First Majestic Silver Corp.
TSX VENTURE : FR
PINK SHEETS : FRMSF
FRANKFURT : FMV

First Majestic Silver Corp.

January 07, 2008 14:20 ET

First Majestic Silver Corp.: La Encantada Silver Mine Update and New NI 43-101 Resource

VANCOUVER, BRITISH COLUMBIA--(Marketwire - Jan. 7, 2008) - First Majestic Silver Corp. (TSX VENTURE:FR)(PINK SHEETS:FRMSF)(FRANKFURT:FMV)(WKN:A0LHKJ) ("First Majestic" or the "Company") is pleased to announce an update regarding its activities in Mexico at the La Encantada Silver Mine and a new NI 43-101 Resource/Reserve update.

La Encantada Silver Mine is located in northern Mexico, in the northern part of the physiographic province of the Sierra Madre Oriental in the NW portion of the State of Coahuila. It is located in the municipality of Ocampo, at about 120km to the N60 degrees W from the city of Muzquiz, and 120km to the N7 degrees W from the city of Ocampo, Coahuila.

First Majestic owns mining rights that cover 2,826 hectares (6,982 acres) within 18 titled concessions and 2 claim applications. Also, surface land ownership of 1,343 hectares (3,319 acres) where mine, plant, housing, camp and associated facilities are installed was acquired from the Ejido Tenochtitlan, Municipality of Ocampo. The La Encantada mine consists of all supporting facilities, including; a flotation plant with an installed capacity of 800 tonnes per day ("tpd"), laboratory, maintenance buildings, water wells and pipeline, airstrip, 180 houses, mine office, warehouses, club house, kitchen and restaurant facilities and guest houses. The mill is presently running at 700 tpd or approximately 87% capacity. Feed for the mill was split almost evenly between ore coming from the mine and ore coming from the reprocessing of waste dumps through a pre-screening process implemented in early 2007. This mixing of ore from both sources has allowed time for the development within the mine to prepare for feeding the mill at a higher percentage rate of ore in 2008.

The aggressive development and exploration program implemented shortly after the La Encantada mine was purchased in late 2006 resulted in the release of a NI 43-101 Resource estimate in June 2007. This aggressive program has continued with exploration efforts carried out during the second half of 2007 being primarily focused in proving and developing additional Reserves and Resources within the mine. This ongoing program has resulted in a significant increment of both Resources and Reserves. Major efforts were undertaken in the areas of Breccia Milagros, Bonanza, San Francisco, Intrusivo Milagros, Azul y Oro, and Cuerpo de Zinc at mine level N-1535 and in the sampling of old dumps. Additional efforts were also carried out in drilling and metallurgical test work of the old tailings dams that have resulted in a positive outcome for reprocessing by Cyanide Leaching this material to recuperate the contained silver.

During the period of June to October, 2007 a total of about 5,000 meters of underground workings for exploration purposes were developed at the La Encantada mine, including about 4,000 meters of access ramps, drifts, and crosscuts, and about 1,000 meters of exploration preparation for underground drill sites access for the 2008 program. As can be seen by the tables below, significant increases in all categories have been achieved over the previously reported Reserves and Resources. Proven and Probable Reserves have increased by 48% from 8,206,336 ounces Silver to 12,110,507 ounces Silver; the Measured and Indicated Resources increased by 212% from 12,548,168 ounces Silver to 39,099,835 ounces Silver, and; Inferred Resources have increased by 30% from 9,587,585 ounces Silver to 12,479,000 ounces Silver. The most significant increases in Reserves and Resources are within the Breccia Milagros, Bonanza, San Francisco areas of the mine and in the two old tailings dams.

The following summary tables were taken from the complete La Encantada Silver Mine NI 43-101 Technical Report prepared by Pincock Allen & Holt, Lakewood, Colorado (PAH). Shareholders and interested parties are encouraged to read this positive report which can be viewed on SEDAR (www.sedar.com) and the Company's web site at www.firstmajestic.com.



