First Majestic Silver (AG) 6-K Condensed Interim Consolidated Financial Statements

CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

FOR THE THREE MONTHS ENDED MARCH 31, 2019 AND 2018

(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

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.

Keith Neumeyer	Raymond Polman, CPA, CA
President & CEO	Chief Financial Officer
May 8, 2019	May 8, 2019

TABLE OF CONTENTS

CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
	Condensed Interim Consolidated Statements of Earnings (Loss)	1
	Condensed Interim Consolidated Statements of Comprehensive Income (Loss)	2
	Condensed Interim Consolidated Statements of Cash Flows	3
	Condensed Interim Consolidated Statements of Financial Position	4
	Condensed Interim Consolidated Statements of Changes in Equity	5
NOTES TO CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
General
	Note 1. Nature of Operations	6
	Note 2. Basis of Presentation	6
	Note 3. Significant Accounting Policies, Estimates and Judgments	7
	Note 4. Acquisition of Primero Mining Corp.	8
Statements of (Loss) Earnings
	Note 5. Segmented Information	9
	Note 6. Revenues	11
	Note 7. Cost of Sales	12
	Note 8. General and Administrative Expenses	12
	Note 9. Investment and Other Income (Loss)	12
	Note 10. Finance Costs	13
	Note 11. Earnings or Loss per Share	13
Statements of Financial Position
	Note 12. Trade and Other Receivables	13
	Note 13. Inventories	14
	Note 14. Other Financial Assets	14
	Note 15. Mining Interests	15
	Note 16. Property, Plant and Equipment	17
	Note 17. Right-of-Use Assets	19
	Note 18. Trade and Other Payables	19
	Note 19. Debt Facilities	20
	Note 20. Lease Liabilities	22
	Note 21. Share Capital	23
Other items
	Note 22. Financial Instruments and Related Risk Management	25
	Note 23. Supplemental Cash Flow Information	29

CONDENSED INTERIM CONSOLIDATED STATEMENTS OF EARNINGS (LOSS)
FOR THE THREE MONTHS ENDED MARCH 31, 2019 and 2018
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 March 31,
	Note	2019			2018
Revenues	6		$86,810			$58,593
Mine operating costs
Cost of sales	7	59,347			39,681
Depletion, depreciation and amortization		17,210			19,335
		76,557			59,016
Mine operating earnings (loss)		10,253			(423		)
General and administrative expenses	8	6,500			4,868
Share-based payments		2,075			2,516
Mine care and maintenance costs		808			—
Foreign exchange (gain) loss		(2,369		)	2,296
Operating earnings (loss)		3,239			(10,103		)
Investment and other income (loss)	9	2,018			(1,459		)
Finance costs	10	(3,705		)	(2,459		)
Earnings (loss) before income taxes		1,552			(14,021		)
Incometaxes
Current income tax expense		3,464			694
Deferred income tax recovery		(4,792		)	(9,123		)
		(1,328		)	(8,429		)
Net earnings (loss) for the period			$2,880			($5,592	)
Earnings (loss) per common share
Basic	11		$0.01			($0.03	)
Diluted	11		$0.01			($0.03	)
Weightedaveragesharesoutstanding
Basic	11	195,832,712			165,819,786
Diluted	11	196,745,512			165,819,786

Approved by the Board of Directors

Keith Neumeyer, Director	Douglas Penrose, Director

The accompanying notes are an integral part of the condensed interim consolidated financial statements
First Majestic Silver Corp. 2019 First Quarter Report	Page 1

CONDENSED INTERIM CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
FOR THE THREE MONTHS ENDED MARCH 31, 2019 and 2018
Condensed Interim Consolidated Financial Statements - Unaudited	(In thousands of US dollars)

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.

	Note	Three Months Ended March 31,
		2019		2018
Net earnings (loss) for the period			$2,880		($5,592	)
Other comprehensive income (loss)
Items that will not be subsequently reclassified to profit or loss:
Unrealized gain (loss) on fair value of investments in marketable securities	14	150		(348		)
Other comprehensive income (loss)		150		(348		)
Total comprehensive income (loss)			$3,030		($5,940	)

The accompanying notes are an integral part of the condensed interim consolidated financial statements
First Majestic Silver Corp. 2019 First Quarter Report	Page 2

