UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 6-K

REPORT OF FOREIGN PRIVATE ISSUER PURSUANT TO RULE 13a-16 OR 15d-16
UNDER THE SECURITIES EXCHANGE ACT OF 1934

For the month of August 3, 2023

Commission File Number 001-34984

FIRST MAJESTIC SILVER CORP.
(Translation of registrant's name into English)

925 West Georgia Street, Suite 1800, Vancouver BC V6C 3L2
(Address of principal executive offices)

Indicate by check mark whether the registrant files or will file annual reports under cover Form 20-F or Form 40-F.

[ ] Form 20-F   [x] Form 40-F

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): [ ]

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): [ ]


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DOCUMENTS INCORPORATED BY REFERENCE

Exhibits 99.1 and 99.2 to this Report on Form 6-K are hereby incorporated by reference (i) as Exhibits to the Registration Statement on Form F-10 of First Majestic Silver Corp. (File No. 333-255798) and (ii) into the Registration Statement on Form S-8 of First Majestic Silver Corp. (File No. 333-258124).


DOCUMENTS FILED AS PART OF THIS FORM 6-K

Exhibits


SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
FIRST MAJESTIC SILVER CORP. 
  
By: 
  
/s/ Samir Patel 
Samir Patel 
General Counsel & Corporate Secretary 
  
August 3, 2023 












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CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2023 AND 2022

(UNAUDITED)















925 West Georgia Street, Suite 1800, Vancouver, B.C., Canada V6C 3L2
Phone: 604.688.3033 | Fax: 604.639.8873| Toll Free: 1.866.529.2807 | Email: info@firstmajestic.com
www.firstmajestic.com










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Management’s Responsibilities over Financial Reporting


The condensed interim consolidated financial statements of First Majestic Silver Corp. (the “Company”) are the responsibility of the Company’s management. The condensed interim consolidated financial statements are prepared in accordance with International Accounting Standard 34, "Interim Financial Reporting", as issued by the International Accounting Standards Board and reflect management’s best estimates and judgment based on information currently available.

Management has developed and maintains a system of internal controls to ensure that the Company’s assets are safeguarded, transactions are authorized and properly recorded, and financial information is reliable.

The Board of Directors is responsible for ensuring management fulfills its responsibilities. The Audit Committee reviews the results of the condensed interim consolidated financial statements prior to their submission to the Board of Directors for approval.

The condensed interim consolidated financial statements have not been audited.




/s/ Keith Neumeyer/s/ David Soares
Keith Neumeyer David Soares, CPA, CA
President & CEOChief Financial Officer
August 2, 2023August 2, 2023






TABLE OF CONTENTS
CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
   
 
 
 
NOTES TO CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS 
   
General
Statements of Earnings (Loss)
Statements of Financial Position
Other items

CONDENSED INTERIM CONSOLIDATED STATEMENTS OF EARNINGS (LOSS)
FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2023 AND 2022
Condensed Interim Consolidated Financial Statements - Unaudited(In thousands of US dollars, except share and per share amounts)









The Condensed Interim Consolidated Statements of Earnings (Loss) provide a summary of the Company’s financial performance and net earnings or loss over the reporting periods.
 Three Months Ended June 30,Six Months Ended June 30,
 Note2023202220232022
Revenues$146,692 $159,443 $303,644 $316,281 
Mine operating costs
Cost of sales104,607 113,619 228,476 224,832 
Cost of sales - standby costs8,360 — 13,437 — 
Depletion, depreciation and amortization
32,587 34,212 67,016 64,768 
145,554 147,831 308,929 289,600 
Mine operating earnings (loss) 1,138 11,612 (5,285)26,681 
General and administrative expenses11,673 9,380 20,121 19,662 
Share-based payments 3,320 2,986 7,949 7,808 
Mine holding costs3,718 2,430 7,507 5,595 
Write down on asset held-for-sale7,229 — 7,229 — 
Impairment (reversal) of non-current asset— (7,585)125,200 (7,585)
Loss on sale of mining interest— — 1,378 — 
Foreign exchange (gain) loss (5,952)986 (11,595)277 
Operating (loss) earnings (18,850)3,415 (163,074)924 
Investment and other income (loss)3,644 (3,918)6,869 (1,286)
Finance costs(7,326)(4,835)(12,949)(9,425)
Loss before income taxes (22,532)(5,338)(169,154)(9,787)
Income taxes
 
Current income tax expense5,348 25,450 5,413 36,942 
Deferred income tax (recovery) expense(10,346)53,262 (56,373)30,036 
 (4,998)78,712 (50,960)66,978 
Net loss for the period($17,534)($84,050)($118,194)($76,765)
Loss per common share 
     Basic
($0.06)($0.32)($0.43)($0.29)
     Diluted
($0.06)($0.32)($0.43)($0.29)
Weighted average shares outstanding
 
     Basic
280,993,803 262,680,950 277,625,669 261,447,267 
     Diluted
280,993,803 262,680,950 277,625,669 261,447,267 

Approved and authorized by the Board of Directors for issuance on August 2, 2023
/s/ Keith Neumeyer/s/ Colette Rustad
Keith Neumeyer, Director Colette Rustad, Director
The accompanying notes are an integral part of the condensed interim consolidated financial statements
First Majestic Silver Corp. 2023 Second Quarter Report
Page 1

CONDENSED INTERIM CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2023 AND 2022
Condensed Interim Consolidated Financial Statements - Unaudited(In thousands of US dollars, except share and per share amounts)

The Condensed Interim Consolidated Statements of Comprehensive Income (Loss) provide a summary of total comprehensive earnings or loss and summarizes items recorded in other comprehensive income that may or may not be subsequently reclassified to profit or loss depending on future events.
 NoteThree Months Ended June 30,Six Months Ended June 30,
 2023202220232022
Net loss for the period($17,534)($84,050)($118,194)($76,765)
Other comprehensive earnings    
Items that will not be subsequently reclassified to net loss:
Unrealized loss on fair value of investments in marketable securities, net of tax(17,376)(9,421)(14,897)(8,106)
Realized gain on investments in marketable securities, net of tax— 248 — 482 
Other comprehensive loss(17,376)(9,173)(14,897)(7,624)
Total comprehensive loss($34,910)($93,223)($133,091)($84,389)

The accompanying notes are an integral part of the condensed interim consolidated financial statements
First Majestic Silver Corp. 2023 Second Quarter Report
Page 2

CONDENSED INTERIM CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2023 AND 2022
Condensed Interim Consolidated Financial Statements - Unaudited(In thousands of US dollars)

The Condensed Interim Consolidated Statements of Cash Flows provide a summary of movements in cash and cash equivalents during the reporting periods by classifying them as operating, investing or financing activities.
  Three Months Ended June 30,Six Months Ended June 30,
 Note2023202220232022
Operating Activities
     
Net loss for the period ($17,534)($84,050)($118,194)($76,765)
Adjustments for: 
Depletion, depreciation and amortization 32,976 34,623 67,795 65,580 
Share-based payments 3,424 2,986 7,677 7,808 
Income tax (recovery) expense (4,998)78,712 (50,960)66,978 
Finance costs7,326 4,835 12,949 9,425 
Write down on asset held-for-sale7,229 — 7,229 — 
Unrealized (gain) loss from marketable securities and silver futures derivatives(1,240)3,303 (3,457)961 
(Gain) loss on sale of mining interest(575)— 803 — 
Impairment (reversal) of non-current asset— (7,585)125,200 (7,585)
Other281 181 (298)1,931 
Operating cash flows before non-cash working capital and taxes 26,889 33,005 48,744 68,333 
Net change in non-cash working capital items(2,538)(17,426)(12,983)(44,265)
Income taxes paid (3,972)(28,832)(20,052)(56,305)
Cash generated by (used in) operating activities
 20,379 (13,253)15,709 (32,237)
Investing Activities
     
Expenditures on mining interests (31,072)(49,319)(72,049)(81,347)
Acquisition of property, plant and equipment (6,375)(18,148)(14,847)(24,444)
Deposits paid for acquisition of non-current assets  (284)(839)(3,132)(4,879)
Other186 1,257 186 3,842 
Cash used in investing activities
 (37,545)(67,049)(89,842)(106,828)
Financing Activities
 
Proceeds from prospectus offering, net of share issue costs77,874 17,341 92,266 30,580 
Proceeds from exercise of stock options 924 1,108 1,242 3,293 
Repayment of lease liabilities(3,531)(2,978)(6,957)(5,998)
Finance costs paid (2,363)(436)(3,737)(688)
Dividends declared and paid(1,605)(3,634)(3,085)(3,634)
Cash provided by financing activities
 71,299 11,401 79,729 23,553 
Effect of exchange rate on cash and cash equivalents held in foreign currencies 1,326 (1,508)3,201 (22)
Increase (decrease) in cash and cash equivalents54,133 (68,901)5,596 (115,512)
Cash and cash equivalents, beginning of the period 104,776 192,801 151,438 237,926 
Cash and cash equivalent reclassified as held for sale— (4,671)— (4,671)
Cash and cash equivalents, end of period $160,235 $117,721 $160,235 $117,721 
Supplemental cash flow information
    
The accompanying notes are an integral part of the condensed interim consolidated financial statements
First Majestic Silver Corp. 2023 Second Quarter Report
Page 3

CONDENSED INTERIM CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
AS AT JUNE 30, 2023 AND DECEMBER 31, 2022
Condensed Interim Consolidated Financial Statements - Unaudited(In thousands of US dollars)
The Condensed Interim Consolidated Statements of Financial Position provides a summary of assets, liabilities and equity, as well as their current versus non-current nature, as at the reporting date.
 NoteJune 30, 2023December 31, 2022
Assets   
Current assets
   
Cash and cash equivalents $160,235 $151,438 
Restricted cash28,746 — 
Trade and other receivables5,259 8,598 
Value added taxes receivable28,224 32,618 
Inventories57,948 64,761 
Other financial assets52,113 34,528 
Prepaid expenses and other 9,021 5,617 
Assets held-for-sale21,254 72,729 
Total current assets
 362,800 370,289 
Non-current assets
   
Mining interests993,850 1,061,124 
Property, plant and equipment408,805 451,335 
Right-of-use assets27,391 26,649 
Deposits on non-current assets 8,207 6,003 
Non-current restricted cash117,304 125,193 
Non-current value added taxes receivable14,006 12,354 
Deferred tax assets81,620 57,062 
Total assets
 $2,013,983 $2,110,009 
Liabilities and Equity
   
Current liabilities
   
Trade and other payables$96,040 $115,120 
Unearned revenue3,662 3,383 
Current portion of debt facilities533 551 
Current portion of lease liabilities16,571 13,827 
Liabilities relating to assets held-for-sale6,354 16,278 
Income taxes payable2,446 18,240 
Total current liabilities
 125,606 167,399 
Non-current liabilities
 
Debt facilities214,329 209,811 
Lease liabilities23,379 23,756 
Decommissioning liabilities153,451 149,017 
Other liabilities 7,207 5,655 
Non-current income taxes payable23,365 20,605 
Deferred tax liabilities90,339 122,468 
Total liabilities
 $637,676 $698,711 
Equity   
Share capital1,877,382 1,781,280 
Equity reserves 89,100 98,914 
Accumulated deficit (590,175)(468,896)
Total equity
 $1,376,307 $1,411,298 
Total liabilities and equity
 $2,013,983 $2,110,009 
Commitments (Note 15); Contingencies (Note 26); Subsequent event (Note 27)
 
The accompanying notes are an integral part of the condensed interim consolidated financial statements
First Majestic Silver Corp. 2023 Second Quarter Report
Page 4

CONDENSED INTERIM CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2023 AND 2022
Condensed Interim Consolidated Financial Statements - Unaudited(In thousands of US dollars, except share and per share amounts)
The Condensed Interim Consolidated Statements of Changes in Equity summarizes movements in equity, including common shares, share capital, equity reserves and retained earnings or accumulated deficit.

 Share Capital Equity Reserves
Accumulated deficit
 Shares Amount
Share-based payments(a)
Other comprehensive income(loss)(b)
Equity component of convertible debenture(c)
Total equity reserves Total equity
Balance at December 31, 2021260,050,658 $1,659,781 $101,385 ($6,387)$3,945 $98,943 ($347,753)$1,410,971 
Net loss for the period— — — — — — (76,765)(76,765)
Other comprehensive loss— — — (7,624)— (7,624)— (7,624)
Total comprehensive loss— — — (7,624)— (7,624)(76,765)(84,389)
Share-based payments— — 7,710 — — 7,710 — 7,710 
Shares issued for:
Prospectus offerings (Note 23(a))
2,318,497 30,580 — — — — — 30,580 
  Exercise of stock options (Note 23(b))
401,498 4,823 (1,530)— — (1,530)— 3,293 
Settlement of restricted share units (Note 23(c))
82,515 1,075 (1,340)— — (1,340)— (265)
Dividend declared and paid (Note 23(g))
— — — — — — (3,634)(3,634)
Balance at June 30, 2022262,853,168 $1,696,259 $106,225 ($14,011)$3,945 $96,159 ($428,152)$1,364,266 
Balance at December 31, 2022272,577,979 $1,781,280 $110,895 ($15,926)$3,945 $98,914 ($468,896)$1,411,298 
Net loss for the period— — — — — — (118,194)(118,194)
Other comprehensive loss— — — (14,897)— (14,897)— (14,897)
Total comprehensive loss— — — (14,897)— (14,897)(118,194)(133,091)
Share-based payments— — 7,677 — — 7,677 — 7,677 
Shares issued for:
Prospectus offerings (Note 23(a))
13,919,634 92,266 — — — — — 92,266 
Exercise of stock options (Note 23(b))
192,500 1,849 (607)— — (607)— 1,242 
Settlement of restricted and deferred share units (Note 23(c) and 23(e))
180,592 1,987 (1,987)— — (1,987)— — 
Dividend declared (Note 23(g))
— — — — — — (3,085)(3,085)
Balance at June 30, 2023286,870,705 $1,877,382 $115,978 ($30,823)$3,945 $89,100 ($590,175)$1,376,307 

(a)Share-based payments reserve records the cumulative amount recognized under IFRS 2 share-based payments in respect of stock options granted, restricted share units, deferred share units and shares purchase warrants issued but not exercised or settled to acquire shares of the Company.
(b)Other comprehensive income reserve principally records the unrealized fair value gains or losses related to fair value through other comprehensive income ("FVTOCI") of financial instruments and re-measurements arising from actuarial gains or losses and return on plan assets in relation to San Dimas' retirement benefit plan.
(c)Equity component of convertible debenture reserve represents the estimated fair value of its conversion option of $42.3 million, net of deferred tax effect of $11.4 million. This amount is not subsequently remeasured and will remain in equity until the conversion option is exercised, in which case, the balance recognized in equity will be transferred to share capital. Where the conversion option remains unexercised at the maturity date of the convertible note, the balance will remain in equity reserves.
The accompanying notes are an integral part of the condensed interim consolidated financial statements
First Majestic Silver Corp. 2023 Second Quarter Report
Page 5

NOTES TO CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
Condensed Interim Consolidated Financial Statements - Unaudited(Tabular amounts are expressed in thousands of US dollars)

1. NATURE OF OPERATIONS

First Majestic Silver Corp. (the “Company” or “First Majestic”) is in the business of production, development, exploration, and acquisition of mineral properties with a focus on silver and gold production in North America. The Company owns three producing mines in Mexico consisting of the San Dimas Silver/Gold Mine, the Santa Elena Silver/Gold Mine and the La Encantada Silver Mine. The Company also owns the Jerritt Canyon Gold Mine in Nevada, USA which has been placed on temporary suspension as of March 20, 2023 to focus on exploration, definition, and expansion of the mineral resources and optimization of mine planning and plant operations. In addition, the Company owns three mines in suspension: the San Martin Silver Mine, the Del Toro Silver Mine, the La Parrilla Silver Mine and several exploration stage projects. As at June 30, 2023 the La Parrilla Silver Mine was classified as an asset held-for-sale (Note 14).

First Majestic is incorporated in Canada with limited liability under the legislation of the Province of British Columbia and is publicly listed on the New York Stock Exchange under the symbol “AG”, on the Toronto Stock Exchange under the symbol “FR” and on the Frankfurt Stock Exchange under the symbol “FMV”. The Company’s head office and principal address is located at 925 West Georgia Street, Suite 1800, Vancouver, British Columbia, Canada, V6C 3L2.

2. BASIS OF PRESENTATION

These condensed interim consolidated financial statements have been prepared in accordance with International Accounting Standard (“IAS”) 34, “Interim Financial Reporting” of the International Financial Reporting Standards ("IFRS") as issued by the International Accounting Standards Board ("IASB"). These condensed interim consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements as at and for the year ended December 31, 2022, as some disclosures from the annual consolidated financial statements have been condensed or omitted.

These condensed interim consolidated financial statements have been prepared on a historical cost basis except for certain items that are measured at fair value including derivative financial instruments (Note 24) and marketable securities (Note 13). All dollar amounts presented are in thousands of United States dollars unless otherwise specified.

These condensed interim consolidated financial statements incorporate the financial statements of the Company and its controlled subsidiaries. Control exists when the Company has the power, directly or indirectly, to govern the financial and operating policies of an entity so as to obtain benefits from its activities. The consolidated financial statements include the accounts of the Company and its subsidiaries. Intercompany balances, transactions, income and expenses are eliminated on consolidation.

These condensed interim consolidated financial statements were prepared using accounting policies consistent with those in the audited consolidated financial statements as at and for the year ended December 31, 2022 except as outlined in Note 3.

3. MATERIAL ACCOUNTING POLICIES, ESTIMATES AND JUDGMENTS

The Company’s management makes judgments in its process of applying the Company’s accounting policies in the preparation of its unaudited condensed interim consolidated financial statements. In addition, the preparation of the financial data requires that the Company’s management to make assumptions and estimates of the impacts of uncertain future events on the carrying amounts of the Company’s assets and liabilities at the end of the reporting period, and the reported amounts of revenues and expenses during the reporting period. Actual results may differ from those estimates as the estimation process is inherently uncertain. Estimates are reviewed on an ongoing basis based on historical experience and other factors that are considered to be relevant under the circumstances. Revisions to estimates and the resulting impacts on the carrying amounts of the Company’s assets and liabilities are accounted for prospectively.

In preparing the Company’s unaudited condensed interim consolidated financial statements for the three and six months ended June 30, 2023, the Company applied the accounting policies, critical judgments and estimates disclosed in Note 3 of its audited consolidated financial statements for the year ended December 31, 2022 and the following accounting policies, critical judgments and estimates in applying accounting policies:


The accompanying notes are an integral part of the condensed interim consolidated financial statements
First Majestic Silver Corp. 2023 Second Quarter Report
Page 6

NOTES TO CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
Condensed Interim Consolidated Financial Statements - Unaudited
(Tabular amounts are expressed in thousands of US dollars)
3. MATERIAL ACCOUNTING POLICIES, ESTIMATES AND JUDGMENTS (continued)

Assets and liabilities held-for-sale:
Accounting Policy:
A non-current asset or disposal group of assets and liabilities ("disposal group") is classified as held-for-sale, if its carrying amount will be recovered principally through a sale transaction rather than through continuing use, and when the following criteria are met:
(i) The non-current asset or disposal group is available for immediate sale in its present condition subject only to terms that are usual and customary for sales of such assets or disposal groups; and
(ii) The sale of the non-current asset or disposal group is highly probable. For the sale to be highly probable:
•The appropriate level of management must be committed to a plan to sell the asset or disposal group;
•An active program to locate a buyer and complete the plan must have been initiated;
•The non-current asset or disposal group must be actively marketed for sale at a price that is reasonable in relation to its current fair value;
•The sale should be expected to qualify for recognition as a completed sale within one year from the date of classification as held for sale (with certain exceptions); and
•Actions required to complete the plan should indicate that it is unlikely that significant changes to the plan will be made or that the plan will be withdrawn.

Non-current assets and disposal groups are classified as held for sale from the date these criteria are met and are measured at the lower of the carrying amount and fair value less costs to sell ("FVLCTS"). If the FVLCTS is lower than the carrying amount, an impairment loss is recognized in net earnings. Upon classification as held for sale, non-current assets are no longer depreciated.

Significant estimates and judgements:
In determining the probability of the sale being completed within a year, management has considered a number of factors including necessary approvals from management, the Board of Directors, regulators and shareholders.

Critical Judgements and Estimates
Investments in Associates and Joint Ventures

Judgement is needed to assess whether the Company’s interest in an investee meets the definition of having significant influence and therefore requires to be accounted for under the equity method.

In making a judgement of whether the Company has significant influence over the entity, management has evaluated the ownership percentage as well as other qualitative factors including but not limited to representation on the Board of Directors, participation in operational or financial policy-making processes, material transactions between the Company and the investee, interchange of managerial personnel, provision of technical information and the nature of potential voting rights.

As part of this assessment, management has considered that until such time that First Majestic holds less than 19.9% of the outstanding shares, the Company has agreed to vote in the manner recommended by the Board of Directors of Sierra Madre.

Based on the qualitative factors noted above, the restrictions imposed on voting rights, and the lack of rights to have or appoint members to the Board, the Company has determined that significant influence does not exist despite holding a 48% interest in Sierra Madre Gold and Silver Ltd. The Company began accounting for the shares received from Sierra Madre as an equity security at FVTOCI.

The accompanying notes are an integral part of the condensed interim consolidated financial statements
First Majestic Silver Corp. 2023 Second Quarter Report
Page 7

NOTES TO CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
Condensed Interim Consolidated Financial Statements - Unaudited
(Tabular amounts are expressed in thousands of US dollars)
3. MATERIAL ACCOUNTING POLICIES, ESTIMATES AND JUDGMENTS (continued)
Critical Judgements and Estimates (continued)
Impairment of non-current asset
Once an indicator of impairment is identified, significant judgement is required to determine the recoverable amounts of the Company's mining interests. Following the recent temporary suspension of operations at Jerritt Canyon, the Company has determined that there was an indicator of impairment. The Company determined that the value of the CGU can be estimated using the market approach, based on the implied value per in-situ ounce of the property, rather than from the future cash flows from continuing operations.

In estimating the fair value less costs of disposal ("FVLCD"), the Company took into account the consideration paid in recent transactions for comparable Companies and benchmarked the value per in-situ ounce at Jerritt Canyon against these transactions. The Company concluded that the resulting measurement is more representative of the fair value of the CGU in the circumstances existing at the end of the current period.

New and amended IFRS standards that are effective for the current year:

In the current year, the Company has applied the below amendments to IFRS Standards and Interpretations issued by the IASB that were effective for annual periods that begin on or after January 1, 2023. Their adoption has not had any material impact on the disclosures or on the amounts reported in these financial statements.

Amendments to IAS 1 Presentation of Financial Statements and IFRS Practice Statement 2 Making Materiality Judgments—Disclosure of Accounting Policies

The amendments change the requirements in IAS 1 with regard to disclosure of accounting policies. The amendments replace all instances of the term "significant accounting policies" with "material accounting policy information." Accounting policy information is material if, when considered together with other information included in an entity’s financial statements, it can reasonably be expected to influence decisions that the primary users of general purpose financial statements make on the basis of those financial statements.

The supporting paragraphs in IAS 1 are also amended to clarify that accounting policy information that relates to immaterial transactions, other events or conditions is immaterial and need not be disclosed. Accounting policy information may be material because of the nature of the related transactions, other events or conditions, even if the amounts are immaterial. However, not all accounting policy information relating to material transactions, other events or conditions is itself material. The International Accounting Standards Board ("IASB") has also developed guidance and examples to explain and demonstrate the application of the ‘four-step materiality process’ described in IFRS Practice Statement 2.

The amendments were applied effective January 1, 2023 and did not have a material impact on the Company's interim consolidated financial statements.

The accompanying notes are an integral part of the condensed interim consolidated financial statements
First Majestic Silver Corp. 2023 Second Quarter Report
Page 8

NOTES TO CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
Condensed Interim Consolidated Financial Statements - Unaudited
(Tabular amounts are expressed in thousands of US dollars)
3. MATERIAL ACCOUNTING POLICIES, ESTIMATES AND JUDGMENTS (continued)
New and amended IFRS standards that are effective for the current year (continued)
Amendments to IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors—Definition of Accounting Estimates

The amendments replace the definition of a change in accounting estimates with a definition of accounting estimates. Under the new definition, accounting estimates are “monetary amounts in financial statements that are subject to measurement uncertainty.”

The definition of a change in accounting estimates was deleted. However, the Board retained the concept of changes in accounting estimates in the Standard with the following clarifications:

• A change in accounting estimate that results from new information or new developments is not the correction of an
error

• The effects of a change in an input or a measurement technique used to develop an accounting estimate are changes
in accounting estimates if they do not result from the correction of prior period errors

The amendments were applied effective January 1, 2023 and did not have a material impact on the Company's interim consolidated financial statements.

Deferred Tax Related to Assets and Liabilities Arising from a Single Transaction (Amendments to IAS 12)
The amendments clarify that companies are required to recognize deferred taxes on transactions where both assets and liabilities are recognized, such as with leases and decommissioning liabilities. The amendments were applied effective January 1, 2023 and did not have a material impact on the Company's interim consolidated financial statements.

Future Changes in Accounting Policies Not Yet Effective in the Current Period

At the date of authorization of these financial statements, the Company has not applied the following new and revised IFRS Accounting Standards that have been issued but are not yet effective. Management does not expect that the adoption of the Standards listed below will have a material impact on the financial statements of the Company in future periods, except if indicated.

Classification of Liabilities as Current or Non-Current with Covenants (Amendments to IAS 1)

The amendments aim to promote consistency in applying the requirements by helping companies determine whether, in the statement of financial position, debt and other liabilities with an uncertain settlement date should be classified as current (due or potentially due to be settled within one year) or non-current.

In addition, the amendment requires entities to disclose information to enable users of the financial statements to understand the risk that non-current liabilities with covenants could become repayable within twelve months. The amendments are applied on or after the first annual reporting period beginning on or after January 1, 2024, with early application permitted. This amendment is not expected to have a material impact on the Company’s consolidated financial statements.

Lease Liability in a Sale and Leaseback (Amendments to IFRS 16)

The amendments require a seller-lessee to subsequently measure lease liabilities arising from a leaseback in a way that it does not recognize any amount of the gain or loss that relates to the right of use it retains. The new requirements do not prevent a seller-lessee from recognizing in profit or loss any gain or loss relating to the partial or full termination of a lease. A seller-lessee applies the amendments retrospectively in accordance with IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors to sale and leaseback transactions entered into after the date of initial application.

The amendments are effective for annual reporting periods beginning on or after January 1, 2024 although earlier application is permitted. This amendment is not expected to have a material impact on the Company's consolidated financial statements.

The accompanying notes are an integral part of the condensed interim consolidated financial statements
First Majestic Silver Corp. 2023 Second Quarter Report
Page 9

NOTES TO CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
Condensed Interim Consolidated Financial Statements - Unaudited
(Tabular amounts are expressed in thousands of US dollars)
4. SEGMENTED INFORMATION

All of the Company’s operations are within the mining industry and its major products are precious metals doré which are refined or smelted into pure silver and gold and sold to global metal brokers. Transfer prices between reporting segments are set on an arms-length basis in a manner similar to transactions with third parties. Coins and bullion cost of sales are based on transfer prices.

An operating segment is defined as a component of the Company that:
•engages in business activities from which it may earn revenues and incur expenses;
•whose operating results are reviewed regularly by the entity’s chief operating decision maker; and
•for which discrete financial information is available.

For the six months ended June 30, 2023, the Company's significant operating segments include its three operating mines in Mexico, the Jerritt Canyon Gold Mine in Nevada, United States and its "non-producing properties" in Mexico which include the La Parrilla, Del Toro and San Martin mines, which have been placed on suspension. The Jerritt Canyon Gold mine has been placed on temporary suspension as of March 20, 2023 to focus on exploration, definition, and expansion of the mineral resources and optimization of mine planning and plant operations. “Others” consists primarily of the Company’s corporate assets including cash and cash equivalents, other development and exploration properties (Note 15), debt facilities (Note 21), coins and bullion sales, and corporate expenses which are not allocated to operating segments. The Company’s chief operating decision maker (“CODM”) evaluates segment performance based on mine operating earnings. Therefore, other income and expense items are not allocated to the segments.

Significant information relating to the Company’s reportable operating segments is summarized in the tables below:
Three Months Ended June 30, 2023 and 2022 RevenueCost of salesDepletion, depreciation, and amortizationMine operating earnings (loss)Capital expenditures
Mexico     
San Dimas2023$66,885 $45,149 $12,863 $8,873 $10,403 
202254,255 33,532 11,445 9,278 14,356 
Santa Elena202342,481 25,512 9,583 7,386 13,423 
202249,334 27,911 6,902 14,521 16,390 
La Encantada202319,272 13,525 2,993 2,754 2,024 
202221,317 11,702 2,341 7,274 2,739 
   Non-producing Properties2023— — 86 (86)30 
2022— — 104 (104)183 
United States
Jerritt Canyon (2)
202315,660 27,225 6,452 (18,017)4,033 
202236,252 41,743 12,827 (18,318)26,859 
Others(1)
20232,394 1,556 610 228 647 
20222,570 1,428 593 549 9,521 
Intercompany elimination2023— — — — — 
2022(4,285)(2,697)— (1,588)— 
Consolidated2023$146,692 $112,967 $32,587 $1,138 $30,560 
2022$159,443 $113,619 $34,212 $11,612 $70,049 
(1) The "Others" segment includes revenues of $2.4 million (2022 - $2.6 million) from coins and bullion sales of 87,657 silver ounces (2022 - 92,498) at an average price of $27.30 per ounce (2022 - $27.78).
(2) Cost of Sales for Jerritt Canyon is inclusive of one time standby costs (Note 6).

During the three months ended June 30, 2023, the Company had three (June 30, 2022 - three) customers that accounted for 98% (June 30, 2022 - 99%) of its sales revenue, with one major metal broker accounting for 93% of total revenue (June 30, 2022 - 94%).
The accompanying notes are an integral part of the condensed interim consolidated financial statements
First Majestic Silver Corp. 2023 Second Quarter Report
Page 10

NOTES TO CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
Condensed Interim Consolidated Financial Statements - Unaudited
(Tabular amounts are expressed in thousands of US dollars)
4. SEGMENTED INFORMATION (continued)
Six Months Ended June 30, 2023 and 2022 RevenueCost of salesDepletion, depreciation, and amortizationMine operating earnings (loss)Capital expenditures
Mexico     
San Dimas2023$128,145 $84,784 $25,627 $17,734 $22,296 
2022116,196 64,835 22,321 29,040 27,259 
Santa Elena202391,497 52,739 18,454 20,304 26,958 
202292,218 52,215 12,312 27,691 26,510 
La Encantada202338,033 26,897 6,018 5,118 3,875 
202236,830 21,731 4,112 10,987 4,938 
   Non-producing Properties2023— — 171 (171)255 
2022— — 208 (208)412 
United States
Jerritt Canyon (2)
202339,769 73,714 15,404 (49,349)22,798 
202273,284 87,354 24,422 (38,492)42,978 
Others(1)
20236,200 3,779 1,342 1,079 1,032 
20226,922 3,857 1,393 1,672 14,876 
Intercompany elimination2023— — — — — 
2022(9,169)(5,160)— (4,009)— 
Consolidated2023$303,644 $241,913 $67,016 ($5,285)$77,214 
2022$316,281 $224,832 $64,768 $26,681 $116,974 
(1) The "Others" segment includes revenues of $6.2 million (2022 - $6.9 million) from coins and bullion sales of 239,143 silver ounces (2022 - 248,698) at an average price of $25.92 per ounce (2022 - $27.83).
(2) Cost of Sales for Jerritt Canyon is inclusive of one time standby costs (Note 6).

During the six months ended June 30, 2023, the Company had three (June 30, 2022 - three) customers that accounted for 98% (June 30, 2022 - 99%) of its sales revenue, with one major metal broker accounting for 93% of total revenue (June 30, 2022 - 94%).




The accompanying notes are an integral part of the condensed interim consolidated financial statements
First Majestic Silver Corp. 2023 Second Quarter Report
Page 11

NOTES TO CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
Condensed Interim Consolidated Financial Statements - Unaudited
(Tabular amounts are expressed in thousands of US dollars)
4. SEGMENTED INFORMATION (continued)

At June 30, 2023 and
December 31, 2022		Mining InterestsProperty, plant and equipmentTotal
mining assets		 Total
assets		Total liabilities
ProducingExploration
Mexico       
San Dimas2023$234,163 $17,609 $90,602 $342,374 $556,903 $102,551 
2022211,658 38,831 94,377 344,866 489,970 76,835 
Santa Elena2023120,525 46,103 96,773 263,401 339,504 83,646 
2022110,094 41,731 99,979 251,804 295,489 79,295 
La Encantada202323,951 3,977 23,631 51,559 104,292 27,008 
202223,496 4,935 24,422 52,853 106,008 30,601 
   Non-producing Properties202362,414 14,022 17,953 94,389 161,319 24,103 
202262,414 13,781 18,195 94,390 206,796 33,391 
United States
Jerritt Canyon2023353,729 81,831 133,858 569,418 631,509 202,804 
2022425,158 93,680 166,778 685,617 756,062 226,814 
Others2023— 35,525 45,988 81,513 220,456 197,564 
2022— 35,346 47,584 82,930 255,684 251,775 
Consolidated2023$794,782 $199,068 $408,805 $1,402,655 $2,013,983 $637,676 
2022$832,820 $228,304 $451,335 $1,512,459 $2,110,009 $698,711 

The accompanying notes are an integral part of the condensed interim consolidated financial statements
First Majestic Silver Corp. 2023 Second Quarter Report
Page 12

NOTES TO CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
Condensed Interim Consolidated Financial Statements - Unaudited
(Tabular amounts are expressed in thousands of US dollars)
5. REVENUES

The majority of the Company’s revenues are from the sale of precious metals contained in doré form. The Company’s primary products are precious metals of silver and gold. Revenues from the sale of metal, including by-products, are recorded net of smelting and refining costs.

Revenues for the period are summarized as follows:
 Three Months Ended June 30,Six Months Ended June 30,
 2023202220232022
Gross revenue from payable metals:
    
   Silver$66,912 45 %$62,090 39 %$127,977 42 %$124,245 39 %
   Gold80,397 55 %98,009 61 %176,934 58 %193,337 61 %
Gross revenue147,309 100 %160,099 100 %304,911 100 %317,582 100 %
Less: smelting and refining costs(617)(656)(1,267)(1,301)
Revenues$146,692 $159,443 $303,644 $316,281 

As at June 30, 2023, the Company had $3.7 million of unearned revenue (December 31, 2022 - $3.4 million) that has not satisfied performance obligations.

(a)Gold Stream Agreement with Sandstorm Gold Ltd.
The Santa Elena mine is subject to a gold streaming agreement with Sandstorm Gold Ltd. (“Sandstorm”), which requires the Company to sell 20% of its gold production over the life of mine from its leach pad and a designated area of its underground operations at the Santa Elena mine. The selling price to Sandstorm is the lesser of the prevailing market price or $450 per ounce, subject to a 1% annual inflation. During the three and six months ended June 30, 2023, the Company delivered 210 and 1,066 ounces (2022 - 864 and 1,484 ounces) of gold to Sandstorm at an average price of $474 and $473 per ounce (2022 - $473 and $471 per ounce).

(b)    Net Smelter Royalty
The Santa Elena mine has a net smelter royalty ("NSR") agreement with Orogen Royalties Inc. that requires a 2% NSR from the production of the Ermitaño property. In addition, there is an underlying NSR royalty where Osisko Gold Royalties Ltd. retains a 2% NSR from the sale of mineral products extracted from the Ermitaño property. For the three and six months ended June 30, 2023, the Company has incurred $1.7 million and $3.6 million (2022 - $1.3 million and $2.6 million) in NSR payments from the production of Ermitaño.
In 2022, the Company sold a portfolio of its existing royalty interests to Metalla Royalty and Streaming Limited. The agreement requires a 100% royalty for the first 1,000 ounces of gold produced annually from the La Encantada property. For the three and six months ended June 30, 2023, the Company has incurred $0.1 and $0.2 million (2022 - $nil and $nil) in NSR payments from production at La Encantada.