Total Proven + Probable Mineral Reserves (Mineable Reserves)(1,3,8)
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Grade Metal Contained(2)
----------------------- -----------------------
Silver
(oz.)
Silver including
Silver Lead Zinc(4) only Lead
Category(3) Tonnes g/tonne % % oz. Credit
--------------------------------------------------------------------------
Proven Reserves 850,684 283 1.80 0.84 7,731,371 8,068,833
Probable Reserves 358,449 380 1.70 0.75 4,379,136 4,552,002
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Total Proven +
Probable
Reserves 1,209,133 312 1.77 0.81 12,110,507 12,620,835
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Total Measured + Indicated Resources(1,3,8)
--------------------------------------------------------------------------
Grade Metal Contained(2)
----------------------- -----------------------
Silver
(oz.)
Silver including
Silver Lead Zinc(4) only Lead
Category(3) Tonnes g/tonne % % oz. Credit
--------------------------------------------------------------------------
Measured
Resources 879,895 347 1.99 0.33 9,823,264 10,247,603
Indicated
Resources(5,6) 6,157,081 148 1.70 2.30 29,276,571 29,875,056
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Total Measured
+ Indicated
Resources(5,6) 7,036,976 173 1.73 2.05 39,099,835 40,122,659
--------------------------------------------------------------------------

Total Inferred Resources(3,7,8)
--------------------------------------------------------------------------
Grade Metal Contained(2)
----------------------- -----------------------
Silver
(oz.)
Silver including
Silver Lead Zinc(4) only Lead
Category(3) Tonnes g/tonne % % oz. Credit
--------------------------------------------------------------------------
Total Inferred
Resources(7) 1,967,000 200 0.50 0.50 12,479,000 13,428,000
--------------------------------------------------------------------------

(1) Cut Off Grade (COG) estimated as 256 g/tonne Ag only; and 241 g/tonne
Ag eq net of Pb credit. Cut Off Grade for dumps is 98 g/tonne Ag only;
and 91 g/tonne Ag eq net of Pb credit (COG is based on actual sales).
(2) Silver equivalent includes Pb credit, at prices US$10.50/oz-Ag,
US$0.68/lb-Pb. Pb credit equals 15 g/tonne-Ag. For dumps Pb credit
equals 7 g/tonne Ag.
(3) Mining dilution is included at over 2.00m width. Estimates do not
include mining recovery.
(4) Zinc is not recovered.
(5) Tailings are considered as indicated resources. Bulk sampling testwork
in progress.
(6) La Morena sulfide deposit requires additional metallurgical testwork to
prove its economic recovery. La Encantada mill does not have an
operating zinc circuit at this time.
(7) Rounded figures
(8) Total Proven & Probable Reserves, Total Measured & Indicated Resources
and Total Inferred Resources are reported exclusive of each other and
thus are not combined.


First Majestic is continuing its aggressive program of exploration and development throughout 2008 which is believed to have a high probability of success given the geological conditions of the mineralization at the mine. In PAH's opinion the combination of direct exploration methods, drilling and underground development represents a good balance for exploration at La Encantada. The program is directed to access projected known areas of mineralization as well as to investigate other adjacent and new promising areas that may result in an increment of the Resource base and a higher level of Reserves for the mine.

The exploration and development program for the La Encantada Silver Mine for calendar year 2008 is planned to consist of a minimum of 8,200 meters of surface diamond drilling, 5,000 meters of diamond drilling from underground sites, and 2,340 meters of underground drifting. In addition to drilling and underground exploration and development, an extensive geophysical survey consisting of 50 line km's of Induced Polarization will be conducted to investigate the various identified anomalous areas, and to confirm other indicated potential zones. Some of the most outstanding targets for investigation are the La Escalera Breccia zone and the Anomalous areas "A", "B", "C" and "D". The La Escalera breccia zone appears to be a significant target for exploration and will also be a target in the upcoming drill program. Due to the current successes and number of targets at La Encantada, it is likely the 2008 exploration and development budget will be expanded further.

The Company's independent Qualified Persons under the policies of National Instrument 43-101 who have reviewed the contents of this news release and who authored the most recent qualifying report are Leonel Lopez, C.P.G., P.G., and Richard Addison P.E., Principal Process Engineer, of Pincock Allen & Holt, who are employees of PAH and are independent of the Company.

First Majestic is a producing silver company focused in Mexico and is aggressively pursuing its business plan to become a senior silver producer through the development of its existing assets and the pursuit through acquisition of additional assets that contribute to achieving its corporate growth objectives.

FIRST MAJESTIC SILVER CORP.

Keith Neumeyer, President & CEO

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 Silver 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 does not accept responsibility for the adequacy or accuracy of this release.

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