First Majestic Silver Corp T.AG

San Martin Update and New NI 43-101 Resource

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First Majestic Silver Corp.: San Martin Silver Mine Update and New NI 43-101 Resource 5/28/2007 VANCOUVER, BRITISH COLUMBIA, May 28, 2007 (MARKET WIRE via COMTEX News Network) -- FIRST MAJESTIC SILVER CORP. (TSX VENTURE: FR)(PINK SHEETS: FRMSF)(FRANKFURT: FMV)(WKN: A0LHKJ) (the "Company") is pleased to announce an update regarding its activities in Mexico at the San Martin Silver Mine and the resource development presently underway. The San Martin Silver Mine is located beside the town of San Martin de Bolanos in the Bolanos River valley, in the northern portion of the State of Jalisco, Mexico. The San Martin operation is 150 kilometres by air or 250 kilometres by paved road north from Guadalajara. The property covers an area in excess of 7,840 hectares and includes several vein systems and structures that have not in the past received serious attention. The mine has been developed primarily on the main Zuloaga vein which has been identified over a strike length of three kilometres and consists of six main levels and an additional three partially developed levels (Pinolea, San Carlos, La Escondida) spanning a vertical interval of approximately 350 meters. The main access levels, San Jose, Santa Maria, Ballenas, Cangrejos, San Pablo, San Juan and San Carlos, are accessible from surface adits and various interconnecting underground ramps totalling over 70 kilometres. Production is also occurring from the La Blanca vein, a vertical split off from the Zuloaga vein. First Majestic is presently developing and rehabilitating the upper parts of the Zuloaga vein and along crosscutting veins at the Rebaje 40 Oriente on the Cangrejos Level, and at the Rebaje 1100 on the Ballenas Level. In both cases north-south veins intersecting the Zuloaga vein show high grade mineralization in widths of up to 10 meters in the hanging wall of the previously mined structures. The La Blanca vein, which cuts upward through the Zuloaga hanging wall, is also being redeveloped which appears to contain higher silver grades. The focus since January 1st has been on improving the mill and mine operations. Within the mill, a maintenance program was initiated on all key equipment, replacing components as required. At the mine, a program of underground development has been ongoing focusing on improving grades and reducing dilution. This program is designed to advance additional resource calculations for future NI 43-101 compliance and to provide higher grade ores for mining. Since January 1, 2007, the Company has completed 2,386 metres of development focusing on areas in the upper part of the Zuloaga vein, such as the La Escondido and Pinolea areas. The Company has also initiated exploration at the old Rosario mine and completed 1,762 metres of diamond drilling over 34 holes (28 underground and 6 from surface). None of this new work since January 1st,, 2007 is included in the new NI 43-101 resource calculation below. Total Proven + Probable Mineral Reserves (Mineable Reserves) (2)-------------------------------------------------------------------------- Silver Contained Grade with Silver (oz) Silver Contained Au/Pb including Grade Silver Credit Au/PbCategory (1) Tonnes g/tonne (oz) (g/tonne) Credits--------------------------------------------------------------------------Proven Mineral Reserves 246,287 293 2,323,861 317 2,509,770Probable Mineral Reserves 245,736 287 2,270,943 310 2,452,618Total Proven + Probable Mineral Reserves (3) 492,023 290 4,594,804 314 4,962,389--------------------------------------------------------------------------Total Measured + Indicated Resources-------------------------------------------------------------------------- Silver Contained Grade with Silver (oz) Silver Contained Au/Pb including Grade Silver Credit Au/PbCategory (1) Tonnes g/tonne (oz) (g/tonne) Credits--------------------------------------------------------------------------Measured Resources 792,652 257 6,549,474 279 7,122,824Indicated Resources 1,005,313 243 7,854,522 263 8,501,916Total Measured + Indicated Resources (4) 1,797,965 250 14,451,468 270 15,624,740--------------------------------------------------------------------------Total Inferred Resources-------------------------------------------------------------------------- Silver Contained Grade with Silver (oz) Silver Contained Au/Pb including Grade Silver Credit Au/PbCategory (1) Tonnes g/tonne (oz) (g/tonne) Credits--------------------------------------------------------------------------Inferred Resources Silver only (5) 1,668,600 245 13,143,700 265 14,216,600--------------------------------------------------------------------------Inferred Resources Silver equivalent (6) 1,069,200 134 4,606,300 277 9,504,800--------------------------------------------------------------------------Total Inferred Resources (7) 2,737,800 202 17,750,000 257 23,721,400--------------------------------------------------------------------------(1) The Total Proven + Probable Mineral Reserves and Total Measured +Indicated Resources and Total Inferred Resources in the tables above areexclusive of each other and are not combined. The complete NI 43-101Technical Report prepared by Pincock Allen & Holt, Lakewood, Colorado (PAH)has been posted and can be viewed on SEDAR (www.sedar.com) and theCompany's web site at www.firstmajestic.com.