(c) Gold Stream Agreement with Wheaton Precious Metals Corporation

In 2018, the San Dimas mine entered into a purchase agreement with Wheaton Precious Metals International ("WPMI"), a wholly owned subsidiary of Wheaton Precious Metals Corp., which entitles WPMI to receive 25% of the gold equivalent production (based on a fixed exchange ratio of 70 silver ounces to 1 gold ounce) at San Dimas in exchange for ongoing payments equal to the lesser of $600 (subject to a 1% annual inflation adjustment) and the prevailing market price for each gold equivalent ounce delivered. Should the average gold to silver ratio over a six-month period exceed 90:1 or fall below 50:1, the fixed exchange ratio would be increased to 90:1 or decreased to 50:1, respectively. The fixed gold to silver exchange ratio as of June 30, 2023, was 70:1.

During the three and six months ended June 30, 2023, the Company delivered 11,354 and 22,005 ounces (2022 - 10,633 and 20,703 ounces) of gold to WPM at $628 and $626 per ounce (2022 - $624 and $621 per ounce).



The accompanying notes are an integral part of the condensed interim consolidated financial statements
First Majestic Silver Corp. 2023 Second Quarter Report
Page 13

NOTES TO CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
Condensed Interim Consolidated Financial Statements - Unaudited
(Tabular amounts are expressed in thousands of US dollars)
6. COST OF SALES

Cost of sales excludes depletion, depreciation and amortization and are costs that are directly related to production and generation of revenues at the operating segments. Significant components of cost of sales are comprised of the following:
 Three Months Ended June 30,Six Months Ended June 30,
 2023202220232022
Consumables and materials$17,241 $26,277 $46,956 $51,907 
Labour costs50,446 51,528 116,691 110,608 
Energy10,060 13,768 23,976 26,093 
Maintenance1,472 2,671 3,270 5,000 
Assays and labwork671 1,533 1,741 2,792 
Insurance554 950 1,991 2,202 
Other costs(1)
13,560 6,796 9,942 8,865 
Production costs$94,004 $103,523 $204,567 $207,467 
Transportation and other selling costs869 915 1,804 1,284 
Workers' participation costs5,420 4,531 9,924 7,241 
Environmental duties and royalties2,795 2,878 5,989 5,647 
Finished goods inventory changes1,519 (1,345)6,192 76 
Other(2)
— 3,117 — 3,117 
Cost of Sales$104,607 $113,619 $228,476 $224,832 
Cost of Sales - Standby Costs(3)
$8,360 $— $13,437 $— 
(1) Other costs include inventory write-downs, stockpile and work-in-process inventory changes, land access payments as well as services related to travel and medical testing. The inventory write-downs during the three and six months ended June 30, 2023 totalled $3.3 million and $13.9 million (2022- $1.9 million and $6.3 million).
(2) Other includes $3.1 million in costs that were incurred during the second quarter of 2022 as a result of marginal ore material that was processed to keep the mill running at minimum feed requirements to perform government mandated air compliance test work at the Jerritt Canyon Gold mine.
(3) Cost of sales for the three and six months ended June 30, 2023 included one time standby costs of $8.4 and $13.4 million primarily related to direct severance and demobilization costs at the Jerritt Canyon mine following the temporary suspension announced on March 20, 2023.

7. GENERAL AND ADMINISTRATIVE EXPENSES

General and administrative expenses are incurred to support the administration of the business that are not directly related to production. Significant components of general and administrative expenses are comprised of the following:
 Three Months Ended June 30,Six Months Ended June 30,
 2023202220232022
Corporate administration$2,553 $2,457 $4,583 $4,295 
Salaries and benefits5,759 3,510 9,782 9,186 
Audit, legal and professional fees2,616 2,593 4,290 4,635 
Filing and listing fees169 188 314 314 
Directors' fees and expenses187 221 373 420 
Depreciation389 411 779 812 
 $11,673 $9,380 $20,121 $19,662 






The accompanying notes are an integral part of the condensed interim consolidated financial statements
First Majestic Silver Corp. 2023 Second Quarter Report
Page 14

NOTES TO CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
Condensed Interim Consolidated Financial Statements - Unaudited
(Tabular amounts are expressed in thousands of US dollars)
8. MINE HOLDING COSTS

The Company’s mine holding costs are primarily comprised of labour costs associated with care and maintenance staff, electricity, security, environmental and community support costs for the following mines which are currently under temporary suspension:
 Three Months Ended June 30,Six Months Ended June 30,
 2023202220232022
La Parrilla(1)
$1,708 $546 $2,913 $1,615 
Del Toro667 580 1,323 1,226 
San Martin4 993 643 1,586 
La Guitarra(1)
— 311 514 1,168 
Santa Elena (2)
477 — 1,252 — 
Jerritt Canyon862 — 862 — 
 $3,718 $2,430 $7,507 $5,595 
(1) As at June 30, 2023, the La Parrilla mine is classified as an asset held-for-sale ("AHFS") following the announcement for the sale of this asset in 2022 (Note 14). The La Guitarra mine, previously classified as an AHFS, was sold during the first quarter of 2023.
(2) During 2023, the Company will be processing ore solely from the Ermitaño mine which is part of the Santa Elena operations. During the three and six months ended June 30, 2023, the Company has incurred $0.5 million and $1.3 million (2022 - $nil and $nil) in holding costs relating to care and maintenance charges for the Santa Elena mine.

9. INVESTMENT AND OTHER INCOME (LOSS)

The Company’s investment and other income (loss) are comprised of the following:
 Three Months Ended June 30,Six Months Ended June 30,
 2023202220232022
Gain from investment in silver futures derivatives$1,391 $— $4,391 $2,888 
Loss from investment in marketable securities (Note 13(a))
(150)(3,303)(934)(3,849)
Interest income and other2,403 (615)3,412 (325)
 $3,644 ($3,918)$6,869 ($1,286)

10. FINANCE COSTS

Finance costs are primarily related to interest and accretion expense on the Company’s debt facilities, lease liabilities and accretion of decommissioning liabilities. The Company’s finance costs in the periods are summarized as follows:
 Three Months Ended June 30,Six Months Ended June 30,
 2023202220232022
Debt facilities(1) (Note 21)
$2,982 $2,507 $5,888 $4,889 
Accretion of decommissioning liabilities2,673 1,510 4,415 3,016 
Lease liabilities (Note 22)
699 506 1,284 1,041 
Silver sales and other972 312 1,362 479 
 $7,326 $4,835 $12,949 $9,425 
(1) During the three and six months ended June 30, 2023, finance costs for debt facilities include non-cash accretion expense of $2.4 million (2022 - $2.3 million) and $4.7 million (2022 - $4.4 million).





The accompanying notes are an integral part of the condensed interim consolidated financial statements
First Majestic Silver Corp. 2023 Second Quarter Report
Page 15

NOTES TO CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
Condensed Interim Consolidated Financial Statements - Unaudited
(Tabular amounts are expressed in thousands of US dollars)
11. EARNINGS OR LOSS PER SHARE

Basic earnings or loss per share is the net earnings or loss available to common shareholders divided by the weighted average number of common shares outstanding during the periods. Diluted net earnings or loss per share adjusts basic net earnings or loss per share for the effects of potential dilutive common shares. The calculations of basic and diluted earnings or loss per share for the periods ended June 30, 2023 and 2022 are as follows:
 Three Months Ended June 30,Six Months Ended June 30,
 2023202220232022
Net loss for the period($17,534)($84,050)($118,194)($76,765)
Weighted average number of shares on issue - basic280,993,803 262,680,950 277,625,669 261,447,267 
Effect on dilutive securities:
Stock options— — — — 
Restricted, performance and deferred share units— — — — 
Weighted average number of shares on issue - diluted(1)
280,993,803 262,680,950 277,625,669 261,447,267 
Loss per share - basic and diluted($0.06)($0.32)($0.43)($0.29)
(1)For the three and six months ended June 30, 2023, diluted weighted average number of shares excluded 6,401,669 and 6,118,807 (2022 - 4,624,573 and 4,272,575) options, 5,000,000 (2022 - 5,000,000) warrants, 1,839,278 restricted and performance share units (2022 - 1,293,862) and 13,888,895 common shares issuable under the 2021 convertible debentures (2022 - 13,888,895) (Note 21(a)) that were anti-dilutive.


12. INVENTORIES

Inventories consist primarily of materials and supplies and products of the Company’s operations, in varying stages of the production process, and are presented at the lower of weighted average cost or net realizable value.
 June 30,
2023		December 31,
2022
Finished goods - doré $3,639 $5,561 
Work-in-process7,710 9,176 
Stockpile3,716 4,825 
Silver coins and bullion5,057 8,001 
Materials and supplies37,826 37,198 
 $57,948 $64,761 

The amount of inventories recognized as an expense during the period is equivalent to the total of cost of sales plus depletion, depreciation and amortization for the period. As at June 30, 2023, mineral inventories, which consist of stockpile, work-in-process and finished goods includes a $3.3 million write down (December 2022 - $9.3 million) which was recognized in cost of sales during the quarter.














The accompanying notes are an integral part of the condensed interim consolidated financial statements
First Majestic Silver Corp. 2023 Second Quarter Report
Page 16

NOTES TO CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
Condensed Interim Consolidated Financial Statements - Unaudited
(Tabular amounts are expressed in thousands of US dollars)
13. OTHER FINANCIAL ASSETS

As at June 30, 2023, other financial assets consists of the Company’s investment in marketable securities comprised of the following:
 June 30,
2023		December 31,
2022
FVTPL marketable securities (a)$5,551 $6,657 
FVTOCI marketable securities (b)46,562 27,871 
Total other financial assets$52,113 $34,528 

(a)Fair Value through Profit or Loss ("FVTPL") Marketable Securities
Loss in marketable securities designated as FVTPL for the three and six months ended June 30, 2023 was $0.2 million (2022 - loss of $3.3 million) and $0.9 million (2022 - loss of $3.8 million) and was recorded through profit or loss.

(b)Fair Value through Other Comprehensive Income ("FVTOCI") Marketable Securities
Changes in fair value of marketable securities designated as FVTOCI for the three and six months ended June 30, 2023 was a loss of $17.4 million (2022 - loss of $9.2 million) and $14.9 million (2022 - loss of $7.6 million), net of tax, and were recorded through other comprehensive income and will not be transferred into earnings or loss upon disposition or impairment.

14. DIVESTITURES

(a) La Guitarra Silver Mine

On May 24, 2022, the Company announced that it entered into a share purchase agreement with Sierra Madre Gold and Silver Ltd. ("Sierra Madre"), to sell the Company's subsidiary La Guitarra Compañia Minera S.A. de C.V. ("La Guitarra"), which owns the La Guitarra Silver Mine for total consideration of approximately $35 million, consisting of 69,063,076 Sierra Madre shares at a deemed price of $0.51 per share. The closing of the transaction was subject to customary closing conditions including approval of the Sierra Madre shareholders (which was obtained in December 2022), regulatory approval and that Sierra Madre raise a minimum of $7.7 million (CAD $10 million) in a private placement concurrent or prior to the sale.

On June 30, 2022, the sale was considered highly probable; therefore, the assets and liabilities of La Guitarra were classified as assets and liabilities held for sale and presented separately under current assets and current liabilities, respectively. Immediately prior to the classification to assets and liabilities held for sale, the carrying amount of La Guitarra was remeasured to its recoverable amount, being its FVLCD, based on the expected proceeds from the sale. At December 31, 2022, the sale continued to be considered highly probable; therefore the assets and liabilities were presented as assets and liabilities held for sale and presented separately under current assets and current liabilities. During 2022, the Company recorded a reversal of impairment loss related to the La Guitarra assets of $12.3 million based on the recoverable amount implied by the share purchase agreement.

Out of the impairment reversal of $12.3 million related to La Guitarra, $8.2 million was allocated to depletable mining interest, $1.0 million was allocated to non-depletable mining interest with the remaining $3.1 million allocated to property, plant and equipment, resulting in an impairment reversal of $8.0 million, net of a $4.4 million adjustment to the deferred tax liability. The recoverable amount of La Guitarra, being its FVLCD, was $34.9 million based on the expected proceeds from the sale.

On March 29, 2023, the Company completed the sale of La Guitarra to Sierra Madre and received total consideration of $33.2 million net of transaction costs, before working capital adjustments. Pursuant to the share purchase agreement, the purchase price is increased to the extent the working capital of La Guitarra is greater than zero, and decreased to the extent the working capital is less than zero. Based on the carrying value of the asset at the time of disposal of $34.3 million, and the working capital adjustment of $0.2 million, the Company has recorded a loss on disposition of $1.4 million. The Company began accounting for the shares received from Sierra Madre as an equity security at FVTOCI (Note 13).
The accompanying notes are an integral part of the condensed interim consolidated financial statements
First Majestic Silver Corp. 2023 Second Quarter Report
Page 17

NOTES TO CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
Condensed Interim Consolidated Financial Statements - Unaudited
(Tabular amounts are expressed in thousands of US dollars)
14. DIVESTITURES (continued)

(b) La Parrilla Silver Mine

On December 7, 2022, the Company announced that it had entered into an asset purchase agreement with Golden Tag Resources Ltd. ("Golden Tag") to sell the La Parrilla Silver Mine for total consideration of up to $33.5 million, consisting of 143,673,684 Golden Tag shares at a deemed price of 0.16 per share, having an aggregate value as of the date of the sale agreement of $20 million, and up to $13.5 million in contingent consideration, in the form of three milestone payments payable in either cash or shares in Golden Tag. The Company has also agreed to purchase $2.7 million of Golden Tag securities in a future Golden Tag equity financing of up to CAD $7.2 million. Closing the transaction is pending and remains subject to customary closing conditions, including completion of such financing and receipt of all necessary regulatory approvals.

At December 31, 2022, the sale was considered highly probable; therefore, the assets of La Parrilla were classified as assets held for sale and presented separately under current assets. Immediately prior to the classification to assets held for sale, the carrying amount of La Parrilla was remeasured to its recoverable amount, being its FVLCD, based on the $20 million initial payment, and the first milestone payment of $2.7 million. As of June 30, 2023, the sale continued to be considered highly probable; therefore, the assets and liabilities were presented as assets and liabilities held for sale and presented separately under current assets and current liabilities.

During 2022, the Company recorded an impairment loss related to the La Parrilla assets of $9.6 million based on the recoverable amount implied by the asset purchase agreement. Out of the impairment of $9.6 million related to La Parrilla, $5.7 million was allocated to depletable mining interest, $2.1 million was allocated to non-depletable mining interest with the remaining $1.7 million allocated to property, plant and equipment, resulting in an impairment of $9.6 million, net of a $nil adjustment to the deferred tax liability. The recoverable amount of La Parrilla, being its FVLCD, was $22.7 million, net of estimated transaction costs, based on the expected proceeds from the sale.

During the three months ended June 30, 2023, the Company recorded an additional write down on asset held-for-sale related to the La Parrilla assets of $7.2 million, based on the change in value of Golden Tag shares at the end of the reporting period.

Out of the write down of $7.2 million related to La Parrilla, $3.7 million was allocated to depletable mining interest, $1.4 million was allocated to non-depletable mining interest with the remaining $2.1 million allocated to property, plant and equipment, resulting in a write down of $7.2 million, net of a $nil adjustment to the deferred tax liability. The recoverable amount of La Parrilla, being its FVLCD, was $14.9 million, net of estimated transaction costs, based on the expected proceeds from the sale.

The accompanying notes are an integral part of the condensed interim consolidated financial statements
First Majestic Silver Corp. 2023 Second Quarter Report
Page 18

NOTES TO CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
Condensed Interim Consolidated Financial Statements - Unaudited
(Tabular amounts are expressed in thousands of US dollars)
14. DIVESTITURES (continued)

(b) La Parrilla Silver Mine (continued)

The components of assets and liabilities held for sale relating to La Guitarra and La Parrilla are as follows:
 As at June 30, 2023As at December
31, 2022
La Parrilla
La Guitarra(1)
La Parrilla
Assets:
Cash and cash equivalents$— $5,218 $— 
Trade and other receivables— 396 — 
Inventory854 437 876 
Prepaid expenses and other— 51 — 
Current assets$854 $6,102 $876 
Non-Current Assets:
Mineral Interests - depletable10,103 30,193 13,758 
Mineral Interests - non-depletable3,788 3,917 5,252 
Property, plant and equipment5,828 4,004 7,821 
Right of use assets591 16 645 
Deposits on long-term assets90 26 117 
Total assets held-for-sale $21,254 $44,258 $28,469 
Liabilities:
Trade payables and accrued liabilities$— $141 $— 
Current portion of lease obligations— 8 — 
Current Liabilities$— $149 $— 
Non-Current Liabilities:
Deferred tax liabilities1,667 6,894 1,667 
Lease obligations519 12 438 
Decommissioning liabilities4,168 2,951 4,167 
Total liabilities relating to assets held-for-sale $6,354 $10,006 $6,272 
Net assets held for sale$14,900 $34,252 $22,197 
(1) On March 29, 2023, the Company completed the sale of La Guitarra to Sierra Madre Gold and Silver Ltd. As such, the asset is no longer classified as held-for-sale, with the assets and liabilities derecognized after disposition.

The La Guitarra and La Parrilla mines are presented in the non-producing properties reportable segment; up to the date of disposition for La Guitarra (Note 4, 15 and 16 ).




The accompanying notes are an integral part of the condensed interim consolidated financial statements
First Majestic Silver Corp. 2023 Second Quarter Report
Page 19

NOTES TO CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
Condensed Interim Consolidated Financial Statements - Unaudited
(Tabular amounts are expressed in thousands of US dollars)
14. DIVESTITURES (continued)

(c) Sale of Royalty Portfolio

On December 21, 2022 the Company completed the sale of a portfolio of royalty interests to Metalla Royalty & Streaming Ltd. ("Metalla"), for total consideration of 4,168,056 Metalla shares with a fair value of $21.5 million based on a share price of $5.16 on the date of closing.

AssetOwnerLocationRoyaltyAllocated Value Total
La EncantadaFirst Majestic Silver Corp.Coahuila, Mexico
100% Gold Royalty(1)
$1,720,574 
La ParrillaFirst Majestic Silver Corp.Durango, Mexico2% Net Smelter Return$3,871,290 
Del ToroFirst Majestic Silver Corp.Zacatecas, Mexico2% Net Smelter Return$3,226,075 
San MartinFirst Majestic Silver Corp.Jalisco, Mexico2% Net Smelter Return$5,376,792 
La GuitarraSierra Madre Gold and Silver Ltd. Mexico, Mexico2% Net Smelter Return$3,011,004 
PlomosasGR Silver Mining Ltd.Sinaloa, Mexico2% Net Smelter Return$4,301,434 
La LuzFirst Majestic Silver Corp.San Luís Potosí, Mexico2% Net Smelter Return$— 
La JoyaFirst Majestic Silver Corp. - Optioned to Silver Dollar ResourcesDurango, Mexico2% Net Smelter Return$— 
(1) Up to the first 1,000 payable ounces annually

The value of the consideration received was credited to mining interests for each property, resulting in a $1.4 million gain during the period ended December 31, 2022 derived from the disposal of the royalty in the Plomosas property, which had a carrying value of $nil.

With the exception of La Encantada, all mines included within the royalty portfolio are presented in the non-producing properties reportable segment (Note 4 and 15 ).

15. MINING INTERESTS

Mining interests primarily consist of acquisition, development, exploration and exploration potential costs directly related to the Company’s operations and projects. Upon commencement of commercial production, mining interests for producing properties are depleted on a units-of-production basis over the estimated economic life of the mine. In applying the units of production method, depletion is determined using quantity of material extracted from the mine in the period as a portion of total quantity of material, based on reserves and resources, considered to be highly probable to be economically extracted over the life of mine plan.

The Company’s mining interests are comprised of the following:
 June 30,
2023		December 31,
2022
Depletable properties$794,782 $832,820 
Non-depletable properties (exploration and evaluation costs, exploration potential)199,068 228,304 
 $993,850 $1,061,124 



The accompanying notes are an integral part of the condensed interim consolidated financial statements
First Majestic Silver Corp. 2023 Second Quarter Report
Page 20

NOTES TO CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
Condensed Interim Consolidated Financial Statements - Unaudited
(Tabular amounts are expressed in thousands of US dollars)
15. MINING INTERESTS (continued)

Depletable properties are allocated as follows:
Depletable propertiesSan DimasSanta ElenaLa EncantadaJerritt Canyon
Non-producing
Properties(1)
Total
Cost   
At December 31, 2021$286,196 $125,921 $122,735 $386,069 $494,568 $1,415,490 
Additions30,733 23,957 2,507 58,728 — 115,925 
Transfer to assets held-for-sale (Note 14)
— — — — (279,399)(279,399)

Change in decommissioning liabilities
  		(1,800)1,518 (879)1,241 (2,332)(2,252)
Disposal of royalty portfolio (Note 14)
— — (1,721)— — (1,721)
Transfer from non-depletable properties— — 2,098 30,503 — 32,601 
At December 31, 2022$315,129 $151,396 $124,740 $476,541 $212,838 $1,280,644 
Additions12,982 16,824 1,377 13,349 — 44,532 
Transfer from non-depletable properties26,426 1,896 2,021 — — 30,343 
At June 30, 2023$354,537 $170,116 $128,138 $489,890 $212,838 $1,355,519 
Accumulated depletion, amortization and impairment reversal  
At December 31, 2021($72,671)($28,650)($96,908)($23,258)($388,354)($609,841)
Depletion and amortization(30,800)(12,652)(4,336)(28,125)— (75,913)
Reversal of impairment (Note 14)
— — — — 8,203 8,203 
Transfer to assets held-for-sale (Note 14)
— — — — 235,448 235,448 
Impairment (Note 14)
— — — — (5,721)(5,721)
At December 31, 2022($103,471)($41,302)($101,244)($51,383)($150,424)($447,824)
Depletion and amortization(16,903)(8,289)(2,943)(6,650)— (34,785)
Impairment (Note 18)
— — — (78,128)— (78,128)
At June 30, 2023($120,374)($49,591)($104,187)($136,161)($150,424)($560,737)
Carrying values   
At December 31, 2022$211,658 $110,094 $23,496 $425,158 $62,414 $832,820 
At June 30, 2023$234,163 $120,525 $23,951 $353,729 $62,414 $794,782 
(1) Non-producing properties include the San Martin, Del Toro, La Parrilla and La Guitarra mines. As at June 30, 2023, the net book value of depletable mining interests for La Parrilla, classified as an asset held-for sale is $10.1 million (December 31, 2022 - $13.8 million). During the six months ended June 30, 2023, the net book value of depletable mining interests for La Parrilla includes a $3.7 million impairment charge (Note 14). La Guitarra was classified as an asset held-for-sale up to the date of disposition during the three months ended March 31, 2023 and as of June 30, 2023, the assets and liabilities have been derecognized (the net carrying value of the disposal group at December 31, 2022 was $30.2 million).





















The accompanying notes are an integral part of the condensed interim consolidated financial statements
First Majestic Silver Corp. 2023 Second Quarter Report
Page 21

NOTES TO CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
Condensed Interim Consolidated Financial Statements - Unaudited
(Tabular amounts are expressed in thousands of US dollars)
15. MINING INTERESTS (continued)

Non-depletable properties costs are allocated as follows:
Non-depletable properties
San Dimas(a)
Santa Elena(b)
La Encantada(c) 
Jerritt Canyon(d)
Non-producing
Properties(1)
Exploration Projects(2)
Springpole
Stream(e)
Total
At December 31, 2021
$29,186 $31,067 $4,640 $104,431 $38,752 $22,948 $11,856 $242,881 
Exploration and evaluation expenditures9,645 10,664 2,393 19,752 771 694 — 43,919 
Change in decommissioning liabilities— — — — — (153)— (153)
Impairment (Note 14)
— — — — (2,132)— — (2,132)
Reversal of impairment— — — — 1,044 — — 1,044 
Metalla royalty— — — — (15,485)— — (15,485)
Transfer to assets held-for-sale (Note 14)
— — — — (9,169)— — (9,169)
Transfer to depletable properties— — (2,098)(30,503)— — — (32,601)
At December 31, 2022
$38,831 $41,731 $4,935 $93,680 $13,781 $23,489 $11,856 $228,304 
Exploration and evaluation expenditures5,204 6,268 1,063 5,539 241 375 — 18,690 
Impairment (Note 18)
— — — (17,388)— — (17,388)
Disposal of La Joya— — — — — (195)— (195)
Transfer to asset held-for-sale (Note 14)
— — — — — — — — 
Transfer to depletable properties(26,426)(1,896)(2,021)— — — — (30,343)
At June 30, 2023$17,609 $46,103 $3,977 $81,831 $14,022 $23,669 $11,856 $199,068 
(1) Non-producing properties include the San Martin, Del Toro, La Parrilla and La Guitarra mines. The net book value of non-depletable mining interest for La Parrilla classified as an asset held-for-sale is $3.8 million (December 31, 2022 - $5.3 million). During the six months ended June 30, 2023, the net book value of non-depletable mining interests for La Parrilla includes a $1.4 million impairment charge (Note 14). La Guitarra was classified as an asset held-for-sale up to the date of disposition on March 29, 2023 and as of June 30, 2023, the assets and liabilities have been derecognized (the net carrying value of the disposal group at December 31, 2022 was $3.9 million).
(2) Exploration projects include the La Luz, La Joya, Los Amoles, Jalisco Group of Properties and Jimenez del Tuel projects.

(a)San Dimas Silver/Gold Mine, Durango State, Mexico

The San Dimas Mine is subject to a gold and silver streaming agreement with WPMI which entitles WPMI to receive 25% of the gold equivalent production (based on a fixed exchange ratio of 70 silver ounces to 1 gold ounce) at San Dimas in exchange for ongoing payments equal to the lesser of $600 (subject to a 1% annual inflation adjustment commencing in May 2019) and the prevailing market price for each gold ounce delivered. Should the average gold to silver ratio over a six-month period exceed 90:1 or fall below 50:1, the fixed exchange ratio would be increased to 90:1 or decreased to 50:1, respectively. The fixed gold to silver exchange ratio as of June 30, 2023, was 70:1.

(b)Santa Elena Silver/Gold Mine, Sonora State, Mexico

The Santa Elena Mine is subject to a gold streaming agreement with Sandstorm, which requires the mine to sell 20% of its life of mine gold production from its leach pad and a designated area of its underground operations of the Santa Elena mine to Sandstorm. The selling price to Sandstorm is currently the lesser of $464 per ounce, subject to a 1% annual inflation increase every April, and the prevailing market price.

The Santa Elena mine has a net smelter royalty ("NSR") agreement with Orogen Royalties Inc. that requires a 2% NSR from the production of the Ermitaño property. In addition, there is an underlying NSR royalty where Osisko Gold Royalties Ltd. retains a 2% NSR from the sale of mineral products extracted from the Ermitaño property. During the three and six months ended June 30, 2023, the Company has incurred $1.7 million and $3.6 million (2022 - $1.3 million and $2.6 million) in NSR payments from the production of Ermitaño.


The accompanying notes are an integral part of the condensed interim consolidated financial statements
First Majestic Silver Corp. 2023 Second Quarter Report
Page 22

NOTES TO CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
Condensed Interim Consolidated Financial Statements - Unaudited
(Tabular amounts are expressed in thousands of US dollars)
15. MINING INTERESTS (continued)

(c) La Encantada Silver Mine, Coahuila State, Mexico

In 2022, the Company sold a portfolio of its existing royalty interests to Metalla Royalty and Streaming Limited. Under the terms of the agreement, the Company is required to pay a 100% gross value royalty on the first 1,000 ounces of gold produced annually from the La Encantada property. For the three and six months ended June 30, 2023, the Company has incurred $0.1 and $0.2 million (2022 - $nil) in royalty payments from gold production at La Encantada.

(d) Jerritt Canyon Gold Mine, Nevada, United States

The Jerritt Canyon Mine is subject to a 0.75% NSR royalty on production of gold and silver from the Jerritt Canyon mines and processing plant. The royalty is applied, at a fixed rate of 0.75%, against proceeds from gold and silver products after deducting treatment, refining, transportation, insurance, taxes and levies charges.

The Jerritt Canyon Mine is also subject to a 2.5% to 5% NSR royalty relating to the production of gold and silver within specific boundary lines at certain mining areas. The royalty is applied, at a fixed rate of 2.5% to 5.0%, against proceeds from gold and silver products.

As at June 30, 2023, total NSR royalty accrual outstanding was $0.6 million (December 31, 2022 - $0.8 million).

(e) Springpole Silver Stream, Ontario, Canada
In July 2020, the Company completed an agreement with First Mining Gold Corp. (“First Mining”) to purchase 50% of the life of mine payable silver produced from the Springpole Gold Project ("Springpole Silver Stream"), a development stage mining project located in Ontario, Canada. First Majestic agreed to pay First Mining consideration of $22.5 million in cash and shares, in three milestone payments, for the right to purchase silver at a price of 33% of the silver spot price per ounce, to a maximum of $7.50 per ounce (subject to annual inflation escalation of 2%, commencing at the start of the third anniversary of production). Commencing with its production of silver, First Mining must deliver 50% of the payable silver which it receives from the offtaker within five business days of the end of each quarter.

Transaction consideration paid and payable by First Majestic is summarized as follows:
•The first payment of $10.0 million, consisting of $2.5 million in cash and $7.5 million in First Majestic shares (805,698 common shares), was paid to First Mining on July 2, 2020;
•The second payment, consisting of $3.75 million in cash and $3.75 million in First Majestic shares (287,300 common shares), was paid on January 21, 2021 upon the completion and public announcement by First Mining of the results of a Pre-Feasibility Study for Springpole; and
•The third payment, consisting of $2.5 million in cash and $2.5 million in First Majestic shares (based on 20 days volume weighted average price), will be paid upon receipt by First Mining of a Federal or Provincial Environmental Assessment approval for Springpole, which has not yet been received.

In connection with the agreement, First Mining also granted First Majestic 30 million common share purchase warrants, each of which will entitle the Company to purchase one common share of First Mining at CAD$0.40 over a period of five years. The fair value of the warrants was measured at $5.7 million using the Black-Scholes option pricing model. First Mining shall have the right to repurchase 50% of the silver stream for $22.5 million at any time prior to the commencement of production at Springpole leaving the Company with a reduced silver stream of 25% of life of mine payable silver production. First Mining is a related party with two independent board members who are also directors and/or officers of First Majestic.











The accompanying notes are an integral part of the condensed interim consolidated financial statements
First Majestic Silver Corp. 2023 Second Quarter Report
Page 23

NOTES TO CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
Condensed Interim Consolidated Financial Statements - Unaudited
(Tabular amounts are expressed in thousands of US dollars)
16. PROPERTY, PLANT AND EQUIPMENT

The majority of the Company's property, plant and equipment is used in the Company's operating mine segments. Property, plant and equipment is depreciated using either the straight-line or units-of-production method over the shorter of the estimated useful life of the asset or the expected life of mine. Where an item of property, plant and equipment comprises of major components with different useful lives, the components are accounted for as separate items of property, plant and equipment. Assets under construction are recorded at cost and re-allocated to land and buildings, machinery and equipment or other when they become available for use.

Property, plant and equipment are comprised of the following: 
Land and Buildings(1)
Machinery and Equipment
Assets under Construction(2)
OtherTotal
Cost
At December 31, 2021$244,957 $624,462 $90,451 $33,583 $993,453 
Additions— 5,038 64,088 507 69,633 
Reclassification to assets held-for-sale (Note 14)
(30,903)(82,275)(176)(2,111)(115,465)
Transfers and disposals23,192 47,783 (80,436)4,772 (4,689)
At December 31, 2022$237,246 $595,008 $73,927 $36,751 $942,932 
Additions14 439 13,293 246 13,992 
Reclassification to asset held-for-sale (Note 14)
(14)26 — — 12 
Transfers and disposals3,087 24,099 (30,915)1,205 (2,524)
At June 30, 2023$240,333 $619,572 $56,305 $38,202 $954,412 
Accumulated depreciation, amortization and impairment reversal
At December 31, 2021($147,079)($374,879)$— ($22,258)($544,216)
Depreciation and amortization(12,016)(40,419)— (3,793)(56,228)
Impairment (Note 14)
(1,742)— — — (1,742)
Impairment reversal (Note 14)
3,076 — — — 3,076 
Reclassification to assets held-for-sale (Note 14)
20,774 80,964 — 1,902 103,640 
Transfers and disposals— 3,606 — 267 3,873 
At December 31, 2022($136,987)($330,728)$— ($23,882)($491,597)
Depreciation and amortization(6,300)(18,179)— (1,976)(26,455)
Impairment (Note 18)
(7,585)(21,979)— (120)(29,684)
Reclassification to asset held-for-sale (Note 14)
— (117)— — (117)
Transfers and disposals— 2,246 — — 2,246 
At June 30, 2023($150,872)($368,757)$— ($25,978)($545,607)
Carrying values
At December 31, 2022$100,259 $264,280 $73,927 $12,869 $451,335 
At June 30, 2023$89,461 $250,815 $56,305 $12,224 $408,805 

(1) Included in land and buildings is $11.2 million (2022 - $11.2 million) of land which is not subject to depreciation.
(2) Assets under construction includes certain innovation projects, such as high-intensity grinding ("HIG") mills and related modernization, plant improvements, other mine infrastructures and equipment overhauls.

The accompanying notes are an integral part of the condensed interim consolidated financial statements
First Majestic Silver Corp. 2023 Second Quarter Report
Page 24

NOTES TO CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
Condensed Interim Consolidated Financial Statements - Unaudited
(Tabular amounts are expressed in thousands of US dollars)
16. PROPERTY, PLANT AND EQUIPMENT (continued)

Property, plant and equipment, including land and buildings, machinery and equipment, assets under construction and other assets above are allocated by mine as follow:
 San DimasSanta ElenaLa EncantadaJerritt Canyon
Non-producing
Properties(1)
OtherTotal
Cost    
At December 31, 2021$158,528 $122,597 $150,718 $193,085 $285,806 $82,719 $993,453 
Additions (2)
6,985 13,093 5,325 16,297 98 27,835 69,633 
Reclassification to assets held-for-sale— — — — (115,465)— (115,465)
Transfers and disposals(717)31,852 1,880 367 (5,421)(32,650)(4,689)
At December 31, 2022$164,796 $167,542 $157,923 $209,749 $165,018 $77,904 $942,932 
Additions(2)
4,110 3,866 1,435 3,910 14 657 13,992 
Reclassification to asset held-for-sale (Note 14)
— — — — 12 — 12 
Transfers and disposals451 (1,435)399 (19)(943)(977)(2,524)
At June 30, 2023$169,357 $169,973 $159,757 $213,640 $164,101 $77,584 $954,412 
Accumulated depreciation, amortization and impairment
At December 31, 2021($53,055)($57,754)($130,038)($20,228)($258,626)($24,515)($544,216)
Depreciation and amortization(17,554)(10,058)(2,809)(22,747)(222)(2,838)(56,228)
Impairment— — — — (1,742)— (1,742)
Impairment reversal— — — — 3,076 — 3,076 
Reclassification to assets held-for-sale— — — — 103,640 — 103,640 
Transfers and disposals190 249 (654)4 7,051 (2,967)3,873 
At December 31, 2022($70,419)($67,563)($133,501)($42,971)($146,823)($30,320)($491,597)
Depreciation and amortization(8,335)(7,367)(2,226)(7,127)(84)(1,316)(26,455)
Impairment (Note 18)
— — — (29,684)— — (29,684)
Reclassification to asset held-for-sale (Note 14)
— — — — (117)— (117)
Transfers and disposals(1)1,730 (399)— 876 40 2,246 
At June 30, 2023($78,755)($73,200)($136,126)($79,782)($146,148)($31,596)($545,607)
Carrying values    
At December 31, 2022$94,377 $99,979 $24,422 $166,778 $18,195 $47,584 $451,335 
At June 30, 2023$90,602 $96,773 $23,631 $133,858 $17,953 $45,988 $408,805 

(1) Non-producing properties include the San Martin, Del Toro, La Parrilla and La Guitarra mines. The net book value of property, plant and equipment for La Parrilla, classified as an asset held-for-sale is $5.8 million (December 31, 2022 - $7.8 million). During the six months ended June 30, 2023, the net book value of property, plant and equipment for La Parrilla includes a $2.1 million impairment charge (Note 14). La Guitarra was classified as an asset held-for-sale up to the date of disposition during the three months ended March 31, 2023 and as of June 30, 2023, the assets and liabilities have been derecognized (the net carrying value of the disposal group at December 31, 2022 was $4.0 million).
(2) Additions classified in "Other" primarily consist of innovation projects and construction-in-progress.