CONDENSED INTERIM CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS ENDED MARCH 31, 2019 and 2018
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 March 31,
	Note	2019			2018
OperatingActivities
Net earnings (loss) for the period			$2,880			($5,592	)
Adjustments for:
Depletion, depreciation and amortization		17,664			19,522
Share-based payments		2,075			2,516
Income tax recovery		(1,328		)	(8,429		)
Finance costs	10	3,705			2,459
Other	23	(1,291		)	5,165
Operatingcashflowsbeforemovementsinworkingcapital and taxes		23,705			15,641
Net change in non-cash working capital items	23	10,246			(5,509		)
Income taxes paid		(1,236		)	(261		)
Cashgeneratedbyoperatingactivities		32,715			9,871
InvestingActivities
Expenditures on mining interests		(19,835		)	(16,639		)
Acquisition of property, plant and equipment		(10,129		)	(6,269		)
Deposits paid for acquisition of non-current assets		(640		)	(826		)
Proceeds from settlement of silver futures derivatives		1,597			—
Cashusedininvestingactivities		(29,007		)	(23,734		)
FinancingActivities
Proceeds from ATM program, net of share issue costs	21(a)	32,458			—
Proceeds from exercise of stock options		1,152			683
Repayment of lease liabilities	20(b)	(1,006		)	(710		)
Finance costs paid		(2,299		)	(640		)
Net proceeds from convertible debentures	19(a)	—			151,079
Repayment of Scotia debt facilities		—			(3,182		)
Shares repurchased and cancelled		—			(1,289		)
Cashprovided byfinancingactivities		30,305			145,941
Effect of exchange rate on cash and cash equivalents held in foreign currencies		431			(980		)
Increase in cash and cash equivalents		34,013			132,078
Cash and cash equivalents, beginning of the period		57,013			118,141
Cash and cash equivalents, end of period			$91,457			$249,239
Cash			$91,457			$211,869
Short-term investments		—			37,370
Cash and cash equivalents, end of period			$91,457			$249,239
Supplementalcashflowinformation	23

The accompanying notes are an integral part of the condensed interim consolidated financial statements
First Majestic Silver Corp. 2019 First Quarter Report	Page 3

CONDENSED INTERIM CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
AS AT MARCH 31, 2019 AND DECEMBER 31, 2018
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.

	Note	March 31, 2019			December 31, 2018
Assets
Currentassets
Cash and cash equivalents			$91,457			$57,013
Trade and other receivables	12	7,929			5,599
Value added taxes receivable	22(c)	49,862			59,665
Income taxes receivable		397			982
Inventories	13	27,358			32,468
Other financial assets	14	8,379			8,458
Prepaid expenses and other		3,801			2,089
Totalcurrentassets		189,183			166,274
Non-currentassets
Mining interests	15	444,659			435,613
Property, plant and equipment	16	253,359			251,084
Right-of-use assets	17	3,869			—
Deposits on non-current assets		3,613			3,464
Non-current income taxes receivable		19,029			18,737
Deferred tax assets		53,893			50,938
Totalassets			$967,605			$926,110
LiabilitiesandEquity
Currentliabilities
Trade and other payables	18		$49,424			$50,183
Unearned revenue	6	4,168			3,769
Current portion of debt facilities	19	444			1,281
Current portion of lease liabilities	20	4,269			2,904
Total currentliabilities		58,305			58,137
Non-currentliabilities
Debt facilities	19	149,781			148,231
Lease liabilities	20	4,865			2,943
Decommissioning liabilities		28,702			27,796
Other liabilities		3,985			3,787
Deferred tax liabilities		88,672			90,643
Totalliabilities			$334,310			$331,537
Equity
Share capital		861,509			827,622
Equity reserves		89,985			88,030
Accumulated deficit		(318,199		)	(321,079		)
Totalequity			$633,295			$594,573
Totalliabilitiesandequity			$967,605			$926,110
Commitments (Note 15; Note 22(c))

The accompanying notes are an integral part of the condensed interim consolidated financial statements
First Majestic Silver Corp. 2019 First Quarter Report	Page 4

CONDENSED INTERIM CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
FOR THE THREE MONTHS ENDED MARCH 31, 2019 and 2018
Condensed Interim Consolidated Financial Statements - Unaudited	(In thousands of US dollars, except share and per share amounts)