(2) Mineral Reserves are estimated as Mineable Reserves, includingestimates of mine dilution and recovery in addition to 8% credit for Auand Pb based on sales records for 2006. These reserves do not includemetallurgical recovery. All silver grades are reported in grams or ouncesper metric tonne, while Pb and Zn are reported in percentage (%).(3) Silver equivalent ounces are 8% of the silver content, based on thecontribution of Pb and Au to revenue for 2006.(4) The resources categories in the PAH Technical Report used an economiccut-off grade based solely on silver for the total operating costs andprocess recoveries of 5.84 oz Ag/tonne or 182g Ag/tonne. PAH's economicbreakeven cut-off grade including the gold & lead contribution for 2006 of8% of silver sales, converted to an equivalent silver grade was 5.38 ozAg equivalent/tonne or 167g Ag Eqv/tonne. In order to report the equivalentsilver values, 182g/tonne Ag was used in the report and the silverequivalent values are calculated according to the following formula: AgEqv. oz. equals $52(($10.00x0.891)+$0.75), where $0.75 is equivalent to 8%of silver sales as contribution of Pb + Au for 2006; $52 is total operatingcost per tonne and $10 is the price per Ag ounce. The calculation ofMeasured + Indicated Resources assumes 100 percent "in situ" resources anddoes not include mine dilution, nor mine and metallurgical recovery.(5) Inferred resources are estimated as silver only for oxidizedmineralization, including 8% contribution for Pb and Au, based on salesrecords.(6) Inferred resources in sulfides mineralization are estimated as silverequivalent with contributions by Pb and Zn based on prices as follows: Ag-$10/oz; Pb-$0.50/lb and Zn-$1.50/lb, or the equivalent of Pb-1% equals 34 gAg/tonne, and Zn-1% equals 103 g Ag/tonne. These resource estimates are "insitu" resources and do not include mine dilution, mine and metallurgicalrecoveries, nor freight, or smelter and refining charges.(7) Inferred resources are presented in rounded figures. These may not beaggregated with Measured and Indicated resources. They are presented due tothe significance for the mine's potential for future development. SanMartin has processed some sulphide mineralization in previous operatingperiods with economic recovery of Pb and Zn concentrates; however it is notoperating with this type of mineralization at the present. The prior resource/reserve estimate completed for the San Martin Silver Mine was presented in a NI 43-101 Technical Report prepared for First Silver Reserve Inc. by Pincock, Allen & Holt, Inc. in June, 2005. First Majestic acquired the San Martin in two stages, in June 2006 and September 2006. In addition, the Company changed its year end to December 31st. It was necessary for accounting purposes to establish an accurate up to date baseline of reserves and resources as at the Company's year end. For this reason, none of the development or exploration work completed at San Martin since January 1st was included in new resource/reserve estimates. Comparative Reserves / Resources 2005 to 2007 (1)-------------------------------------------------------------------------- January 1, 2005 January 1, 2007-------------------------------------------------------------------------- Ag eq Ag eq Tonnes g/tonne Tonnes g/tonne--------------------------------------------------------------------------Reserves (2) (2)--------------------------------------------------------------------------Proven + Probable 675,955 273 492,022 314----------------------------------------------------------------------------------------------------------------------------------------------------Resources--------------------------------------------------------------------------Measured + Indicated 4,443,854 296 1,797,965 270--------------------------------------------------------------------------Contained Silver Ounces 42,290,470 15,607,596----------------------------------------------------------------------------------------------------------------------------------------------------Inferred (3) 0 0 2,737,823 257--------------------------------------------------------------------------Contained Silver Ounces 22,621,922---------------------------------------------------------------------------------------------------------------------------------------------------- 2005 2006-------------------------------------------------------------------------- Ag eq Ag eq Tonnes g/tonne Tonnes g/tonne--------------------------------------------------------------------------Production 249,239 243 261,834 209----------------------------------------------------------------------------------------------------------------------------------------------------Sales Dore 2005 2006--------------------------------------------------------------------------Silver Troy Ounces 1,742,675 