17. RIGHT-OF-USE ASSETS

The Company entered into operating leases to use certain land, buildings, mining equipment and corporate equipment for its operations. The Company is required to recognize right-of-use assets representing its right to use these underlying leased assets over the lease term.




The accompanying notes are an integral part of the condensed interim consolidated financial statements
First Majestic Silver Corp. 2023 Second Quarter Report
Page 25

NOTES TO CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
Condensed Interim Consolidated Financial Statements - Unaudited
(Tabular amounts are expressed in thousands of US dollars)
17. RIGHT-OF-USE ASSETS (continued)

Right-of-use assets are initially measured at cost, equivalent to its obligation for payments over the term of the leases, and subsequently measured at cost less accumulated depreciation and impairment losses. Depreciation is recorded on a straight-line basis over the shorter period of lease term and useful life of the underlying asset.

Right-of-use assets are comprised of the following: 
Land and BuildingsMachinery and EquipmentOtherTotal
At December 31, 2021$8,302 $20,921 $2 $29,225 
Additions1,786 1,514 14 3,314 
Remeasurements578 2,239 (2)2,815 
Depreciation and amortization(1,608)(6,431)(5)(8,044)
Transfer to asset held-for-sale(634)(27)— (661)
At December 31, 2022$8,424 $18,216 $9 $26,649 
Remeasurements78 5,323 — 5,401 
Depreciation and amortization(865)(3,848)(3)(4,716)
Transfer to asset held-for-sale (Note 14)
47 10 — 57 
At June 30, 2023$7,684 $19,701 $6 $27,391 


18. IMPAIRMENT OF NON-CURRENT ASSET

On March 20, 2023, the Company announced the temporary suspension of operations at the Jerritt Canyon Gold mine. Having considered the facts and circumstances including the temporary suspension of operations, heightened costs, and operating mine performance, the Company determined that impairment indicators existed for the Jerritt Canyon mine. IFRS accounting standards require an entity to assess its assets for indicators of impairment at the cash-generating unit level based on their individual recoverable amounts. After the Company identified an indicator of impairment for Jerritt Canyon, the Company assessed the recoverable value of the Jerritt Canyon Gold Mine based on its FVLCD.

Key Assumptions

The FVLCD for Jerritt Canyon was determined using a multiple-based valuation method to estimate the value per in-situ ounce based on comparable market transactions. Valuation multiples applied to mineral resources and property, plant and equipment in the CGU, subject to impairment testing were determined as follows:

•External valuation specialists were used to obtain a population of gold exploration, development and operating companies. The value of trading multiples for operating companies based on recent transactions was determined to be between $149 per ounce and $248 per ounce.
•Management considered the $165 per ounce multiple to be the most reasonable estimate of the fair value of Jerritt Canyon, as companies in this range included companies in operations that had invested significantly in exploration, capital structure, an operating plant and had significant exploration potential.

The market approach used to determine FVLCD is significantly affected by changes in key assumptions of determining which population of comparable companies are most relevant and the price for these precedent transactions. In determining the comparability of public companies and precedent transactions, factors such as primary ore, location, stage of operations, reserves and resources, exploration potential, infrastructure, and accessibility for the underlying commodity were taken into consideration. The Company performed a sensitivity analysis on the key assumption being the population of comparable transactions and determined that a change in this assumption could lead to a different fair value of this asset. Management’s estimate of FVLCD is classified as a level 3 in the fair value hierarchy as the inputs are not based on observable market data.



The accompanying notes are an integral part of the condensed interim consolidated financial statements
First Majestic Silver Corp. 2023 Second Quarter Report
Page 26

NOTES TO CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
Condensed Interim Consolidated Financial Statements - Unaudited
(Tabular amounts are expressed in thousands of US dollars)
18. IMPAIRMENT OF NON-CURRENT ASSET (continued)

In prior periods, management utilized the discounted cash flow method as the valuation technique to determine the recoverable amount. Recoverable values were determined with internal discounted cash flow economic models projected using management’s best estimate of recoverable mineral reserves and resources, future operating costs, capital expenditures and long-term foreign exchange rates and corroborated by in situ value of its Reserves and Resources. As Jerritt Canyon does not currently have a mine plan to estimate future cash flows, the market approach was used during the current period to determine the FVLCD.

Based on the Company's assessment, the Company concluded that the carrying value of the Jerritt Canyon mine had an estimated recoverable value, based on its FVLCD, below its carrying value at March 31, 2023. As a result, the following impairment charge was recognized during the first quarter of 2023:

Six Months Ended June 30, 2023
Impairment of non-current asset$125,200 
Deferred income tax recovery(31,237)
Impairment of non-current asset, net of tax$93,963 

With the exception of La Parrilla (Note 14), the Company determined there were no significant events or changes in circumstances to indicate that the carrying amount of its other non-current assets may not be recoverable, nor indicators that the recoverable amount of its previously impaired assets will exceed its carrying value. As such, no other impairment or impairment reversal were recognized during the three and six months ended June 30, 2023 (2022 - ($7.6) million).

The impairment charge recognized for the six months ended June 30, 2023 with respect to the Jerritt Canyon operating segment, which was recorded during the first quarter of 2023, was allocated as follows:
Six Months Ended June 30, 2023
Mining interest - producing properties$78,128 
Mining interests - exploration properties (non-depletable)17,388 
Property, plant and equipment29,684 
Impairment of non-current asset$125,200 






















The accompanying notes are an integral part of the condensed interim consolidated financial statements
First Majestic Silver Corp. 2023 Second Quarter Report
Page 27

NOTES TO CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
Condensed Interim Consolidated Financial Statements - Unaudited
(Tabular amounts are expressed in thousands of US dollars)
19. RESTRICTED CASH

Restricted cash is comprised of the following:

 June 30,
2023		December 31,
2022
Chartis Commutation Account(2)
$28,746 $— 
Current Restricted Cash$28,746 $— 
Nevada Division of Environmental Protection(1)
$17,875 $17,702 
Chartis Commutation Account(2)
— 28,365 
SAT Primero tax dispute(3)
99,429 79,126 
Non-Current Restricted Cash$117,304 $125,193 
Total Restricted Cash$146,050 $125,193 

1.On November 2, 2021, the Company executed an agreement with the Nevada Division of Environmental Protection ("NDEP") relating to funds required to establish a trust agreement to cover post-closure water treatment cost at Jerritt Canyon. During the year ended December 31, 2022, the Company funded $17.7 million into a trust; these amounts are included within non-current restricted cash.
2.The Company owns an environmental risk transfer program (the "ERTP") for Jerritt Canyon from American Insurance Group ("AIG"). As part of the ERTP, $28.7 million is on deposit in an interest-bearing account with AIG (the "Commutation Account"). The Commutation Account principal plus interest earned on the principal is used to fund ongoing reclamation and mine closure obligations. The Company has elected to extinguish all rights under the policy releasing AIG from reclamation cost and financial assurance liabilities by replacing the policy with surety bonds on June 28, 2023. By releasing AIG from their liabilities they are required to return the remaining balance in the Jerritt Canyon Commutation Account. The NDEP and the USDA Forest Services ("USFS") have provided correspondence confirming their acceptance of the replacement surety bonds in the third quarter of 2023 therefore, the total of $28.7 million, has been re-classified to current restricted cash as of June 30, 2023. Upon receipt of these funds, the total current restricted cash balance of $28.7 million will be reclassified to cash and cash equivalents.         
3.In connection with the dispute between Primero Empresa Minera, S.A. de C.V. ("PEM") and the Servicio de Admistracion Tributaria ("SAT") in relation to the advanced pricing agreement (Note 26), the tax authority has frozen a PEM bank account with funds of $99.4 million (1,697 million MXN) as a guarantee against certain disputed tax assessments. This balance consists of Value Added Tax ("VAT") refunds that the Company has received which were previously withheld by the tax authority. The Company does not agree with SAT's position and has challenged it through the relevant legal channels.



20. TRADE AND OTHER PAYABLES

The Company’s trade and other payables are primarily comprised of amounts outstanding for purchases relating to mining operations, exploration and evaluation activities and corporate expenses. The normal credit period for these purchases is usually between 30 to 90 days.

Trade and other payables are comprised of the following items:
 June 30,
2023		December 31,
2022
Trade payables$36,251 $40,782 
Trade related accruals22,276 30,312 
Payroll and related benefits27,454 31,797 
NSR royalty liabilities (Notes 15(b)(c))
1,930 1,518 
Environmental duty and net mineral sales proceeds tax1,616 3,570 
Other accrued liabilities6,513 7,141 
 $96,040 $115,120 





The accompanying notes are an integral part of the condensed interim consolidated financial statements
First Majestic Silver Corp. 2023 Second Quarter Report
Page 28

NOTES TO CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
Condensed Interim Consolidated Financial Statements - Unaudited
(Tabular amounts are expressed in thousands of US dollars)
21. DEBT FACILITIES

The movement in debt facilities during the six months ended June 30, 2023 and year ended December 31, 2022, respectively, are comprised of the following:
Convertible Debentures
(a)		Revolving Credit Facility
(b)		Total
Balance at December 31, 2021$181,178 $56 $181,234 
Finance costs
Interest expense896 1,241 2,137 
Accretion8,673 — 8,673 
Proceeds from drawdown of revolving credit facility— 50,000 50,000 
Repayments of principal— (30,000)(30,000)
Payments of finance costs(505)(1,177)(1,682)
Balance at December 31, 2022$190,242 $20,120 $210,362 
Finance costs
Interest expense395 975 1,370 
Accretion4,518 — 4,518 
Payments of finance costs(431)(957)(1,388)
Balance at June 30, 2023$194,724 $20,138 $214,862 
Statements of Financial Position Presentation
Current portion of debt facilities$431 $120 $551 
Non-current portion of debt facilities189,811 20,000 209,811 
Balance at December 31, 2022$190,242 $20,120 $210,362 
Current portion of debt facilities$395 $138 $533 
Non-current portion of debt facilities194,329 20,000 214,329 
Balance at June 30, 2023$194,724 $20,138 $214,862 

(a)Convertible Debentures
Senior Convertible Debentures

On December 2, 2021, the Company issued $230 million of unsecured senior convertible debentures (the “Notes”). The Company received net proceeds of $222.8 million after transaction costs of $7.2 million. The Notes mature on January 15, 2027 and bear an interest rate of 0.375% per annum, payable semi-annually in arrears in January and July of each year.

The Notes are convertible into common shares of the Company at any time prior to maturity at a conversion rate of 60.3865 common shares per $1,000 principal amount of Notes converted, representing an initial conversion price of $16.56 per common share, subject to certain anti-dilution adjustments. In addition, if certain fundamental changes occur, holders of the Notes may be entitled to an increased conversion rate.

The Company may not redeem the Notes before January 20, 2025 except in the event of certain changes in Canadian tax law. At any time on or after January 20, 2025 and until maturity, the Company may redeem all or part of the Notes for cash if the last reported share price of the Company’s common shares for 20 or more trading days in a period of 30 consecutive trading days exceeds 130% of the conversion price in effect on each such trading day. The redemption price is equal to the sum of: (i) 100% of the principal amount of the Notes to be redeemed and (ii) accrued and unpaid interest, if any, to the redemption date.
The accompanying notes are an integral part of the condensed interim consolidated financial statements
First Majestic Silver Corp. 2023 Second Quarter Report
Page 29

NOTES TO CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
Condensed Interim Consolidated Financial Statements - Unaudited
(Tabular amounts are expressed in thousands of US dollars)
21. DEBT FACILITIES (continued)

(a)Convertible Debentures (continued)

The Company is required to offer to purchase for cash all of the outstanding Notes upon a fundamental change, at a cash purchase price equal to 100% of the principal amount of the Notes to be purchased, plus accrued and unpaid interest, if any, to the fundamental change purchase date.

The component parts of the convertible debentures, a compound instrument, are classified separately as financial liabilities and equity in accordance with the substance of the contractual arrangement and the definitions of a financial liability and an equity instrument. A conversion option that will be settled by the exchange of a fixed amount of cash or another financial asset for a fixed number of the Company's own equity instrument is an equity instrument.

At initial recognition, net proceeds of $222.8 million from the Notes were allocated into its debt and equity components. The fair value of the debt portion was estimated at $180.4 million using a discounted cash flow model method with an expected life of five years and a discount rate of 4.75%. This amount is recorded as a financial liability on an amortized cost basis using the effective interest method at an effective interest rate of 5.09% until extinguished upon conversion or at its maturity date.

The conversion option is classified as equity and was estimated based on the residual value of $42.3 million. This amount is not subsequently remeasured and will remain in equity until the conversion option is exercised, in which case, the balance recognized in equity will be transferred to share capital. Where the conversion option remains unexercised at the maturity date of the convertible note, the balance will remain in equity reserves. Deferred tax liability of $11.4 million related to taxable temporary difference arising from the equity portion of the convertible debenture was recognized in equity reserves.

Transaction costs of $7.2 million that relate to the issuance of the convertible debentures were allocated to the liability and equity components in proportion to the allocation of the gross proceeds. Transaction costs relating to the equity component are recognized directly in equity. Transaction costs relating to the liability component are included in the carrying amount of the liability component and are amortized over the life of the convertible debentures using the effective interest method.


(b)     Revolving Credit Facility

On June 29, 2023, the Company amended its senior secured revolving credit facility (the "Revolving Credit Facility") with the Bank of Montreal, BMO Harris Bank N.A., Bank of Nova Scotia, Toronto Dominion Bank, and National Bank of Canada ("syndicate") by extending the maturity date from March 31, 2025 to June 29, 2026 and increasing the credit limit from $100.0 million to $175.0 million. Interest on the drawn balance will accrue at the Secured Overnight Financing Rate ("SOFR") plus an applicable range of 2.25% to 3.5% per annum while the undrawn portion is subject to a standby fee with an applicable range of 0.563% to 0.875% per annum, dependent on certain financial parameters of First Majestic. As at June 30, 2023, the applicable rates were 2.75% and 0.688% per annum, respectively.

The accompanying notes are an integral part of the condensed interim consolidated financial statements
First Majestic Silver Corp. 2023 Second Quarter Report
Page 30

NOTES TO CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
Condensed Interim Consolidated Financial Statements - Unaudited
(Tabular amounts are expressed in thousands of US dollars)
21. DEBT FACILITIES (continued)

(b) Revolving Credit Facility (continued)

These debt facilities are guaranteed by certain subsidiaries of the Company and are also secured by a first priority charge against the assets of the Company, and a first priority pledge of shares of the Company’s subsidiaries.

The Revolving Credit Facility includes financial covenants, to be tested quarterly on a consolidated basis, requiring First Majestic to maintain the following: (a) a leverage ratio based on net indebtedness to rolling four quarters adjusted EBITDA of not more than 3.00 to 1.00; and (b) an interest coverage ratio, based on rolling four quarters adjusted EBITDA divided by interest payments, of not less than 4.00 to 1.00. The debt facilities also provide for negative covenants customary for these types of facilities and allows the Company to enter into finance leases, excluding any leases that would have been classified as operating leases in effect immediately prior to the implementation of IFRS 16 - Leases, of up to $50.0 million. As at June 30, 2023 and December 31, 2022, the Company was in compliance with these covenants.

During the three months ended June 30, 2023, as part of ongoing reclamation and mine closure obligations, the Company issued $25.4 million (2022 - $5 million) in letters of credit for a total outstanding commitment of $30.4 million. As at June 30, 2023 the undrawn portion of the Revolving Credit Facility totals $124.6 million (December 2022- $75.0 million).


22. LEASE LIABILITIES

The Company has finance leases, operating leases and equipment financing liabilities for various mine and plant equipment, office space and land. Finance leases and equipment financing obligations require underlying assets to be pledged as security against the obligations and all of the risks and rewards incidental to ownership of the underlying asset being transferred to the Company. For operating leases, the Company controls but does not have ownership of the underlying right-of-use assets.

Lease liabilities are initially measured at the present value of the lease payments that are not paid at the commencement date, discounted using the interest rate implicit in the lease or, if that rate cannot be readily determined, the Company's incremental borrowing rate. Lease liabilities are subsequently measured at amortized cost using the effective interest rate method.

Certain lease agreements may contain lease and non-lease components, which are generally accounted for separately. For certain equipment leases, such as vehicles, the Company has elected to account for the lease and non-lease components as a single lease component.






















The accompanying notes are an integral part of the condensed interim consolidated financial statements
First Majestic Silver Corp. 2023 Second Quarter Report
Page 31

NOTES TO CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
Condensed Interim Consolidated Financial Statements - Unaudited
(Tabular amounts are expressed in thousands of US dollars)
22. LEASE LIABILITIES (continued)

The movement in lease liabilities during the periods ended June 30, 2023 and December 31, 2022 are comprised of the following:
Finance Leases
Operating Leases(a)
Equipment Financing(b)
Total
Balance at December 31, 2021$5,253 $34,544 $64 $39,861 
Additions3,109 3,314 — 6,423 
Remeasurements— 2,815 — 2,815 
Finance costs237 1,894 — 2,131 
Repayments of principal(2,446)(10,959)(64)(13,469)
Payments of finance costs(210)— — (210)
Transfer to asset held-for-sale (Note 14)
— (458)— (458)
Foreign exchange— 490 — 490 
Balance at December 31, 2022$5,943 $31,640 $— $37,583 
Additions2,231 — — 2,231 
Remeasurements— 5,401 — 5,401 
Disposals— (22)— (22)
Finance costs199 1,085 — 1,284 
Repayment of principal(1,833)(5,124)— (6,957)
Repayments of finance costs(199)(788)— (987)
Transfer to asset held-for-sale (Note 14)
— (81)— (81)
Foreign Exchange66 1,432 — 1,498 
Balance at June 30, 2023$6,407 $33,543 $— $39,950 
Statements of Financial Position Presentation
Current portion of lease liabilities$2,801 $11,026 $— $13,827 
Non-current portion of lease liabilities3,142 20,614 — 23,756 
Balance at December 31, 2022$5,943 $31,640 $— $37,583 
Current portion of lease liabilities$3,427 $13,144 $— $16,571 
Non-current portion of lease liabilities2,980 20,399 — 23,379 
Balance at June 30, 2023$6,407 $33,543 $— $39,950 

(a) Operating leases
Operating leases primarily relate to equipment and building rental contracts, land easement contracts and service contracts that contain embedded leases for property, plant and equipment. These operating leases have remaining lease terms of one to ten years, some of which include options to terminate the leases within a year, with incremental borrowing rates ranging from 2.5% to 11.2% per annum.











The accompanying notes are an integral part of the condensed interim consolidated financial statements
First Majestic Silver Corp. 2023 Second Quarter Report
Page 32

NOTES TO CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
Condensed Interim Consolidated Financial Statements - Unaudited
(Tabular amounts are expressed in thousands of US dollars)
22. LEASE LIABILITIES (continued)

(b) Equipment financing
During 2017, the Company entered into a $7.9 million credit facility with repayment terms ranging from 12 to 16 equal quarterly installments in principal plus related interest. Proceeds from the equipment financing were primarily used for the purchase and rehabilitation of property, plant and equipment. The equipment financing is secured by certain equipment of the Company and is subject to various covenants, including the requirement for First Majestic to maintain a leverage ratio based on total debt to rolling four quarters adjusted EBITDA. As of June 30, 2023, the credit facility has expired. As of December 31, 2022, the Company was in compliance with these covenants.
As at June 30, 2023, the net book value of property, plant and equipment includes $nil (December 31, 2022 - $nil) equipment pledged as security for the equipment financing.

23. SHARE CAPITAL

(a)Authorized and issued capital

The Company has unlimited authorized common shares with no par value.

The movement in the Company’s issued and outstanding capital during the periods is summarized in the consolidated statements of changes in equity.

 Six Months Ended June 30, 2023Six Months Ended June 30, 2022
 Number of SharesNet ProceedsNumber of SharesNet Proceeds
ATM program(1)(2)(3)
13,919,634 $92,2662,318,497 $30,580 

(1) The Company files prospectus supplements to its short form base shelf prospectus, pursuant to which the Company may, at its discretion and from time-to-time, sell common shares of the Company. The sale of common shares is to be made through “at-the-market distributions” ("ATM"), as defined in the Canadian Securities Administrators’ National Instrument 44-102 Shelf Distributions, directly on the New York Stock Exchange. For the six months ended June 30, 2022, the Company sold 2,318,497 common shares of the Company under the 2021 ATM program at an average price of $13.53 per common share for gross proceeds of $31.4 million, or net proceeds of $30.6 million.

(2) During the six months ended June 30, 2023, the Company sold 1,719,634 (2022 - nil) common shares of the Company under the 2022 ATM program at an average price of $8.75 per common share (2022 - $nil) for gross proceeds of $15.0 million (2022 - $nil), or net proceeds of $14.4 million (2022 - $nil).

(3) During the six months ended June 30, 2023, the Company sold 12,200,000 (2022 - nil) common shares of the Company under the 2023 ATM program at an average price of $6.51 per common share (2022 - $nil) for gross proceeds of $79.5 million (2022 - $nil), or net proceeds of $77.9 million (2022 - $nil). At June 30, 2023, the Company incurred $0.6 million (2022 - $nil) in transaction costs in relation to the ATM.

(b)Stock options
On May 26, 2022, a new Long-Term Incentive Plan was adopted ("LTIP"). Under the terms of the Company’s LTIP, the maximum number of shares reserved for issuance under the LTIP is 6% of the issued shares on a rolling basis. Options may be exercisable over periods of up to ten years as determined by the Board of Directors of the Company and the exercise price shall not be less than the closing price of the shares on the day preceding the award date, subject to regulatory approval. All stock options granted are subject to vesting with 25% vesting on first anniversary from the date of grant, and 25% vesting each six months thereafter. Any options granted prior to May 26, 2022 will be governed by the 2017 Option Plan and the 2019 Long-Term Incentive Plans, respectively ("2017 Plan" and "2019 LTIP").


The accompanying notes are an integral part of the condensed interim consolidated financial statements
First Majestic Silver Corp. 2023 Second Quarter Report
Page 33

NOTES TO CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
Condensed Interim Consolidated Financial Statements - Unaudited
(Tabular amounts are expressed in thousands of US dollars)
23. SHARE CAPITAL (continued)

(b)Stock options (continued)
The following table summarizes information about stock options outstanding as at June 30, 2023:
 
    Options Outstanding    
    Options Exercisable    
Exercise prices (CAD$)Number of
Options		Weighted Average Exercise Price (CAD $/Share)Weighted Average Remaining Life (Years)Number of
Options		Weighted Average Exercise Price (CAD $/Share)Weighted Average Remaining Life (Years)
5.01 - 10.002,064,795 8.64 6.36 1,521,795 8.63 5.32 
10.01 - 15.003,848,760 12.79 8.51 1,279,487 13.74 7.32 
15.01 - 20.001,126,607 16.38 7.34 770,587 16.23 7.03 
20.01 - 250.00577,250 21.49 7.91 430,855 21.44 7.90 
7,617,412 12.85 7.71 4,002,724 13.11 6.56 

The movements in stock options issued for the quarter ended June 30, 2023 and year ended December 31, 2022 are summarized as follows:
 Six Months EndedYear Ended
 June 30, 2023December 31, 2022
 Number of
Options		Weighted Average Exercise Price (CAD $/Share)Number of
Options		Weighted Average Exercise Price (CAD $/Share)
Balance, beginning of the period7,275,744 13.19 5,638,383 13.29 
Granted1,037,149 10.23 3,107,500 12.96 
Exercised(192,500)8.64 (609,623)9.76 
Cancelled or expired(502,981)13.95 (860,516)15.44 
Balance, end of the period7,617,412 12.85 7,275,744 13.19 

During the six months ended June 30, 2023, the aggregate fair value of stock options granted was $3.7 million (December 31, 2022 - $14.7 million), or a weighted average fair value of $3.58 per stock option granted (December 31, 2022 - $4.73).

During the six months ended June 30, 2023, total share-based payments expense related to stock options was $4.1 million (December 31, 2022 - $9.0 million).

The following weighted average assumptions were used in estimating the fair value of stock options granted using the Black-Scholes Option Pricing Model:
  Six Months EndedYear Ended
Assumption
Based on
June 30, 2023December 31, 2022
Risk-free interest rate (%)Yield curves on Canadian government zero- coupon bonds with a remaining term equal to the stock options’ expected life3.662.16
Expected life (years)Weighted average life of previously transacted awards3.845.91
Expected volatility (%)Historical volatility of the Company's stock60.2849.00
Expected dividend yield (%)Annualized dividend rate as of the date of grant0.33%1.64%


The accompanying notes are an integral part of the condensed interim consolidated financial statements
First Majestic Silver Corp. 2023 Second Quarter Report
Page 34

NOTES TO CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
Condensed Interim Consolidated Financial Statements - Unaudited
(Tabular amounts are expressed in thousands of US dollars)
23. SHARE CAPITAL (continued)

(b) Stock options (continued)
The weighted average closing share price at date of exercise for the six months ended June 30, 2023 was CAD$10.80 (December 31, 2022 - CAD$14.70).

(c) Restricted Share Units
On May 26, 2022, a new LTIP was adopted. The Company adopted the LTIP to allow the Company to grant to its directors, employees and consultants non-transferable Restricted Share Units ("RSU's") based on the value of the Company's share price at the date of grant. Unless otherwise stated, the awards typically have a graded vesting schedule over a three-year period and can be settled either in cash or equity upon vesting at the discretion of the Company. The Company intends to settle all RSU's in equity. Any RSU's granted prior to May 26, 2022 will be governed by the 2019 LTIP.

The associated compensation cost is recorded as share-based payments expense against equity reserves.

The following table summarizes the changes in RSU's for the six months ended June 30, 2023 and the year ended December 31, 2022:
Six Months Ended June 30, 2023Year Ended December 31, 2022
Number of sharesWeighted
Average
Fair Value
(CAD$)		Number of sharesWeighted
Average
Fair Value
(CAD$)
Outstanding, beginning of the period652,339 14.35 400,549 16.77 
Granted741,782 10.97 498,740 13.18 
Settled(142,505)14.7 (159,016)16.57 
Forfeited(148,393)11.95 (87,934)14.74 
Outstanding, end of the period1,103,223 12.36 652,339 14.35 

During the six months ended June 30, 2023, total share-based payments expense related to RSU's was $2.6 million (December 31, 2022 - $2.9 million).

(d) Performance Share Units
On May 26, 2022, a new LTIP was adopted. The Company adopted the LTIP to allow the Company to grant to its directors, employees and consultants non-transferable Performance Share Units ("PSU's"). The amount of units to be issued on the vesting date will vary from 0% to 200% of the number of PSU’s granted, depending on the Company’s total shareholder return compared to the return of a selected group of peer companies. Unless otherwise stated, the awards typically vest three years from the grant date. The fair value of a PSU is based on the value of the Company's share price at the date of grant and will be adjusted based on actual units issued on the vesting date. The Company intends to settle all PSU's in equity. Any PSU's granted prior to May 26, 2022 will be governed by the 2019 LTIP.

The following table summarizes the changes in PSU's granted to employees and consultants for the six months ended June 30, 2023 and the year ended December 31, 2022:    










The accompanying notes are an integral part of the condensed interim consolidated financial statements
First Majestic Silver Corp. 2023 Second Quarter Report
Page 35

NOTES TO CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
Condensed Interim Consolidated Financial Statements - Unaudited
(Tabular amounts are expressed in thousands of US dollars)
23. SHARE CAPITAL (continued)

(d) Performance Share Units (continued)
Six Months Ended June 30, 2023Year Ended December 31, 2022
Number of sharesWeighted
Average
Fair Value
(CAD$)		Number of sharesWeighted
Average
Fair Value
(CAD$)
Outstanding, beginning of the period474,654 14.82 275,516 16.58 
Granted358,369 11.29 268,955 13.21 
Settled(38,087)15.47 — — 
Forfeited(109,482)13.96 (69,817)15.55 
Outstanding, end of the period685,454 13.08 474,654 14.82 

During the six months ended June 30, 2023, total share-based payments expense related to PSU's was $0.9 million (year ended December 31, 2022 - $1.5 million).

(e)     Deferred Share Units
The Company adopted the 2019 LTIP to allow the Company to grant to its directors, employees and consultants non-transferrable Deferred Share Units ("DSU's"), in addition to options, RSU's and PSU's. Unless otherwise stated, the DSU awards typically vest immediately at the grant date. The fair value of a DSU is based on the value of the Company's share price at the date of grant. The Company intends to settle all DSU's under the 2019 LTIP in equity.

On March 23, 2022, a new DSU plan was adopted ("2022 DSU Plan"). All DSU's issued under the 2022 DSU Plan will be settled in cash. There were 53,189 DSU's granted under the 2022 plan during the six months ended June 30, 2023 resulting in a total expense of $0.3 million. As at June 30, 2023, there were a total of 62,332 DSU's outstanding, with a total liability of $0.4 million.

The following table summarizes the changes in DSU's granted to directors for the six months ended June 30, 2023 and the year ended December 31, 2022 under the 2019 DSU plan:    
Six Months Ended June 30, 2023Year Ended December 31, 2022
Number of sharesWeighted
Average
Fair Value
(CAD$)		Number of sharesWeighted
Average
Fair Value
(CAD$)
Outstanding, beginning of the period50,601 15.83 25,185 18.31 
Granted— — 37,312 14.07 
Settled— — (11,896)15.55 
Outstanding, end of the period50,601 15.83 50,601 15.83 
During the six months ended June 30, 2023, total share-based payments expense related to DSU's was $0.3 million (year ended December 31, 2022 - $0.3 million).


The accompanying notes are an integral part of the condensed interim consolidated financial statements
First Majestic Silver Corp. 2023 Second Quarter Report
Page 36

NOTES TO CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
Condensed Interim Consolidated Financial Statements - Unaudited
(Tabular amounts are expressed in thousands of US dollars)
23. SHARE CAPITAL (continued)
(f)     Share Repurchase Program and Share Cancellation
The Company has an ongoing share repurchase program to repurchase up to 5,000,000 of the Company's issued and outstanding shares up to March 31, 2024. The normal course issuer bid will be carried out through the facilities of the Toronto Stock Exchange and alternative Canadian marketplaces. All common shares, if any, purchased pursuant to the Share Repurchase will be cancelled. The Company believes that from time to time, the market price of its common shares may not fully reflect the underlying value of the Company's business and its future business prospects. The Company believes that at such times, the purchase of common shares would be in the best interest of the Company. During the six months ended June 30, 2023, the Company repurchased an aggregate of nil common shares (December 2022 - 100,000) at an average price of CDN $nil per share as part of the Share Repurchase Program (December 2022 - $8.52) for total proceeds of $nil million (December 2022 - $0.7 million), net of transaction costs.


(g)     Dividends

The Company declared the following dividends during the six months ended June 30, 2023:
Declaration DateRecord DateDividend per Common Share
February 23, 2023March 10, 2023$0.0054
May 4, 2023May 18, 2023$0.0057
August 3, 2023(1)
August 16, 2023$0.0051

(1) These    dividends    were declared subsequent to the period end and have not been recognized as distributions to owners    during the period     presented.


24. FINANCIAL INSTRUMENTS AND RELATED RISK MANAGEMENT

The Company’s financial instruments and related risk management objectives, policies, exposures and sensitivity related to financial risks are summarized below.

(a)     Fair value and categories of financial instruments

Financial instruments included in the consolidated statements of financial position are measured either at fair value or amortized cost. Estimated fair values for financial instruments are designed to approximate amounts for which the instruments could be exchanged in an arm’s-length transaction between knowledgeable and willing parties.

The Company uses various valuation techniques in determining the fair value of financial assets and liabilities based on the extent to which the fair value is observable. The following fair value hierarchy is used to categorize and disclose the Company’s financial assets and liabilities held at fair value for which a valuation technique is used.

Level 1: Unadjusted quoted prices in active markets that are accessible at the measurement date for identical assets or liabilities.
Level 2: All inputs which have a significant effect on the fair value are observable, either directly or indirectly, for substantially the full contractual term.
Level 3: Inputs which have a significant effect on the fair value are not based on observable market data.

During the six months ended June 30, 2023, marketable securities valued at $21.9 million have been transferred from Level 3 to Level 1 (there were no transfers between levels 1, 2, and 3 for the year ended December 31, 2022) due to the resumption of trading of Sierra Madre shares on the TSX Venture on June 5, 2023. Level 1 assets include those assets in which unadjusted quoted prices in active markets are accessible to the Company at the measurement date.







The accompanying notes are an integral part of the condensed interim consolidated financial statements
First Majestic Silver Corp. 2023 Second Quarter Report
Page 37

NOTES TO CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
Condensed Interim Consolidated Financial Statements - Unaudited
(Tabular amounts are expressed in thousands of US dollars)
24. FINANCIAL INSTRUMENTS AND RELATED RISK MANAGEMENT (continued)

(a)     Fair value and categories of financial instruments (continued)

The table below summarizes the valuation methods used to determine the fair value of each financial instrument:
Financial Instruments Measured at Fair ValueValuation Method
Marketable securities - common sharesMarketable securities and silver future derivatives are valued based on quoted market prices for identical assets in an active market (Level 1) as at the date of statements of financial position. Marketable securities - stock warrants are valued using the Black-Scholes model based on the observable market inputs (Level 2).
Marketable securities - stock warrants
Silver futures derivatives
  
Financial Instruments Measured at Amortized CostValuation Method
Cash and cash equivalentsApproximated carrying value due to their short-term nature
Restricted cash
Trade and other receivables 
Trade and other payables 
Debt facilitiesApproximated carrying value as discount rate on these
instruments approximate the Company's credit risk.


The following table presents the Company’s fair value hierarchy for financial assets and financial liabilities that are measured at fair value:
 June 30, 2023December 31, 2022
  Fair value measurement Fair value measurement
 Carrying valueLevel 1Level 2Carrying valueLevel 1Level 2
Financial assets      
Marketable securities (Note 13)
$52,113 $50,478 $1,636 $34,528 $33,426 $1,102 

The Company’s objectives when managing capital are to maintain financial flexibility to continue as a going concern while
optimizing growth and maximizing returns of investments from shareholders.

In 2022, an impairment reversal and impairment were recorded for the La Guitarra and La Parrilla mines, respectively, bringing the carrying value of the asset to its recoverable amount, being its FVLCD. The valuation technique used in the calculation of this fair value is categorized as Level 2 as it is based on the implied selling price within the purchase agreement (Note 14). During the three months ended March 31, 2023, an impairment was recorded for the Jerritt Canyon mine bringing the carrying value of the asset to its recoverable amount, being its FVLCD (Note 18). Management’s estimate of FVLCD is classified as a level 3 in the fair value hierarchy as the inputs are not based on observable market data. During the period ended June 30, 2023, an additional write down was recorded for the La Parrilla mine, bringing the carrying value of the asset to its recoverable amount, being its FVLCD. The valuation technique used in the calculation of the fair value of consideration receivable, is categorized as Level 2 as it is based on the selling price in the market (Note 14). At June 30, 2023, the sale of La Parrilla continues to be considered highly probable; therefore, La Parrilla continues to be classified as an asset held-for-sale.

