2007

La Parrilla Silver Mine Update and New NI 43-101 Resource


July 4, 2007

FIRST MAJESTIC SILVER CORP. (FR-V) (“First Majestic” or the “Company”) is pleased to announce an update regarding its activities in Mexico at the La Parrilla Silver Mine and the resource development presently underway.

The La Parrilla Silver Mine is located in the Municipality of Nombre de Dios, Durango State, México approximately a 45 minute drive from the City of Durango east along Highway 45. The La Parrilla consists of underground silver / lead /zinc mining operation, a cyanidation and flotation ore processing plant with an installed capacity of 800 tonnes per day (tpd). The plant processes both oxide and sulphide silver ores in two separate 400 tpd parallel circuits. The La Parrilla property consists of 53,290 hectares (131,682 acres) of mining rights that cover 3,434 hectares (8,484 acres) within 36 titled concessions in addition to 49,857 hectares (123,199 acres) in two claim applications. The mill is presently running at 700 tpd or 87% capacity. This capacity is increasing on a monthly basis as operational efficiencies are gained. Both doré metal bars and flotation concentrates are being produced.

La Parrilla underground mine development is ongoing and is designed to increase and upgrade the current Resources which includes drifts, ramps, raises and new accesses and upgrades to old workings along the S-SE-trending Los Rosarios System. This system consists of a 2-km-long mineralized structure that encloses numerous veins that branch out into veinlets and stockwork zones. The Los Rosarios System comprises the La Rosa, Rosarios, La Blanca and San José mines and it tends to intersect the NS-trending San Marcos vein. Other mineralized zones are located within the surrounding skarn zone of a regional diorite intrusive stock. These include the Quebradillas, Protectora, San Nicolas, San José and Las Vacas and other areas. First Majestic is operating three mines within La Parrilla property including the Rosa/Rosario and La Blanca, the San Marcos, and Quebradillas operations while other mines within the property are being developed for future production.

To date, the La Parrilla resource development has exceeded management’s expectations due to the success of the ongoing drill program currently underway. In addition, as can be expected production levels are increasing monthly as improvements in the operations are achieved.

The property’s geologic potential remains very high as the current Resources / Reserves definitions have been focused on the La Rosa, Rosarios, La Blanca, San Marcos and Quebradillas areas. Mineralization at La Parrilla is a typical assemblage of metasomatic deposit minerals with a high content of silver. The most important mineralization consists of vein deposits and mineral concentrations within breccias. It mainly consists of pyrite, esphalerite, galena, some chalcopyrite, argentite and other silver sulfosalts associated with calcite and quartz as gangue minerals. Oxidation and secondary enrichment of these sulfides makes up the mineral concentrations in the upper parts of the deposits, and consists of sulfosalts (ceragyrite, pyrargyrite, stephanite) carbonates (cerussite, hydrozincite, hemimorphite), sulfates (anglesite, willemite), and iron oxides, hematite, limonite, etc.

In June 2005 First Majestic launched an aggressive drilling program to explore the various areas of interest within La Parrilla holdings. From that time to June 2007, a total of 162 drill holes have been completed consisting of 37,943m of drilling. In addition, underground mine development and exploration has amounted to 6,666 metres of declines, drifts, ramps and raises since January 2006. The following Reserve / Resource Tables outline the current NI 43-101 compliant estimates to date.

The following summary tables were taken from the complete La Parrilla Silver Mine NI 43-101 Technical Report prepared by Pincock Allan & 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.

Total Proven + Probable Mineral Reserves (Mineable Reserves) (1) (5) (6)

Category (2)

Tonnes

Grade

Contained Silver Eq. oz. (2)

Silver
g/tonne

Lead
%

Zinc
%

Proven Reserves – Oxides (3)

137,051

275

0.00

0.00

1,232,385

Proven Reserves – Sulphides (4)

139,293

331

0.35

0.22

1,575,792

Probable Reserves – Oxides (3)

84,807

319

0.00

0.00

884,126

Probable Reserves – Sulphides (4)

41,862

300

0.80

0.39

431,117

Total Proven + Probable Mineral Reserves

403,014

271

0.20

0.13

3,660,727



Total Indicated Resources (1) (5) (6)

