Mr. Keith Neumeyer reports

FIRST MAJESTIC ANNOUNCES PROPOSED SALE OF THE LA GUITARRA SILVER MINE

First Majestic Silver Corp. has entered into a definitive agreement dated May 24, 2022, to sell its 100-per-cent-owned, past-producing La Guitarra silver mine, located in the Temascaltepec mining district, Mexico, to Sierra Madre Gold & Silver Ltd. for a total consideration of $35-million (U.S.). It is a condition to closing of the transaction that Sierra Madre raise a minimum of $10-million in a private placement concurrent with or prior to the closing of the transaction.

Total consideration consists of 69,063,076 Sierra Madre shares at a deemed price of 65 cents per Sierra Madre share, having an aggregate value of $35-million (U.S.). Upon closing, First Majestic will also be granted a 2-per-cent net smelter return royalty on all mineral production from the La Guitarra concessions, with the net smelter return royalty subject to a 1-per-cent buyback option for $2-million (U.S.). The equity component of the consideration will be paid upon closing of the transaction.

Once closed, First Majestic will hold approximately 47 per cent of the outstanding shares in Sierra Madre, which will be subject to a statutory holding period of four months and one day following the date of closing and contractual resale restrictions. Closing of the transaction remains subject to the approval of the TSX Venture Exchange and other customary closing conditions and is expected to occur in the second half of the year.

The La Guitarra silver mine is a past-producing silver and gold operation that was placed under care and maintenance by First Majestic in August, 2018. Sierra Madre is a mineral exploration company currently focused on the acquisition, exploration and development of the Tepic and La Tigra properties in Nayarit, Mexico. Sierra Madre has an experienced management team that had previously operated the La Guitarra mine from 2006 to 2009 and has a proven record of wealth creation in Mexico through project discovery, advancement, and monetization.

About First Majestic Silver Corp.

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 Jerritt Canyon gold mine, the Santa Elena silver/gold mine and the La Encantada silver mine.

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