First Majestic Resource Corp.

First Majestic Resource Corp.
First Silver Reserve Inc.

First Silver Reserve Inc.

June 06, 2006 15:39 ET

First Majestic and First Silver to Complete Business Combination

VANCOUVER, BRITISH COLUMBIA--(CCNMatthews - June 6, 2006) - First Majestic Resource Corp. (TSX VENTURE:FR)(PINK SHEETS:FMJRF)(FWB:905910) ("First Majestic" or the "Company"), and First Silver Reserve Inc. (TSX:FSR) ("FSR") are pleased to announce that they have entered into an agreement dated June 5, 2006 (the "Agreement"), whereby the parties have agreed to enter into a business combination, such that FSR will become a wholly-owned subsidiary of the Company (the "Merger"). It is expected that the Merger will occur by way of plan of arrangement or amalgamation subject to review of tax, accounting, corporate and securities law issues. The Merger will be subject to a due diligence period on behalf of FSR and receipt of regulatory and shareholder approval.

Pursuant to the terms of the Agreement, First Majestic intends to acquire all of the issued and outstanding common shares of FSR on the basis of 1.00 common share of the Company for every 2.00 common shares of FSR. Shareholders of FSR may elect to receive either (i) one common share of First Majestic for every 2 common shares of FSR, which represents a 5.43% premium over the 10 day trading average of the shares of FSR, which closed at $2.38 on June 5, 2006, or (ii) cash compensation for their FSR shares on the same basis as its major shareholder who recently sold 24,649,200 shares to the Company. More specifically, any shareholder not wishing to receive shares of First Majestic in exchange for their FSR shares may elect to receive cash consideration of $2.165 per share payable on the basis of 50% upon completion of the Merger and the balance payable in two equal installments over two years, with interest payable quarterly at 6.0% per annum on the unpaid balance.

All validly subsisting warrants, options and other rights to acquire common shares of First Majestic or FSR (including all requirements to issue shares for mineral property acquisitions and for consulting services) will, as a result of the Merger, be deemed to represent, comparable securities of First Majestic, on an adjusted basis as to the number and price based on the share exchange ratio.
Subject to obtaining all necessary shareholder and regulatory approvals and acceptances, and the satisfaction of all conditions precedent the name of the resulting merged company will be First Majestic Resource Corp. or First Majestic Silver Corp.

First Majestic owns 63% of FSR and as a result after FSR's annual general meeting to be held on June 19th, 2006 the board of directors of FSR will consist of Keith Neumeyer, Ramon Davila, Robert McCallum, Bernard Fahy and Robert Young.

Upon closing of the Merger, which is anticipated to take place in late August or early September, the board of directors of First Majestic will consist of the following individuals: Keith Neumeyer, Ramon Davila, Robert McCallum, David Shaw, Bernard Fahy, Robert Young and Tony Pezzotti. The officers of the Company will be: Keith Neumeyer, President and Chief Executive Officer, Ramon Davila, Chief Operating Officer, Douglas Scott, Chief Financial Officer and Jude Fawcett, Corporate Secretary.

The Merger as outlined in the Agreement is in line with First Majestic's strategy for growth through acquisition and development to aggressively continue to take steps to become one of the largest pure silver producers. The benefits to shareholders of First Majestic and FSR are as follows;

- The opportunity for a near term increase in silver production with the combination of the La Parrilla Silver Mine and the San Martin Silver Mine.

- A renewed focus on developing an increased resource base at the San Martin with the First Majestic geological team in place.

- Additional production increases in 2007 & 2008 as a result of planned investments at the La Parrilla Silver Mine, the San Martin Silver Mine and the Dios Padre Silver Mine.

- The combination of an aggressive management team with an enlarged asset base will prove to bring additional value to shareholders.

First Silver Reserve Inc. owns 100% interest in the San Martin Silver Mine in Jalisco State, Mexico and First Majestic owns 100% of the La Parrilla Silver Mine in Durango State, Mexico. The combination of the two companies will bring together synergies that will result in a very efficient team of mining, development and exploration professionals that will result in one of the most dynamic pure silver producing companies in the world.


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.

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