Category

Tonnes

Grade

Contained Silver Eq. oz. (2)

Gold
g/tonne

Silver
g/tonne

Lead
%

Zinc
%

Indicated Resources – Oxides (3)

344,329

0.20

500

0.00

0.00

5,592,004

Indicated Resources – Sulphides (4)

751,374

0.16

293

1.99

1.18

7,577,489

Total Indicated Resources

1,095,703

0.17

358

1.37

0.81

13,169,493


Total Inferred Resources (1) (5) (6)

Category

Tonnes

Grade

Contained Silver Eq. oz. (2)

Gold
g/tonne

Silver
g/tonne

Lead
%

Zinc
%

Inferred Resources – Oxides

1,358,758

0.16

360

0.00

0.00

15,960,044

Inferred Resources – Sulphides

2,750,533

0.14

204

1.34

1.70

19,824,449

Total Inferred Resources

4,109,291

0.15

255

0.90

1.14

35,784,493


(1) Estimates by First Majestic Resources México, reviewed by PAH. Estimates based on Minimum Mining Width > 2.00m. No mine recovery included.

(2) Silver equivalent based on sales. Prices used for evaluation: Ag — US$10/oz; Au — US$570/oz; Pb — US$0.50/lb.

(3) Oxides Ag equivalent includes Gold Credit based on FMRM sales. Au Credit = 0.15 g/tonne Au X Met. Rec X Payable Au X Au price = $1.61 = 5 g/tonne Ag.

(4) Sulphides Ag equivalent includes Pb credit = 20.6 g/tonne Ag. Pb Credit = (1.00 X 2204/100) X 0.70 X 0.85 X US$0.50 = US$6.61/tonne

(5) Cut Off Grade estimated as 225 g/tonne Ag net of Au credit in oxide ores; and 235 g/tonne Ag net of Pb credit in sulphide ores. Zinc not considered.

(6) Total Proven & Probable Reserves, Total Indicated Resources and Total Inferred Resources are report exclusive of each other and thus are not combined.


It should be noted that within the Quebradillas area, Grupo México carried out a drill program from 1990 to 1993 which consisted of 73 drill holes with a drilled depth of 16,634m. The historic resources defined by this program have not been included in the above Resource estimates as confirmation drilling and testing by the Company is still underway. In addition, PAH in its report excluded the zinc mineralization from the Reserve / Resource calculation which may represent a significant value for the La Parrilla operation. The exclusion was due to the fact that the zinc flotation circuit was inactive during their site visit. The flotation circuit to produce and recuperate zinc concentrates has now been activated.

The Company’s prior NI 43-101 Report dated February 2007, reported compliant Resources of; total Indicated Resources of 14,488,459 ounces silver (20,859,348 ounces silver equivalent) and total Measured Resources of 589,815 ounces silver (596,563 ounces silver equivalent) for a total Measured + Indicated Resource of 15,078,274 ounces silver (or, 21,455,911 ounces silver equivalent). The most current report demonstrates a much larger Resource base that is anticipated to sustain operations at the La Parrilla for several additional years.

Presently, six drill rigs are active in various areas of the La Parrilla property. Over the coming six months, the focus will remain to continue to upgrade present Resources and to develop additional Resources in known mineralized areas. Resource development and exploration planned for the balance of 2007 is to include a total of 101 drill holes consisting of 23,050m in depth. The ongoing drilling program for this period will include 12,100 meters in 48 drill holes from surface and 10,950m in 53 drill holes from underground areas. In addition, approximately 1,500m of drifting, crosscutting and ramp development over this period is also planned.

Significant geologic potential exists within several additional areas of the La Parrilla property. These areas are presently being mapped and studied by a geophysics program in order to define future exploration targets. These areas that appear to be significant target zones are; San José mine, Sacramento, Cerro Santiago, stockwork zone to the east of Quebradillas, Las Víboras, San Marqueña, Mina Los Perros, colour anomaly to the west of San José de la Parrilla, La Protectora, and others. These areas of interest will be investigated and explored on a priority basis going forward.

The Company intends to issue another updated NI 43-101 Technical Report on the La Parrilla Silver Mine in October/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 López, 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.

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.

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 does not accept responsibility for the adequacy or accuracy of this release.