Investors

First Majestic Silver Corp.: Second Quarter Financial Results

August 15, 2008

FIRST MAJESTIC SILVER CORP. (FR-T) (the “Company”) is pleased to announce the unaudited financial results for the Company’s second quarter ending June 30, 2008. The full version of the financial statements can be viewed on the Company’s web site at www.firstmajestic.com or on SEDAR at www.sedar.com.



FINANCIAL HIGHLIGHTS

• Sales revenues for the quarter (after smelting charges) were $11.4 million; an increase of 6% compared to $10.8 million for the quarter ended June 30, 2007. Gross revenues for the quarter, prior to smelting charges were $15.9 million.
• A marked improvement to direct cash costs per ounce of silver produced during the quarter ended June 30, 2008 was achieved primarily due to the improvements underway at the San Martin Silver Mine which amounted to US$4.84 per ounce compared to the previous quarter ended March 31, 2008 of US$6.51.
• Mine operating earnings for the quarter amounted to $2.2 million, compared to $1.1 million for the quarter ended June 30, 2007.
• Smelting charges for the quarter increased significantly to $4.47 million as a result of a new agreement signed with Peñoles. The most impacted mine was the La Encantada as 100% of its production is in the form of concentrates. The present expansion program underway at La Encantada is converting the mill from concentrate production to doré production which will come into effect in early 2009. As a result of higher charges affecting all mining companies in Mexico who sell their concentrates to Peñoles, management is reviewing its alternatives to mitigate the smelting charges going forward. The adoption of new technologies which may affect the amounts and qualities of concentrates produced are being investigated as well as establishing new buyers for concentrate production.
• Total quarterly production consisted of 1,271,141 ounces of silver equivalents, including 1,109,821 ounces of silver, 482 ounces of gold, and 1,987,551 pounds of lead. The Company shipped 892,406 payable ounces of silver equivalent in the quarter resulting in an increase of 11% over the 801,324 payable ounces of silver equivalent sold in the quarter ended June 30, 2007. The remaining silver produced in the quarter was in inventory at the end of the period.
• The Company realized a price of US$17.38 (CDN$17.82) per ounce of silver sold in the quarter which is higher than the average trading price of US$17.17 per ounce.
• The Company generated an operating loss of $0.6 million for the quarter, compared to an operating loss of $1.5 million for the quarter ended June 30, 2007.
• The Company generated a net loss of $0.3 million for the quarter ended June 30, 2008, compared to a loss of $0.7 million for the quarter ended June 30, 2007. The net income for this quarter was after deducting a non-cash stock-based compensation expense of $670,616 (2007 - $ 775,532).
• The Company has been extracting ore from the Del Toro Silver Mine (formerly referred to as the Chalchihuites Group of Properties) over the past two quarters. As a result of the material volumes being extracted during this quarter and as is anticipated going forward, Del Toro is now considered to be in the early stage of production. The ore extracted is being shipped, processed and blended at the La Parrilla mill. For the second quarter ending June 30, 2008, 15,261 tonnes were extracted from Del Toro, resulting in production of 117,120 ounces of silver equivalents, and allowing quarterly production to increase at La Parrilla to 72,650 tonnes (95% of capacity). Production and the resulting costs associated with mining activity at Del Toro are included in La Parrilla’s costs and operating results.
• The Company currently has more than $46 million in its treasury, is generating significant cash flows from operations, and has sufficient capital to support its operating and current requirements and current expansion plans.
• During the quarter, the Company invested $12,096,777 in capital expenditures on mill expansions, mine development, exploration and equipment throughout its operations and projects.

OPERATIONAL HIGHLIGHTS

The Company continues to focus its efforts on production growth, Resource and Reserve growth and reducing costs in order to improve profitability. Mill expansions are presently underway at each operation with the largest expansion program taking place at the La Encantada Silver Mine. Management is very much focused on executing its business plan by continuing the ongoing improvements at each mine, and achieving production and resource targets going forward. In addition to increasing production and improving profitability, continued increases in NI 43-101 compliant silver Resources is a key goal. As at the latest NI 43-101 Reports, the Company has defined a global Resource of 184 million ounces of Silver equivalents. Twenty two drill rigs are presently focused on further Resource development. Each of the Company’s NI 43-101 Reports will be updated by year end and are expected to show substantial increases. The Company’s primary focus is to build long term sustainable and profitable mining operations.