(b) Capital risk management

The Company monitors its capital structure and based on changes in operations and economic conditions, may adjust the structure by repurchasing shares, issuing new shares, issuing new debt or retiring existing debt. The Company prepares annual budget and quarterly forecasts to facilitate the management of its capital requirements. The annual budget is approved by the Company’s Board of Directors.

The capital of the Company consists of equity (comprising of issued capital, equity reserves and retained earnings or accumulated deficit), debt facilities, lease liabilities, net of cash and cash equivalents as follows:
The accompanying notes are an integral part of the condensed interim consolidated financial statements
First Majestic Silver Corp. 2023 Second Quarter Report
Page 38

NOTES TO CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
Condensed Interim Consolidated Financial Statements - Unaudited
(Tabular amounts are expressed in thousands of US dollars)
24. FINANCIAL INSTRUMENTS AND RELATED RISK MANAGEMENT (continued)

(b) Capital risk management (continued)

 June 30,
2023		December 31,
2022
Equity$1,376,307 $1,411,298 
Debt facilities214,862 210,362 
Lease liabilities39,950 37,583 
Less: cash and cash equivalents(160,235)(151,438)
 $1,470,884 $1,507,805 

The Company’s investment policy is to invest its cash in highly liquid short-term investments with maturities of 90 days or less, selected with regards to the expected timing of expenditures from operations. The Company expects that its available capital resources will be sufficient to carry out its development plans and operations for at least the next 12 months.

The Company is not subject to any externally imposed capital requirements with the exception of complying with covenants under the debt facilities (Note 21(b)) and lease liabilities (Note 22(b)). As at June 30, 2023 and December 31, 2022, the Company was in compliance with these covenants.

(c) Financial risk management
The Company thoroughly examines the various financial instruments and risks to which it is exposed and assesses the impact and likelihood of those risks. These risks may include credit risk, liquidity risk, currency risk, commodity price risk, and interest rate risk. Where material, these risks are reviewed and monitored by the Board of Directors.

Credit Risk
Credit risk is the risk of financial loss if a customer or counterparty fails to meet its contractual obligations. The Company’s credit risk relates primarily to chartered banks, trade receivables in the ordinary course of business, value added taxes receivable and other receivables.

As at June 30, 2023, net VAT receivable was $42.2 million (December 31, 2022 - $44.9 million), of which $25.1 million (December 31, 2022 - $21.6 million) relates to Minera La Encantada S.A. de C.V. ("MLE") and $21.5 million (December 31, 2022 - $17.7 million) relates to PEM, offset by VAT payable balances.

The Company sells and receives payment upon delivery of its silver doré and by-products primarily through three international customers. All of the Company's customers have good ratings and payments of receivables are scheduled, routine and fully received within 60 days of submission; therefore, the balance of trade receivables owed to the Company
in the ordinary course of business is not significant.

The carrying amount of financial assets recorded in the condensed consolidated financial statements represents the Company’s maximum exposure to credit risk. With the exception to the above, the Company believes it is not exposed to significant credit risk.

The accompanying notes are an integral part of the condensed interim consolidated financial statements
First Majestic Silver Corp. 2023 Second Quarter Report
Page 39

NOTES TO CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
Condensed Interim Consolidated Financial Statements - Unaudited
(Tabular amounts are expressed in thousands of US dollars)
24. FINANCIAL INSTRUMENTS AND RELATED RISK MANAGEMENT (continued)

Liquidity Risk

Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they arise. The Company manages liquidity risk by monitoring actual and projected cash flows and matching the maturity profile of financial assets and liabilities. Cash flow forecasting is performed regularly to ensure that there is sufficient capital in order to meet short-term business requirements, after taking into account cash flows from operations and our holdings of cash and cash equivalents.

The following table summarizes the maturities of the Company’s financial liabilities as at June 30, 2023 based on the undiscounted contractual cash flows:
 Carrying Amount
Contractual
Cash Flows
Less than
1 year		2 to 3
years		4 to 5
years		After 5 years
Trade and other payables$96,040 $96,040 $96,040 $— $— $— 
Debt facilities214,862 259,744 3,104 26,209 230,431 — 
Lease liabilities39,950 44,274 16,772 22,260 4,347 895 
Other liabilities7,207 6,956 — — 6,956 — 
Commitments4,157 4,157 4,157 — — — 
 $362,216 $411,171 $120,073 $48,469 $241,734 $895 

At June 30, 2023, the Company had working capital of $237.2 million (December 31, 2022 – $202.9 million). Total available liquidity at June 30, 2023 was $361.8 million (December 31, 2022 - $277.9 million), including $124.6 million of undrawn revolving credit facility (December 31, 2022 - $75.0 million).

The Company believes it has sufficient cash on hand, combined with cash flows from operations, to meet operating requirements as they arise for at least the next 12 months. If the Company needs additional liquidity to meet obligations, the Company may consider drawing on its debt facility, securing additional debt financing and/or equity financing.


The accompanying notes are an integral part of the condensed interim consolidated financial statements
First Majestic Silver Corp. 2023 Second Quarter Report
Page 40

NOTES TO CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
Condensed Interim Consolidated Financial Statements - Unaudited
(Tabular amounts are expressed in thousands of US dollars)
24. FINANCIAL INSTRUMENTS AND RELATED RISK MANAGEMENT (continued)

Currency Risk

The Company is exposed to foreign exchange risk primarily relating to financial instruments that are denominated in Canadian dollars or Mexican pesos, which would impact the Company’s net earnings or loss. To manage foreign exchange risk, the Company may occasionally enter into short-term foreign currency derivatives, such as forwards and options, to hedge its cash flows.

The sensitivity of the Company’s net earnings or loss and comprehensive income or loss due to changes in the exchange rates of the Canadian dollar and the Mexican peso against the U.S. dollar is included in the table below:
 June 30, 2023
 Cash and cash equivalentsRestricted cashValue added taxes receivableOther financial assetsTrade and other payablesNet assets (liabilities) exposureEffect of +/- 10% change in currency
Canadian dollar$20,895 $— $— $1,968 ($4,864)$17,999 $1,800 
Mexican peso17,128 99,433 42,230 — (57,223)101,568 10,157 
 $38,023 $99,433 $42,230 $1,968 ($62,087)$119,567 $11,957 

From time to time, the Company utilizes certain derivatives to manage its foreign exchange exposures to the Mexican Peso. During the three and six months ended June 30, 2023, the Company did not have any gain or loss (2022 - gain of $0.5 million and $0.5 million) on fair value adjustments to its foreign currency derivatives. As at June 30, 2023, the Company does not hold any foreign currency derivatives ( December 31, 2022- $nil).

Commodity Price Risk

The Company is exposed to commodity price risk on silver and gold, which have a direct and immediate impact on the value of its related financial instruments and net earnings. The Company’s revenues are directly dependent on commodity prices that have shown volatility and are beyond the Company’s control. The Company does not use long-term derivative instruments to hedge its commodity price risk to silver or gold.

The following table summarizes the Company’s exposure to commodity price risk and their impact on net earnings:
 June 30, 2023
 Effect of +/- 10% change in metal prices
 SilverGoldTotal
Metals in doré inventory$1,200 $445 $1,645 
 $1,200 $445 $1,645 

Interest Rate Risk
The Company is exposed to interest rate risk on its short-term investments, debt facilities and lease liabilities. The Company monitors its exposure to interest rates and has not entered into any derivative contracts to manage this risk. The Company’s interest-bearing financial assets comprise of cash and cash equivalents which bear interest at a mixture of variable and fixed rates for pre-set periods of time.

As at June 30, 2023, the Company’s exposure to interest rate risk on interest bearing liabilities is limited to its debt facilities and lease liabilities. Based on the Company’s interest rate exposure at June 30, 2023, a change of 25 basis points increase or decrease of market interest rate does not have a significant impact on net earnings or loss.







The accompanying notes are an integral part of the condensed interim consolidated financial statements
First Majestic Silver Corp. 2023 Second Quarter Report
Page 41

NOTES TO CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
Condensed Interim Consolidated Financial Statements - Unaudited
(Tabular amounts are expressed in thousands of US dollars)
25. SUPPLEMENTAL CASH FLOW INFORMATION
 Three Months Ended June 30,Six Months Ended June 30,
 2023202220232022
Other adjustments to investing activities:
Purchase of marketable securities($1,065)$— ($1,065)($1,419)
Proceeds from disposal of marketable securities1,251 1,623 1,251 2,739 
Cash received on settlement of silver futures— (366)— 2,522 
$186 $1,257 $186 $3,842 
Net change in non-cash working capital items:
    
Decrease in trade and other receivables$1,555 $3,783 $3,339 $1,134 
Decrease in value added taxes receivable5,936 126 2,742 7,216 
Decrease (increase) in inventories10,599 (1,576)4,978 (3,953)
Decrease (increase) in prepaid expenses and other919 (2,101)(3,403)(6,338)
Increase in income taxes payable524 450 1,489 442 
Decrease in trade and other payables(7,083)(20,441)(1,271)(28,732)
  (Increase) decrease in restricted cash (Note 19)
(14,988)2,333 (20,857)(14,034)
 ($2,538)($17,426)($12,983)($44,265)
Non-cash investing and financing activities:
    
   Shares received from disposition of mining interest $575 $— $33,747 $— 
   Disposition of La Guitarra— — (34,550)— 
Transfer of share-based payments reserve upon settlement of RSU's402 493 1,987 1,340 
Transfer of share-based payments reserve upon exercise of options447 505 607 1,530 
Assets acquired by finance lease— — (2,231)(1,810)
  $1,424 $998 ($440)$1,060 
As at June 30, 2023, cash and cash equivalents include $1.6 million (December 31, 2022 - $1.4 million) that are held in-trust as bonds for tax audits in Mexico.
The accompanying notes are an integral part of the condensed interim consolidated financial statements
First Majestic Silver Corp. 2023 Second Quarter Report
Page 42

NOTES TO CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
Condensed Interim Consolidated Financial Statements - Unaudited
(Tabular amounts are expressed in thousands of US dollars)
26. CONTINGENCIES AND OTHER MATTERS
Due to the size, complexity and nature of the Company’s operations, various legal and tax matters arise in the ordinary course of business. The Company accrues for such items when a liability is probable and the amount can be reasonably estimated.

(a) Claims and Legal Proceedings Risks
The Company is subject to various claims and legal proceedings covering a wide range of matters that arise in the ordinary course of business activities. Each of these matters is subject to various uncertainties and it is possible that some of these other matters may be resolved in a manner that is unfavourable to the Company which may result in a material adverse impact on the Company's financial performance, cash flow or results of operations. First Majestic carries liability insurance coverage and establishes provisions for matters that are probable and can be reasonably estimated, however there can be no guarantee that the amount of such coverage is sufficient to protect against all potential liabilities. In addition, the Company may in the future be subjected to regulatory investigations or other proceedings and may be involved in disputes with other parties in the future which may result in a significant impact on our financial condition, cash flow and results of operations.

(b) Primero Tax Rulings
When Primero, the previous owner of San Dimas acquired the San Dimas Mine in August 2010, it assumed the obligations under a Silver Purchase Agreement (“Old Stream Agreement”) that required its subsidiary PEM to sell exclusively to Wheaton Precious Metals ("WPMI") up to 6 million ounces silver produced from the San Dimas Mine, and 50% of silver produced thereafter, at the lower of: (i) the spot market price and (ii) $4.014 per ounce plus an annual increase of 1% (“PEM Realized Price”). In May 2018, the Old Stream Agreement was terminated between WPMI and STB in connection with the Company entering into a new stream agreement with WPMI concurrent with the acquisition of Primero by the Company.

In order to reflect the commercial terms and the effects of the Old Stream Agreement, for Mexican income tax purposes, PEM recognized the revenue on these silver sales based on the PEM Realized Price instead of at spot market prices.

To obtain tax and legal assurance that the Mexican tax authority, Servicio de Administración Tributaria ("SAT") would accept the PEM Realized Price as the transfer price to calculate Mexican income taxes payable by PEM, a mutually binding Advance Pricing Agreement (“APA”) was entered into with the SAT for taxation years 2010 to 2014. On October 4, 2012, the SAT confirmed that based on the terms of the APA, the PEM Realized Price could be used as PEM’s basis for calculating taxes owed for the silver sold under the Old Stream Agreement.

In February 2015, the SAT filed a legal process seeking to retroactively nullify the APA.

In 2019, the SAT issued reassessments for the 2010 to 2012 tax years in the total amount of $345.3 million (5,895 million MXN) inclusive of interest, inflation, and penalties. In 2021, the SAT also issued a reassessment against PEM for the 2013 tax year in the total amount of $182.4 million (3,114 million MXN) (collectively, the "Reassessments"). In 2023, the SAT issued reassessments for the 2014 and 2015 tax years in the total amount of $374 million (6,331 million MXN) inclusive of interest, inflation, and penalties. The Company believes that the Reassessments fail to recognize the applicability of a valid transfer pricing methodology. The major items in the Reassessments include determination of revenue based on silver spot market prices, denial of the deductibility of interest expense and service fees, SAT technical error related to double counting of taxes, and interest and penalties.



The accompanying notes are an integral part of the condensed interim consolidated financial statements
First Majestic Silver Corp. 2023 Second Quarter Report
Page 43

NOTES TO CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
Condensed Interim Consolidated Financial Statements - Unaudited
(Tabular amounts are expressed in thousands of US dollars)
26. CONTINGENCIES AND OTHER MATTERS (continued)

(b) Primero Tax Rulings (continued)
The Company continues to defend the APA in the Mexican legal proceedings, and also requested resolution of the transfer price dispute pursuant to the Mutual Agreement Procedure (“MAP”), under the relevant avoidance of double taxation treaties, between the competent tax authorities of Mexico, Canada, Luxembourg and Barbados. The SAT has refused to take the necessary steps under the MAP process contained in the three treaties. The Company believes that by its refusal, Mexico is in breach of its international obligations regarding double taxation treaties. Furthermore, the Company continues to believe that the APA remains valid and legally binding on the SAT.

The Company continues to pursue all available domestic and international remedies under the laws of Mexico and under the relevant tax treaties. Furthermore, as discussed further below, it has also made claims against Mexico under Chapter 11 of the North American Free Trade Agreement (“NAFTA”) for violation of its international law obligations.

Domestic Remedies

In September 2020, the Company was served with a decision of the Federal Court seeking to nullify the APA granted to PEM. The Federal Court’s decision directs SAT to re-examine the evidence and basis for the issuance of the APA with retroactive effect, for the following key reasons:
(i) SAT’s errors in analyzing PEM’s request for the APA and the evidence provided in support of the request; and
(ii) SAT’s failure to request from PEM certain additional information before issuing the APA.

The Company filed an appeal of the decision to the Mexican Circuit Courts on November 30, 2020. Since two writs of certiorari were filed before the Mexican Supreme Court of Justice, on April 15, 2021, the Plenary of the Supreme Court i) admitted one of those writs, ii) requested the Circuit Court to send the appeal file and iii) assigned such writ to the Second Chamber of the Supreme Court for issuing the corresponding decision. Both writs of certiorari were withdrawn in December 2022. The challenge filed by the Company has been returned to the Mexican Circuit Courts and a decision may be issued within the second half of 2023.

The Company, in addition to challenging the SAT’s actions in the Mexican courts, is also pursuing resolution of its dispute through Mexico’s Federal Taxpayer Defense Attorney's Office (known as “PRODECON”).

International Remedies

i. NAFTA APA Claim
On March 2, 2021, the Company submitted a Request for Arbitration to the International Centre for Settlement of Investment Disputes ("ICSID"), on its own behalf and on behalf of PEM, based on Chapter 11 of NAFTA. On March 31, 2021, the Notice of Registration of the Request for Arbitration was issued by the ICSID Secretariat. Once the NAFTA Arbitration Panel (the “Tribunal”) was fully constituted on August 20, 2021 by the appointment of all three panel members, the NAFTA Arbitration Proceedings (the “NAFTA Proceedings”) were deemed to have been fully commenced. The first session of the Tribunal was held by videoconference on September 24, 2021 to decide upon the procedural rules which will govern the NAFTA Proceedings. The Tribunal issued Procedural Order No. 1 on October 21, 2021. Thereafter, on April 26, 2022, the Company submitted its Claimant’s Memorial including expert reports and witness statements to the Tribunal, and on November 25, 2022, Mexico submitted its Counter-Memorial. On January 4, 2023, the Company submitted a Request for Provisional Measures (the “PM Request”) to the Tribunal. Following a reply that was filed by Mexico on February 16th, a hearing regarding the request took place on March 13th. On May 26th, the Tribunal made its decision on the PM Request, partially granting the provisional measures set out in the request. On June 15th, the Company requested Mexico to comply with the Tribunal’s decision, and in response, on June 19th, Mexico filed a Revocation Request against the decision.

Subsequent to the end of the quarter, on July 21st, the Company filed its response to Mexico’s Revocation Request. The Company is now waiting for the Tribunal to render its decision on Mexico’s request, and expects that such a decision will be rendered by the end of the year.

The accompanying notes are an integral part of the condensed interim consolidated financial statements
First Majestic Silver Corp. 2023 Second Quarter Report
Page 44

NOTES TO CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
Condensed Interim Consolidated Financial Statements - Unaudited
(Tabular amounts are expressed in thousands of US dollars)
26. CONTINGENCIES AND OTHER MATTERS (continued)

(b) Primero Tax Rulings (continued)

ii. NAFTA VAT Claim
On March 31, 2023, the Company filed a new Notice of Intent on its own behalf and on behalf of PEM under Chapter 11 of NAFTA to invite the Government of Mexico to engage in discussions to resolve the dispute regarding the ongoing denial of access to PEM’s VAT refunds ("NAFTA VAT Claim") within the stipulated 90-day consultation period. On June 29, 2023, the Company submitted its Request for Arbitration for the NAFTA VAT Claim to ICSID in order to preserve its legacy claim within NAFTA's applicable limitation period.

While the Company remains confident in its position with regards to its two NAFTA filings, it continues to engage the Government of Mexico in consultation discussions so as to amicably resolve these disputes.

If the SAT’s attempts to retroactively nullify the APA are successful, the SAT can be expected to enforce any Reassessments for 2010 through 2014 against PEM in respect of its sales of silver pursuant to the Old Stream Agreement. Such an outcome would likely have a material adverse effect on the Company’s results of operations, financial condition and cash flows. Should the Company ultimately be required to pay tax on its silver revenues based on spot market prices without any mitigating adjustments, the incremental income tax for the years 2010-2019 would be approximately $301.1 million (5,141 million MXN), before taking into consideration interest or penalties.

Based on the Company’s consultation with third party advisors, the Company believes PEM filed its tax returns in compliance with applicable Mexican law and, therefore, at this time no liability has been recognized in the financial statements.

To the extent it is ultimately determined that the pricing for silver sales under the Old Stream Agreement is significantly different from the PEM Realized Price, and while PEM would have rights of appeal in connection with any reassessments, it is likely to have a materially adverse effect on the Company’s business, financial position and results of operations.

(c) La Encantada Tax Re-assessments

In December 2019, as part of the ongoing annual audits of the tax returns of Minera La Encantada S.A. de C.V. and Corporacion First Majestic S.A. de C.V., the SAT issued tax assessments for fiscal 2013 for corporate income tax in the amount of $29.7 million (507 million MXN) including interest, inflation and penalties. In December 2022, the SAT issued tax assessments to Minera La Encantada, S.A. de C.V. for fiscal years 2014 and 2015 for corporate income tax in the amount of $18.4 million (313 million MXN) and $231.0 million (3,943 million MXN). The major items relate to forward silver purchase agreement and denial of the deductibility of mine development costs and service fees. The Company continues to defend the validity of the forward silver purchase agreement and will vigorously dispute the assessments that have been issued. The Company, based on advice from legal and financial advisors, believes MLE’s tax filings were appropriate and its tax filing position is correct, therefore no liability has been recognized in the financial statements.

(d) San Martin Tax Re-assessments

In 2023, as part of the ongoing annual audits of the tax returns of Minera El Pilon S.A. de C.V. ("MEP"), the SAT issued tax assessments for fiscal 2014 and 2015 for corporate income tax in the total amount of $24.3 million (415 million MXN) including interest, inflation and penalties. The major items relate to forward silver purchase agreement and denial of the deductibility of mine development costs. The Company continues to defend the validity of the forward silver purchase agreement and will vigorously dispute the assessments that have been issued. The Company, based on advice from legal and financial advisors, believes MEP’s tax filings were appropriate and its tax filing position is correct, therefore no liability has been recognized in the financial statements.


The accompanying notes are an integral part of the condensed interim consolidated financial statements
First Majestic Silver Corp. 2023 Second Quarter Report
Page 45

NOTES TO CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
Condensed Interim Consolidated Financial Statements - Unaudited
(Tabular amounts are expressed in thousands of US dollars)
26. CONTINGENCIES AND OTHER MATTERS (continued)

(e) La Parrilla Tax Re-assessments

In 2023, as part of the ongoing annual audits of the tax returns of First Majestic Plata S.A. de C.V. ("FMP"), the SAT issued tax assessment for fiscal 2014 for corporate income tax in the total amount of $25.6 million (438 million MXN) including interest, inflation and penalties. The major items relate to forward silver purchase agreement and denial of the deductibility of mine development costs. The Company continues to defend the validity of the forward silver purchase agreement and will vigorously dispute the assessments that have been issued. The Company, based on advice from legal and financial advisors, believes FMP’s tax filings were appropriate and its tax filing position is correct, therefore no liability has been recognized in the financial statements.

(f) First Silver Litigation

In April 2013, the Company received a positive judgment on the First Silver litigation from the Supreme Court of British Columbia (the “Court”), which awarded the sum of $93.8 million in favour of First Majestic against Hector Davila Santos (the “Defendant”) in connection with a dispute between the Company and the Defendant and his private company involving a mine in México (the “Bolaños Mine”) as set out further below. The Company received a sum of $14.1 million in June 2013 as partial payment of the judgment, leaving an unpaid amount of approximately $64.3 million (CAD$81.5 million). As part of the ruling, the Court granted orders restricting any transfer or encumbrance of the Bolaños Mine by the Defendant and limiting mining at the Bolaños Mine. The orders also require the Defendant to preserve net cash flow from the Bolaños Mine in a holding account and periodically provide to the Company certain information regarding the Bolaños Mine. After many years of domestic Mexican litigation, the enforceability of the British Columbia judgment was finally recognized by the Mexican Supreme Court in a written judgment on November 11, 2022. The Company has commenced collection actions in Mexico against the Defendant’s assets and continues to seek recovery of the balance against one of the Defendant’s assets located in the United States. Nonetheless, there can be no guarantee that the remainder of the judgment amount will be collected. Therefore, as at June 30, 2023, the Company has not accrued any of the remaining $64.3 million (CAD$81.5 million) unrecovered judgment in favour of the Company.

27. SUBSEQUENT EVENTS

Declaration of Quarterly Dividend
On August 3, 2023, the Company's board of directors approved the declaration of its quarterly common share dividend of $0.0051 per share, payable on or after August 31, 2023, to common shareholders of record at the close of business on August 16, 2023. These dividends were declared subsequent to the quarter-end and have not been recognized as distributions to owners during the period ended June 30, 2023.

The accompanying notes are an integral part of the condensed interim consolidated financial statements
First Majestic Silver Corp. 2023 Second Quarter Report
Page 46








image0b331.gif


MANAGEMENT’S DISCUSSION AND ANALYSIS

FOR THE QUARTER ENDED JUNE 30, 2023







925 West Georgia Street, Suite 1800, Vancouver, B.C., Canada V6C 3L2
Phone: 604.688.3033 | Fax: 604.639.8873| Toll Free: 1.866.529.2807 | Email: info@firstmajestic.com
www.firstmajestic.com


TABLE OF CONTENTS
OVERVIEW OF OPERATING RESULTS
OVERVIEW OF FINANCIAL PERFORMANCE
OTHER DISCLOSURES
 


First Majestic Silver Corp. 2023 Second Quarter Report
Page 2
              

MANAGEMENT’S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION

This Management’s Discussion and Analysis of Results of Operations and Financial Condition (“MD&A”) should be read in conjunction with the unaudited condensed interim consolidated financial statements of First Majestic Silver Corp. (“First Majestic” or “the Company”) for the three and six months ended June 30, 2023 which are prepared in accordance with International Accounting Standard ("IAS") 34, "Interim Financial Reporting", and audited consolidated financial statements of the Company as at and for the year ended December 31, 2022, as some disclosures from the annual consolidated financial statements have been condensed or omitted. All dollar amounts are expressed in United States (“US”) dollars and tabular amounts are expressed in thousands of US dollars, unless otherwise indicated. Certain amounts shown in this MD&A may not add exactly to total amounts due to rounding differences.

This MD&A contains reference to certain non-GAAP measures, as explained below under "Non-GAAP Measures" and also contains “forward-looking statements” that are subject to risk factors set out in a cautionary note contained at the end of this MD&A. All information contained in this MD&A is current and has been approved by the Board of Directors of the Company as of August 2, 2023 unless otherwise stated.

COMPANY OVERVIEW

First Majestic is a multinational mining company headquartered in Vancouver, Canada, focused on primary silver and gold production in North America, pursuing the exploration and development of its existing mineral properties and acquiring new assets. The Company owns three producing mines in Mexico consisting of the San Dimas Silver/Gold Mine, the Santa Elena Silver/Gold Mine and the La Encantada Silver Mine. The Company also owns the Jerritt Canyon Gold Mine in Nevada, USA which has been placed on temporary suspension as of March 20, 2023 to focus on exploration, definition, and expansion of the mineral resources and optimization of mine planning and plant operations. In addition, the Company owns three mines currently in care and maintenance in Mexico: the San Martin Silver Mine, the Del Toro Silver Mine, and the La Parrilla Silver Mine as well as several exploration projects. As at June 30, 2023, the La Parrilla Silver Mine remains classified as an asset held-for-sale.

First Majestic is publicly listed on the New York Stock Exchange under the symbol “AG”, on the Toronto Stock Exchange under the symbol “FR” and on the Frankfurt Stock Exchange under the symbol “FMV”.

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2023 SECOND QUARTER HIGHLIGHTS
Key Performance Metrics2023-Q22023-Q1Change
Q2 vs Q1		2022-Q2Change Q2 vs Q22023-YTD2022-YTDChange
Operational
Ore Processed / Tonnes Milled733,170 845,868 (13 %)903,791 (19 %)1,579,038 1,780,909 (11 %)
Silver Ounces Produced2,633,411 2,543,059 4 %2,775,928 (5 %)5,176,470 5,389,255 (4 %)
Gold Ounces Produced45,022 60,594 (26 %)59,391 (24 %)105,616 118,282 (11 %)
Silver Equivalent Ounces Produced6,320,971 7,627,105 (17 %)7,705,935 (18 %)13,948,076 14,927,937 (7 %)
Cash Costs per Silver Equivalent Ounce (1)
$15.58 $15.16 3 %$14.12 10 %$15.35 $14.52 6 %
All-in Sustaining Cost per Silver Equivalent Ounce (1)
$21.52 $20.90 3 %$19.91 8 %$21.17 $20.38 4 %
Total Production Cost per Tonne(1)
$128.21 $130.71 (2 %)$114.55 12 %$129.55 $116.50 11 %
Average Realized Silver Price per Silver Equivalent Ounce (1)
$24.95 $21.98 14 %$23.93 4 %$23.32 $23.82 (2 %)
Financial (in $millions)
Revenues$146.7 $157.0 (7 %)$159.4 (8 %)$303.6 $316.3 (4 %)
Mine Operating Earnings (Loss)$1.1 ($6.4)118 %$11.6 (91 %)($5.3)$26.7 (120 %)
Net Loss($17.5)($100.7)83 %($84.1)79 %($118.2)($76.8)(54 %)
Operating Cash Flows before Non-Cash Working Capital and Taxes
$26.9 $21.9 23 %$33.0 (18 %)$48.7 $68.3 (29 %)
Cash and Cash Equivalents$160.2 $104.8 53 %$117.7 36 %$160.2 $117.7 36 %
Working Capital (1)
$237.2 $184.6 28 %$199.8 19 %$237.2 $199.8 19 %
Free Cash Flow (1)
$7.4 ($26.7)128 %($37.5)120 %($19.3)($77.9)75 %
Shareholders
 (Loss) Earnings per Share ("EPS") - Basic($0.06)($0.37)84 %($0.32)81 %($0.43)($0.29)(45 %)
Adjusted EPS (1)
($0.02)$0.00 (100 %)($0.02)0 %($0.02)($0.05)64 %
NM - Not meaningful

(1)The Company reports non-GAAP measures which include cash costs per silver equivalent ounce produced, cash costs per gold ounce produced, all-in sustaining cost per silver equivalent ounce produced, all-in sustaining cost per gold ounce produced, total production cost per tonne, average realized silver price per silver equivalent ounce sold, average realized gold price per ounce sold, working capital, adjusted EPS and free cash flow. These measures are widely used in the mining industry as a benchmark for performance, but do not have a standardized meaning under the Company's financial reporting framework and the methods used by the Company to calculate such measures may differ from methods used by other companies with similar descriptions. See “Non-GAAP Measures” on pages 37 to 46 for further details on these measures and a reconciliation of non-GAAP to GAAP measures.

Second Quarter Production SummarySan DimasSanta ElenaLa Encantada
Jerritt Canyon (1)
Consolidated
Ore Processed / Tonnes Milled227,065 213,878 260,986 31,240 733,170 
Silver Ounces Produced1,690,831 142,037 800,543 — 2,633,411 
Gold Ounces Produced20,509 20,073 76 4,364 45,022 
Silver Equivalent Ounces Produced3,372,418 1,788,596 806,789 353,168 6,320,971 
Cash Costs per Silver Equivalent Ounce$12.07 $14.45 $16.90 $51.66 $15.58 
All-in Sustaining Cost per Silver Equivalent Ounce$15.89 $18.00 $19.83 $51.96 $21.52 
Cash Cost per Gold OunceN/AN/AN/A$4,181 N/A
All-In Sustaining Costs per Gold OunceN/AN/AN/A$4,205 N/A
Total Production Cost per Tonne$173.62 $109.88 $49.91 $577.83 $128.21 
(1) Jerritt Canyon production during the second quarter comprised of processing most of its remaining ore stockpiles and work-in-process ("WIP") inventory throughout April and May. Refer to Jerritt Canyon operational highlights for further details.



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Operational Highlights

•Higher Q2 Silver Production from Mexican Operations: The Company's Mexican operations produced over 2.6 million ounces of silver and 40,658 gold ounces, or approximately 6.0 million silver equivalent ("AgEq") ounces in the quarter. Silver production increased 4% over the prior quarter primarily due to higher tonnes processed at San Dimas and slightly higher silver grades and recoveries at Santa Elena. Gold production in Mexico decreased 8% as lower gold grades were processed at Santa Elena.
•Santa Elena’s Dual-Circuit Plant Achieves Record Quarterly Recovery Rates: Metallurgical recoveries of Ermitaño’s ore achieved record quarterly rates as a result of strong operational performance of the recently commissioned dual-circuit plant. Gold and silver recoveries averaged 94% and 52%, respectively, in the second quarter.

•Safety: In Q2 2023, the consolidated Total Reportable Incident Frequency Rate ("TRIFR") was 1.07 and the Lost Time Incident Frequency Rate (LTIFR) was 0.36.
•Cash Cost per AgEq Ounce for the quarter was $15.58 per ounce, compared to $15.16 per ounce in the previous quarter. The increase in cash costs per AgEq ounce was primarily attributable to lower production at Jerritt Canyon which was temporarily suspended as well as a strong Mexican Peso against the U.S. dollar which averaged 5% higher compared to the previous quarter.
Excluding Jerritt Canyon, cash costs for the three Mexican operations were $13.44 per AgEq ounce compared to $11.85 per AgEq ounce in the previous quarter. There was a decrease in AgEq production at Santa Elena and La Encantada due to processing lower grade gold at Santa Elena and lower throughput rates and water availability at La Encantada resulting from drought conditions in the area during the quarter, which was partially offset by an increase in AgEq production at San Dimas. The Company has implemented a series of cost saving initiatives in an effort to help offset the strong Peso’s impact, which include lowering production costs, capital spending, care and maintenance holding costs, G&A costs, while also increasing silver and gold production. In the second half of 2023, the Company expects cash costs to decrease and be within the range of $12.23 to $12.89 per AgEq ounce.
•All-in Sustaining Cost ("AISC") per AgEq Ounce in the second quarter was $21.52 per ounce compared to $20.90 per ounce in the previous quarter. The increase in AISC per AgEq ounce was primarily attributed to the stronger Mexican Peso resulting in higher cash costs along with an increase in worker participation costs during the quarter. In the second half of 2023, the Company anticipates AISC to be within a range of $17.69 to $18.92 per AgEq ounce following the temporary suspension of Jerritt Canyon which had significantly higher AISC.
•19 Drill Rigs Active: The Company completed a total of 42,285 metres of drilling across all sites in the second quarter, representing a 15% increase over the prior quarter. Throughout the quarter, up to 19 drill rigs were active consisting of eight rigs at San Dimas, six rigs at Santa Elena, two rigs at La Encantada, and three rigs at Jerritt Canyon. Please refer to the Company's press release dated July 18, 2023, where the Company reported high-grade exploration results at the San Dimas, Santa Elena and the Jerritt Canyon mines.
Financial Highlights

•In the second quarter, the Company generated revenues of $146.7 million compared to $159.4 million in the second quarter of 2022. There was a 12% decrease in the total number of payable AgEq ounces sold due to the suspension of production at Jerritt Canyon, offset by higher payable AgEq ounces sold at San Dimas. The decrease in payable AgEq ounces sold was also offset by a 4% increase in the average realized silver price, which was $24.95 per ounce during the quarter, compared to $23.93 per ounce in the second quarter of 2022.
•The Company realized mine operating earnings of $1.1 million compared to mine operating earnings of $11.6 million in the second quarter of 2022. The decrease in mine operating earnings was primarily attributed to a stronger Mexican Peso against the U.S. dollar which has increased production costs. As of July 2023, the Peso reached a new seven-year high compared to the U.S. dollar. The Company continues to implement cost saving programs and review efficiency improvement opportunities to offset this foreign exchange impact.
•Net loss for the quarter was $17.5 million (EPS of ($0.06)) compared to net loss of $84.1 million (EPS of ($0.32)) in the second quarter of 2022. During the quarter, the Company incurred one-time standby costs at Jerritt Canyon in the amount of $8.4 million, compared to $5.1 million in the previous quarter.
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•Adjusted net earnings (a non-GAAP measure)1 for the quarter, normalized for non-cash or non-recurring items such as impairment of non-current assets, write-downs on mineral inventory, standby costs, share-based payments, and unrealized gains on marketable securities for the quarter ended June 30, 2023, was ($5.5) million (Adjusted EPS of ($0.02)) compared to an adjusted net earnings of ($5.7) million (Adjusted EPS of ($0.02)) in the second quarter of 2022.
•Operating cash flow before movements in working capital and taxes in the quarter was $26.9 million compared to $33.0 million in the second quarter of 2022.
•As of June 30, 2023, the Company had a cash and restricted cash balance of $306.2 million consisting of $160.2 million of cash and cash equivalents and $146.0 million of restricted cash. The Company also had working capital of $237.2 million.
•On June 29, 2023, the Company entered into an agreement to amend its senior secured revolving credit facility by extending the maturity date from March 21, 2025 to June 29, 2026 and increasing the credit limit from $100.0 million to $175.0 million.









































1 This measure does not have a standardized meaning under the Company's financial reporting framework and the methods used by the Company to calculate this measure may differ from methods used by other companies with similar descriptions. See “Non-GAAP Measures” on pages 37 to 46 for further details on these measures and a reconciliation of non-GAAP to GAAP measures.
First Majestic Silver Corp. 2023 Second Quarter Report
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2023 PRODUCTION OUTLOOK AND COST GUIDANCE UPDATE

This section provides management’s revised production outlook and cost guidance for 2023. These are forward-looking estimates and are subject to the cautionary note regarding the risks associated with relying on forward-looking statements at the end of this MD&A. Actual results may vary based on production throughputs, grades, recoveries and changes in economic circumstances.

