Mill • Uses rotating grinding discs with ceramic beads to grind ore as fine as 20 microns which has shown to significantly increase recoveries • Low cost energy consumption • Low maintenance compared to standard ball mill • Two 3,000 tpd units being delivered in 2019 with a third unit on orde
Slide 24: High recovery flotation columns
24 High Recovery Flotation Columns • Increases metallurgical recoveries of Ag, Pb & Zn as a result of significantly larger surface area and concentration of bubbles • Improves final grade of concentrates • Being delivered to La Parrilla in early 2019
Slide 25: Silver recoveries
25 Microbubbles Cyanide Mill & Grind Oxygen Lime feed pH monitoring & consumption optimization Injection Fine Grinding 90% target 85 % recovery goal 200 Silver Grade (g/t) Silver Recoveries 80 % Santa Elena Acquisition 150 75 % 100 70 % 65 % 50 Every 1% increase in silver recoveries ~ 150K Ag oz 60
Slide 26: Expected production improvements
26 ❑ Start-up of roasting circuit at La Encantada expected to add 1.5 million Ag ounces per year ❑ Continued improvements in metallurgical recoveries through implementation of microbubbles, fine grinding & other R&D ❑ Connection to power grid / LNG at Santa Elena to reduce operating costs ❑ Higher s
Slide 27: Analyst estimates and metal price assumptions
27 Source: BMO SilverPages Report - Jan. 7, 2019 2019 metal price assumptions: silver: $15.75/oz, gold: $1,283/oz, lead: $1.01/lb, zinc: $1.15/lb, copper: $3.25/lb
Slide 28: Massive short squeeze potential
28 Massive Short Squeeze Potential (9.5 days to cover) Source: Bloomberg (NYSE & TSX reported short interest)
Slide 29: Our strategy: one metal, one country
29 Our Strategy… One Metal One Country Continue to Acquire the Best Talent in Mexico Build through Development and Acquisitions Become World’s Largest Primary Silver Producer
Slide 30: Natural Gas Generators
30 Natural Gas Generators
Slide 31: Research coverage and top shareholders
31 Research Coverage Top Shareholders % S/O Bank of Montreal - Ryan Thompson Van Eck (GDXJ & GDX) 13.1% Cormark - Richard Gray Wheaton Precious Metals 10.8% H.C. Wainwright - Heiko Ihle The Vanguard Group 2.1% National Bank Financial - Don DeMarco Keith Neumeyer (President & CEO) 1.7% Roth Capital P
Slide 32: Santa Elena plant operations
32 Plant Operations Mill Throughput: 3,000 tpd 2019E Production: 2.3M – 2.6M Ag oz (5.2M – 5.8M AgEq oz) 2019E AISC: $8.99 - $10.66 Reserves & Resources Proven & Probable: 14.1M Ag + 216K Au oz Measured & Indicated: 15.8M Ag + 241K Au oz Inferred: 11.0M Ag + 481K Au oz *M&I Resources are inclusive o
Slide 33: La Encantada plant operations
33 Plant Operations Mill Throughput: 3,000 tpd 2019E Production: 3.2M – 3.6M Ag oz 2019E AISC: $13.87 – $14.85 Reserves & Resources Proven & Probable: 31.4M Ag oz Measured & Indicated: 32.4M Ag oz Inferred: 11.4M Ag oz *M&I Resources are inclusive of Reserves • Natural gas generators currently Quart
Slide 34: San Martin plant operations
34 Plant Operations Mill Throughput: 900 tpd 2019E Production: 1.9M – 2.1M Ag oz (2.2M – 2.4M AgEq oz) 2019E AISC: $12.39 – $13.47 Reserves & Resources Proven & Probable: 18.8M Ag + 26K Au oz Measured & Indicated: 22.3M Ag + 33K Au oz Inferred: 21.4M Ag + 7K Au oz *M&I Resources are inclusive of Res
Slide 35: La Parrilla plant operations
35 Plant Operations Mill Throughput: 1,200 tpd 2019E Production: 0.9M – 1.0M Ag oz (1.6M – 1.8M AgEq oz) 2019E AISC: $14.76 – $16.49 Reserves & Resources Proven & Probable: 14.3M AgEq oz Measured & Indicated: 16.7M AgEq oz Inferred: 28.5M AgEq oz *M&I Resources are inclusive of Reserves Quarter End
Slide 36: Del Toro plant operations
36 Plant Operations Mill Throughput: 270 tpd 2019E Production: 0.4M Ag oz (0.6M – 0.7M AgEq oz) 2018E AISC: $23.87 - $26.69 Reserves & Resources Proven & Probable: 11.9M AgEq oz Measured & Indicated: 16.4M AgEq oz Inferred: 18.0M AgEq oz *M&I Resources are inclusive of Reserves Quarter End Full Year
Slide 37: Proven and probable mineral reserves
39 Mine / Project Category Mineral Type k tonnes Ag (g/t) Au (g/t) Pb (%) Zn (%) Ag-Eq (g/t) Ag (k Oz) Au (k Oz) Ag-Eq (k Oz) SAN DIMAS Proven (UG) Oxides 1,208 364 4.33 - - 682 14,120 168.2 26,480 Probable (UG) Oxides 2,845 279 3.57 - - 542 25,540 326.5 49,550 Total Proven and Probable (UG) Oxides
Slide 38: Measured and indicated mineral resources
40 Measured and Indicated Mineral Resources are reported inclusive of Mineral Reserves) Mine / Project Category Mineral Type k tonnes Ag (g/t) Au (g/t) Pb (%) Zn (%) Ag-Eq (g/t) Ag (k Oz) Au (k Oz) Ag-Eq (k Oz) Measured (UG) Oxides 1,586 483 6.54 - - 964 24,650 333.5 49,160 SAN DIMAS Indicated (UG)
Slide 39: Inferred mineral resources
41 Mine / Project Category Mineral Type k tonnes Ag (g/t) Au (g/t) Pb (%) Zn (%) Ag-Eq (g/t) Ag (k Oz) Au (k Oz) Ag-Eq (k Oz) SAN DIMAS Inferred Total (UG) Oxides 6,915 319 3.52 - - 577 70,860 781.9 128,340 Inferred Santa Elena Mine (UG) Sulphides 1,063 105 1.44 - - 216 3,580 49.4 7,390 SANTA ELENA
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