La Parrilla Silver Mine

As part of the ongoing improvements at the La Parrilla, during the quarter within the mill, two new filter presses were delivered and installed. Also, construction of two new leaching tanks and one additional thickener tank commenced. Recoveries and capacity are expected to improve once these new tanks come online in the third quarter. At the mine, preparation of the lower levels within the Rosarios area and the addition of a long hole drilling machine is now allowing for an increase in production and improved grades from the sulphides area. Seven drill rigs are presently active which are focusing on drilling out NI 43-101 compliant Resources. A new updated NI 43-101 report is expected to be released prior to year end.

San Martin Silver Mine

At San Martin during the quarter the primary focus was a change in mining methods that has resulted in productivity improvements and reduction in costs. The changes have allowed for a reduction of development and improvement in the use of the underground fleet of equipment. In addition, a new portable screen was installed at the mine in order to take advantage of some of the backfill and dumps left from previous years of operation. Another focus has been; in order to achieve certification as a “clean industry” at the mill, reinforcement of older leaching tanks is in process, construction of a complete spillage control system was completed, a new dust collector within the crushing area was installed and a fumes control system was installed within the smelter area. Also, the flotation circuit continues to be expanded and improved with the installation of the two new thickeners and filters. Once completed, it is anticipated that a higher quality concentrate will be produced. Nine drill rigs are presently exploring and developing Resources at San Martin. An updated NI 43-101 is expected to be released prior to year end.

La Encantada Silver Mine

Construction of the new 3500tpd cyanidation mill is going well at the La Encantada. Three flat bed trucks of equipment have arrived since construction commenced and 17 trailers are presently waiting at the US border. In addition to this major construction project, several additional pieces of underground equipment were added to the operations and improvements in the underground electric installations were completed. Three drill rigs commenced drilling during the quarter from underground and are showing good signs of early successes. In addition to exploration successes during the quarter, development has been going well with several new areas within the mine being opened for production. Within the mill, the replacement of the secondary crusher was completed and an upgrade to the flotation cells has allowed a better quality of the lead concentrate production which has helped to compensate the increase the increase in smelting costs. An updated NI 43-101 is expected to be released prior to year end.

In Summary

Equally as important to increasing production is costs savings. 2008 still represents a year of high expenses as a result of the present growth underway. In addition, the Company was negatively impacted from higher smelting costs during the quarter. Management is pleased by the many improvements in costs which can be seen in the second quarter, however, further improvements in profitability can be made and are expected going forward as smelting costs are reduced and expenses come down. It’s important to note that one of the primary drivers of costs savings is the use of new equipment. The Company is now in the third year of a major fleet expansion and replacement program with Sandvik. In order to increase mining efficiencies and tonnages, 21 pieces of underground equipment were ordered for 2008. Nine pieces have been received of which three were delivered in this quarter. These new pieces of equipment include scoop-trams, underground trucks and jumbos. These same efficiencies can be seen in mill operations as new components replace older components.

Other developments that are either underway or in the planning stage, include: an extensive regional geophysics program was completed at the La Encantada during the 2nd quarter; expansion of the crushing area within the San Martin mill is in the final planning stage; the Del Toro Silver Mine (previously referred to as Chalchihuites) is undergoing an extensive underground development program including diamond drilling in order to release the first NI 43-101 compliant Resource estimate in the third quarter; also, at the Cuitaboca project the exploration and development program is continuing which is also anticipated to result in the release of a NI 43-101 Report.

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.


FOR FURTHER INFORMATION contact info@firstmajestic.com, visit our website at www.firstmajestic.com or call our toll free number 1.866.529.2807.

FIRST MAJESTIC SILVER CORP.

“SIGNED”

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.