First Majestic Silver Corp. Achieved Record Production of 1.96M Silver Ounces (2.1M Silver Eqv. Ounces) in Q4; Produced a Record 7

Thu Jan 12, 2012 8:00am EST

* Reuters is not responsible for the content in this press release.

  VANCOUVER, BRITISH COLUMBIA, Jan 12 (MARKET WIRE) --
First Majestic Silver Corp. ("First Majestic" or the "Company")
(TSX:FR)(NYSE:AG)(FRANKFURT:FMV) is pleased to announce the Company's
fourth quarter and full year 2011 production results.

    Highlights


--  Total production increased by 17% to a new quarterly record of 2,101,528
    silver equivalent ounces 
--  Total silver production increased by 15% to a new quarterly record of
    1,957,657 ounces 
--  Silver production amounted to 93% of total production in the fourth
    quarter 
--  Total processed ore in the quarter increased by 7% to a record 565,003
    tonnes 

----------------------------------------------------------------------------
                                    Quarter Ended  Quarter Ended            
                                     December 31,  September 30,            
Consolidated                                 2011           2011  % Variance
----------------------------------------------------------------------------
Ore processed/tonnes milled               565,003        530,159          7%
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Total production - ounces of silver                                         
 equivalent                             2,101,527      1,791,770         17%
----------------------------------------------------------------------------
Total commercial production -                                               
 ounces silver equivalent               2,101,527      1,751,178         20%
----------------------------------------------------------------------------
Silver ounces produced                  1,957,657      1,708,865         15%
----------------------------------------------------------------------------
Pre-commercial silver ounces                                                
 produced                                       -         34,316      (100%)
----------------------------------------------------------------------------
Ag grade (g/t)                                201            188          7%
----------------------------------------------------------------------------
Ag recovery (%)                               54%            53%          1%
----------------------------------------------------------------------------
Pounds of lead produced                 3,416,908      1,891,991         81%
----------------------------------------------------------------------------
Equivalent ounces from lead                97,342         54,319         79%
----------------------------------------------------------------------------
Gold ounces produced                          440            409          7%
----------------------------------------------------------------------------
Equivalent ounces from gold                27,472         20,648         33%
----------------------------------------------------------------------------
Pounds of zinc produced                   152,664              -        100%
----------------------------------------------------------------------------
Equivalent ounces from zinc                 4,291              -        100%
----------------------------------------------------------------------------
Tonnes of iron ore produced                 4,695          3,075         53%
----------------------------------------------------------------------------
Equivalent ounces from iron ore            14,764          7,939         86%
----------------------------------------------------------------------------
Total underground development (m)          11,978         10,130         18%
----------------------------------------------------------------------------
Diamond drilling (m)                       19,916         18,558          7%
----------------------------------------------------------------------------


    The production in 2011 reached 7,562,493 equivalent ounces of silver,
representing an 8% increase over 2010 from 7,024,056 equivalent ounces of
silver.

    The equivalent silver production for 2011 consisted of 7,216,109 ounces
of pure silver, representing an 11% increase from the prior year,
7,888,943 pounds of lead, representing a 23% increase from the previous
year, and 1,537 ounces of gold, representing a decrease of 29% compared
to the previous year. Total silver production in 2011 as a percentage of
total production amounted to 95% maintaining First Majestic as the purest
silver producer in the world.

    Keith Neumeyer, President and CEO, stated, "Our operational team has once
again done an outstanding job and should be congratulated for their
efforts in 2011. The year, 2011 marks the eighth year in a row that First
Majestic has achieved record production of silver. Not only is this a
great achievement, but our growth is not slowing down.  There appears to
be no end in sight of our growth in silver production. As the fastest
growing and purest silver producer in the world, management's focus and
top priority remains to continually deliver shareholder value."

    Revised guidance released on November 9, 2011 stated, production is
anticipated to reach 7.6 million ounces of silver equivalents consisting
of 7.3 million ounces of silver and 0.3 million ounces of silver
equivalents in the form of lead, zinc, gold and iron. Due to the many
factors that can affect production, the Company has elected to provide
guidance for 2012 production estimated in a range from 8.9 to 9.4 million
ounces of equivalent silver or 8.3 to 8.7 million ounces of pure silver.
The Company remains on a very aggressive growth plan over the next three
years with the construction and development of the Del Toro Silver Mine
and the La Luz Silver Project. Del Toro is expected to become the
Company's largest operation by 2014 and is projected to produce over 6
million ounces of silver per year.

    In addition to further increases in production for 2012 due to the
expansion at the La Parrilla Silver Mine, metallurgical improvements at
the La Encantada Silver Mine, and the Del Toro Silver Mine commencing
production in the fourth quarter, the Company is also expanding its
exploration budget. The current 2012 budget calls for 96,739 metres of
drilling over the Company's five projects for a total expenditure of
$16.6 million. This exploration program compares to a total of 56,713
metres drilled in 2011 for total expenditures of $9.0 million. It is
further anticipated that new updated NI 43-101 Technical Reports will be
released on each of the Company's projects in 2012. The Company currently
has 19 drill rigs operating and is expected to have 27 drill rigs
operating by March 2012.