The Company is revising its full year 2023 guidance to reflect changes due to production variances including improved milling efficiencies at Santa Elena’s dual-circuit plant, improved silver and gold grades from the Ermitaño mine, the exclusion of gold production at Jerritt Canyon as a result of the previously announced temporary suspension, as well as incorporating changes to metal price assumptions, foreign exchange rates, and production impacts from the first half of 2023. Details of the changes and their expected impacts are presented below:

1.Higher production in the second half of 2023 expected at Santa Elena due to strong recovery performance of the dual-circuit plant and processing higher silver and gold grades from the Ermitaño mine. Total production is expected to increase to between 4.7 to 5.2 million AgEq ounces in the second half of 2023, or 27% higher based on the guidance midpoint compared to the first half of 2023.
2.As a result of the previously announced temporary suspension at Jerritt Canyon, the Company has assumed there will be no production from Jerritt Canyon in the second half of 2023.
3.Increased silver and gold price assumptions in the second half of 2023 to $23.50/oz and $1,950/oz, respectively, which reduces the silver to gold ratio to 83:1.
4.As a result of the continued strength of the Mexican Peso, the Company is now assuming a 17:1 (MXN:USD) ratio in the second half of 2023 compared to the original guidance of 20:1.

As a result of these adjustments, the Company's estimate for 2023 full year silver production has increased slightly to an estimated range of 10.5 to 11.2 million ounces compared to prior guidance of 10.0 to 11.1 million ounces. Additionally, 2023 gold production is now estimated to range between 190,000 to 201,000 ounces compared to the prior guidance of 277,000 to 310,000 ounces. As a result, total 2023 production is estimated to range between 26.2 to 27.8 million AgEq ounces compared to the prior guidance of 33.2 to 37.1 million AgEq ounces.

The Company is also providing guidance below on a mine-by-mine basis for the second half of 2023.

GUIDANCE FOR SECOND HALF 2023
Silver Oz (M)Gold Oz (k)Silver Eqv Oz (M)Cash CostAISC
Silver:($ per AgEq oz)($ per AgEq oz)
San Dimas, Mexico3.1 – 3.538 – 426.3 – 7.011.03 – 11.6414.77 – 15.46
Santa Elena, Mexico0.7 – 0.848 – 534.7 – 5.212.04 – 12.6614.78 – 15.44
La Encantada, Mexico1.5 – 1.7–1.5 – 1.717.78 – 18.7720.76 – 21.92
Total Production5.3 – 5.986 - 9512.4 – 13.812.23 – 12.8917.69 – 18.92
* Certain amounts shown may not add exactly to the total amount due to rounding differences.
* Consolidated AISC includes general and administrative cost estimates and non-cash costs of $2.04 to $2.28 per AgEq ounce.
* Cash Costs and AISC are non‐GAAP measures and are not standardized financial measures under the Company's financial reporting framework. These measures have been calculated on a basis consistent with historical periods. See “Non-GAAP Measures” on pages 37 to 46 for further details on these measures and a reconciliation of non-GAAP to GAAP measures.

In the first half of 2023, the Company produced a total of 14.0 million AgEq ounces consisting of 5.2 million ounces of silver and 105,616 ounces of gold. In the second half of 2023, the Company expects to produce 12.4 to 13.8 million AgEq ounces. Silver production is expected to range between 5.3 to 5.9 million ounces, or 8% higher based on the guidance midpoint when compared to the first half of the year due to anticipated higher silver grades and recoveries at Santa Elena. Additionally, gold production is now expected to range between 86,000 to 95,000 ounces, or 14% lower based on the guidance midpoint when compared to the first half of 2023. The decrease in gold production is primarily due to the suspension of Jerritt Canyon partially offset by higher gold production at both San Dimas and Santa Elena.

Cash costs in the second half of 2023 are expected to be within the range of $12.23 to $12.89 per AgEq ounce. In addition, AISC are expected to be within a range of $17.69 to $18.92 per AgEq ounce in the second half of 2023. The stronger than normal Mexican Peso has increased operating costs in Mexico. The Company continues to implement cost savings initiatives that are expected to partially offset the exchange rate impact. As of July 2023, the Peso reached a new 7-year high compared to the US Dollar.

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A mine-by-mine breakdown of the revised full year 2023 production guidance is included in the table below and assumes the prices for calculating AgEq ounces are the same as previously stated above.

GUIDANCE FOR FULL YEAR 2023

Silver Oz (M)Gold Oz (k)Silver Eqv Oz (M)Cash CostAISC
Silver:($ per AgEq oz)($ per AgEq oz)
San Dimas, Mexico6.4 – 6.878 – 8312.9 – 13.711.06 – 11.4114.79 – 15.19
Santa Elena, Mexico0.9 – 1.091 – 978.5 – 9.112.51 – 12.9215.62 – 16.06
La Encantada, Mexico3.1 – 3.3–3.1 – 3.317.01 – 17.5219.85 – 20.44
Mexico Consolidated:10.5 – 11.2169 – 18024.5 – 26.112.33 – 12.7217.23 – 17.66
Gold:($ per AuEq oz)($ per AuEq oz)
Jerritt Canyon, USA–211.72,8813,267
Total Production($ per AgEq oz)($ per AgEq oz)
Consolidated*10.5 – 11.2190 - 20126.2 – 27.813.63 – 14.0719.37 – 20.15
* Certain amounts shown may not add exactly to the total amount due to rounding differences.
* Consolidated AISC includes general and administrative cost estimates and non-cash costs of $2.15 to $2.28 per AgEq ounce.
* Cash Costs and AISC are non‐GAAP measures and are not standardized financial measures under the Company's financial reporting framework. These measures have been calculated on a basis consistent with historical periods. See “Non-GAAP Measures” on pages 37 to 46 for further details on these measures and a reconciliation of non-GAAP to GAAP measures.

REVISED CAPITAL BUDGET

In an effort to maintain its strong balance sheet and manage inflationary pressures, the Company has updated its annual 2023 capital budget to include the reallocation of development and exploration expenditures across its operations and investments in projects. As a result, the Company has reduced its planned 2023 capital investments of $187.8 million by 26% to $139.7 million consisting of $64.3 million of sustaining investments and $75.4 million of expansionary investments. Furthermore, the Company plans to invest approximately $54.4 million of the revised capital budget in the second half of 2023.

The revised 2023 annual budget includes total capital investments of $74.4 million on underground development, $29.7 million towards property, plant and equipment, $29.2 million on exploration and $6.5 million towards efficiency and corporate projects.

Revised 2023 Capital Budget ($millions)SustainingExpansionaryTotal
Underground Development$39.9$34.5$74.4
Exploration—29.229.2
Property, Plant and Equipment22.96.729.7
Corporate Projects1.55.06.5
Total*$64.3$75.4$139.7
*Certain amounts shown may not add exactly to the total amount due to rounding differences.

In the first half of 2023, the Company completed 19,649 metres of underground development and 78,973 metres of exploration drilling. Under the revised 2023 budget, the Company is now planning to complete a total of approximately 34,400 metres of underground development in 2023, representing a 15% decrease compared to the original guidance of 40,700 metres. In addition, the Company is now planning to complete a total of approximately 162,300 metres of exploration drilling in 2023, representing a 34% decrease compared to the original guidance of 245,350 metres. The decrease in exploration drilling metres is partly due to the re-prioritization of exploration targets at Jerritt Canyon as the exploration program is being redefined, and lower development metres at some of our Mexican operations.







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OVERVIEW OF OPERATING RESULTS

Selected Production Results for the Past Eight Quarters
202320222021
PRODUCTION HIGHLIGHTS
Q2(2)
Q1(2)
Q4Q3Q2Q1Q4Q3
Ore processed/tonnes milled
San Dimas227,065 219,367 210,108 185,126 197,102 195,300 206,738 214,205 
Santa Elena213,878 208,821 207,188 214,387 228,487 201,911 224,459 234,862 
La Encantada260,986 271,278 254,766 255,945 264,555 249,906 268,239 263,645 
Jerritt Canyon31,240 146,403 179,502 181,056 213,647 230,001 256,374 230,415 
Consolidated733,170 845,868 851,564 836,514 903,791 877,118 955,810 943,126 
Silver equivalent ounces produced
San Dimas3,372,418 3,296,367 3,054,098 3,776,124 3,046,664 3,080,940 4,015,346 3,422,032 
Santa Elena1,788,596 2,105,336 2,302,904 2,733,761 2,241,763 1,868,787 1,955,550 1,061,657 
La Encantada806,789 843,951 813,649 788,872 871,365 651,875 768,796 913,481 
Jerritt Canyon353,168 1,381,452 1,388,140 1,467,435 1,546,143 1,620,400 1,821,331 1,922,270 
Consolidated6,320,971 7,627,105 7,558,791 8,766,192 7,705,935 7,222,002 8,561,023 7,319,441 
Silver ounces produced
San Dimas1,690,831 1,602,483 1,392,506 1,649,002 1,527,465 1,632,117 2,174,353 1,888,371 
Santa Elena142,037 104,129 199,388 308,070 384,953 337,201 426,870 508,641 
La Encantada800,543 836,448 804,802 779,028 863,510 644,009 757,586 905,074 
Consolidated2,633,411 2,543,059 2,396,696 2,736,100 2,775,928 2,613,327 3,358,809 3,302,086 
Gold ounces produced
San Dimas20,509 20,124 20,257 23,675 18,354 18,528 23,795 20,767 
Santa Elena20,073 24,039 25,830 26,989 22,309 19,556 19,810 7,498 
Jerritt Canyon4,364 16,341 16,845 16,299 18,632 20,707 23,660 26,145 
Consolidated44,946 60,504 62,932 66,963 59,295 58,791 67,265 54,410 
Cash cost per Ounce(1)
San Dimas (per AgEq Ounce)$12.07 $10.86 $11.54 $8.25 $10.41 $9.41 $7.98 $8.29 
Santa Elena (per AgEq Ounce)$14.45 $11.93 $11.20 $10.37 $12.34 $12.96 $11.56 $17.09 
La Encantada (per AgEq Ounce)$16.90 $15.48 $15.48 $15.55 $14.09 $16.41 $14.51 $12.25 
Jerritt Canyon (per Au Ounce)$4,181 $2,540 $2,519 $2,767 $1,989 $2,120 $1,674 $1,735 
Consolidated (per AgEq Ounce)$15.58 $15.16 $15.36 $13.34 $14.12 $14.94 $12.32 $14.09 
All-in sustaining cost per Ounce(1)
San Dimas (per AgEq Ounce)$15.89 $14.67 $16.79 $10.97 $14.97 $12.98 $11.29 $11.58 
Santa Elena (per AgEq Ounce)$18.00 $15.18 $12.75 $12.29 $15.34 $16.31 $14.02 $21.10 
La Encantada (per AgEq Ounce)$19.83 $18.64 $19.39 $18.61 $16.65 $19.63 $19.41 $15.28 
Jerritt Canyon (per Au Ounce)$4,205 $3,055 $2,865 $3,317 $2,429 $2,488 $2,077 $2,286 
Consolidated (per AgEq Ounce)$21.52 $20.90 $20.69 $17.83 $19.91 $20.87 $17.26 $19.93 
Production cost per tonne
San Dimas$173.62 $157.39 $162.68 $161.41 $155.09 $143.66 $146.30 $128.67 
Santa Elena$109.88 $108.74 $114.29 $124.94 $109.50 $111.36 $93.78 $75.76 
La Encantada$49.91 $46.27 $47.69 $46.29 $44.58 $41.43 $39.70 $41.08 
Jerritt Canyon$577.83 $278.57 $233.39 $245.66 $169.16 $187.15 $151.23 $192.17 
Consolidated$128.21 $130.71 $131.41 $135.07 $114.55 $118.51 $105.37 $106.52 
1) These measures do not have a standardized meaning under the Company's financial reporting framework and the methods used by the Company to calculate these measures may differ from methods used by other companies with similar descriptions. See “Non-GAAP Measures” on pages 37 to 46 for further details on these measures and a reconciliation of non-GAAP to GAAP measures.
2) At Jerritt Canyon, the Company incurred costs related to mining activities for only 79 days during the first quarter. Jerritt Canyon production during the second quarter comprised of processing most of its remaining ore stockpiles and work-in-process ("WIP") inventory throughout April and May. Refer to Jerritt Canyon operational highlights for further details.
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Operating Results – Consolidated Operations
CONSOLIDATED2023-Q22023-Q12023-YTD2022-YTD Change
Q2 vs Q1		 Change
'23 vs '22
Ore processed/tonnes milled733,170845,8681,579,0381,780,909(13 %)(11 %)
Production
Silver ounces produced2,633,4112,543,0595,176,4705,389,2554 %(4 %)
Gold ounces produced 45,02260,594105,616118,282(26 %)(11 %)
Silver equivalent ounces produced6,320,9717,627,10513,948,07614,927,937(17 %)(7 %)
Cost
Cash cost per AgEq Ounce$15.58$15.16$15.35$14.523 %6 %
All-in sustaining costs per AgEq Ounce$21.52$20.90$21.17$20.383 %4 %
Total production cost per tonne$128.21$130.71$129.55$116.50(2 %)11 %
Underground development (m)8,68710,96219,64924,557(21 %)(20 %)
Exploration drilling (m)42,28536,68878,973151,66915 %(48 %)

Production
Total production in the second quarter was 6.3 million AgEq ounces consisting of 2.6 million ounces of silver and 45,022 ounces of gold, representing a 4% increase and 26% decrease, respectively, compared to the previous quarter. Silver production increased over the prior quarter primarily due to higher tonnes processed at San Dimas and slightly higher silver grades and recoveries at Santa Elena. Gold production in Mexico decreased 8% as lower gold grades were processed at Santa Elena.

Total ore processed amounted to 733,170 tonnes during the quarter, representing a 13% decrease compared to the prior quarter, driven by the suspension of processing activities at Jerritt Canyon.

Consolidated silver and gold grades in the quarter averaged 133 g/t and 2.03 g/t, respectively, compared to 113 g/t and 2.46 g/t, respectively, in the previous quarter. The increase in consolidated silver grades were primarily due to higher grades at San Dimas and Santa Elena. The decrease in gold grades were due to lower grades at the Santa Elena and San Dimas mine.

Consolidated silver and gold recoveries averaged 84% and 94%, respectively, during the quarter compared to silver and gold recoveries of 83% and 91%, respectively, in the prior quarter. The increase in recoveries at Santa Elena was driven by the completion of the Santa Elena dual-circuit plant which achieved record quarterly recovery rates.

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Cash Cost and All-In Sustaining Cost per Ounce

Cash cost per AgEq ounce for the quarter was $15.58 per ounce, compared to $15.16 per ounce in the previous quarter. The increase in cash costs per AgEq ounce was primarily attributable to lower production at Jerritt Canyon which was temporarily suspended as well as a strong Mexican Peso against the U.S. dollar which averaged 5% higher compared to the previous quarter.

Excluding Jerritt Canyon, cash costs for the three Mexican operations were $13.44 per AgEq ounce compared to $11.85 per AgEq ounce in the previous quarter. There was a decrease in AgEq production at Santa Elena and La Encantada due to processing lower grade gold at Santa Elena and lower throughput rates and water availability at La Encantada resulting from drought conditions in the area during the quarter, which was partially offset by an increase in AgEq production at San Dimas. In the second half of 2023, the Company expects cash costs to decrease and be within the range of $12.23 to $12.89 per AgEq ounce.

All-in Sustaining Cost per AgEq ounce in the second quarter was $21.52 per ounce compared to $20.90 per ounce in the previous quarter. The increase in AISC per AgEq ounce was primarily attributed to the stronger Mexican Peso resulting in higher cash costs along with an increase in worker participation costs during the quarter. In the second half of 2023, the Company anticipates AISC to be within a range of $17.69 to $18.92 per AgEq ounce following the temporary suspension of Jerritt Canyon which had significantly higher AISC.

Management has developed a series of cost reduction initiatives across the organization aimed at improving efficiencies, lowering production costs, capital spending, care and maintenance holding costs and corporate G&A costs while also increasing production which includes:

•Renegotiating certain contracts and reducing the use of external consultants;
•Restructuring to optimize workforce and reduce labour costs;
•Optimizing use of reagent consumption;
•Optimize mobile fleet and plant maintenance programs;
•Efficiently manage energy costs by reducing plant operations during peak rates;
•Improving dilution controls at San Dimas and prioritizing long hole stoping of the Jessica and Regina veins which is expected to improve ore grade and production and continue developing the Perez vein; and
•Advancing mining at La Encantada towards the Ojuelas and Beca-Zone orebodies to extract higher-grade ores.

Development and Exploration
During the quarter, the Company completed 8,687 metres of underground development and 42,285 metres of exploration drilling, compared to 10,962 metres and 36,688 metres, respectively, in the previous quarter. Throughout the quarter, up to 19 drill rigs were active consisting of eight rigs at San Dimas, six rigs at Santa Elena, two rigs at La Encantada, and three rigs at Jerritt Canyon. Please refer to the Company's press release dated July 18, 2023, where the Company reported high-grade exploration results at the San Dimas, Santa Elena and the Jerritt Canyon mines.

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San Dimas Silver/Gold Mine, Durango, México

The San Dimas Silver/Gold Mine is located approximately 130 km northwest of Durango, Durango State, Mexico and consists of 71,868 hectares of mining claims located in the states of Durango and Sinaloa, Mexico. San Dimas is one of the country’s most prominent silver and gold mines and the largest producing underground mine in the state of Durango with over 250 years of operating history. The San Dimas operating plan involves processing ore from several underground mining areas with a 2,500 tpd capacity milling operation which produces silver/gold doré bars. The mine is accessible via a 40-minute flight from the Durango International Airport to the private airstrip in the town of Tayoltita, or by improved roadway. The Company owns 100% of the San Dimas mine.
San Dimas2023-Q22023-Q12023-YTD2022-YTD Change
Q2 vs Q1		 Change
'23 vs '22
Total ore processed/tonnes milled227,065219,367446,432392,4024 %14 %
Average silver grade (g/t)2452412432692 %(10 %)
Average gold grade (g/t)2.922.982.953.05(2 %)(3 %)
Silver recovery (%)95 %94 %94 %93 %1 %1 %
Gold recovery (%)96 %96 %96 %96 %0 %0 %
Production
Silver ounces produced1,690,8311,602,4833,293,3133,159,5826 %4 %
Gold ounces produced20,50920,12440,63336,8822 %10 %
Silver equivalent ounces produced3,372,4183,296,3676,668,7856,127,6042 %9 %
Cost
Cash cost per AgEq Ounce$12.07$10.86$11.47$9.9011 %16 %
All-In sustaining costs per AgEq Ounce$15.89$14.67$15.29$13.978 %9 %
Total production cost per tonne$173.62$157.39$165.64$149.4010 %11 %
Underground development (m)4,8954,6649,55911,8615 %(19 %)
Exploration drilling (m)16,58814,14530,73341,70017 %(26 %)

During the second quarter, San Dimas produced 3,372,418 silver equivalent ounces consisting of 1,690,831 ounces of silver and 20,509 ounces of gold. Silver and gold production increased 6% and 2%, respectively, compared to the prior quarter primarily due to a 4% increase in tonnes processed.

The mill processed a total of 227,065 tonnes of ore with average silver and gold grades of 245 g/t and 2.92 g/t, respectively, compared to 219,367 tonnes milled with average silver and gold grades of 241 g/t and 2.98 g/t, respectively, in the previous quarter.

Silver and gold recoveries averaged 95% and 96%, respectively, during the quarter which were comparable to the prior quarter.

The Central Block and Sinaloa Graben areas contributed approximately 75% and 25%, respectively, of the total production during the quarter.

In the second quarter, cash cost per AgEq ounce was $12.07 per ounce compared to $10.86 per ounce in the prior quarter. The increase in cash costs during the quarter was primarily due to an increase in direct production costs due to a stronger Mexican Peso against the U.S. dollar which averaged 5% higher compared to the previous quarter along with higher worker participation costs. This was offset by the 2% increase in AgEq ounces produced. The Company continues to implement cost saving programs and review efficiency improvement opportunities to offset this foreign exchange impact.

AISC per AgEq ounce for the quarter was $15.89 per ounce compared to $14.67 per ounce in the prior quarter. The increase was primarily due to higher cash costs along with an increase in worker participation costs in the second quarter.

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The San Dimas mine is subject to a gold and silver streaming agreement with Wheaton Precious Metals Corp. ("Wheaton" or "WPM") which entitles Wheaton to receive 25% of the gold equivalent production (based on a fixed exchange ratio of 70 silver ounces to 1 gold ounce) at San Dimas in exchange for ongoing payments equal to the lesser of $600 (subject to a 1% annual inflation adjustment commencing in May 2019) and the prevailing market price, for each gold ounce delivered. Should the average gold to silver ratio over a six-month period exceed 90:1 or fall below 50:1, the fixed exchange ratio would be increased to 90:1 or decreased to 50:1, respectively. The fixed gold to silver exchange ratio as of June 30, 2023, was 70:1. During the three and six months ended June 30, 2023, the Company delivered 11,354 and 22,005 ounces (2022 - 10,633 and 20,703 ounces) of gold to WPM at $628 and $626 per ounce (2022 - $624 and $621 per ounce).

A total of 4,895 metres of underground development was completed in the second quarter, compared to 4,664 metres in the prior quarter. During the second quarter, up to eight underground drill rigs were active on the property and completed 16,588 metres of exploration drilling compared to 14,145 metres in the prior quarter.










































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Santa Elena Silver/Gold Mine, Sonora, México

The Santa Elena Silver/Gold Mine is located approximately 150 kilometres northeast of the city of Hermosillo, Sonora, Mexico. The operating plan for Santa Elena involves the processing of ore in a 3,000 tpd cyanidation circuit from a combination of underground reserves. Santa Elena consists of a central processing plant that can receive ore from two separate underground mining operations, Santa Elena and Ermitaño. The Company owns 100% of the Santa Elena Silver/Gold Mine including mining concessions totaling over 102,244 hectares.
SANTA ELENA2023-Q22023-Q12023-YTD2022-YTDChange
Q2 vs Q1		 Change
'23 vs '22
Total ore processed/tonnes milled213,878208,821422,699430,3982 %(2 %)
Average silver grade (g/t)3931356826 %(49 %)
Average gold grade (g/t)3.124.003.553.22(22 %)10 %
Silver recovery (%)52 %50 %51 %77 %4 %(34 %)
Gold recovery (%)94 %90 %91 %94 %4 %(3 %)
Production
Silver ounces produced142,037104,129246,166722,15436 %(66 %)
Gold ounces produced20,07324,03944,11241,865(16 %)5 %
Silver equivalent ounces produced1,788,5962,105,3363,893,9324,110,550(15 %)(5 %)
Cost
Cash cost per AgEq Ounce$14.45$11.93$13.09$12.6221 %4 %
All-In sustaining costs per AgEq Ounce$18.00$15.18$16.48$15.7819 %4 %
Total production cost per tonne$109.88$108.74$109.31$110.371 %(1 %)
Underground development (m)3,0422,6235,6647,42416 %(24 %)
Exploration drilling (m)16,37314,49930,87232,32013 %(4 %)

During the second quarter, Santa Elena produced 1,788,596 AgEq ounces consisting of 142,037 ounces of silver and 20,073 ounces of gold. Total production decreased 15% primarily due to processing lower gold grades at the Santa Elena plant when compared to the prior quarter.

The mill processed 213,878 tonnes of ore during the quarter from Ermitaño containing average silver and gold head grades of 39 g/t and 3.12 g/t, respectively.

Silver and gold recoveries from Ermitaño reached new quarterly records during the second quarter averaging 52% and 94%, respectively, compared to 50% and 90%, respectively, in the prior quarter. The increased recoveries are the result of the robust operational performance of the new 3,000 tpd filter press and dual-circuit plant. The new tailing filter press combined with additional leaching and settling capacity allowed the plant to reduce the grind size thus liberating more Au and Ag which drove recovery rates up.
Cash cost per AgEq ounce in the second quarter was $14.45 per ounce compared to $11.93 per ounce in the previous quarter. The increase in cash cost was primarily attributed to lower Au grades resulting in a 15% decrease in AgEq ounces produced compared to the previous quarter. Additionally, the Company incurred higher maintenance costs on long hole drilling equipment in addition to the negative impact of a stronger Mexican peso.

AISC per AgEq ounce for the quarter was $18.00 per ounce compared to $15.18 per ounce in the prior quarter. The increase in AISC was primarily driven by the increase in cash costs per AgEq ounce, a stronger Mexican Peso, along with higher sustaining development costs.

The Santa Elena mine is subject to a gold streaming agreement with Sandstorm Gold Ltd. (“Sandstorm”), which requires the Company to sell 20% of its gold production over the life of mine from its leach pad and a designated area of its underground operations at the Santa Elena mine. The selling price to Sandstorm is the lesser of the prevailing market price or $450 per
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ounce, subject to a 1% annual inflation. During the three and six months ended June 30, 2023, the Company settled 210 and 1,066 ounces (2022 - 864 and 1,484 ounces) of gold to Sandstorm at an average price of $474 and $473 per ounce (2022 - $473 and $471 per ounce).

Orogen Royalties Inc., formerly Evrim Resource Corp., retains a 2% net smelter return ("NSR") royalty from the sale of mineral products extracted from the Ermitaño mining concessions. In addition, there is an underlying NSR royalty where Osisko Gold Royalties Ltd. retains a 2% NSR from the sale of mineral products extracted from the Ermitaño mining concessions. For the three and six months ended June 30, 2023, the Company has incurred $1.7 million and $3.6 million (June 30, 2022 - $1.3 million and $2.6 million) in NSR payments from the production of Ermitaño ores.

In the second quarter, Santa Elena completed a total of 3,042 metres of underground development, compared to 2,623 metres in the previous quarter. Up to six drill rigs consisting of four surface rigs and two underground rigs completed 16,373 metres of exploration drilling compared to 14,499 metres in the prior quarter.
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La Encantada Silver Mine, Coahuila, México

The La Encantada Silver Mine is an underground mine located in the northern México State of Coahuila, 708 kilometres northeast of Torreon. La Encantada has 4,076 hectares of mineral concessions and surface land ownership of 1,343 hectares. La Encantada also has a 4,000 tpd cyanidation plant, a camp with 120 houses as well as administrative offices, laboratory, general store, hospital, airstrip and all the necessary infrastructure required for such an operation. The mine is accessible via a two-hour flight from the Durango International Airport to the mine’s private airstrip, or via an improved road from the closest city, Muzquiz, Coahuila State, which is 225 kilometres away. The Company owns 100% of the La Encantada Silver Mine.
LA ENCANTADA2023-Q22023-Q12023-YTD2022-YTDChange
Q2 vs Q1		 Change
'23 vs '22
Ore processed/tonnes milled260,986271,278532,264514,462(4 %)3 %
Average silver grade (g/t)127132130125(4 %)4 %
Silver recovery (%)75 %72 %74 %73 %4 %1 %
Production
Silver ounces produced800,543836,4481,636,9911,507,519(4 %)9 %
Gold ounces produced 7689166196(15 %)(15 %)
Silver equivalent ounces produced806,789843,9511,650,7401,523,240(4 %)8 %
Cost
Cash cost per AgEq Ounce$16.90$15.48$16.18$15.089 %7 %
All-In sustaining costs per AgEq Ounce$19.83$18.64$19.22$17.926 %7 %
Total production cost per tonne$49.91$46.27$48.05$43.058 %12 %
Underground development (m)7508341,5841,101(10 %)44 %
Exploration drilling (m)1,9501,8633,8125,2255% (27%)

During the quarter, La Encantada produced 800,543 silver ounces compared to 836,448 silver ounces in the previous quarter, representing a 4% decrease in production. The lower production was mostly due to limited water availability caused by extended drought conditions and a main well failure in the area which limited plant and processing rates. The Company has implemented water conservation measures and has engaged a geophysical consultant to help determine pilot well drill targets to provide additional water sources; the Company expects these conditions to be temporary.

The mill processed a total of 260,986 tonnes of ore with an average silver grade and recovery during the quarter of 127 g/t and 75%, respectively, compared to 271,278 tonnes, 132 g/t and 72%, respectively, in the previous quarter. Stope production from the new Beca Zone began in the quarter and contributed 46,849 tonnes with average silver grades of 166 g/t.

Cash cost per AgEq ounce for the quarter was $16.90 per ounce compared to $15.48 per ounce in the prior quarter. The increase is primarily due to the 4% decrease in AgEq ounces produced compared to the prior quarter, along with a stronger Mexican peso. AISC per AgEq ounce for the quarter was $19.83 per ounce compared to $18.64 per ounce in the previous quarter. The 6% increase in AISC per AgEq ounce was primarily due to the increase in cash costs.

In 2022, the Company sold a portfolio of its existing royalty interests to Metalla Royalty and Streaming Limited. Under the terms of the agreement, the Company is required to pay a 100% gross value royalty on the first 1,000 ounces of gold produced annually from the La Encantada property. For the three months ended June 30, 2023, the Company has incurred $0.1 and $0.2 million (June 30, 2022 - $nil) in royalty payments from gold production at La Encantada.

During the quarter, up to two underground rigs completed 1,950 metres of drilling compared to 1,863 metres in the previous quarter. A total of 750 metres of underground development was completed in the second quarter compared to 834 metres in the prior quarter. Exploration drilling at La Encantada was temporarily suspended in the quarter as a water conservation measure.

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Jerritt Canyon Gold Mine, Nevada, United States
The Jerritt Canyon Gold Mine is an underground mining complex located in northern Nevada, United States. Jerritt Canyon was discovered in 1972 and has been in production since 1981 having produced over 9.5 million ounces of gold over its 40-year production history. The operation, which was purchased by the Company on April 30, 2021, has one of only three permitted gold processing plants in Nevada that uses roasting in its treatment of ore. This processing plant has a capacity of 4,000 tonnes per day (“tpd”). On March 20, 2023, the Company temporarily suspended all mining activities at Jerritt Canyon to reduce overall costs and refocus mining and exploration plans. The property consists of a large, underexplored land package consisting of 30,821 hectares (119 square miles). Jerritt Canyon is 100% owned by the Company.
Jerritt Canyon2023-Q22023-Q12023-YTD2022-YTDChange
Q2 vs Q1		 Change
'23 vs '22
Ore processed/tonnes milled31,240146,403177,643443,648(79 %)(60 %)
Average gold grade (g/t)4.904.034.193.4021 %23 %
Gold recovery (%)89 %86 %87 %81 %3 %7 %
Production
Gold ounces produced4,36416,34120,70539,339(73 %)(47 %)
Silver equivalent ounces produced353,1681,381,4521,734,6193,166,543(74 %)(45 %)
Cost
Cash cost per Au Ounce$4,181$2,540$2,886$2,05865 %40 %
All-In sustaining costs per Au Ounce$4,205$3,055$3,297$2,46038 %34 %
Total production cost per tonne$577.83$278.57$331.19$178.49107 %86 %
Underground development (m)— 2,8412,8414,172(100 %)(32 %)
Exploration drilling (m)7,3756,18113,55672,42319 %(81 %)

During its partial quarter, Jerritt Canyon produced 4,364 ounces of gold by processing most of its remaining ore stockpiles and WIP inventory throughout April and May. As of April 24, 2023, all activities at the Jerritt Canyon processing plant were successfully suspended following the Company's previously announced temporary suspension of mining activities on March 20, 2023.

The mill processed a total of 31,240 tonnes with an average gold grade and recovery of 4.90 g/t and 89%, respectively, compared to 146,403 tonnes with an average grade and recovery of 4.03 g/t and 86%, respectively, in the prior quarter.

Cash cost per Au ounce for the quarter was $4,181 per ounce, an increase of 65% compared to $2,540 in the prior quarter. This increase in cash cost per ounce was primarily due to the 73% decrease in ounces produced as a result of the partial quarter of production. AISC per Au ounce for the quarter was $4,205 per ounce, an increase of 38%, compared to $3,055 per ounce in the prior quarter, primarily due to higher cash costs and suspension of operations.

Standby costs during the quarter were $8.4 million, compared to $5.1 million in the prior quarter. These costs were primarily related to one time severance and demobilization costs due to the temporary suspension of mining and processing activities. All mining contractors are now off site with processing activities suspended. The Company continues to advance exploration efforts at Jerritt Canyon following the positive drill results highlighting the exploration potential of the project.

During the quarter, up to three underground drill rigs completed a total of 7,375 exploration drill metres compared to 6,181 metres in the prior quarter.





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La Parrilla Silver Mine, Durango, México

The La Parrilla Silver Mine, located approximately 65 kilometres southeast of the city of Durango in Durango State, México, is a complex of underground operations consisting of the Rosarios, La Blanca and San Marcos mines which are inter-connected through underground workings, and the Vacas and Quebradillas mines which are connected via above-ground gravel roads. The total mining concessions consist of 69,478 hectares. The Company owns 60 hectares, and leases an additional 107 hectares of surface rights, for a total of 167 hectares of surface rights. La Parrilla includes a 2,000 tpd sequential processing plant consisting of a 1,000 tpd cyanidation circuit and a 1,000 tpd flotation circuit, metallurgical pilot plant, buildings, offices and associated infrastructure. The Company owns 100% of the La Parrilla Silver Mine.

Operations at the La Parrilla mine have been placed on care and maintenance since September 2019.

On December 7, 2022, the Company announced that it had entered into an asset purchase agreement with Golden Tag Resources Ltd. ("Golden Tag") to sell the La Parrilla Silver Mine for total consideration of up to $33.5 million, consisting of 143,673,684 Golden Tag shares at a deemed price of 0.16 per share, having an aggregate value as of the date of the sale agreement of $20 million, and up to $13.5 million in contingent consideration, in the form of three milestone payments payable in either cash or shares in Golden Tag. The Company has also agreed to purchase $2.7 million of Golden Tag securities in a future Golden Tag equity financing of up to CAD $7.2 million. Closing the transaction is pending and remains subject to customary closing conditions, including completion of such financing and receipt of all necessary regulatory approvals.

At December 31, 2022, the sale was considered highly probable; therefore, the assets of La Parrilla were classified as assets held for sale and presented separately under current assets. Immediately prior to the classification to assets held for sale, the carrying amount of La Parrilla was remeasured to its recoverable amount, being its FVLCD, based on the $20 million initial payment, and the first milestone payment of $2.7 million. As of June 30, 2023, the sale continued to be considered highly probable; therefore, the assets and liabilities were presented as assets and liabilities held for sale and presented separately under current assets and current liabilities.

During the three months ended June 30, 2023, the Company recorded an additional write down on asset held-for-sale related to the La Parrilla assets of $7.2 million, based on the change in value of Golden Tag shares at the end of the reporting period. The recoverable amount of La Parrilla, being its FVLCD, was $14.9 million, net of estimated transaction costs, based on the expected proceeds from the sale.

Del Toro Silver Mine, Zacatecas, México

The Del Toro Silver Mine is located 60 kilometres to the southeast of the Company’s La Parrilla mine and consists of 3,815 hectares of mining concessions and 219 hectares of surface rights. The Del Toro operation represents the consolidation of three historical silver mines, the Perseverancia, San Juan and Dolores mines, which are approximately one and three kilometres apart, respectively. Del Toro includes a 2,000 tpd flotation circuit and a 2,000 tpd cyanidation circuit. First Majestic owns 100% of the Del Toro Silver Mine.

