Temporary Suspension Of Mining Activities At Jerritt Canyon

VANCOUVER -  First Majestic Silver Corp is taking action to reduce overall costs by reducing investments, temporarily suspending all mining activities and reducing its workforce at Jerritt Canyon effective immediately. Over the past 22 months since the acquisition of the Jerritt Canyon Gold Mine in Nevada, the Company has been focused on increasing underground mining rates in order to sustainably feed the processing plant at a minimum of 3,000 tpd in order to generate free cash flow as our plans suggested. Despite these efforts, mining rates have remained below this threshold and cash costs per ounce have remained higher than anticipated primarily due to ongoing challenges such as contractor inefficiencies and high costs, inflationary cost pressures, lower than expected head grades and multiple extreme weather events affecting northern Nevada, which have compounded conditions and caused material headwinds for the operation.

"The decision to temporarily suspend mining activities at Jerritt Canyon, which represented approximately 21% of the Company's 2022 revenue, was driven by our goal to produce profitable ounces across the Company," said, Keith Neumeyer, President and CEO. "Since the acquisition in 2021, we have invested heavily at Jerritt Canyon and have been successful in executing several key projects. We rehabilitated and reopened the West Generator and Saval II underground mines and have successfully upgraded and modified the roaster and refinery off-gas handling systems to insure we remain fully compliant with all state and federal air quality standards. The team at Jerritt Canyon has helped the Company achieve significant milestones and we are thankful for their service. While mining activities have temporarily stopped, processing of the remaining surface stockpiles will occur for the next couple of months. The Company will continue exploring both near-mine and prospective regional greenfield targets to grow Jerritt Canyon's resources, which we believe will significantly enhance the economics for the eventual restart of operations."

During the suspension, the Company intends to process approximately 45,000 tonnes of aboveground stockpiles through the plant. Exploration activities are expected to also continue throughout 2023 with additional plans to: Explore for new regional discoveries and expand current known reserves and resources; Analyze the optimization of bulk mining and cost-effective mining methods; Conversion of inferred and indicated resources into measured resources; Reduce mining costs through adopting self-perform mining and improve contractor rates and terms; and Continue modernizing the processing plant to be able to better withstand severe weather conditions.