    In addition, in preparation of the expanding production levels
anticipated in 2012, 2013 and 2014, the Company's underground development
budget is being increased to $32.5 million in 2012 compared with $30.9
million in 2011. Total metres of underground development for 2012 are
expected to reach 41,921 metres.

    With respect to the fourth quarter production results, total ore
processed at the Company's three operating silver mines, the La Encantada
Silver Mine, the La Parrilla Silver Mine and the San Martin Silver Mine,
amounted to 565,003 tonnes milled in the quarter representing a 7%
increase over the previous quarter. The average silver head grade in the
quarter for the three mines increased 7% from the previous quarter to 201
g/t of silver. The combined recoveries of silver also increased slightly
from 53% to 54%. As a result of the increased capacity at the La Parrilla
operation and the fresh ore tonnage increases at the La Encantada mine,
recoveries in 2012 are anticipated to improve.

    The Company developed 11,978 metres underground in the fourth quarter,
compared to 10,130 metres of underground development completed in the
previous quarter. The total annual underground development for 2011
amounted to 37,311 metres. Development has been focused on increasing the
Reserve and Resource preparation ratios at the three operating mines and
further mine preparation at Del Toro in advance of initial production
commencing in late 2012.

    Also, the diamond drilling programs totalled 19,916 metres of exploration
drilling over 63 holes in the quarter, for a 2011 annual total of 56,713
metres of drilling completed over 244 holes at the Company's three mines,
and at the Del Toro Silver Mine.

    As a result of the efforts and work completed in 2011, some of the
improvements and advances made during the year included:

    At the La Encantada Silver Mine


--  The new 3,500 tpd cyanidation plant which was inaugurated on November
    2009 and reached full capacity in the second quarter of 2010 was further
    upgraded in 2011 and was re-rated to 4,000 tpd. 
--  Based on some additions and improvements to the flow sheet the average
    throughput for the fourth quarter was 4,345 tpd while the full 2011
    average came in at 4,083 tpd. 
--  An intensive metallurgical test is being conducted with the objective of
    liberating the manganese from the ore feed prior to the cyanidation
    process. The results are promising and a pilot plant with a 500 tpd
    capacity was constructed in the fourth quarter of 2011. Start-up is
    expected at the end of January to evaluate the economic feasibility of
    applying the process to the full capacity of the cyanidation plant. 
--  During 2011, the San Francisco vein was accessed and brought into
    production prior to year end. This area is known for higher silver
    grades and lower manganese content. In addition, the Milagros Breccia
    pipe is being developed at the 600 Level in order for it to be brought
    into production in the second quarter. 
--  The third ball mill is currently being installed and is expected to be
    operational by April bringing mine fresh ore throughput to 1,500 tpd
    which is expected to assist in improved recoveries. 
--  Three drill rigs, two underground and one on surface are currently
    operating. A new NI 43-101 Technical Report will be released prior to
    year end. 


    At the La Parrilla Silver Mine


--  Completion of the latest expansion project launched in December 2010 is
    in the final stages and is expected to be fully operational by late
    January 2012. The final items required are the connection of the new
    power line to the national grid, the completion of the Merrill Crowe
    circuit and the installation of the new tailings filters. 
--  After a careful review of the La Parrilla operation and after the
    completion of the latest NI 43-101 Technical Report, the expansion went
    through a review which resulted in the mill capacity being expanded to
    2,000 tpd from the originally planned 1,600 tpd, representing a 135%
    increase of mill capacity from the previous 850 tpd capacity. 
--  At the newly designed run rate of 2,000 tpd, it is anticipated that the
    La Parrilla operation will produce in the range of 3.0 to 3.5 million
    ounces of silver equivalent annually. The mill is currently running at
    1,500 tpd. 
--  As part of the expansion program, an intensive underground development
    program and a new ramp system will be constructed in 2012 including a
    new shaft. Once completed, an underground rail system connecting the
    different operations to the shaft will be constructed. This investment
    will improve logistics, transportation of ore and ultimately reduce cash
    costs. 
--  An aggressive exploration program with diamond drilling both underground
    and on surface has indicated the continuation of the Rosarios vein both
    at depth and in the lateral extension connecting the San Marcos vein
    with the Rosarios vein system. 
--  2012 will mark the first time that the regional geological anomalies
    within this large 69,440 hectare land package will be drilled. Results
    from this exploration program are expected to be released late in 2012
    in an updated NI 43-101 Technical Report. 
--  Five drill rigs are currently operating of which three are on surface
    and two are underground. 


