Purchasing of the La Encantada Complete
FIRST MAJESTIC SILVER CORP. (the "Company") is pleased to announce that
further to its news release dated December 21, 2006 the Company has now
completed the purchase of 100% of the issued and outstanding shares of
Minera La Encantada S.A. de C. V. ("La Encantada"), a Mexican mining
company previously owned by Minas Penoles SA de CV and Industrias Penoles
SA de CV (collectively "Penoles").
La Encantada's primary asset is the La Encantada Silver Mine located in
northern part of Mexico in the Coahuila State. This mine has at least 50
years of mining history and has been operated by Penoles from the early
1970's to 2003 after which time the mine was operated by Desmin S.A. de C.
V. ("Desmin") until October 31, 2006. First Majestic purchased Desmin last
year and thus took over operations of the La Encantada Silver Mine on
November 1, 2006.
The La Encantada Silver Mine for the calendar year 2006 produced
950,000 ounces of silver. The mill, which has a total capacity of 800 tpd
is presently running at only approximately 50% capacity. The Company
anticipates production numbers will be improved significantly over the
coming months.
In addition to the main mine and mill installations, La Encantada owns;
985 hectares of surrounding mining claims; surface rights to 2272 hectares
of land covering the local landing strip, and all town facilities and
buildings which include 180? single family dwellings, recreation
facilities, school house, hospital and a variety of other structures.
The regional development and exploration potential of the current land
holdings is considered excellent with several advanced areas of immediate
interest. In order to secure additional land holdings, the company has
recently acquired through staking an additional 3,100 hectares of mining
claims surrounding the property which covers additional areas of geological
interest.
The Company agreed to pay the total purchase price of US$3,250,000 and
a NSR royalty of 4%. An initial payment of US$1,000,000.00 was paid on
signing of the original Letter Agreement, leaving a balance of US$2,250,000
which has now been paid in full.
As part of the original Letter Agreement, the Company had also agreed
to buy-out the 4% royalty to zero at an additional cost of US$1,500,000 in
common shares and warrants. The shares and warrants were priced on the date
of signing which called for the issuance of 382,582 shares and 191,291 two
year warrants priced at $6.81. The shares and warrants have now been issued
and delivered to Penoles resulting in no further royalty's payable after
March 19th, 2007.
First Majestic is a producing silver company focused in Mexico and is
aggressively pursuing its business plan to become a senior silver producer
through development of its existing assets and the pursuit through
acquisition of additional assets that make sense to achieving its corporate
objective.
FIRST MAJESTIC SILVER CORP.
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.