Operations at the Del Toro mine has been placed on care and maintenance since January 2020.

San Martin Silver Mine, Jalisco, México

The San Martin Silver Mine is an underground mine located near the town of San Martin de Bolaños in the Bolaños river valley, in the northern portion of the State of Jalisco, México. San Martin has 33 contiguous mining concessions in the San Martin de Bolaños mining district covering mineral rights for 12,795 hectares, plus an application of a new mining concession covering 24,723 hectares to be granted. In addition, the mine includes 160 hectares of surface land where the processing plant, camp, office facilities, maintenance shops, and tailings dams are located, and an additional 640 hectares of surface rights. The 1,300 tpd mill and processing plant consists of crushing, grinding and conventional cyanidation by agitation in tanks and a Merrill-Crowe doré production system. The mine can be accessed via small plane, 150 kilometres from Durango, or 250 kilometres by paved road north of Guadalajara, Jalisco. The San Martin Silver Mine is 100% owned by the Company.

In July 2019, the Company suspended all mining and processing activities at the San Martin operation due to growing insecurity in the area. Increasing violence and safety concerns resulted in the Company removing all of its remaining employees from the area in 2021 and the mine and plant have been occupied and are currently under the de facto control of an organized criminal group. The Company has repeatedly requested all applicable governmental authorities to take
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action to secure the area but, to date, the Mexican government has failed to take any such action and the Company's own efforts have been unsuccessful. The Company is continuing its efforts to work with governmental authorities to take action to secure the area, although it is not known when that might, if ever, occur.

La Guitarra Silver Mine, México State, México

The La Guitarra Silver Mine is located in the Temascaltepec Mining District in the State of México, México, approximately 130 kilometres southwest from México City. The La Guitarra mine covers 39,714 hectares of mining claims and has a 500 tpd flotation processing plant, buildings and related infrastructure.

The La Guitarra milling and mining operations were placed under care and maintenance effective August 3, 2018.

On May 24, 2022, the Company announced that it entered into a share purchase agreement with Sierra Madre Gold and Silver Ltd. ("Sierra Madre"), to sell the Company's subsidiary La Guitarra Compañia Minera S.A. de C.V. ("La Guitarra"), which owns the La Guitarra Silver Mine for total consideration of approximately $35 million, consisting of 69,063,076 Sierra Madre shares at a deemed price of $0.51 per share. The closing of the transaction was subject to customary closing conditions including approval of the Sierra Madre shareholders (which was obtained in December 2022), regulatory approval and that Sierra Madre raise a minimum of $7.7 million (CAD $10 million) in a private placement concurrent or prior to the sale.

On June 30, 2022, the sale was considered highly probable; therefore, the assets and liabilities of La Guitarra were classified as assets and liabilities held for sale and presented separately under current assets and current liabilities, respectively. Immediately prior to the classification to assets and liabilities held for sale, the carrying amount of La Guitarra was remeasured to its recoverable amount, being its FVLCD, based on the expected proceeds from the sale. At December 31, 2022, the sale continued to be considered highly probable; therefore the assets and liabilities were presented as assets and liabilities held for sale and presented separately under current assets and current liabilities. During 2022, the Company recorded a reversal of impairment loss related to the La Guitarra assets of $12.3 million based on the recoverable amount implied by the share purchase agreement.

On March 29, 2023, the Company completed the sale of La Guitarra to Sierra Madre and received total consideration of $33.2 million net of transaction costs (paid in shares of Sierra Madre), before working capital adjustments. Based on the carrying value of the asset at the time of disposal of $34.3 million, and the working capital adjustment of $0.2 million, the Company has recorded a loss on disposition of $1.4 million. The Company began accounting for the shares received from Sierra Madre as an equity security at FVTOCI.

Springpole Silver Stream, Ontario, Canada

In July 2020, the Company completed an agreement with First Mining Gold Corp. (“First Mining”) to purchase 50% of the life of mine payable silver produced from the Springpole Gold Project ("Springpole Silver Stream"), a development stage mining project located in Ontario, Canada. First Majestic agreed to pay First Mining consideration of $22.5 million in cash and shares, in three milestone payments, for the right to purchase silver at a price of 33% of the silver spot price per ounce, to a maximum of $7.50 per ounce (subject to annual inflation escalation of 2%, commencing at the start of the third anniversary of production). Commencing with its production of silver, First Mining must deliver 50% of the payable silver which it receives from the offtaker within five business days of the end of each quarter.

Transaction consideration paid and payable by First Majestic is summarized as follows:
•The first payment of $10.0 million, consisting of $2.5 million in cash and $7.5 million in First Majestic shares (805,698 common shares), was paid to First Mining on July 2, 2020;
•The second payment, consisting of $3.75 million in cash and $3.75 million in First Majestic shares (287,300 common shares), was paid on January 21, 2021 upon the completion and public announcement by First Mining of the results of a Pre-Feasibility Study for Springpole; and
•The third payment, consisting of $2.5 million in cash and $2.5 million in First Majestic shares (based on 20 days volume weighted average price), will be paid upon receipt by First Mining of a Federal or Provincial Environmental Assessment approval for Springpole, which has not yet been received.

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In connection with the agreement, First Mining also granted First Majestic 30 million common share purchase warrants, each of which will entitle the Company to purchase one common share of First Mining at CAD$0.40 over a period of five years. The fair value of the warrants was measured at $5.7 million using the Black-Scholes option pricing model.

First Mining shall have the right to repurchase 50% of the silver stream for $22.5 million at any time prior to the commencement of production at Springpole leaving the Company with a reduced silver stream of 25% of life of mine payable silver production.

Springpole is one of Canada’s largest, undeveloped gold projects with permitting underway. In January 2021, First Mining announced positive results of its Pre-Feasibility Study (“PFS”) which supports a 30,000 tonnes-per-day open pit mining operation over an 11-year mine life. First Mining announced resources of 24.3 million ounces of silver in the Indicated category and 1.4 million ounces of silver in the Inferred category, plus 4.6 million ounces of gold in the Indicated category and 0.3 million ounces of gold in the Inferred category.

The Springpole Project also includes large land holdings of 41,913 hectares which are fully encompassed under the silver streaming agreement.

First Mining is a related party with two independent board members who are also directors and/or officers of First Majestic.

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OVERVIEW OF FINANCIAL PERFORMANCE
For the quarters ended June 30, 2023 and 2022 (in thousands of dollars, except for per share amounts):
Second QuarterSecond Quarter
20232022Variance %
Revenues$146,692 $159,443 (8 %)(1)
Mine operating costs
Cost of sales104,607 113,619 (8 %)(2)
Cost of sales - standby costs8,360 — 100 %(2)
Depletion, depreciation and amortization32,587 34,212 (5 %)(3)
145,554 147,831 (2 %)
Mine operating earnings1,138 11,612 (90 %)
General and administrative expenses11,673 9,380 24 %(4)
Share-based payments3,320 2,986 11 %
Mine holding costs3,718 2,430 53 %
Reversal of Impairment— (7,585)(100 %)
Write down on assets held-for-sale7,229 — 100 %(5)
Foreign exchange (gain) loss (5,952)986 NM
Operating (loss) earnings(18,850)3,415 NM
Investment and other income (loss)3,644 (3,918)193 %(6)
Finance costs(7,326)(4,835)52 %(7)
Loss before income taxes(22,532)(5,338)NM
Current income tax expense5,348 25,450 (79 %)(8)
Deferred income tax (recovery) expense(10,346)53,262 (119 %)
Income tax (recovery) expense(4,998)78,712 106 %(8)
Net loss for the period($17,534)($84,050)79 %(9)
Loss per share (basic and diluted)($0.06)($0.32)81 %(9)

NM - Not meaningful

1.Revenues in the quarter decreased $12.8 million compared to the same quarter of the prior year primarily attributed to:
•a 12% decrease in the payable AgEq ounces sold compared to the same quarter of the prior year, which resulted in a decrease in revenues of $7.1 million. This was primarily due to a temporary suspension at Jerritt Canyon in the first quarter with production in the second quarter made up of processing the majority of its remaining ore stockpiles and work-in-process inventory throughout April and May.
Partially offset by:
•a 4% increase in the average realized silver price, which averaged $24.95 per ounce, compared to $23.93 per ounce during the same quarter of the prior year. This resulted in a $5.9 million increase in revenue compared to the second quarter of 2022.
2.Cost of sales in the quarter decreased $0.7 million compared to the same quarter of the prior year primarily due to:
•a $15.0 million decrease in labour, consumables, energy and maintenance costs during the quarter.
Partially offset by:
•an increase of $8.4 million in one time standby costs for the temporary suspension of mining and processing activities at Jerritt Canyon;
•a $2.9 million increase in change in inventory expense compared to the same quarter of 2022;
First Majestic Silver Corp. 2023 Second Quarter Report
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•a $0.9 million decrease in worker participation costs in Mexico; and
•a stronger Mexican Peso against the U.S. dollar, which averaged 12% higher compared to the same period of 2022.
3. Depletion, depreciation and amortization in the quarter decreased $1.6 million compared to the same quarter of the previous year, primarily as a result of:
•a decrease of $6.4 million related to lower depletion at Jerritt Canyon due to an 85% decrease in tonnes milled.
Partially offset by:
•an increase of $4.7 million related to depletion at the San Dimas, Santa Elena and La Encantada mines primarily due to an increase in production from San Dimas in the current quarter and an increase in depletable assets during the quarter following the reclassification from non-depletable to depletable mineral interest in the first quarter of 2023.
4. General and administrative expenses increased by $2.3 million compared to the same quarter of 2022, primarily due to higher severance costs during the quarter relating to restructuring efforts to optimize the workforce.
5. Write down on asset held-for-sale of $7.2 million in the second quarter of 2023 was related to La Parrilla as a result of mark to market movements in the value of shares receivable from Golden Tag Resources.
6. Investment and other income for the quarter increased by $7.6 million compared to the second quarter of the prior year, primarily due to additional interest income of $2.4 million, compared to a loss of $0.6 million in the same quarter of the prior year along with a gain on silver futures of $1.4 million during the quarter. Additionally, there was an unrealized loss on marketable securities of $0.2 million, compared to a loss of $3.3 million in the same quarter of the prior year.
7. Finance costs in the quarter increased by $2.5 million compared to the second quarter of the prior year primarily due to an increase in the accretion expense for decommissioning liabilities resulting from changes in the asset retirement obligations as well as an increase in interest expense as a result of an increase in rates along with amounts outstanding on the revolving credit facility during the quarter.
8. During the quarter, the Company recorded an income tax recovery of $5.0 million compared to an expense of $78.7 million in the second quarter of 2022. The decrease in income tax expense was primarily driven by the one time payment Corporación First Majestic S.A. de C.V. ("CFM") made of approximately $21.3 million and surrendering of certain tax loss carry forwards resulting in a non cash deferred tax expense of $53.3 million in the second quarter of 2022.
9. As a result of the foregoing, net loss for the quarter was $17.5 million (EPS of ($0.06)) compared to a net loss of $84.1 million (EPS of ($0.32)) in the same quarter of the prior year.



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For the years to date ended June 30, 2023 and 2022 (in thousands of dollars, except for per share amounts):
Year to DateYear to DateVariance %
2023202223 vs '22
Revenues$303,644 $316,281 (4 %)(1)
Mine operating costs
Cost of sales228,476 224,832 2 %(2)
Cost of sales - standby costs13,437 — 100 %(2)
Depletion, depreciation and amortization67,016 64,768 3 %(3)
308,929 289,600 7 %
Mine operating (loss) earnings (5,285)26,681 (120 %)
General and administrative20,121 19,662 2 %(4)
Share-based payments7,949 7,808 2 %(5)
Impairment (reversal) of non-current assets125,200 (7,585)NM(6)
Write down on assets held-for-sale7,229 — 100 %(7)
Mine holding costs7,507 5,595 34 %
Loss on divestitures1,378 — 100 %(8)
Foreign exchange (gain) loss (11,595)277 NM
Operating (loss) earnings (163,074)924 NM
Investment and other income (loss)6,869 (1,286)NM
Finance costs(12,949)(9,425)37 %
Loss before income taxes(169,154)(9,787)NM
Current income tax expense5,413 36,942 (85 %)
Deferred income tax (recovery) expense(56,373)30,036 NM(9)
Income tax (recovery) expense(50,960)66,978 (176 %)(9)
Net loss for the year($118,194)($76,765)(54 %)(10)
Loss per common share
     Basic and diluted($0.43)($0.29)(45 %)(10)

NM - Not meaningful
1.Revenues in the six months ended June 30, 2023 decreased $12.6 million or 4% compared to the previous year, primarily attributed to:
•$7.1 million decrease due to a 4% decrease in payable AgEq ounces sold compared to the prior year. This was mainly attributed to the suspension of Jerritt Canyon during the first quarter. Jerritt Canyon only contributed 79 full days of production during the first quarter, with production in the second quarter made up of processing the majority of its remaining ore stockpiles and work-in-process inventory through April and May; and
•$5.6 million decrease due to an 2% decrease in realized silver price per ounce sold, which averaged $23.32 compared to $23.82 in the prior year.
2.Cost of sales in the year increased $17.1 million or 2% compared to 2022 as a result of the following factors:
•one time standby costs of $13.4 million due to the temporary suspension of mining and processing activities at Jerritt Canyon; and
•a stronger Mexican Peso against the U.S. dollar, which averaged 10% higher compared to the same period of 2022.
Partially offset by:
•a $10.1 million decrease in consumables, materials, energy and other costs including insurance, lab work, and service costs, primarily due to the temporary suspension of operations at the Jerritt Canyon Mine.
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3.Depletion, depreciation and amortization in the year increased $2.2 million or 3% compared to the previous year primarily as a result of $11.3 million increase from the Mexican operations due to an increase in throughput as well as higher depreciation due to the addition of the dual circuit plant at Santa Elena.
Partially offset by:
•a $9.0 million decrease related to lower depletion at Jerritt Canyon as a result of placing the Jerritt Canyon Gold mine on temporary suspension.
4. General and administrative expense in the year increased $0.5 million or 2% compared to the prior year, primarily attributed to higher severance costs related to restructuring efforts to optimize the workforce during the year.
5. Share based payments in the year increased $0.1 million which is consistent with prior year.
6. Impairment of $125.2 million on the Jerritt Canyon mine due to the temporary suspension of mining operations was recorded during the year. This was compared to 2022 where the Company recorded a reversal of impairment of $7.6 million for La Guitarra based on its recoverable amount, being its fair value less cost of disposal.
7. Write down on asset held-for-sale increased by $7.2 million compared to the prior year as the Company recorded an additional impairment loss related to La Parrilla based on the change in value of Golden Tag shares at the end of the reporting period.
8. Loss on sale of mining interest for the year increased by $1.4 million compared to the prior year, following the sale of La Guitarra to Sierra Madre Gold and Silver Ltd. The sale was completed on March 29, 2023, and the Company received $33.2 million net of transaction costs, before working capital adjustments, representing the value of the Sierra Madre shares received. Based on the carrying value of the asset at the time of disposal of $34.3 million, and the working capital adjustment of $0.2 million, along with changes in the foreign exchange rate between the time the asset was classified as held-for-sale and the closing date, the Company has recorded a loss on disposition of $1.4 million.
9. During the six months ended June 30, 2023, the Company recorded an income tax recovery of $51.0 million, compared to an income tax expense of $67.0 million in 2022. The decrease in income tax expense was primarily driven by the one time payment CFM made of approximately $21.3 million and surrendering of certain tax loss carry forwards resulting in a non cash deferred tax expense of $53.3 million in the second quarter of 2022.
10. As a result of the foregoing, net loss for the six months ended June 30, 2023 was $118.2 million (EPS of ($0.43)), compared to the net loss of $76.8 million (EPS of ($0.29)) in the prior year.
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SUMMARY OF QUARTERLY RESULTS

The following table presents selected financial information for each of the most recent eight quarters:
202320222021
Selected Financial InformationQ2Q1Q4Q3Q2Q1Q4Q3
Revenue$146,692 $156,952 $148,189 $159,751 $159,443 $156,838 $204,876 $124,646 
Cost of sales$104,607 $123,868 $126,148 $120,707 $113,619 $111,213 $121,236 $92,006 
Depletion, depreciation and amortization$32,587 $34,429 $35,307 $35,707 $34,212 $30,556 $43,278 $29,122 
Mine operating earnings (loss)$1,138 ($6,423)($13,266)$3,337 $11,612 $15,069 $40,362 $3,518 
Net (loss) earnings after tax($17,534)($100,660)($16,819)($20,692)($84,050)$7,285 ($3,971)($18,406)
(Loss) earnings per share - basic($0.06)($0.37)($0.06)($0.08)($0.32)$0.03 ($0.02)($0.07)
(Loss) earnings per share - diluted($0.06)($0.37)($0.06)($0.08)($0.32)$0.03 ($0.02)($0.07)

During the second quarter of 2023, mine operating earnings were $1.1 million compared to a loss of $6.4 million in the previous quarter primarily due to lower cost of sales and depletion, depreciation and amortization. This was offset by additional one time standby costs for winding down activities at Jerritt Canyon. The net loss for the quarter was $17.5 million compared to the net loss of $100.7 million in the prior quarter primarily attributed to the impairment expense at Jerritt Canyon during the prior quarter.

LIQUIDITY, CAPITAL RESOURCES AND CONTRACTUAL OBLIGATIONS

Liquidity

As at June 30, 2023, the Company had cash and cash equivalents of $160.2 million, comprised primarily of cash held with reputable financial institutions and is invested in cash accounts and in highly liquid short-term investments with maturities of three months or less. With the exception of $1.6 million held in-trust for tax audits in Mexico, the Company's cash and cash equivalents are not exposed to liquidity risk and there are no restrictions on the ability of the Company to use these funds to meet its obligations.

Working capital as at June 30, 2023 was $237.2 million compared to $202.9 million at December 31, 2022. Total available liquidity at June 30, 2023 was $361.8 million, including working capital and $124.6 million of undrawn revolving credit facility.

The following table summarizes the Company's cash flow activity during the year:
 Three Months Ended June 30,Six Months Ended June 30,
 2023202220232022
Cash flow    
Cash generated by (used in) operating activities$20,379 ($13,253)$15,709 ($32,237)
Cash used in investing activities(37,545)(67,049)(89,842)(106,828)
Cash provided by financing activities71,299 11,401 79,729 23,553 
Increase (decrease) in cash and cash equivalents$54,133 ($68,901)$5,596 ($115,512)
Effect of exchange rate on cash and cash equivalents held in foreign currencies 1,326 (1,508)3,201 (22)
Cash and cash equivalent reclassified as held for sale— (4,671)— (4,671)
Cash and cash equivalents, beginning of the period104,776 192,801 151,438 237,926 
Cash and cash equivalents, end of period$160,235 $117,721 $160,235 $117,721 

The Company’s cash flows from operating, investing and financing activities during the six months ended June 30, 2023 are summarized as follows:

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•Cash generated by operating activities of $15.7 million, primarily due to:
•$48.7 million in cash flows from operating activities before movements in working capital and taxes;
net of:
•$20.1 million in income taxes paid during the period; and
•$13.0 million net change in non-cash working capital items during the period, including a $20.9 million increase in restricted cash, a $3.4 million increase in prepaid expenses, a $1.5 million decrease in income taxes payable and a $1.3 million decrease in trade payable, partially offset by a $3.3 million decrease in trade and other receivables, a $2.7 million decrease in value added tax ("VAT") receivables, a $5.0 million decrease in inventories.

•Cash used in investing activities of $89.8 million, primarily related to:
•$72.0 million spent on mine development and exploration activities;
•$14.8 million spent on purchase of property, plant and equipment; and
•$3.1 million spent on deposits on non-current assets.
•Cash provided by financing activities of $79.7 million, primarily consists of the following:
•$92.3 million of net proceeds from the issuance of shares through the ATM;
•$1.2 million of net proceeds from the exercise of stock options;
net of:
•$7.0 million for repayment of lease obligations;
•$3.1 million for the payment of dividends during the period; and
•$3.7 million payment of financing costs.

During the quarter ended June 30, 2023, the Company received $24.5 million (418.8 million MXN) related to value added tax filings. In connection with the Primero Empresa Minera, S.A. de C.V. ("PEM") tax ruling, the tax authority has frozen a PEM bank account with cumulative funds of $99.4 million as a guarantee against certain disputed tax assessments which are currently held within the Company's restricted cash accounts. This balance consists of VAT refunds that the Company has received which were previously withheld by the tax authority. The Company does not agree with Servicio de Administracion Tributaria's ("SAT") position and is challenging the freezing of the bank account through the relevant legal channels.

Current Restricted Cash includes $28.7 million related to an interest-bearing account with AIG (the "Commutation Account"). The Commutation Account principal plus interest earned on the principal is used to fund ongoing reclamation and mine closure obligations. The Company has elected to extinguish all rights under the policy releasing AIG from reclamation cost and financial assurance liabilities by replacing the policy with surety bonds on June 28, 2023. By releasing AIG from their liabilities they are required to return the remaining balance in the Jerritt Canyon Commutation Account. The NDEP and the USDA Forest Services ("USFS") have provided correspondence confirming their acceptance of the replacement surety bonds in the third quarter of 2023 therefore, the total of $28.7 million, has been re-classified to current restricted cash as of June 30, 2023. Upon receipt of these funds, the total current restricted cash balance of $28.7 million will be reclassified to cash and cash equivalents.

Capital Resources

The Company’s objective when managing capital is to maintain financial flexibility to continue as a going concern while optimizing growth and maximizing returns of investments from shareholders.

The Company monitors its capital structure and based on changes in operations and economic conditions, may from time to time adjust the structure by repurchasing shares, issuing new shares, issuing new debt or retiring existing debt. The Company prepares an annual budget and quarterly forecasts to facilitate the management of its capital requirements. The annual budget is approved by the Company’s Board of Directors.

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The Company is not subject to any externally imposed capital requirements with the exception of complying with banking covenants defined in its debt facilities. As at June 30, 2023 and December 31, 2022, the Company was fully in compliance with these covenants.

Contractual Obligations and Commitments

As at June 30, 2023, the Company’s contractual obligations and commitments are summarized as follows:
Contractual
Cash Flows		Less than
1 year		2 to 3
years		4 to 5
years		After 5 years
Trade and other payables$96,040 $96,040 $— $— $— 
Debt facilities259,744 3,104 26,209 230,431 — 
Lease liabilities44,274 16,772 22,260 4,347 895 
Other liabilities6,956 — — 6,956 — 
Purchase obligations and commitments4,157 4,157 — — — 
$411,171 $120,073 $48,469 $241,734 $895 

At June 30, 2023, the Company had a working capital of $237.2 million (December 2022 – $202.9 million) and total available liquidity of $361.8 million (December 2022 – $277.9 million), including $124.6 million (December 2022 - $75.0 million) of undrawn revolving credit facility.

The Company believes it has sufficient cash on hand, combined with cash flows from operations, to meet operating requirements as they arise for at least the next 12 months.

MANAGEMENT OF RISKS AND UNCERTAINTIES

The Company thoroughly examines the various financial instruments and risks to which it is exposed and assesses the impact and likelihood of those risks. These risks may include credit risk, liquidity risk, currency risk, commodity price risk, and interest rate risk. Where material, these risks are reviewed and monitored by the Board of Directors.

Credit Risk

Credit risk is the risk of financial loss if a customer or counterparty fails to meet its contractual obligations. The Company’s credit risk relates primarily to chartered banks, trade receivables in the ordinary course of business, value added taxes receivable and other receivables.

As at June 30, 2023, net VAT receivable was $42.2 million (December 31, 2022 - $44.9 million), of which $25.1 million (December 31, 2022 - $21.6 million) relates to Minera La Encantada S.A. de C.V. ("MLE") and $21.5 million (December 31, 2022 - $17.7 million) relates to PEM, offset by VAT payable balances.

The Company sells and receives payment upon delivery of its silver doré and by-products primarily through three international customers. All of the Company's customers have good ratings and payments of receivables are scheduled, routine and fully received within 60 days of submission; therefore, the balance of trade receivables owed to the Company
in the ordinary course of business is not significant.

The carrying amount of financial assets recorded in the condensed consolidated financial statements represents the Company’s maximum exposure to credit risk. With the exception to the above, the Company believes it is not exposed to significant credit risk.
Liquidity Risk

Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they arise. The Company manages liquidity risk by monitoring actual and projected cash flows and matching the maturity profile of financial assets and liabilities. Cash flow forecasting is performed regularly to ensure that there is sufficient capital in order to meet short-term business requirements, after taking into account cash flows from operations and our holdings of cash and cash equivalents.

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Currency Risk

The Company is exposed to foreign exchange risk primarily relating to financial instruments that are denominated in Canadian dollars or Mexican pesos, which would impact the Company’s net earnings or loss. To manage foreign exchange risk, the Company may occasionally enter into short-term foreign currency derivatives, such as forwards and options, to hedge its cash flows.

The sensitivity of the Company’s net earnings or loss and comprehensive income or loss due to changes in the exchange rates of the Canadian Dollar and the Mexican Peso against the U.S. Dollar is included in the table below:
 June 30, 2023
 Cash and cash equivalentsRestricted cashValue added taxes receivableOther financial assetsTrade and other payablesNet assets (liabilities) exposureEffect of +/- 10% change in currency
Canadian dollar$20,895 $— $— $1,968 ($4,864)$17,999 $1,800 
Mexican peso17,128 99,433 42,230 — (57,223)101,568 10,157 
 $38,023 $99,433 $42,230 $1,968 ($62,087)$119,567 $11,957 


Commodity Price Risk

The Company is exposed to commodity price risk on silver and gold, which have a direct and immediate impact on the value of its related financial instruments and net earnings. The Company’s revenues are directly dependent on commodity prices that have shown volatility and are beyond the Company’s control. The Company does not use long-term derivative instruments to hedge its commodity price risk to silver or gold.

The following table summarizes the Company’s exposure to commodity price risk and their impact on net earnings:
  June 30, 2023
 
 Effect of +/- 10% change in metal prices
 SilverGoldTotal
Metals in doré inventory$1,200 $445 $1,645 
 $1,200 $445 $1,645 

Political and Country Risk
First Majestic currently conducts foreign operations in México and the United States, and as such the Company’s operations are exposed to various levels of political and economic risks by factors outside of the Company’s control. These potential factors include, but are not limited to: royalty and tax increases or claims by governmental bodies, the conflict between Russia and Ukraine, expropriation or nationalization, foreign exchange controls, high rates of inflation, extreme fluctuations in foreign currency exchange rates, import and export tariffs and regulations, lawlessness, cancellation or renegotiation of contracts and environmental and permitting regulations, illegal mining operations by third parties on the Company's properties, labour unrest and surface access issues. The Company currently has no political risk insurance coverage against these risks.

The Company is unable to determine the impact of these risks on its future financial position or results of operations. Changes, if any, in mining or investment policies or shifts in political attitude in foreign countries may substantively affect the Company’s exploration, development and production activities.

Uncertainty in the Estimation of Mineral Resources and Mineral Reserves, and Metal Recovery
There is a degree of uncertainty attributable to the estimation of Mineral Resources and Mineral Reserves (as defined in the Canadian Institute of Mining's Estimation of Mineral Resources and Mineral Reserves Best Practice Guidelines. Until Mineral Reserves or Mineral Resources are actually mined, extracted and processed, the quantity of minerals and their grades must be considered estimates only. In addition, the quantity of Mineral Reserves and Mineral Resources may vary depending on, among other things, applicable metal prices, exchange rates assumptions used, underground stability conditions, the ability to maintain constant underground access to all working areas, geological variability, mining methods assumptions used and operating cost escalation. Any material change in the quantity of Mineral Reserves, Mineral Resources, grade or dimensions of the geological structures may affect the economic viability of some or all of the Company’s mineral properties and may
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have a material adverse effect on the Company's operational results and financial condition. Mineral Reserves on the Company’s properties have been estimated on the basis of economic factors at the time of calculation, including commodity prices and operating costs; variations in such factors may have an impact on the amount of the Company’s Mineral Reserves. In addition, there can be no assurance that metal recoveries in small scale laboratory tests will be replicated in larger scale tests under on-site conditions or during production, or that the existing known and experienced recoveries will continue.

Public Health Crises
Global financial conditions and the global economy in general have, at various times in the past and may in the future, experience extreme volatility in response to economic shocks or other events, such as the concern with COVID‐19. Many industries, including the mining industry, are impacted by volatile market conditions in response to the widespread outbreak of epidemics, pandemics, or other health crises. Such public health crises and the responses of governments and private actors can result in disruptions and volatility in economies, financial markets, and global supply chains as well as declining trade and market sentiment and reduced mobility of people, all of which could impact commodity prices, interest rates, credit ratings, credit risk and inflation.

The Company's business could be materially adversely affected by the effects of the COVID‐19 pandemic. As of the date of this MD&A, the global spread of COVID‐19 appears to have stabilized. The Company has modified its measures to monitor, combat and manage the impact of COVID-19 at its operations. The Company also continues to provide sanitary support for the local communities in which it operates. Due to the potential for new variants of COVID-19, future disruptions to business internationally and related financial impact on the Company and the economy in general cannot be estimated with any degree of certainty at this time.

During 2022, the Company modified its preventative control measures. These measures include continuing education and, where appropriate, voluntary vaccination campaigns to avoid illnesses related to COVID-19, COVID-19 variants, and the seasonal flu. Monitoring of worker wellness or fitness for duty, as recommended by the Mexican, US and Canadian Governments health agencies, continues.

There is no guarantee that the Company will not experience disruptions to some of its active mining operations due to COVID-19 restrictions in the future. Any resurgence of COVID‐19 or the spread of other public health crises could materially and adversely impact the Company's business, including without limitation, employee health, workforce availability and productivity, limitations on travel, supply chain disruptions, increased insurance premiums, increased costs and reduced efficiencies, the availability of industry experts and personnel, restrictions on the Company's exploration and drilling programs and/or the timing to process drill and other metallurgical testing and the slowdown or temporary suspension of operations at some or all of the Company's properties, resulting in reduced production volumes. Although the Company has the capacity to continue certain administrative functions remotely, many other functions, including mining operations, cannot be conducted remotely. Any such disruptions could have an adverse effect on the Company’s production, revenue, net income and business.

Environmental and Health and Safety Risks

The Company’s activities are subject to extensive laws and regulations governing environmental protection and employee health and safety. Environmental laws and regulations are complex and have tended to become more stringent over time. The Company is required to obtain governmental permits and in some instances air, water quality, waste disposal, hazardous substances and mine reclamation rules and permits. Although the Company makes provisions for environmental compliance and reclamation costs, it cannot be assured that these provisions will be adequate to discharge its future obligations for these costs. Failure to comply with applicable environmental and health and safety laws may result in injunctions, damages, suspension or revocation of permits and imposition of penalties. There can be no assurance that First Majestic has been or will be at all times in complete compliance with such laws, regulations and permits, or that the costs of complying with current and future environmental and health and safety laws and permits will not materially and adversely affect the Company’s business, results of operations or financial condition.

On August 26, 2021, the NDEP issued 10 Notices of Alleged Violation (collectively the “NOAV”) that alleged the Company doing business as Jerritt Canyon Gold, LLC had violated various air permit conditions and regulations applicable to operations at the Jerritt Canyon in Elko County, Nevada. The NOAV are related to compliance with emission monitoring, testing, recordkeeping requirements, and emission and throughput limits.

The Company filed a Notice of Appeal on September 3, 2021, challenging the NOAV before the Nevada State Environmental Commission (“NSEC”). The Company raised various defenses to the NOAV, including that the Company is not liable for the
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violations because it was never the owner/operator of Jerritt Canyon during the period the alleged violations began (on April 30, 2021, the Company acquired Jerritt Canyon Canada Ltd, which, through subsidiaries, owns and operates Jerritt Canyon). There is currently no hearing scheduled or any scheduling order in the matter, and the parties have yet to engage in discovery.

On March 8, 2022, NDEP issued an additional four Notices of Alleged Violations to Jerritt Canyon Gold, LLC for alleged exceedances and violations of an Air Quality Operating permit and Mercury Operating Permit to Construct. The new NOAVs relate to alleged exceedances of mercury emission limitations, exceedances of operating parameters, installation of equipment, and recordkeeping requirements. The Company filed a Request for Hearing with the Nevada State Environmental Commission on March 18, 2022, that challenged the bases for the alleged NOAVs and any potential penalties associated with the NOAVs. JCG and NDEP agreed to waive the 20-day hearing requirement for the NOAVs and the parties request that the NSEC withhold schedule a hearing for the NOAVs at this time. At this time the estimated amount cannot be reliably determined.

Climate Related Risks

A number of governments have introduced or are moving to introduce climate change legislation and treaties at the international, national, state/provincial and local levels. Regulation relating to emission levels (such as carbon taxes) and energy efficiency is becoming more stringent. If the current regulatory trend continues, this may result in increased costs at some or all of the Company’s operations. In addition, the physical risks of climate change may also have an adverse effect on the Company’s operations. These risks include the following:
•Changes in sea levels could affect ocean transportation and shipping facilities that are used to transport supplies, equipment and workforce and products from the Company's operations to world markets.
•Extreme weather events (such as prolonged drought, flooding or freezing conditions) have the potential to disrupt operations at the Company’s mines and may require the Company to make additional expenditures to mitigate the impact of such events. Extended disruptions to supply lines could result in interruption to production.
•The Company’s facilities depend on regular supplies of consumables (diesel, tires, sodium cyanide, etc.) and reagents to operate efficiently. In the event that the effects of climate change or extreme weather events cause prolonged disruption to the delivery of essential commodities, production levels at the Company’s operations may be reduced.
There can be no assurance that efforts to mitigate the risks of climate changes will be effective and that the physical risks of climate change will not have an adverse effect on the Company’s operations and profitability.


Claims and Legal Proceedings Risks

The Company is subject to various claims and legal proceedings covering a wide range of matters that arise in the ordinary course of business activities. Each of these matters is subject to various uncertainties and it is possible that some of these other matters may be resolved in a manner that is unfavourable to the Company which may result in a material adverse impact on the Company's financial performance, cash flow or results of operations. First Majestic carries liability insurance coverage and establishes provisions for matters that are probable and can be reasonably estimated, however there can be no guarantee that the amount of such coverage is sufficient to protect against all potential liabilities. In addition, the Company may in the future be subjected to regulatory investigations or other proceedings and may be involved in disputes with other parties in the future which may result in a significant impact on our financial condition, cash flow and results of operations.











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Title to Properties
The validity of mining or exploration titles or claims or rights, which constitute most of the Company’s property holdings, can be uncertain and may be contested. The Company has used reasonable commercial efforts to investigate the Company’s title or claim to its various properties, however, no assurance can be given that applicable governments will not revoke or significantly alter the conditions of the applicable exploration and mining titles or claims and that such exploration and mining titles or claims will not be challenged or impugned by third parties. Mining laws are continually developing and changes in such laws could materially impact the Company’s rights to its various properties or interests therein. The Company has obtained title insurance for its Jerritt Canyon Mine but there is a risk that such insurance could be insufficient, or the Company could not be successful in any claim against its insurer. Accordingly, the Company may have little or no recourse as a result of any successful challenge to title to any of its properties. The Company’s properties may be subject to prior unregistered liens, agreements or transfers, land claims or undetected title defects which may have a material adverse effect on the Company’s ability to develop or exploit the properties.

Primero Tax Rulings
When Primero, the previous owner of San Dimas acquired the San Dimas Mine in August 2010, it assumed the obligations under a Silver Purchase Agreement (“Old Stream Agreement”) that required its subsidiary PEM to sell exclusively to Wheaton Precious Metals ("WPMI") up to 6 million ounces silver produced from the San Dimas Mine, and 50% of silver produced thereafter, at the lower of: (i) the spot market price and (ii) $4.014 per ounce plus an annual increase of 1% (“PEM Realized Price”). In May 2018, the Old Stream Agreement was terminated between WPMI and STB in connection with the Company entering into a new stream agreement with WPMI concurrent with the acquisition of Primero by the Company.