1,566,400--------------------------------------------------------------------------Gold Troy Ounces 3,565 2,326--------------------------------------------------------------------------1) 2005 reserve statement for the San Martin Silver Mine was presented in atechnical report prepared for First Silver Reserve Inc. by Pincock, Allen &Holt, Inc. June 23, 2005 which was published in SEDAR on July 5, 2005.Mineral reconciliation at the San Martin mine is difficult to controlbecause the mining activity is carried out in numerous stopes along thedrifts and at the different mine levels. First Majestic is working towardsa better control of the production stopes with relation to reserve blocks.2) Silver grade includes credit for Au/Pb based on actual metal salesduring the production year. This credit was estimated as 13.5% for 2005 and8% for 2006.3) No inferred resources were reported in 2005. First Majestic hasestablished more strict resource classification that includes the'Inferred' category. Presently, three drill rigs are operating on site from both surface and underground stations. The focus of the drilling program is to develop additional NI 43-101 compliant resources and to explore known mineralized structures. The Company intends to add an additional three drill rigs within the next two months to increase drilling activities from surface. Immediate attention is being focused on the upper La Escondida and Pinolea levels and areas below the known ore shoots on the Zuloaga vein. This program will assess areas of resources with the objective to increase reserves and add additional resources to the project. The areas to be assessed cover an extension to the existing resources of approximately 500,000 m2 of known mineralized portions of the Zuloaga vein. Once additional drill rigs arrive on site, other areas that will receive continued attention for exploration and development include the Condesa workings and the Rosario mine. Both are located to the southwest and have northwest trends. The Condesa workings show mineralization over 150 meters along strike, with mineralized zones ranging from 1.5 to 2.0 meters in width. The Rosario mine and old Condesa workings, which are located in close proximity, in addition to other areas in the region have had historic production activity. However, records of past mining activity are either unavailable or incomplete. In addition, these vein trends intersect the Zuloaga vein in an area below the mineralized surface outcrops, and thus represent very good targets for exploration and potential future mining activity. In addition to the drilling program, a complete regional geologic survey is underway covering the different outcrops and structures with the purpose of defining future diamond drill objectives in other areas within this large property. All in all, the San Martin property has significant potential for the advancement of additional NI 43-101 compliant resources including a high likelihood of additional discoveries. The Company intends to issue another updated NI 43-101 technical report on the San Martin Silver Mine in November 2007. 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 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. Cautionary Notes to U.S. Investors Concerning Reserve and Resource Estimates The definitions of proven and probable reserves used in National Instrument 43-101 - Standards of Disclosure for Mineral Projects ("NI 43-101") differ from the definitions in the United States Securities and Exchange Commission ("SEC") Industry Guide 7. Under SEC Guide 7 standards, a "Final" or "Bankable" feasibility study is required to report reserves, the three year history average price is used in any reserve or cash flow analysis to designate reserves and the primary environmental analysis or report must be filed with the appropriate governmental authority. In addition, the terms "mineral resource", "measured mineral resource", "indicated mineral resource" and "inferred mineral resource" are defined in and required to be disclosed by NI 43-101; however, these terms are not defined terms under SEC Industry Guide 7 and normally are not permitted to be used in reports and registration statements filed with the SEC. Investors are cautioned not to assume that any part or all of mineral deposits in these categories will ever be converted into reserves. "Inferred mineral resources" have a great amount of uncertainty as to their existence, and great uncertainty as to their economic and legal feasibility. It cannot be assumed that all or any part of an inferred mineral resource will ever be upgraded to a higher category. Under Canadian rules, estimates of inferred mineral resources may not form the basis of feasibility or pre-feasibility studies, except in rare cases. 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. Contacts: First Majestic Silver Corp. Keith Neumeyer President & CEO [phone] or Toll Free: 1-866-529-2807 [phone] (FAX) Email: [e-mail] Website: www.firstmajestic.com SOURCE: First Majestic Silver Corp. mailto:[e-mail] https://www.firstmajestic.com Copyright 2007 Market Wire, All rights reserved.