First Stage of Expansion At The La Parrilla Processing Plant Completed 

VANCOUVER, BC - First Majestic Silver Corp. reported completion of the first stage of expansion at the La Parrilla Silver Mine's processing plant in Mexico. The new 1,000 tpd flotation circuit has been operating since September 1, 2011 at an average rate of 787 tpd, bringing the total mill throughput to 1,254 tpd.

A decision was made to expand the La Parrilla operation to 2,000 tpd from the previous throughput of 850 tpd due to the significant increases in Reserves. This expansion, which commenced in December 2010, was originally planned to reach 1,600 tpd, however, is now planned to reach 2,000 tpd by year end. This new flotation circuit is still in the start-up phase and will be ramped up to the end of October. The flotation circuit is planned to reach its capacity of 1,000 tpd commencing in November bring the total throughput up to 1,425 tpd.

Meanwhile, the expansion of the cyanidation circuit is continuing well with progress now reaching approximately 60% completion. Construction is expected to be finished in October with start-up commencing in November. Once fully operational, the current 425 tpd cyanidation circuit is anticipated to reach 1,000 tpd by year end.

This new dual processing plant will have a total capacity of 2,000 tpd (1,000 tpd in flotation & 1,000 tpd in cyanidation) and is anticipated to be running at capacity by December 31, 2011. Once completed, production is estimated at over three million ounces of pure silver, 6.0 million pounds of lead and 4.3 million pounds of zinc. The total investment to the end of 2011 is budgeted at US$40.5 million including mine development.

This major expansion project was planned to allow for no disruption in production during construction. Both circuits for flotation and cyanidation continued operating during this entire process and will continue while the new cyanidation circuit is completed. Commercial production for the flotation circuit will be declared when operating performance reaches 70% of design parameters for throughput and recovery. The start-up phase has been progressing well and management anticipates commercial production for the flotation circuit to commence on October 1, 2011.

In addition to the construction project underway to expand the plant, preparation of the La Parrilla mining complex is also underway as defined in the recently announced pre-feasibility study. The La Parrilla is a complex of five mines surrounding the mill. A key component for the future of this operation is the consolidation of all these mines by the construction of a large shaft and connecting all the mines with an underground rail system. The construction of the shaft commenced at Rosario which is the closest mine from the mill and is expected to be finished by the end of 2012. Upon completion, all underground mining areas will be connected and ore haulage will be via underground trains. This consolidation of underground operations will dramatically improve efficiencies and should have a positive impact on costs.

Keith Neumeyer, President & CEO, said, "We are very pleased with the completion of this first stage of this new expansion at La Parrilla. Our Mexican construction team should be recognized for their hard work and tireless efforts and should be congratulated for the completion of this first stage that will lead to the La Parrilla operation doubling production to over three million ounces of silver annually." The company's address is 1805 - 925 West Georgia Street, Vancouver, BC V6C 3L2, 604.688.3033, fax: 604.639.8873, [email protected].