In order to reflect the commercial terms and the effects of the Old Stream Agreement, for Mexican income tax purposes, PEM recognized the revenue on these silver sales based on the PEM Realized Price instead of at spot market prices.

To obtain tax and legal assurance that the Mexican tax authority, Servicio de Administración Tributaria ("SAT") would accept the PEM Realized Price as the transfer price to calculate Mexican income taxes payable by PEM, a mutually binding Advance Pricing Agreement (“APA”) was entered into with the SAT for taxation years 2010 to 2014. On October 4, 2012, the SAT confirmed that based on the terms of the APA, the PEM Realized Price could be used as PEM’s basis for calculating taxes owed for the silver sold under the Old Stream Agreement.

In February 2015, the SAT filed a legal process seeking to retroactively nullify the APA.

In 2019, the SAT issued reassessments for the 2010 to 2012 tax years in the total amount of $345.3 million (5,895 million MXN) inclusive of interest, inflation, and penalties. In 2021, the SAT also issued a reassessment against PEM for the 2013 tax year in the total amount of $182.4 million (3,114 million MXN) (collectively, the "Reassessments"). In 2023, the SAT issued reassessments for the 2014 and 2015 tax years in the total amount of $374 million (6,331 million MXN) inclusive of interest, inflation, and penalties. The Company believes that the Reassessments fail to recognize the applicability of a valid transfer pricing methodology. The major items in the Reassessments include determination of revenue based on silver spot market prices, denial of the deductibility of interest expense and service fees, SAT technical error related to double counting of taxes, and interest and penalties.

The Company continues to defend the APA in the Mexican legal proceedings, and also requested resolution of the transfer price dispute pursuant to the Mutual Agreement Procedure (“MAP”), under the relevant avoidance of double taxation treaties, between the competent tax authorities of Mexico, Canada, Luxembourg and Barbados. The SAT has refused to take the necessary steps under the MAP process contained in the three treaties. The Company believes that by its refusal, Mexico is in breach of its international obligations regarding double taxation treaties. Furthermore, the Company continues to believe that the APA remains valid and legally binding on the SAT.

The Company continues to pursue all available domestic and international remedies under the laws of Mexico and under the relevant tax treaties. Furthermore, as discussed further below, it has also made claims against Mexico under Chapter 11 of the North American Free Trade Agreement (“NAFTA”) for violation of its international law obligations.

Domestic Remedies

In September 2020, the Company was served with a decision of the Federal Court seeking to nullify the APA granted to
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PEM. The Federal Court’s decision directs SAT to re-examine the evidence and basis for the issuance of the APA with retroactive effect, for the following key reasons:
(i) SAT’s errors in analyzing PEM’s request for the APA and the evidence provided in support of the request; and
(ii) SAT’s failure to request from PEM certain additional information before issuing the APA.

The Company filed an appeal of the decision to the Mexican Circuit Courts on November 30, 2020. Since two writs of certiorari were filed before the Mexican Supreme Court of Justice, on April 15, 2021, the Plenary of the Supreme Court i) admitted one of those writs, ii) requested the Circuit Court to send the appeal file and iii) assigned such writ to the Second Chamber of the Supreme Court for issuing the corresponding decision. Both writs of certiorari were withdrawn in December 2022. The challenge filed by the Company has been returned to the Mexican Circuit Courts and a decision may be issued within the second half of 2023.

The Company, in addition to challenging the SAT’s actions in the Mexican courts, is also pursuing resolution of its dispute through Mexico’s Federal Taxpayer Defense Attorney's Office (known as “PRODECON”).

International Remedies

i. NAFTA APA Claim
On March 2, 2021, the Company submitted a Request for Arbitration to the International Centre for Settlement of Investment Disputes ("ICSID"), on its own behalf and on behalf of PEM, based on Chapter 11 of NAFTA. On March 31, 2021, the Notice of Registration of the Request for Arbitration was issued by the ICSID Secretariat. Once the NAFTA Arbitration Panel (the “Tribunal”) was fully constituted on August 20, 2021 by the appointment of all three panel members, the NAFTA Arbitration Proceedings (the “NAFTA Proceedings”) were deemed to have been fully commenced. The first session of the Tribunal was held by videoconference on September 24, 2021 to decide upon the procedural rules which will govern the NAFTA Proceedings. The Tribunal issued Procedural Order No. 1 on October 21, 2021. Thereafter, on April 26, 2022, the Company submitted its Claimant’s Memorial including expert reports and witness statements to the Tribunal, and on November 25, 2022, Mexico submitted its Counter-Memorial. On January 4, 2023, the Company submitted a Request for Provisional Measures (the “PM Request”) to the Tribunal. Following a reply that was filed by Mexico on February 16th, a hearing regarding the request took place on March 13th. On May 26th, the Tribunal made its decision on the PM Request, partially granting the provisional measures set out in the request. On June 15th, the Company requested Mexico to comply with the Tribunal’s decision, and in response, on June 19th, Mexico filed a Revocation Request against the decision.

Subsequent to the end of the quarter, on July 21st, the Company filed its response to Mexico’s Revocation Request. The Company is now waiting for the Tribunal to render its decision on Mexico’s request, and expects that such a decision will be rendered by the end of the year.

ii. NAFTA VAT Claim
On March 31, 2023, the Company filed a new Notice of Intent on its own behalf and on behalf of PEM under Chapter 11 of NAFTA to invite the Government of Mexico to engage in discussions to resolve the dispute regarding the ongoing denial of access to PEM’s VAT refunds ("NAFTA VAT Claim") within the stipulated 90-day consultation period. On June 29, 2023, the Company submitted its Request for Arbitration for the NAFTA VAT Claim to ICSID in order to preserve its legacy claim within NAFTA's applicable limitation period.

While the Company remains confident in its position with regards to its two NAFTA filings, it continues to engage the Government of Mexico in consultation discussions so as to amicably resolve these disputes.

If the SAT’s attempts to retroactively nullify the APA are successful, the SAT can be expected to enforce any Reassessments for 2010 through 2014 against PEM in respect of its sales of silver pursuant to the Old Stream Agreement. Such an outcome would likely have a material adverse effect on the Company’s results of operations, financial condition and cash flows. Should the Company ultimately be required to pay tax on its silver revenues based on spot market prices without any mitigating adjustments, the incremental income tax for the years 2010-2019 would be approximately $301.1 million (5,141 million MXN), before taking into consideration interest or penalties.

Based on the Company’s consultation with third party advisors, the Company believes PEM filed its tax returns in compliance with applicable Mexican law and, therefore, at this time no liability has been recognized in the financial statements.
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To the extent it is ultimately determined that the pricing for silver sales under the Old Stream Agreement is significantly different from the PEM Realized Price, and while PEM would have rights of appeal in connection with any reassessments, it is likely to have a materially adverse effect on the Company’s business, financial position and results of operations.

La Encantada Tax Re-assessments

In December 2019, as part of the ongoing annual audits of the tax returns of Minera La Encantada S.A. de C.V. and Corporacion First Majestic S.A. de C.V., the SAT issued tax assessments for fiscal 2013 for corporate income tax in the amount of $29.7 million (507 million MXN) including interest, inflation and penalties. In December 2022, the SAT issued tax assessments to Minera La Encantada, S.A. de C.V. for fiscal years 2014 and 2015 for corporate income tax in the amount of $18.4 million (313 million MXN) and $231.0 million (3,943 million MXN). The major items relate to forward silver purchase agreement and denial of the deductibility of mine development costs and service fees. The Company continues to defend the validity of the forward silver purchase agreement and will vigorously dispute the assessments that have been issued. The Company, based on advice from legal and financial advisors, believes MLE’s tax filings were appropriate and its tax filing position is correct, therefore no liability has been recognized in the financial statements.

San Martin Tax Re-assessments

In 2023, as part of the ongoing annual audits of the tax returns of Minera El Pilon S.A. de C.V. ("MEP"), the SAT issued tax assessments for fiscal 2014 and 2015 for corporate income tax in the total amount of $24.3 million (415 million MXN) including interest, inflation and penalties. The major items relate to forward silver purchase agreement and denial of the deductibility of mine development costs. The Company continues to defend the validity of the forward silver purchase agreement and will vigorously dispute the assessments that have been issued. The Company, based on advice from legal and financial advisors, believes MEP’s tax filings were appropriate and its tax filing position is correct, therefore no liability has been recognized in the financial statements.

La Parrilla Tax Re-assessments

In 2023, as part of the ongoing annual audits of the tax returns of First Majestic Plata S.A. de C.V. ("FMP"), the SAT issued tax assessment for fiscal 2014 for corporate income tax in the total amount of $25.6 million (438 million MXN) including interest, inflation and penalties. The major items relate to forward silver purchase agreement and denial of the deductibility of mine development costs. The Company continues to defend the validity of the forward silver purchase agreement and will vigorously dispute the assessments that have been issued. The Company, based on advice from legal and financial advisors, believes FMP’s tax filings were appropriate and its tax filing position is correct, therefore no liability has been recognized in the financial statements.

First Silver litigation

In April 2013, the Company received a positive judgment on the First Silver litigation from the Supreme Court of British Columbia (the “Court”), which awarded the sum of $93.8 million in favour of First Majestic against Hector Davila Santos (the “Defendant”) in connection with a dispute between the Company and the Defendant and his private company involving a mine in México (the “Bolaños Mine”) as set out further below. The Company received a sum of $14.1 million in June 2013 as partial payment of the judgment, leaving an unpaid amount of approximately $64.3 million (CAD$81.5 million). As part of the ruling, the Court granted orders restricting any transfer or encumbrance of the Bolaños Mine by the Defendant and limiting mining at the Bolaños Mine. The orders also require the Defendant to preserve net cash flow from the Bolaños Mine in a holding account and periodically provide to the Company certain information regarding the Bolaños Mine. After many years of domestic Mexican litigation, the enforceability of the British Columbia judgment was finally recognized by the Mexican Supreme Court in a written judgment on November 11, 2022. The Company has commenced collection actions in Mexico against the Defendant’s assets and continues to seek recovery of the balance against one of the Defendant’s assets located in the United States. Nonetheless, there can be no guarantee that the remainder of the judgment amount will be collected. Therefore, as at June 30, 2023, the Company has not accrued any of the remaining $64.3 million (CAD$81.5 million) unrecovered judgment in favour of the Company.





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Amendments to mining and other related laws in Mexico

On May 8, 2023, the Mexican Government enacted a decree amending several provisions of the Mining Law, the Law on National Waters, the Law on Ecological Equilibrium and Environmental Protection and the General Law for the Prevention and Integral Management of Waste (the "Decree"), which became effective on May 9, 2023.

The Decree amends the mining and water laws, including: i) the duration of the mining concession titles, ii) the process to obtain new mining concessions (through a public tender), iii) imposing conditions on water use and availability for the mining concessions, iv) the elimination of “free land and first applicant” scheme; iv) new social and environmental requirements in order to obtain and keep mining concessions, v) the authorization by the Ministry of Economy of any mining concession’s transfer, vi) new penalties and cancellation of mining concessions grounds due to non-compliance with the applicable laws, vii) the automatic dismissal of any application for new concessions, viii) new financial instruments or collaterals that should be provided to guarantee the preventive, mitigation and compensation plans resulting from the social impact assessments, among other amendments.

These amendments are expected to have an impact on our current and future exploration activities and operations in Mexico and the extent of such impact is yet to be determined but could be material for the Company.

On June 7, 2023, the Senators of the opposition parties (PRI, PAN and PRD) filed a constitutional action against the Decree, which is pending to be decided by Plenary of the Supreme Court of Justice. Additionally, during the second quarter of 2023, the Company filed amparo lawsuits, challenging the constitutionality of the Decree. Those amparo lawsuits are pending to be decided by the District Courts.

OTHER FINANCIAL INFORMATION

Share Repurchase Program

The Company has an ongoing share repurchase program to repurchase up to 5,000,000 of the Company's issued and outstanding shares up to March 31, 2024. The normal course issuer bid will be carried out through the facilities of the Toronto Stock Exchange and alternative Canadian marketplaces. All common shares, if any, purchased pursuant to the Share Repurchase will be cancelled. The Company believes that from time to time, the market price of its common shares may not fully reflect the underlying value of the Company's business and its future business prospects. The Company believes that at such times, the purchase of common shares would be in the best interest of the Company. During the six months ended June 30, 2023, the Company repurchased an aggregate of nil common shares (December 2022 - 100,000) at an average price of CDN $nil per share as part of the Share Repurchase Program (December 2022 - $8.52) for total proceeds of $nil million (December 2022 - $0.7 million), net of transaction costs.

Off-Balance Sheet Arrangements

At June 30, 2023, the Company had no material off-balance sheet arrangements such as contingent interest in assets transferred to an entity, derivative instruments obligations or any obligations that generate financing, liquidity, market or credit risk to the Company, other than contingent liabilities and vendor liability and interest, as disclosed in this MD&A and the consolidated financial statements and the related notes.

Related Party Disclosures

Amounts paid to related parties were incurred in the normal course of business and measured at the exchange amount, which is the amount agreed upon by the transacting parties and on terms and conditions similar to non-related parties.

In July 2020, the Company completed the agreement with First Mining Gold Corp., to purchase 50% of the payable silver produced from the Springpole Gold Project for total consideration of $22.5 million in cash and shares, over three payments, for the silver stream which covers the life of the Springpole project. First Mining is a related party with two independent board members who are directors and/or officers of First Majestic.

With the exception of the agreement with First Mining Gold Corp., there were no transactions with related parties outside of the ordinary course of business during the six months ended June 30, 2023.
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Outstanding Share Data

As at August 2, 2023, the Company has 286,928,342 common shares issued and outstanding.

Senior Management Changes

In support of the reorganization and future growth of the Company, the Corporate Secretary and General Counsel positions were combined. These positions were held by two officers who are no longer with the Company. Samir Patel, LL.B., was appointed as the Company's General Counsel & Corporate Secretary, and an officer of the Company. Prior to joining First Majestic, Mr. Patel was General Counsel and Corporate Secretary of First Mining Gold Corp.

In addition, Exploration and Technical Services were combined under the leadership of Gonzalo Mercado, Vice President of Exploration and Technical Services, and Michael Deal has been appointed as Vice President of Metallurgy and Innovation.


SUBSEQUENT EVENTS

The following significant events occurred subsequent to June 30, 2023:

Declaration of Quarterly Dividend
On August 3, 2023, the Company's board of directors approved the declaration of its quarterly common share dividend of $0.0051 per share, payable on or after August 31, 2023, to common shareholders of record at the close of business on August 16, 2023. These dividends were declared subsequent to the quarter-end and have not been recognized as distributions to owners during the period ended June 30, 2023


ACCOUNTING POLICIES, JUDGMENTS AND ESTIMATES

Critical Accounting Judgments and Estimates

The preparation of consolidated financial statements in conformity with IFRS as issued by the International Accounting Standards Board ("IASB") requires management to make judgments, estimates and assumptions about future events that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Although these estimates are based on management’s best knowledge of the amount, events or actions, actual results may differ from these estimates.

For the Company's condensed interim consolidated financial statements for the three and six months ended June 30, 2023, there were no changes in critical accounting judgments and estimates that were significantly different from those disclosed in the Company's annual MD&A as at and for the year ended December 31, 2022 and the following accounting policies, critical judgments and estimates in applying accounting policies:

Assets and liabilities held-for-sale
Accounting Policy
A non-current asset or disposal group of assets and liabilities ("disposal group") is classified as held-for-sale, if its carrying amount will be recovered principally through a sale transaction rather than through continuing use, and when the following criteria are met:
(i) The non-current asset or disposal group is available for immediate sale in its present condition subject only to terms that are usual and customary for sales of such assets or disposal groups; and
(ii) The sale of the non-current asset or disposal group is highly probable. For the sale to be highly probable:
•The appropriate level of management must be committed to a plan to sell the asset or disposal group;
•An active program to locate a buyer and complete the plan must have been initiated;
•The non-current asset or disposal group must be actively marketed for sale at a price that is reasonable in relation to its current fair value;
•The sale should be expected to qualify for recognition as a completed sale within one year from the date of classification as held for sale (with certain exceptions); and
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•Actions required to complete the plan should indicate that it is unlikely that significant changes to the plan will be made or that the plan will be withdrawn.

Non-current assets and disposal groups are classified as held for sale from the date these criteria are met and are measured at the lower of the carrying amount and fair value less costs to sell ("FVLCTS"). If the FVLCTS is lower than the carrying amount, an impairment loss is recognized in net earnings. Upon classification as held for sale, non-current assets are no longer depreciated.

Significant estimates and judgements
In determining the probability of the sale being completed within a year, management has considered a number of factors including necessary approvals from management, the Board of Directors, regulators and shareholders.

Critical Judgements and Estimates
Investments in Associates and Joint Ventures

Judgement is needed to assess whether the Company’s interest in an investee meets the definition of having significant influence and therefore requires to be accounted for under the equity method.

In making a judgement of whether the Company has significant influence over the entity, management has evaluated the ownership percentage as well as other qualitative factors including but not limited to representation on the Board of Directors, participation in operational or financial policy-making processes, material transactions between the Company and the investee, interchange of managerial personnel, provision of technical information and the nature of potential voting rights.

As part of this assessment, management has considered that until such time that First Majestic holds less than 19.9% of the outstanding shares, the Company has agreed to vote in the manner recommended by the Board of Directors of Sierra Madre.

Based on the qualitative factors noted above, the restrictions imposed on voting rights, and the lack of rights to have or appoint members to the Board, the Company has determined that significant influence does not exist despite holding a 48% interest in Sierra Madre Gold and Silver Ltd. The Company began accounting for the shares received from Sierra Madre as an equity security at FVTOCI.

Impairment of non-current asset
Once an indicator of impairment is identified, significant judgement is required to determine the recoverable amounts of the Company's mining interests. Following the recent temporary suspension of operations at Jerritt Canyon, the Company has determined that there was an indicator of impairment. The Company determined that the value of the CGU can be estimated using the market approach, based on the implied value per in-situ ounce of the property, rather than from the future cash flows from continuing operations.

In estimating the fair value less costs of disposal ("FVLCD"), the Company took into account the consideration paid in recent transactions for comparable Companies and benchmarked the value per in-situ ounce at Jerritt Canyon against these transactions. The Company concluded that the resulting measurement is more representative of the fair value of the CGU in the circumstances existing at the end of the current period.

New and amended IFRS standards that are effective for the current year

In the current year, the Company has applied the below amendments to IFRS Standards and Interpretations issued by the IASB that were effective for annual periods that begin on or after January 1, 2023. Their adoption has not had any material impact on the disclosures or on the amounts reported in these financial statements.

Amendments to IAS 1 Presentation of Financial Statements and IFRS Practice Statement 2 Making Materiality Judgments—Disclosure of Accounting Policies

The amendments change the requirements in IAS 1 with regard to disclosure of accounting policies. The amendments replace all instances of the term "significant accounting policies" with "material accounting policy information." Accounting policy information is material if, when considered together with other information included in an entity’s financial
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statements, it can reasonably be expected to influence decisions that the primary users of general purpose financial statements make on the basis of those financial statements.

The supporting paragraphs in IAS 1 are also amended to clarify that accounting policy information that relates to immaterial transactions, other events or conditions is immaterial and need not be disclosed. Accounting policy information may be material because of the nature of the related transactions, other events or conditions, even if the amounts are immaterial. However, not all accounting policy information relating to material transactions, other events or conditions is itself material. The International Accounting Standards Board ("IASB") has also developed guidance and examples to explain and demonstrate the application of the ‘four-step materiality process’ described in IFRS Practice Statement 2.

The amendments were applied effective January 1, 2023 and did not have a material impact on the Company's interim consolidated financial statements.


Amendments to IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors—Definition of Accounting Estimates

The amendments replace the definition of a change in accounting estimates with a definition of accounting estimates. Under the new definition, accounting estimates are “monetary amounts in financial statements that are subject to measurement uncertainty.”

The definition of a change in accounting estimates was deleted. However, the Board retained the concept of changes in accounting estimates in the Standard with the following clarifications:

• A change in accounting estimate that results from new information or new developments is not the correction of an
error

• The effects of a change in an input or a measurement technique used to develop an accounting estimate are changes
in accounting estimates if they do not result from the correction of prior period errors

The amendments were applied effective January 1, 2023 and did not have a material impact on the Company's interim consolidated financial statements.

Deferred Tax Related to Assets and Liabilities Arising from a Single Transaction (Amendments to IAS 12)
The amendments clarify that companies are required to recognize deferred taxes on transactions where both assets and liabilities are recognized, such as with leases and decommissioning liabilities. The amendments were applied effective January 1, 2023 and did not have a material impact on the Company's interim consolidated financial statements.

Future Changes in Accounting Policies Not Yet Effective in the Current Period:

At the date of authorization of these financial statements, the Company has not applied the following new and revised IFRS Accounting Standards that have been issued but are not yet effective. Management does not expect that the adoption of the Standards listed below will have a material impact on the financial statements of the Company in future periods, except if indicated.

Classification of Liabilities as Current or Non-Current with Covenants (Amendments to IAS 1)

The amendments aim to promote consistency in applying the requirements by helping companies determine whether, in the statement of financial position, debt and other liabilities with an uncertain settlement date should be classified as current (due or potentially due to be settled within one year) or non-current.

In addition, the amendment requires entities to disclose information to enable users of the financial statements to understand the risk that non-current liabilities with covenants could become repayable within twelve months. The amendments are applied on or after the first annual reporting period beginning on or after January 1, 2024, with early application permitted. This amendment is not expected to have a material impact on the Company’s consolidated financial statements.



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Lease Liability in a Sale and Leaseback (Amendments to IFRS 16)

The amendments require a seller-lessee to subsequently measure lease liabilities arising from a leaseback in a way that it does not recognize any amount of the gain or loss that relates to the right of use it retains. The new requirements do not prevent a seller-lessee from recognizing in profit or loss any gain or loss relating to the partial or full termination of a lease. A seller-lessee applies the amendments retrospectively in accordance with IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors to sale and leaseback transactions entered into after the date of initial application.

The amendments are effective for annual reporting periods beginning on or after January 1, 2024 although earlier application is permitted. This amendment is not expected to have a material impact on the Company's consolidated financial statements.


NON-GAAP MEASURES

The Company has included certain non-GAAP measures including “Cash costs per silver equivalents ounce”, "All-in sustaining cost per silver equivalent ounce", "All-in sustaining cost per gold ounce", “Production cost per tonne”, “Average realized silver price per silver equivalent ounce”, "Average realized gold price", "Adjusted net earnings", “Adjusted earnings per share”, “Free cash flow” and "Working capital” to supplement its consolidated financial statements, which are presented in accordance with IFRS. The terms IFRS and generally accepted accounting principles (“GAAP”) are used interchangeably throughout this MD&A.

The Company believes that these measures, together with measures determined in accordance with IFRS, provide investors with an improved ability to evaluate the underlying performance of the Company. Non-GAAP measures do not have any standardized meaning prescribed under IFRS and the methods used by the Company to calculate such measures may differ from methods used by other companies with similar descriptions, therefore they may not be comparable to similar measures employed by other companies. The data is intended to provide additional information and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with IFRS.

Cash Cost per AgEq Ounce, All-In Sustaining Cost per AgEq Ounce, All-In Sustaining Cost per Au Ounce, and Production Cost per Tonne

Cash costs per AgEq ounce and total production cost per tonne are non-GAAP performance measures used by the Company to manage and evaluate operating performance at each of the Company’s operating mining units, in conjunction with the related GAAP amounts. These metrics are widely reported in the mining industry as benchmarks for performance but do not have a standardized meaning and are disclosed in addition to IFRS measures. Management and investors use these metrics for comparing the costs against peers in the industry and for assessing the performance of each mine within the portfolio.

Management calculates the cash costs per ounce and production costs per tonne by:
•starting with the production costs (GAAP) from the income statement;
•adding back duties and royalties, smelting and refining costs as well as transportation and selling costs, which form a part of the cost of sales on the financial statements and provide a better representation of total costs incurred;
•cash costs are divided by the payable silver equivalent ounces produced; and
•production costs are divided by the total tonnes milled.

AISC is a non-GAAP performance measure and was calculated based on guidance provided by the World Gold Council (“WGC”). WGC is not a regulatory industry organization and does not have the authority to develop accounting standards for disclosure requirements. Other mining companies may calculate AISC differently as a result of differences in underlying accounting principles and policies applied, as well as differences in definitions of sustaining versus expansionary capital expenditures. AISC is a more comprehensive measure than cash cost per ounce and is useful for investors and management to assess the Company’s operating performance by providing greater visibility, comparability and representation of the total costs associated with producing silver from its current operations, in conjunction with related GAAP amounts. AISC helps investors to assess costs against peers in the industry and help management assess the performance of each mine within the portfolio in a standardized manner.

The Company defines sustaining capital expenditures as, “costs incurred to sustain and maintain existing assets at current productive capacity and constant planned levels of productive output without resulting in an increase in the life of assets,
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future earnings, or improvements in recovery or grade. Sustaining capital includes costs required to improve/enhance assets to minimum standards for reliability, environmental or safety requirements. Sustaining capital expenditures excludes all expenditures at the Company’s new projects and certain expenditures at current operations which are deemed expansionary in nature.”

Expansionary capital expenditure is defined as, "costs incurred to extend existing assets beyond their current productive capacity and beyond their planned levels of productive output, resulting in an increase in the life of the assets, increasing their future earnings potential, or improving their recoveries or grades which would serve to increase the value of the assets over their useful lives". Development and exploration work which moves inferred resources to measured or indicated resources and adds to the Net Present Value of the assets is considered expansionary in nature. Expansionary capital also includes costs required to improve/enhance assets beyond their minimum standard for reliability, environmental or safety requirements.

Consolidated AISC includes total production costs (GAAP measure) incurred at the Company’s mining operations, which forms the basis of the Company’s total cash costs. Additionally, the Company includes sustaining capital expenditures, corporate general and administrative expenses, share-based payments, operating lease payments and reclamation cost accretion. AISC by mine does not include certain corporate and non-cash items such as general and administrative expense and share-based payments. The Company believes this measure represents the total sustainable costs of producing silver from current operations and provides additional information of the Company’s operational performance and ability to generate cash flows. As the measure seeks to reflect the full cost of silver production from current operations, new projects and expansionary capital at current operations are not included. Certain other cash expenditures, including tax payments, dividends and financing costs are also not included.
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The following tables provide detailed reconciliations of these measures to cost of sales, as reported in notes to our condensed interim consolidated financial statements.
(expressed in thousands of U.S. Dollars,
except ounce and per ounce amounts)		Three Months Ended June 30, 2023
San DimasSanta ElenaLa EncantadaJerritt CanyonConsolidated
Mining cost$16,694 $9,395 $4,222 $2,040 $32,352 
Milling cost 8,941 9,214 5,290 14,880 38,325 
Indirect cost 13,794 4,891 3,512 1,132 23,329 
Total production cost (A)$39,430 $23,500 $13,024 $18,051 $94,005 
Add: transportation and other selling cost405 232 155 16 869 
Add: smelting and refining cost404 55 144 16 619 
Add: environmental duty and royalties cost365 2,026 255 148 2,794 
Total cash cost (B)$40,604 $25,813 $13,578 $18,231 $98,287 
Workers’ participation4,958 242 220 — 5,760 
General and administrative expenses— — — — 11,284 
Share-based payments— — — — 3,320 
Accretion of decommissioning liabilities418 293 306 — 1,017 
Sustaining capital expenditures7,309 4,190 957 105 12,976 
Operating lease payments164 1,604 870 — 3,093 
All-In Sustaining Costs (C)$53,453 $32,142 $15,931 $18,334 $135,737 
Payable silver equivalent ounces produced (D)3,364,067 1,785,988 803,400 352,860 6,306,315 
Payable gold ounces produced (E)N/AN/AN/A4,360 N/A
Tonnes milled (F)227,065 213,878 260,986 31,240 733,170 
Cash cost per AgEq ounce (B/D)$12.07 $14.45 $16.90 $51.66 $15.58 
AISC per AgEq ounce (C/D)$15.89 $18.00 $19.83 $51.96 $21.52 
Cash cost per Au ounce (B/E)N/AN/AN/A$4,181 N/A
AISC per Au ounce (C/E)N/AN/AN/A$4,205 N/A
Production cost per tonne (A/F)$173.62 $109.88 $49.91 $577.83 $128.21 



First Majestic Silver Corp. 2023 Second Quarter Report
Page 40
              

(expressed in thousands of U.S. Dollars,
except ounce and per ounce amounts)		Three Months Ended June 30, 2022
San DimasSanta ElenaLa EncantadaJerritt CanyonConsolidated
Mining cost $11,785 $11,611 $3,683 $18,270 $45,348 
Milling cost 8,550 8,237 5,284 12,696 34,767 
Indirect cost 10,234 5,171 2,827 5,176 23,408 
Total production cost (A)$30,569 $25,019 $11,794 $36,141 $103,523 
Add: transportation and other selling cost405 267 136 53 915 
Add: smelting and refining cost331 116 187 23 657 
Add: environmental duty and royalties cost316 2,209 106 837 3,468 
Total cash cost (B)$31,621 $27,611 $12,223 $37,054 $108,563 
Workers’ participation3,619 1,392 (480)— 4,531 
General and administrative expenses— — — — 8,969 
Share-based payments— — — — 2,986 
Accretion of decommissioning liabilities298 163 210 514 1,510 
Sustaining capital expenditures9,844 4,163 1,673 7,682 24,227 
Operating lease payments125 1,007 815 — 2,345 
All-In Sustaining Costs (C)$45,507 $34,336 $14,441 $45,250 $153,131 
Payable silver equivalent ounces produced (D)3,039,048 2,238,242 867,675 1,544,596 7,689,561 
Payable gold ounces produced (E)N/AN/AN/A18,632 N/A
Tonnes milled (F)197,102 228,487 264,555 213,647 903,791 
Cash cost per AgEq ounce (B/D)$10.41 $12.34 $14.09 $23.99 $14.12 
AISC per AgEq ounce (C/D)$14.97 $15.34 $16.65 $29.29 $19.91 
Cash cost per Au ounce (B/E)N/AN/AN/A$1,989 N/A
AISC per Au ounce (C/E)N/AN/AN/A$2,429 N/A
Production cost per tonne (A/F)$155.09 $109.50 $44.58 $169.16 $114.55 


























First Majestic Silver Corp. 2023 Second Quarter Report
Page 41
              

(expressed in thousands of U.S. Dollars,
except ounce and per ounce amounts)		Six Months Ended June 30, 2023
San DimasSanta ElenaLa EncantadaJerritt CanyonConsolidated
Mining cost$31,282 $17,797 $8,048 $26,838 $83,966 
Milling cost 16,823 18,328 10,729 26,745 72,625 
Indirect cost 25,843 10,082 6,800 5,252 47,977 
Total production cost (A)$73,947 $46,207 $25,578 $58,834 $204,566 
Add: transportation and other selling cost843 477 331 30 1,804 
Add: smelting and refining cost789 104 323 52 1,268 
Add: environmental duty and royalties cost742 4,106 361 780 5,989 
Total cash cost (B)$76,321 $50,894 $26,593 $59,696 $213,627 
Workers’ participation8,352 903 669 — 10,285 
General and administrative expenses— — — — 19,342 
Share-based payments— — — — 7,949 
Accretion of decommissioning liabilities815 573 598 514 2,500 
Sustaining capital expenditures15,859 8,733 1,991 7,994 34,999 
Operating lease payments349 2,955 1,747 — 5,884 
All-In Sustaining Costs (C)$101,696 $64,058 $31,598 $68,204 $294,586 
Payable silver equivalent ounces produced (D)6,652,193 3,888,166 1,643,779 1,732,930 13,917,068 
Payable gold ounces produced (E)N/AN/AN/A20,685 N/A
Tonnes milled (F)446,432 422,699 532,264 177,643 1,579,038 
Cash cost per AgEq ounce (B/D)$11.47 $13.09 $16.18 $34.45 $15.35 
AISC per AgEq ounce (C/D)$15.29 $16.48 $19.22 $39.36 $21.17 
Cash cost per Au ounce (B/E)N/AN/AN/A$2,886 N/A
AISC per Au ounce (C/E)N/AN/AN/A$3,297 N/A
Production cost per tonne (A/F)$165.64 $109.31 $48.05 $331.19 $129.55 



First Majestic Silver Corp. 2023 Second Quarter Report
Page 42
              

(expressed in thousands of U.S. Dollars, except ounce and per ounce amounts)Six Months Ended June 30, 2022
San DimasSanta ElenaLa EncantadaJerritt CanyonConsolidated
Mining cost$22,682 $21,902 $6,776 $45,463 $96,824 
Milling cost 14,708 15,466 9,516 23,029 62,719 
Indirect cost 21,235 10,136 5,856 10,694 47,921 
Total production cost (A)$58,626 $47,504 $22,149 $79,187 $207,466 
Add: transportation and other selling cost511 377 222 66 1,284 
Add: smelting and refining cost721 216 325 39 1,301 
Add: environmental duty and royalties cost697 3,688 183 1,670 6,238 
Total cash cost (B)$60,555 $51,785 $22,879 $80,962 $216,289 
Workers’ participation6,018 2,223 (1,000)— 7,241 
General and administrative expenses— — — — 18,850 
Share-based payments— — — — 7,808 
Accretion of decommissioning liabilities590 322 419 1,027 3,017 
Sustaining capital expenditures18,023 8,354 3,261 14,783 45,672 
Operating lease payments241 2,076 1,625 — 4,724 
All-In Sustaining Costs (C)$85,427 $64,760 $27,184 $96,772 $303,601 
Payable silver equivalent ounces produced (D)6,114,098 4,104,111 1,516,738 3,163,376 14,898,323 
Payable gold ounces produced (E)N/AN/AN/A39,339 N/A
Tonnes milled (F)392,402 430,398 514,462 443,648 1,780,909 
Cash cost per AgEq ounce (B/D)$9.90 $12.62 $15.08 $25.59 $14.52 
AISC per AgEq ounce (C/D)$13.97 $15.78 $17.92 $30.59 $20.38 
Cash cost per Au ounce (B/E)N/AN/AN/A$2,058 N/A
AISC per Au ounce (C/E)N/AN/AN/A$2,460 N/A
Production cost per tonne (A/F)$149.40 $110.37 $43.05 $178.49 $116.50 






















First Majestic Silver Corp. 2023 Second Quarter Report
Page 43
              

Average Realized Silver Price per Silver Equivalent Ounce

Revenues are presented as the net sum of invoiced revenues related to delivered shipments of silver or gold doré bars, including associated metal by-products of lead and zinc after having deducted refining and smelting charges, and after elimination of intercompany shipments of silver, silver being minted into coins, ingots and bullion products.