    At the San Martin Silver Mine


--  In 2011, the exploration program focused on the new La Esperanza Vein
    discovered in 2009, located 2 km to the North of the main Zuloaga vein,
    and the Huichola / Rosarios vein system, located to the South of the
    Zuloaga vein. This program has led to the current extensive surface
    drilling program which will continue throughout 2012. 
--  The development program launched in early 2011 into the La Esperanza
    vein resulted in the construction of a 14 km road and a 500 metre ramp
    including development along the vein. Currently, 100 tonnes of ore is
    being extracted per day from this area in order to improve the overall
    head grades at the mill. In addition, approximately 150 tonnes of ore
    per day is being sent to the mill from the Huichola area which was
    discovered in 2008 however was not developed until 2011. 
--  During 2012, the focus will remain to develop additional ounces within
    the Zuloaga, La Esperanza and Huichola / Rosarios vein systems. A new NI
    43-101 Technical Report is expected to be released prior to the 2012
    year end. 
--  Also during 2011, several improvements were made at the mill which
    included the replacement of the old filter presses in the Merrill Crowe
    circuit and two new induction furnaces. Further improvements are
    budgeted for 2012 including new leaching tanks and new thickeners. 
--  Seven drill rigs are currently operating at San Martin; three on surface
    and four underground. 


    At the Del Toro Silver Mine


--  At a ceremony celebrated in December 2011, the first stone of the new
    plant was placed by the Governor of Zacatecas, Governor Lic. Miguel
    Alonso Reyes, and the first stage of the construction of the new mill
    was officially launched which is expected to be completed by the fourth
    quarter of 2012. 
--  The underground development at the San Juan mine in 2011 was successful
    in reaching ore bodies 1 and 2 via the main ramp. Development continues
    in this ramp to access ore body No. 3 at depth. This main ramp, which is
    now 1,825 metres in length and 250 metres in depth, will be used for ore
    haulage in the first stage prior to the shaft being completed. 
--  Land clearing for the construction of a 2,000 tpd dual circuit mill
    commenced in April 2011. To date, four out of the five large platforms
    have been cleared and mill foundation construction is now underway. 
--  90% of the required equipment for the flotation circuit and 50% of the
    equipment for the cyanidation circuit has been ordered. 
--  Underground development is also underway at the Perseverancia mine which
    is proving very successful. A new discovery, San Nicolas, was
    intersected in November and the Company is now focusing on the
    development of additional NI 43-101 compliant silver ounces. This new
    discovery has resulted in the delay of the release of the Preliminary
    Economic Assessment (PEA) originally expected to be released in January.
    The PEA is now expected to be released prior to the end of the first
    quarter of 2012. 
--  Currently, four drill rigs are active; two on surface and two
    underground. 


    At the La Luz Silver Project


--  The permit for the restoration of the old historic buildings at the
    Santa Ana Hacienda has been received and the construction of the
    previously announced Thematic and Cultural Park which will include a
    mining museum has begun. In addition, cleaning of the impressive
    underground workings is underway to rehabilitate this historic mine for
    public access. This new cultural facility and mining museum will form a
    "Sustainable Development Project" which will provide permanent long term
    jobs to the local communities. 
--  To date, the Baseline Study and the Geo-hydrologic Study have been
    completed. The Environmental Impact Statement, the Risk Study, and the
    Change of Use of Land Studies are expected to be presented to government
    authorities in the first quarter of 2012. 
--  A metallurgical test is also underway to define the final flow sheet
    diagram for a flotation plant which will pave the way for final
    permitting. 
--  The Company continued with the process of obtaining final approval for
    the purchasing of 100 hectares of surface rights that was purchased
    during the third quarter of 2011 in order to secure an area where the
    proposed plant and the mine access will be located. 


    First Majestic is a producing silver company focused on silver production
in Mexico and is aggressively pursuing its business plan of becoming a
senior silver producer through the development of its existing mineral
property assets and the pursuit through acquisition of additional mineral
assets which contribute to the Company achieving its aggressive corporate
growth objectives.

    FIRST MAJESTIC SILVER CORP.

    Keith Neumeyer, President & CEO

    SPECIAL NOTE REGARDING FORWARD-LOOKING INFORMATION

    This news release includes certain "Forward-Looking Statements" of
"forward looking information" within the meaning of the United States
Private Securities Litigation Reform Act of 1995 and applicable Canadian
securities laws, respectively. 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 accuracy of
mineral reserve and resource estimates; the estimated cost and timing of
development of our development projects; the timing of completion of
exploration programs and preparation of technical reports; 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 or Mexico; the Company's cash flow and availability of alternate
sources of capital; 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 or development,
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.

Contacts:
First Majestic Silver Corp.
Keith Neumeyer
President & CEO
(604) 688-3033 or Toll Free: 1-866-529-2807
(604) 639-8873 (FAX)
info@firstmajestic.com
www.firstmajestic.com

Copyright 2012, Market Wire, All rights reserved.

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