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First Majestic Stepping Up Exploration As Reserves Decline

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First Majestic Silver Corp. (TSX: FR; NYSE: AG; FRANKFURT: FMV; BVM: AG) reports that reserves declined last year but the company is stepping up exploration spending. As of the end of 2016, proven and probable reserves totaled 116.7 million silver-equivalent ounces, a 14% decrease from the prior estimate. This was primarily due to the production depletion of 14.5 million silver-equivalent ounces despite a modest increase of 3% in the assumed silver and gold prices and higher metal prices for lead and zinc, First Majestic says. In addition, the reduction was the effect of an average increase of 10% in the cut-off grades for most of the mines. Measured and indicated resources totaled 139.6 million silver-equivalent ounces, representing an 11% decrease from 2015, while inferred resources decreased 15% to 233.2 million silver-equivalent ounces. However, Keith Neumeyer, president and chief executive officer, outlined plans to step up exploration efforts. "We began 2016 with a small exploration budget of only $9.9 million designed to primarily assist with our mining activities," he says. "In the second half of 2016, we increased the exploration budget by 71% and returned our focus on growing the ounces in the ground. For 2017, we are investing $27 million to complete over 183,000 meters of diamond drilling across our Mexican assets. This renewed investment is expected to add significant growth to our reserves and resources in the years ahead."

Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.

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