The average realized silver price is a non-GAAP performance measure that allows management and investors to assess the Company's ability to sell ounces produced, in conjunction with related GAAP amounts. Management calculates this measure by taking total revenue reported under GAAP and adding back smelting and refining charges to arrive at the gross reportable revenue for the period. Gross revenues are divided into payable silver equivalent ounces sold to calculate the average realized price per ounce of silver equivalents sold. The streaming and royalty agreements in place between the Company and Sandstorm as well as Wheaton, impacts the total revenues reported on the financial statements given the reduced prices provided to these vendors in line with the terms of the agreements. Therefore, management adjusts revenue to exclude smelting and refining charges as well as revenues earned through agreements with these vendors. This provides management with a better picture regarding its ability to convert ounces produced to ounces sold and provides the investor with a clear picture of the price that the Company can currently sell the inventory for, excluding pre-arranged agreements.
Three Months Ended June 30,Six Months Ended June 30,
2023202220232022
Revenues as reported$146,693 $159,442 $303,644 $316,281 
Add back: smelting and refining charges617 656 1,267 1,301 
Gross revenues147,310 160,098 304,911 317,582 
Less: Sandstorm gold revenues(99)(408)(504)(699)
Less: Wheaton gold revenues(7,131)(6,630)(13,782)(12,855)
Gross revenues, excluding Sandstorm, Wheaton (A)$140,079 $153,060 $290,625 $304,028 
Payable silver equivalent ounces sold6,123,091 7,359,045 13,934,728 14,559,149 
Less: Payable silver equivalent ounces sold to Sandstorm(17,644)(73,311)(92,632)(121,425)
Less: Payable silver equivalent ounces sold to Wheaton(490,104)(889,941)(1,377,805)(1,676,335)
Payable silver equivalent ounces sold, excluding Sandstorm and Wheaton (B)5,615,343 6,395,794 12,464,291 12,761,388 
Average realized silver price per silver equivalent ounce (A/B)$24.95 $23.93 $23.32 $23.82 
Average market price per ounce of silver per COMEX$24.20 $22.63 $23.38 $23.34 













First Majestic Silver Corp. 2023 Second Quarter Report
Page 44
              

Average Realized Gold Price per Ounce

Revenues are presented as the net sum of invoiced revenues related to delivered shipments of silver or gold doré bars, including associated metal by-products of lead and zinc after having deducted refining and smelting charges, and after elimination of intercompany shipments of silver, silver being minted into coins, ingots and bullion products.

The average realized gold price is a non-GAAP performance measure that allows management and investors to assess the Company's ability to sell ounces produced, in conjunction with related GAAP amounts. Management calculates this measure by taking total revenue reported under GAAP and adding back smelting and refining charges to arrive at the gross reportable revenue for the period. Silver revenues are deducted from the reportable revenue for the period in order to arrive at the gold revenue for the period. Gross gold revenues are divided into gold ounces sold to calculate the average realized price per ounce of gold sold. The streaming and royalty agreements in place between the Company and Sandstorm as well as Wheaton, impacts the total revenues reported on the financial statements given the reduced prices provided to these vendors in line with the terms of the agreements. Therefore, management adjusts revenue to exclude smelting and refining charges as well as revenues earned through agreements with these vendors. This provides management with a better picture regarding its ability to convert ounces produced to ounces sold and provides the investor with a clear picture of the price that the Company can currently sell the inventory for, excluding pre-arranged agreements.

Three Months Ended June 30,Six Months Ended June 30,
2023202220232022
Gross revenue, excluding Sandstorm, Wheaton $140,079 $153,060 $290,625 $304,028 
Less: Silver revenues66,912 62,089 127,977 124,245 
Gross gold revenues, excluding Sandstorm, Wheaton (A)$73,166 $90,970 $162,648 $179,783 
Gold ounces sold50,460 59,697 109,647 117,912 
Less: Gold ounces sold to Wheaton11,354 10,633 22,005 20,703 
Less: Gold ounces sold to Sandstorm210 864 1,066 1,484 
Gold ounces sold, excluding Sandstorm and Wheaton (B)38,896 48,200 86,576 95,725 
Average realized gold price per ounce (A/B)$1,881 $1,887 $1,879 $1,878 
Average market price per ounce of gold$1,977 $1,872 $1,934 $1,873 

Free Cash Flow

Free cash flow is a non-GAAP liquidity measure which is determined based on operating cash flows less sustaining capital expenditures. Management uses free cash flow as a critical measure in the evaluation of liquidity in conjunction with related GAAP amounts. It also uses the measure when considering available cash, including for decision-making purposes related to dividends and discretionary investments. Further, it helps management, the Board of Directors and investors evaluate a Company's ability to generate liquidity from operating activities.

Three Months Ended June 30,Six Months Ended June 30,
2023202220232022
Operating cash flows $20,379 ($13,253)$15,709 ($32,237)
Less: Sustaining capital expenditures12,976 24,227 34,999 45,672 
Free cash flow$7,403 ($37,480)($19,290)($77,909)




First Majestic Silver Corp. 2023 Second Quarter Report
Page 45
              

Adjusted Earnings per Share (“Adjusted EPS”)

The Company uses the financial measure “Adjusted EPS” which is a non-GAAP measure, to supplement earnings per share (GAAP) information in its condensed interim consolidated financial statements. The Company believes that, in addition to conventional measures prepared in accordance with IFRS, the Company and certain investors and analysts use this information to evaluate the Company’s performance.

Management uses adjusted earnings per share as a critical measure of operating performance in conjunction with the related GAAP amounts. The only items considered in the adjusted earnings-per-share calculation are those that management believes (1) may affect trends in underlying performance from year to year and (2) are not considered normal recurring cash operating expenses.

Adjusted earnings per share is used for forecasting, operational and strategic decision making, evaluating current Company and management performance, and calculating financial covenants. Management believes that excluding certain non-cash and non-recurring items from the calculation increases comparability of the metric from period to period, which makes it useful for management, the audit committee and investors, to evaluate the underlying core operations. The presentation of Adjusted EPS is not meant to be a substitute for EPS presented in accordance with IFRS, but rather should be evaluated in conjunction with such IFRS measure.

To calculate adjusted earnings per share, management adjusts from net earnings (GAAP), the per-share impact, net of the tax effects of adjustments, of the following:
•share based payments;
•realized and unrealized gains and losses from investment in derivatives and marketable securities; and
•other infrequent or non-recurring losses and gains.

The following table provides a detailed reconciliation of net earnings (losses) as reported in the Company’s condensed interim consolidated financial statements to adjusted net earnings and Adjusted EPS:
Three Months Ended June 30,Six Months Ended June 30,
2023202220232022
Net (loss) earnings as reported($17,534)($84,050)($118,194)($76,765)
Adjustments for non-cash or unusual items:
Tax settlement— 21,340 — 21,340 
Impairment (reversal) of non-current assets— (7,585)125,200 (7,585)
Deferred income tax (recovery) expense(10,346)53,262 (56,373)30,036 
Loss from investment in marketable securities150 3,303 934 3,849 
Loss on divestiture of mining interest— — 1,378 — 
Share-based payments3,320 2,986 7,949 7,808 
Standby Costs8,360 — 13,437 — 
Abnormal costs (1)
— 3,117 — 3,117 
Write-down on assets held-for-sale7,229 — 7,229 — 
Write-down of mineral inventory3,348 1,941 13,869 6,353 
Adjusted net loss($5,473)($5,686)($4,571)($11,847)
Weighted average number of shares on issue - basic280,993,803 262,680,950 277,625,669 261,447,267 
Adjusted EPS($0.02)($0.02)($0.02)($0.05)
(1) Abnormal costs includes $3.1 million in costs that were incurred during the second quarter of 2022 as a result of marginal ore material that was processed to keep the mill running at minimum feed requirements to perform government mandated air compliance test work at the Jerritt Canyon Gold mine.

First Majestic Silver Corp. 2023 Second Quarter Report
Page 46
              

Working Capital and Available Liquidity

Working capital is determined based on current assets and current liabilities as reported in the Company’s consolidated financial statements. The Company uses working capital as a measure of the Company’s short-term financial health and operating efficiency. Available liquidity includes the Company's working capital and undrawn revolving credit facility.
June 30, 2023December 31, 2022
Current Assets$362,800 $370,289 
Less: Current Liabilities(125,606)(167,399)
Working Capital$237,194 $202,890 
Available Undrawn Revolving Credit Facility124,640 75,000 
Available Liquidity$361,834 $277,890 

MANAGEMENT’S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING

Disclosure Controls and Procedures

The Company’s management, with the participation of its President and Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”), has evaluated the effectiveness of the Company’s disclosure controls and procedures. Based upon the results of that evaluation, the Company’s CEO and CFO have concluded that, as of June 30, 2023, the Company’s disclosure controls and procedures were effective to provide reasonable assurance that the information required to be disclosed by the Company in reports it files is recorded, processed, summarized and reported, within the appropriate time periods and is accumulated and communicated to management, including the CEO and CFO, as appropriate to allow timely decisions regarding required disclosure.

Internal Control over Financial Reporting

The Company’s management, with the participation of its CEO and CFO, is responsible for establishing and maintaining adequate internal control over financial reporting as such term is defined in the rules of the United States Securities and Exchange Commission and the Canadian Securities Administrators. The Company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with IFRS as issued by the IASB. The Company’s internal control over financial reporting includes policies and procedures that:

•maintain records that accurately and fairly reflect, in reasonable detail, the transactions and dispositions of assets of the Company;
•     provide reasonable assurance that transactions are recorded as necessary for preparation of financial statements in accordance with IFRS as issued by IASB;
•provide reasonable assurance that the Company’s receipts and expenditures are made only in accordance with authorizations of management and the Company’s Directors; and
• provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the Company’s assets that could have a material effect on the Company’s condensed interim consolidated financial statements.

The Company’s internal control over financial reporting may not prevent or detect all misstatements because of inherent limitations. Additionally, projections of any evaluation of effectiveness for future periods are subject to the risk that controls may become inadequate because of changes in conditions or deterioration in the degree of compliance with the Company’s policies and procedures.

The Company's management evaluated the effectiveness of our internal controls over financial reporting based upon the criteria set forth in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on management's evaluation, our CEO and CFO concluded that our internal controls over financial reporting was effective as of June 30, 2023. There have been no significant changes in our internal controls during the quarter ended June 30, 2023 that have materially affected, or are reasonably likely to materially affect, internal control over financial reporting.
First Majestic Silver Corp. 2023 Second Quarter Report
Page 47
              

Limitations of Controls and Procedures

The Company’s management, including the President and CEO and CFO, believes that any disclosure controls and procedures or internal control over financial reporting, no matter how well conceived and operated, may not prevent or detect all misstatements because of inherent limitations. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, they cannot provide absolute assurance that all control issues and instances of fraud, if any, within the Company have been prevented or detected. These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of simple errors or mistakes. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people, or by unauthorized override of the control. The design of any control system also is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Accordingly, because of the inherent limitations in a cost effective control system, misstatements due to error or fraud may occur and not be detected.

CAUTIONARY STATEMENTS

Cautionary Note regarding Forward-Looking Statements

Certain information contained herein this MD&A constitutes forward-looking statements under applicable securities laws (collectively, “forward-looking statements”). These statements relate to future events or the Company’s future performance, business prospects or opportunities. Forward-looking statements include, but are not limited to: commercial mining operations; anticipated mineral recoveries; projected quantities of future mineral production; statements with respect to the Company’s business strategy; future planning processes; interpretation of drill results and other technical data; anticipated development, expansion, exploration activities and production rates and mine plans and mine life; the security situation at the San Martin mine; the estimated cost and timing of plant improvements at the Company’s operating mines and development of the Company’s development projects; the timing of completion of exploration programs and drilling programs; the restarting of operations or potential interim plans at the Company's temporarily suspended and/or non-operating mines; suspension of processing activities at Jerritt Canyon; decommissioning activities at Jerritt Canyon; anticipated reclamation and decommissioning activities; conversion of mineral resources to proven and probable mineral reserves; statements with respect to the Company’s future financial position including operating efficiencies, cash flow, capital budgets, costs and expenditures; the implementation and effect of cost reduction initiatives; the preparation of technical reports and completion of preliminary economic assessments; the repurchase of the Company’s shares; viability of the Company’s projects; potential metal recovery rates; completion of the sale of the Company's La Parrilla mine; payment of dividends; the impact of amendments to accounting policies; effectiveness of internal controls and procedures; statements with respect to the recovery of value added tax receivables and the tax regime in México; the conduct or outcome of outstanding litigation, regulatory proceedings, negotiations or proceedings under NAFTA or other claims; expectations regarding the continuing effect of the COVID‐19 pandemic on the Company's operations, the global economy and the market for the Company's products. All statements other than statements of historical fact may be forward-looking statements. Any statements that express or involve discussions with respect to predictions, expectations, beliefs, plans, projections, objectives, assumptions or future events or performance (often, but not always, using words or phrases such as “seek”, “anticipate”, “plan”, “continue”, “estimate”, “expect”, “may”, “will”, “project”, “predict”, “forecast”, “potential”, “targeting”, “intend”, “could”, “might”, “should”, “believe” and similar expressions) are not statements of historical fact and may be “forward-looking statements”.

Forward-looking statements are based on forecasts of future results, estimates of amounts not yet determinable and assumptions of management made in light of management's experience and perception of historical trends, current conditions and expected future developments at the dates the statements are made, and are subject to a variety of risks and uncertainties and other factors that could cause actual events or results to differ materially from those projected in the forward-looking statements. These factors include, without limitation: global economic conditions including public health threats, the inherent risks involved in the mining, exploration and development of mineral properties, the uncertainties involved in interpreting drilling results and other geological data, fluctuating commodity prices, fluctuating currency exchange rates, the possibility of project delays or cost overruns or unanticipated excessive operating costs and expenses, uncertainties related to the necessity of financing, the availability of and costs of financing needed in the future, uninsured risks, defects in title, availability and costs of materials and equipment, climate change events including, but not limited to, drought conditions, changes in national or local governments, changes in applicable legislation or application thereof, timeliness of government approvals, actual performance of facilities, equipment, and processes relative to specifications and expectations and unanticipated environmental impacts on operations, availability of time on court calendars in Canada
First Majestic Silver Corp. 2023 Second Quarter Report
Page 48
              

and elsewhere; the recognition of Canadian judgments under Mexican law; the possibility of settlement discussions; the risk of appeal of judgment; and the insufficiency of the defendant's assets to satisfy the judgment amount and other factors described in the Company’s Annual Information Form under the heading “Risk Factors”.

The Company believes that the expectations reflected in any such forward-looking statements are reasonable, but no assurance can be given that these expectations will prove to be correct and such forward-looking statements included herein this MD&A should not be unduly relied upon. These statements speak only as of the date of this MD&A. The Company does not intend, and does not assume any obligation, to update these forward-looking statements, except as required by applicable laws. Actual results may differ materially from those expressed or implied by such forward-looking statements.

Cautionary Note regarding Reserves and Resources

National Instrument 43-101 (“NI 43-101”), issued by the Canadian Securities Administrators, lays out the standards of disclosure for mineral projects. This includes a requirement that a certified Qualified Person (“QP”) (as defined under the NI 43-101) supervises the preparation of the mineral reserves and mineral resources. Gonzalo Mercado, Vice President of Exploration and Technical Services is a certified QP for the Company and has reviewed this MD&A for QP technical disclosures. All NI 43-101 technical reports can be found on the Company’s website at www.firstmajestic.com or on SEDAR+ at www.sedarplus.ca.

Cautionary Note to United States Investors Concerning Estimates of Mineral Reserves and Resources

This Management’s Discussion and Analysis has been prepared in accordance with the requirements of the securities laws in effect in Canada, which differ materially from the requirements of United States securities laws applicable to U.S. companies. Information concerning our mineral properties has been prepared in accordance with the requirements of Canadian securities laws, which differ in material respects from the requirements of the United States Securities and Exchange Commission (the “SEC”) applicable to domestic United States issuers. Accordingly, the disclosure in this Management’s Discussion and Analysis regarding our mineral properties is not comparable to the disclosure of United States issuers subject to the SEC’s mining disclosure requirements.

Additional Information

Additional information on the Company, including the Company’s Annual Information Form and the Company’s audited consolidated financial statements for the year ended December 31, 2022, is available on SEDAR+ at www.sedarplus.ca and on the Company’s website at www.firstmajestic.com.

First Majestic Silver Corp. 2023 Second Quarter Report
Page 49
              

Exhibit 99.3




Form 52-109F1
Certification of Interim Filings
Full Certificate

I, Keith Neumeyer, President & Chief Executive Officer of First Majestic Silver Corp., certify the following:

1.Review: I have reviewed the interim financial report and interim MD&A (together, the “interim filings”) of First Majestic Silver Corp. (the “issuer”) for the interim period ended June 30, 2023.

2.No misrepresentations: Based on my knowledge, having exercised reasonable diligence, the interim filings do not contain any untrue statement of a material fact or omit to state a material fact required to be stated or that is necessary to make a statement not misleading in light of the circumstances under which it was made, with respect to the period covered by the interim filings.

3.Fair presentation: Based on my knowledge, having exercised reasonable diligence, the interim financial report together with the other financial information included in the interim filings fairly present in all material respects the financial condition, financial performance and cash flows of the issuer, as of the date of and for the periods presented in the interim filings.

4.Responsibility: The issuer’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (DC&P) and internal control over financial reporting (ICFR), as those terms are defined in National Instrument 52-109 Certification of Disclosure in Issuers’ Annual and Interim filings, for the issuer.

5.Design: Subject to the limitations, if any, described in paragraphs 5.2 and 5.3, the issuer’s other certifying officer(s) and I have, as at the financial year end

(a)designed DC&P, or caused it to be designed under our supervision, to provide reasonable assurance that

(i)material information relating to the issuer is made known to us by others, particularly during the period in which the annual filings are being prepared; and

(ii)information required to be disclosed by the issuer in its annual filings, interim filings or other reports filed or submitted by it under securities legislation is recorded, processed, summarized and reported within the time periods specified in securities legislation; and

(b)designed ICFR, or caused it to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with the issuer’s GAAP.

5.1Control framework: The control framework the issuer’s other certifying officer(s) and I used to design the issuer’s ICFR is COSO’s 2013 Internal Control – Integrated Framework.

5.2N/A.


5.3    N/A

6.Reporting changes in ICFR: The issuer has disclosed in its interim MD&A any change in the issuer’s ICFR that occurred during the period beginning on April 1, 2023 and ended on June 30, 2023 that has materially affected, or is reasonably likely to materially affect, the issuer’s ICFR.



Date: August 2, 2023
/s/ Keith Neumeyer
Keith Neumeyer
President & Chief Executive Officer



Exhibit 99.4




Form 52-109F1
Certification of Interim Filings
Full Certificate


I, David Soares, Chief Financial Officer of First Majestic Silver Corp., certify the following:

1.Review: I have reviewed the interim financial report and interim MD&A (together, the “interim filings”) of First Majestic Silver Corp. (the “issuer”) for the interim period ended June 30, 2023.

2.No misrepresentations: Based on my knowledge, having exercised reasonable diligence, the interim filings do not contain any untrue statement of a material fact or omit to state a material fact required to be stated or that is necessary to make a statement not misleading in light of the circumstances under which it was made, with respect to the period covered by the interim filings.

3.Fair presentation: Based on my knowledge, having exercised reasonable diligence, the interim financial report together with the other financial information included in the interim filings fairly present in all material respects the financial condition, financial performance and cash flows of the issuer, as of the date of and for the periods presented in the interim filings.

4.Responsibility: The issuer’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (DC&P) and internal control over financial reporting (ICFR), as those terms are defined in National Instrument 52-109 Certification of Disclosure in Issuers’ Annual and Interim filings, for the issuer.

5.Design: Subject to the limitations, if any, described in paragraphs 5.2 and 5.3, the issuer’s other certifying officer(s) and I have, as at the financial year end

(a)designed DC&P, or caused it to be designed under our supervision, to provide reasonable assurance that

(i)material information relating to the issuer is made known to us by others, particularly during the period in which the annual filings are being prepared; and

(ii)information required to be disclosed by the issuer in its annual filings, interim filings or other reports filed or submitted by it under securities legislation is recorded, processed, summarized and reported within the time periods specified in securities legislation; and

(b)designed ICFR, or caused it to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with the issuer’s GAAP.

5.1Control framework: The control framework the issuer’s other certifying officer(s) and I used to design the issuer’s ICFR is COSO’s 2013 Internal Control – Integrated Framework.

5.2N/A

5.3    N/A

6.Reporting changes in ICFR: The issuer has disclosed in its interim MD&A any change in the issuer’s ICFR that occurred during the period beginning on April 1, 2023 and ended on June 30, 2023 that has materially affected, or is reasonably likely to materially affect, the issuer’s ICFR.




Date: August 2, 2023
/s/ David Soares
David Soares
Chief Financial Officer



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NEWS RELEASE
New York - AGAugust 3, 2023
Toronto – FR
Frankfurt – FMV 

First Majestic Reports Second Quarter Financial Results and Quarterly Dividend Payment

Vancouver, BC, Canada - First Majestic Silver Corp. (AG: NYSE; FR: TSX) (the "Company" or “First Majestic”) is pleased to announce the unaudited interim consolidated financial results of the Company for the second quarter ended June 30, 2023. The full version of the financial statements and the management discussion and analysis can be viewed on the Company's website at www.firstmajestic.com or on SEDAR+ at www.sedarplus.ca and on EDGAR at www.sec.gov. All amounts are in U.S. dollars unless stated otherwise.

Q2 2023 HIGHLIGHTS

•Production of 6.3 million silver equivalent (“AgEq”) ounces, consisting of 2.6 million silver ounces and 45,022 gold ounces, or a decrease of 17% compared to the previous quarter.
•Quarterly revenues totalled $146.7 million, a decrease of 7% compared to the previous quarter.
•Operating cash flows before non-cash working capital and taxes totalled $26.9 million, up 23% compared to $21.9 million in the previous quarter.
•Consolidated cash costs were $15.58 per AgEq ounce and All-In Sustaining Costs (“AISC”) (see “Non-GAAP Financial Measures”, below) were $21.52 per AgEq ounce. Excluding Jerritt Canyon, cash costs for the three Mexican operations were $13.44 per AgEq ounce compared to $11.85 in the previous quarter.
•Adjusted net earnings of ($5.5) million (adjusted EPS of ($0.02)) (See “Non-GAAP Financial Measures”, below) after excluding non-cash and non-recurring items.
•Sold 87,657 ounces of silver bullion, or approximately 3.3% of the Company’s silver production, on First Majestic’s online bullion store at an average silver price of $27.30 per ounce for total proceeds of $2.4 million.
•At the end of the quarter, the Company had a cash and restricted cash balance of $306.3 million consisting of $160.2 million of cash and cash equivalents and $146.1 million of restricted cash.
•Declared a cash dividend payment of $0.0051 per common share for the second quarter of 2023 for shareholders of record as of the close of business on August 16, 2023, which will be distributed on or about August 31, 2023.

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OPERATIONAL AND FINANCIAL HIGHLIGHTS
Key Performance Metrics2023-Q22023-Q1Change
Q2 vs Q1		2022-Q2Change Q2 vs Q2
Operational
Ore Processed / Tonnes Milled733,170 845,868 (13 %)903,791 (19 %)
Silver Ounces Produced2,633,411 2,543,059 4 %2,775,928 (5 %)
Gold Ounces Produced45,022 60,594 (26 %)59,391 (24 %)
Silver Equivalent Ounces Produced6,320,971 7,627,105 (17 %)7,705,935 (18 %)
Cash Costs per Silver Equivalent Ounce (1)
$15.58 $15.16 3 %$14.12 10 %
All-in Sustaining Cost per Silver Equivalent Ounce (1)
$21.52 $20.90 3 %$19.91 8 %
Total Production Cost per Tonne (1)
$128.21 $130.71 (2 %)$114.55 12 %
Average Realized Silver Price per Silver Equivalent Ounce (1)
$24.95 $21.98 14 %$23.93 4 %
Financial (in $millions)
Revenues$146.7 $157.0 (7 %)$159.4 (8 %)
Mine Operating Earnings (Loss)$1.1 ($6.4)118 %$11.6 (91 %)
Net Loss($17.5)($100.7)83 %($84.1)79 %
Operating Cash Flows before Non-Cash Working Capital and Taxes$26.9 $21.9 23 %$33.0 (18 %)
Cash and Cash Equivalents$160.2 $104.8 53 %$117.7 36 %
Working Capital (1)
$237.2 $184.6 28 %$199.8 19 %
Free Cash Flow (1)
$7.4 ($26.7)128 %($37.5)120 %
Shareholders
(Loss) Earnings per Share ("EPS") - Basic($0.06)($0.37)84 %($0.32)81 %
Adjusted EPS (1)
($0.02)$0.00(100 %)($0.02)0 %
NM – Not meaningful
(1) The Company reports non-GAAP measures which include cash costs per silver equivalent ounce produced, cash costs per gold ounce produced, all-in sustaining cost per silver equivalent ounce produced, all-in sustaining cost per gold ounce produced, total production cost per tonne, average realized silver price per silver equivalent ounce sold, average realized gold price per ounce sold, working capital, adjusted EPS and free cash flow. These measures are widely used in the mining industry as a benchmark for performance, but do not have a standardized meaning under the Company's financial reporting framework and the methods used by the Company to calculate such measures may differ from methods used by other companies with similar descriptions. See “Non-GAAP Measures” below for further details of these measures.

Q2 2023 FINANCIAL RESULTS

The Company realized an average silver price of $24.95 per AgEq ounce during the second quarter of 2023, representing an 4% increase compared to the second quarter of 2022 and a 14% increase compared to the prior quarter.
Revenues generated in the second quarter totaled $146.7 million compared to $159.4 million in the second quarter of 2022. The decrease in revenues was primarily due to the temporary suspension of Jerritt Canyon which processed the majority of its remaining stockpiles and work in process (“WIP”) inventory during the quarter.
Cash flow from operations before movements in working capital and income taxes in the quarter was $26.9 million, representing an 18% decrease compared to the second quarter of 2022 and a 23% increase compared to the prior quarter.
The Company reported mine operating earnings of $1.1 million compared to $11.6 million in the second quarter of 2022. The decrease in mine operating earnings was primarily attributed to a stronger Mexican Peso against the U.S. dollar which has increased production costs. As of July 2023, the Peso reached a new 7-year high compared to the U.S. Dollar. The Company continues to implement cost saving programs and review efficiency improvement opportunities to offset the foreign exchange impact.
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The Company reported net earnings of ($17.5) million (EPS of ($0.06)) compared to ($84.1) million (EPS of ($0.32)) in the second quarter of 2022. During the quarter, the Company incurred one-time severance and operational suspension payments at Jerritt Canyon in the amount of $8.4 million, compared to $5.1 million in the previous quarter.
Adjusted net earnings for the quarter, normalized for non-cash or non-recurring items such as share-based payments, unrealized losses on marketable securities and non-recurring write-downs on mineral inventory for the quarter was ($5.5) million (adjusted EPS of ($0.02)) compared to ($5.7) million (adjusted EPS of ($0.02)) in the second quarter of 2022.
Cash flow from operations before movements in working capital and income taxes in the quarter was $26.9 million compared to $33.0 million in the second quarter of 2022.
As of June 30, 2023, the Company had a cash and restricted cash balance of $306.3 million consisting of $160.2 million of cash and cash equivalents and $146.1 million of restricted cash. The Company also had working capital of $237.2 million.
On June 29, 2023, the Company entered into an agreement to extend the maturity date on its senior secured revolving credit facility from March 21, 2025, to June 29, 2026, and increased the credit limit from $100.0 million to $175.0 million.

OPERATIONAL HIGHLIGHTS

The table below represents the quarterly operating and cost parameters at each of the Company’s four producing mines during the quarter.

Second Quarter Production SummarySan DimasSanta ElenaLa Encantada
Jerritt Canyon(1)
Consolidated
Ore Processed / Tonnes Milled227,065213,878260,98631,240733,170
Silver Ounces Produced1,690,831142,037800,543— 2,633,411
Gold Ounces Produced20,50920,073764,36445,022
Silver Equivalent Ounces Produced3,372,4181,788,596806,789353,1686,320,971
Cash Costs per Silver Equivalent Ounce(2)
$12.07 $14.45 $16.90 $51.66 $15.58 
All-in Sustaining Cost per Silver Equivalent Ounce(2)
$15.89 $18.00 $19.83 $51.96 $21.52 
Cash Cost per Gold Ounce(2)
N/AN/AN/A$4,181 N/A
All-In Sustaining Costs per Gold Ounce(2)
N/AN/AN/A$4,205 N/A
Total Production Cost per Tonne(2)
$173.62 $109.88 $49.91 $577.83 $128.21 
(1) Jerritt Canyon production during the second quarter comprised of processing most of its remaining ore stockpiles and WIP inventory throughout April and May.
(2) See “Non-GAAP Financial Measures”, below for further details of these measures.

The Company produced 6.3 million AgEq ounces consisting of 2.6 million ounces of silver and 45,022 ounces of gold. Silver production increased by 4% over the prior quarter primarily due to higher tonnes processed at San Dimas combined with slightly higher silver grades and record metallurgical recoveries of Ermitaño’s ore. Gold production was 26% lower compared to the previous quarter primarily due to the temporary suspension of mining activities at Jerritt Canyon, which was previously announced on March 20, 2023.
Cash cost for the quarter was $15.58 per AgEq ounce, compared to $15.16 AgEq per ounce in the previous quarter. The increase in cash costs per AgEq ounce was primarily attributable to lower production at Jerritt Canyon which was temporarily suspended as well as a strong Mexican Peso compared to the US dollar which averaged 5% higher compared to the previous quarter. Excluding Jerritt Canyon, cash costs at the three Mexican operations were $13.44 per AgEq ounce compared to $11.85 in the previous quarter. The Company has implemented a series of cost saving initiatives in an effort to help offset the strong Peso’s impact, which include lowering production costs, capital spending, care and maintenance holding costs, G&A costs, while also increasing silver and gold production. In the second half of 2023, the Company expects cash costs to decrease and be within the range of $12.23 to $12.89 per AgEq ounce.
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AISC in the second quarter was $21.52 per AgEq ounce, compared to $20.90 per AgEq ounce in the previous quarter. The increase in AISC was primarily attributed to the strong Mexican Peso which resulted in higher cash costs as well as an increase in worker participation costs during the quarter. In the second half of 2023, the Company anticipates AISC to be within a range of $17.69 to $18.92 per AgEq ounce following the temporary suspension of Jerritt Canyon which had significantly higher AISC.
Total capital expenditures in the second quarter were $30.5 million, consisting of $10.4 million at San Dimas, $13.4 million at Santa Elena, $2.0 million at La Encantada, $4.0 million at Jerritt Canyon, and $0.7 million for strategic projects.

Q2 2023 DIVIDEND ANNOUNCEMENT

The Company is pleased to announce that its Board of Directors has declared a cash dividend payment in the amount of $0.0051 per common share for the second quarter of 2023. The second quarter cash dividend will be paid to holders of record of First Majestic’s common shares as of the close of business on August 16, 2023, and will be distributed on or about August 31, 2023.
Under the Company’s dividend policy, the quarterly dividend per common share is targeted to equal approximately 1% of the Company’s net quarterly revenues divided by the Company’s then outstanding common shares on the record date.
The amount and distribution dates of future dividends remain at the discretion of the Board of Directors. This dividend qualifies as an ‘eligible dividend’ for Canadian income tax purposes. Dividends paid to shareholders outside Canada (non-resident investors) may be subject to Canadian non-resident withholding taxes.

ABOUT THE COMPANY
First Majestic is a publicly traded mining company focused on silver and gold production in Mexico and the United States. The Company presently owns and operates the San Dimas Silver/Gold Mine, the Santa Elena Silver/Gold Mine, and the La Encantada Silver Mine as well as a portfolio of development and exploration assets, including the Jerritt Canyon Gold project located in northeastern Nevada.
First Majestic is proud to offer a portion of its silver production for sale to the public. Bars, ingots, coins and medallions are available for purchase online at its Bullion Store at some of the lowest premiums available.
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

Non-GAAP Financial Measures

This press release includes reference to certain financial measures which are not standardized measures under the Company's financial reporting framework. These measures include cash costs per silver equivalent ounce produced, all-in sustaining cost (or “AISC”) per silver equivalent ounce produced, cash costs per gold ounce produced, AISC per gold ounce produced, total production cost per tonne, average realized silver price per ounce sold, average realized gold price per ounce sold, working capital, adjusted net earnings and EPS and free cash flow. The Company believes that these measures, together with measures determined in accordance with IFRS, provide investors with an improved ability to evaluate the underlying performance of the Company. These measures are widely used in the mining industry as a benchmark for performance but do not have any standardized meaning prescribed under IFRS, and therefore they may not be comparable to similar measures disclosed by other companies. The data is intended to provide additional information and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with IFRS. For a complete description of how the Company calculates such measures and a reconciliation of certain measures to GAAP terms please see "Non-GAAP Measures" in the Company's most recent management discussion and analysis filed on SEDAR+ at www.sedarplus.ca and EDGAR at www.sec.gov and which is incorporated by reference herein.



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Cautionary Note Regarding Forward Looking Statements

This press release contains “forward‐looking information” and "forward-looking statements” under applicable Canadian and U.S. securities laws (collectively, “forward‐looking statements”). These statements relate to future events or the Company's future performance, business prospects or opportunities that are based on forecasts of future results, estimates of amounts not yet determinable and assumptions of management made in light of management's experience and perception of historical trends, current conditions and expected future developments. Forward-looking statements include, but are not limited to, statements with respect to: commercial mining operations; cash flow; anticipated costs; and payment of dividends, if any. Assumptions may prove to be incorrect and actual results may differ materially from those anticipated. Consequently, guidance cannot be guaranteed. As such, investors are cautioned not to place undue reliance upon guidance and forward-looking statements as there can be no assurance that the plans, assumptions or expectations upon which they are placed will occur. All statements other than statements of historical fact may be forward‐looking statements. Any statements that express or involve discussions with respect to predictions, expectations, beliefs, plans, projections, objectives or future events or performance (often, but not always, using words or phrases such as “seek”, “anticipate”, “plan”, “continue”, “estimate”, “expect”, “may”, “will”, “project”, “predict”, “forecast”, “potential”, “target”, “intend”, “could”, “might”, “should”, “believe” and similar expressions) are not statements of historical fact and may be “forward‐looking statements”.

Actual results may vary from forward-looking statements. Forward-looking statements are subject to known and unknown risks, uncertainties and other factors that may cause actual results to materially differ from those expressed or implied by such forward-looking statements, including but not limited to: the duration and effects of the coronavirus and COVID-19, and any other pandemics on our operations and workforce, and the effects on global economies and society; general economic conditions including inflation risks; the inherent risks involved in the mining, exploration and development of mineral properties; changes in project parameters as plans continue to be refined; commodity prices; variations in ore reserves, grade or recovery rates; actual performance of plant, equipment or processes relative to specifications and expectations; accidents; labour relations; relations with local communities; uninsured risks; defects in title; climate change events including, but not limited to, drought conditions; changes in national or local governments; changes in applicable legislation or application thereof, including, but not limited to, Mexican mining reforms; delays in obtaining approvals or financing or in the completion of development or construction activities; exchange rate fluctuations; requirements for additional capital; government regulation; environmental risks; reclamation expenses; outcomes of pending litigation; conditions in the market for the Company’s shares and the equity markets in general; as well as those factors discussed in the section entitled "Description of the Business - Risk Factors" in the Company's most recent Annual Information Form, available on www.sedar.com, and Form 40-F on file with the United States Securities and Exchange Commission in Washington, D.C. Although First Majestic has attempted to identify important factors that could cause actual results to differ materially from those contained in forward-looking statements, there may be other factors that cause results not to be as anticipated, estimated or intended. The Company notes that changes in climate conditions could adversely affect the business and operations through shifting weather patterns, environmental incidents, and extreme weather events. This can include changes in snow and precipitation levels, extreme temperatures, changing sea levels and other weather events which can result in frozen conditions, flooding, droughts, or fires. Such conditions could directly or indirectly impact our operations by affecting the safety of our staff and the communities in which we operate, disrupting safe access to sites, damaging facilities and equipment, disrupting energy and water supply, creating labor and material shortages and can cause supply chain interruptions. There is no assurance that the Company will be able to successfully anticipate, respond to or manage risks associated with severe climate conditions. Any such disruptions could have an adverse effect on the Company’s operations, production, and financial results.

The Company believes that the expectations reflected in these forward‐looking statements are reasonable, but no assurance can be given that these expectations will prove to be correct and such forward‐looking statements included herein should not be unduly relied upon. These statements speak only as of the date hereof. The Company does not intend, and does not assume any obligation, to update these forward-looking statements, except as required by applicable laws.

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