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

First Majestic Silver Corp.

December 23, 2008 08:20 ET

First Majestic Silver Corp.: La Encantada Updated NI 43-101 Report Increasing Reserves By 183%

VANCOUVER, BRITISH COLUMBIA--(Marketwire - Dec. 23, 2008) - FIRST MAJESTIC SILVER CORP. (TSX: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.

This newly updated report with a cut-off date of September 30, 2008, has resulted in a significant increase in overall Resources at La Encantada. Total Proven & Probable Reserves have increased by 183%, while Total Measured and Indicated Resources declined by 17% due to upgrading some of those Resources to Reserves and Total Inferred Resources increased by 51%.

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. The La Encantada consists of the mine, mill and plant facilities, housing, recreation centre, church, hospital, restaurant, store and associated structures including an airstrip.

For the period between November 1, 2007 and September 30, 2008 the Company completed an exploration program consisting of; Underground Development including, access ramps, drifts, crosscuts, raises and drill sites totalling 6,144 meters. Underground Drilling consisted of 29 holes totalling 6,660 meters. In addition, a 50km line Geophysics Program confirmed previously defined anomalies for future exploration at La Encantada.

During the recently completed exploration program a new mineralized zone was discovered at the 1790 mine level. This zone has been named the Buenos Aires zone and has been defined 15 drill holes resulting in about 850,000 tonnes of Resources at an average grade of 339 g/tonne Ag and 0.6% Pb, containing approximately 13.4 million ounces of silver equivalent which has been included in the Indicated and Inferred category. Drilling and development is presently ongoing in this area.

Construction of the new cyanidation plant with a capacity of 3,500 tonnes per day continues and is progressing well. The plant will process the ore and dump rock that is currently processed through the flotation plant in conjunction with reclaimed tailings. The plant is scheduled to commence operation in April 2009. Once completed, the new plant will produce 4,000,000 ounces of silver in the form of Dore on an annualized basis.

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.



Mineral Reserves and Resources as of September 30, 2008 (1)
Total Proven + Probable Mineral Reserves (Mineable Reserves) (4)
--------------------------------------------------------------------------
Grade Metal Contained (3)
--------------------- -----------------------
Silver
(oz.)
Zinc Silver including
Silver Lead (5) only Lead
Category Tonnes g/tonne % % oz. Credit
--------------------------------------------------------------------------
Proven Reserves 683,992 354 2.23 0.92 7,777,602 8,261,401
Probable
Reserves 4,511,686 186 2.45 2.54 26,936,651 27,287,462
--------------------------------------------------------------------------
Total Proven
+ Probable
Reserves 5,195,677 208 2.42 2.33 34,714,253 35,548,863
--------------------------------------------------------------------------


Total Measured + Indicated Resources (4)
--------------------------------------------------------------------------
Grade Metal Contained (3)
--------------------- -----------------------
Silver
(oz.)
Zinc Silver including
Silver Lead (5) only Lead
Category Tonnes g/tonne % % oz. Credit
--------------------------------------------------------------------------
Measured
Resources 445,650 399 4.15 0.65 5,710,055 6,025,271
Indicated
Resources
(6, 7, 8) 4,931,103 156 1.15 0.87 24,774,263 27,390,491
--------------------------------------------------------------------------
Total Measured
+ Indicated
Resources 5,376,753 176 1.40 0.85 30,484,318 33,415,762
--------------------------------------------------------------------------
Total Proven
and Probable
Reserves plus
Measured and
Indicated
Resources (9) 10,572,000 192 1.90 1.58 65,199,000 68,700,000
--------------------------------------------------------------------------


Total Inferred Resources (1, 2, 3, 4)
--------------------------------------------------------------------------
Grade Metal Contained (3)
--------------------- -----------------------
Silver
(oz.)
Zinc Silver including
Silver Lead (5) only Lead
Category Tonnes g/tonne % % oz. Credit
--------------------------------------------------------------------------
Total Inferred
Resources
(5, 9) 2,557,000 220 1.00 1.00 18,226,765 20,034,145
--------------------------------------------------------------------------
1. Cut Off Grade (COG) estimated as 250 g/tonne Ag only; and 228 g/tonne
Ag eqv net of Pb credit.
2. Estimated Reserves are exclusive of Resources.
3. Silver equivalent includes Pb credit, at prices US$12.00/oz-Ag,
US$0.75/lb-Pb. Pb credit equals 22 g/tonne-Ag.
4. Mining dilution is included at over 2.00m width. Estimates do not
include mining recovery.
5. Zinc is not recovered.
6. Dump stockpile is considered as Measured Resource because the average
grade is below COG - 203 g/tonne Ag only and 186 g/tonne Ag eqv however
with pre-screening may be processed.
7. La Morena sulphide deposit requires additional metallurgical test work
to prove its economic recovery. La Encantada mill does not have an
operating zinc circuit at this time.
8. Tailings are included within the Indicated Resources due to required
additional test work and grade below Cut-off grade - 111 g/tonne Ag.
9. Rounded figures.


Estimated Proven and Probable Reserves and Measured and Indicated Resources and Inferred Resources are defined as of September 30, 2008. These include Proven and Probable Reserves of 5.2 million tonnes at 208 g/tonne (6.7 oz) Ag, and 2.42 percent (53 lb/tonne) Pb, for a total contained silver equivalent, inclusive of Pb credit, of 35.5 million ounces. These Reserves include 4 million tonnes of tailings at an average grade of 168 g/tonne silver, estimated at a Cut-off grade of 111 g/tonne silver.

La Encantada Reserves have been estimated at a Cut-off Grade of 250 g/tonne Ag only and 228 g/tonne Ag equivalent net of Pb credit. The La Encantada Proven and Probable Reserves in hard rock include 1.2 million tonnes at an average grade of 343 g/tonne silver and 2.39 percent lead.

The Resources outlined in this report are estimated from the following areas: Breccia Milagros, Azul y Oro, Breccia Keylor, Cuerpo 660 E, Cola de Gallo, Bonanza, La Piedra, Breccia San Javier, Dique San Francisco, San Francisco, Jorobada, Rebaje 141, Rebaje and Ojuela Ampliacion zones in addition to the Tailings Dam No. 1. Most of these deposit areas remain opened for exploration and development; for instance, Breccia Milagros appears to represent a significant deposit, the full extent of which is still unknown.

Even though exploration at all the Company's projects has been scaled back somewhat, the exploration program at La Encantada to date has resulted in significant growth in resources and thus due to the geological conditions of the mineralization at the mine a high probability of success is expected to result from the 2009 exploration program. 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 and 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 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.

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