TSX Venture Exchange - FR Pink Sheets - FMJRF Frankfurt - 905910 VANCOUVER, Nov. 1 /CNW/ - First Majestic Resource Corp. is pleased to announce that it has signed a Letter Agreement with Compania Minera Rio Frio, S.A. de C.V., a privately owned Mexican mining company, for the purchase of a 100% interest in a presently operating silver mine known as the La Candelaria Silver Mine. Included in this purchase is an operating flotation mill with a present capacity of 100 tpd and surrounding property consisting of over 1,384 hectares. This large land package is in a very prolific and old silver district in Mexico and includes other old mines such as the El Orito and La Fortuna silver mines and others yet to be reviewed. This purchase, upon closing, will immediately result in the Company owning and operating two producing silver mines in Mexico. Under the terms of the Letter Agreement the Company made an initial payment of US$100,000. A due-diligence confirmation period of three months has commenced. Subject to a successful completion of due-diligence and certain other conditions a further payment of US$500,000 will become due and the issuance of 1,000,000 common shares will be paid. In addition, execution of formal documentation and title transfers will take place and a formal closing will occur on or before January 31, 2006. An additional payment of US$2,000,000 divided between six payments on each six month anniversary up to the 36th month are due as follows; US$250,000 on the 12th month anniversary; US$350,000 on the 18th month anniversary; US$400,000 on the 24th month anniversary; US$500,000 on the 30th month anniversary and a final payment of US$500,000 on the 36 month anniversary from closing along with issuance of an additional 400,000 common shares. The Candelaria Mine is located in the Hostotipaquillo silver mining district in the Jalisco State in Mexico where over 400 years of mining activity has taken place. The overall property hosts a very large and prolific network of veins and brachiated ore bodies within the 1,384 hectares land package. The property was originally mined by the Spaniards late in the 1500's and had been mined intermittently until 1974. Since that time the district has been mostly inactive until Minera Rio Frio was able to assemble this attractive package of mining claims and began operating the flotation mill again in 2003. During the due diligence program, the Company intends to carry out an exploration program which will include surface geology and underground and surface sampling in order to define the available ore resources. Based on the results and if resources are confirmed, the intent is to continue production in the open pit area in the Candelaria mine to produce ore for the mill and at the same time, start the development of underground resources at the three mines located within the mining claims. Production at the mill during the first six months will continue at a rate of approximately 50-100 tpd with an anticipated increase to 200 tpd and within a year anticipated increases in production to 400 tpd. The Company will manage and continue to operate the mine during the due diligence period. Average ore grades being fed to the mill are presently 350 grams/tonne silver and 2 grams/tonne gold. Of additional interest are old tailings on the property estimated at 150,000 tonnes grading 300 grams/tonne of silver and 1 gram per tonne of gold. Historical records indicate the presence of several potentially important silver mineralized areas. During the due diligence period, geological mapping, extensive sampling and budgeting for development of the known mineralized structures and expansion of the mill will be completed. A complete NI 43-101 Technical Report will be prepared and filed with the TSX Venture Exchange and posted on www.sedar.com in support of this transaction. Further to the terms and conditions of the Letter Agreement outlined herein, the closing is subject to final legal due diligence and regulatory approval. FIRST MAJESTIC RESOURCE CORP. "signed" Keith Neumeyer President This press release includes certain "Forward-Looking Statements" within the meaning of section 21E of the United States Securities Exchange Act of 1934, as amended. All statements, other than statements of historical fact, included herein, including without limitation, statements regarding potential mineralization and reserves, exploration results and future plans and objectives of First Majestic Resource Corp. are forward-looking statements that involve various risks and uncertainties. There can be no assurance that such statements will prove to be accurate and actual results and future events could differ materially from those anticipated in such statements. The TSX Venture Exchange has in no way passed upon the merits of the proposed transaction and the TSX Venture Exchange does not accept responsibility for the adequacy or accuracy of this release.