The 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(b)			Retirement Benefit Plan(c)		Equity component of convertible debenture(d)		Total equity reserves						Total equity
Balance at December 31, 2017	165,824,164			$636,672			$65,307			($3,004	)		$—		$—		$62,303			($116,490	)		$582,485
Net loss for the period	—		—			—			—			—		—		—			(5,592		)	(5,592		)
Other comprehensive loss	—		—			—			(348		)	—		—		(348		)	—			(348		)
Total comprehensive loss	—		—			—			(348		)	—		—		(348		)	(5,592		)	(5,940		)
Share-based payments	—		—			2,516			—			—		—		2,516			—			2,516
Equity component of convertible debenture, net of tax (Note 19(a))	—		—			—			—			—		19,164		19,164			—			19,164
Shares issued for:
Exercise of stock options (Note 21(b))	149,490		795			(112		)	—			—		—		(112		)	—			683
Shares cancelled	(230,000	)	(899		)	—			—			—		—		—			(390		)	(1,289		)
Balance at March 31, 2018	165,743,654			$636,568			$67,711			($3,352	)		$—		$19,164		$83,523			($122,472	)		$597,619
Balance at December 31, 2018	193,873,335			$827,622			$71,715			($3,514	)		$665		$19,164		$88,030			($321,079	)		$594,573
Net earnings for the period	—		—			—			—			—		—		—			2,880			2,880
Other comprehensive income	—		—			—			150			—		—		150			—			150
Total comprehensive income	—		—			—			150			—		—		150			2,880			3,030
Share-based payments	—		—			2,075			—			—		—		2,075			—			2,075
Shares issued for:
Exercise of stock options (Note 21(b))	289,641		1,422			(270		)	—			—		—		(270		)	—			1,152
At-the-Market Distributions (Note 21(a))	5,250,000		32,458			—			—			—		—		—			—			32,458
Shares cancelled	1,661		7			—			—			—		—		—			—			7
Balance at March 31, 2019	199,414,637			$861,509			$73,520			($3,364	)		$665		$19,164		$89,985			($318,199	)		$633,295

(a) Share-based payments reserve records the cumulative amount recognized under IFRS 2 share-based payments in respect of options granted and shares purchase warrants issued but not exercised 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") financial instruments.

(c) Retirement benefit plan reserve records re-measurements arising from actuarial gains or losses and return on plan assets in relation to San Dimas' retirement benefit plan.

(d) Equity component of convertible debenture reserve represents the estimated fair value of its conversion option of $26.3 million, net of deferred tax effect of $7.1 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. 2019 First 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 silver production, development, exploration, and acquisition of mineral properties with a focus on silver production in Mexico. The Company owns and operates six producing mines: the San Dimas Silver/Gold Mine, the Santa Elena Silver/Gold Mine, the La Encantada Silver Mine, the San Martin Silver Mine, the La Parrilla Silver Mine and the Del Toro Silver Mine.

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”, and International Financial Reporting Standards as issued by the International Accounting Standards Board (“IFRS”). 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, 2018, 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 22(a)) and marketable securities (Note 14). 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, 2018, except for the following:

Leases

On January 1, 2019, the Company adopted IFRS 16 - Leases ("IFRS 16") which superseded IAS 17 - Leases. IFRS 16 applies a control model to the identification of leases, distinguishing between a lease and a service contract on the basis of whether the customer controls the asset. Control is considered to exist if the customer has the right to obtain substantially all of the economic benefits from the use of an identified asset and the right to direct the use of that asset. For those assets determined to meet the definition of a lease, IFRS 16 introduces significant changes to the accounting by lessees, introducing a single, on balance sheet accounting model that is similar to the finance lease accounting, with limited exceptions for short-term leases or leases of low value assets.

The Company adopted IFRS 16 on its effective date, using the modified retrospective application method, with the cumulative effect of initially applying the standard recorded as an adjustment to retained earnings and no restatement of comparative information. The Company has elected to measure its right-of-use assets at amounts equal to the associated lease liabilities as at the adoption date, which resulted in a $3.7 million increase in right-of-use assets (note 17) and lease liabilities (note 20), with no adjustment necessary to retained earnings.

The Company has elected to apply the available exemptions as permitted by IFRS 16 to recognize a lease expense on a straight line basis for short term leases (lease term of 12 months or less) and low value leases. The Company has also elected to apply the practical expedient whereby leases whose term ends within 12 months of the date of initial application would be accounted for in the same way as short term leases.

For certain leases, such as vehicles, the Company has also 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. 2019 First 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)

2. BASIS OF PRESENTATION (continued)

Leases (continued)

In transitioning to IFRS 16, the Company analyzed its contracts to identify whether they are or contain a lease arrangement. This analysis identified contracts containing leases that have an equivalent increase to both the Company’s right-of-use assets and lease liabilities. Upon the adoption of IFRS 16, the Company recognized additional right-of-use assets and lease liabilities primarily related to the Company’s equipment and building rental contracts, land easement contracts and service contracts that contain embedded leases for property, plant and equipment. The incremental borrowing rates for lease liabilities initially recognized on adoption of IFRS 16 was 5.8% to 12.4%. Due to the recognition of additional right-of-use assets and lease liabilities, during the three months ended March 31, 2019, depreciation expense increased by $0.3 million and financing costs increased by $0.1 million, respectively, under IFRS 16 compared to the previous standard. Additionally, operating cash flows increased by $0.3 million with a corresponding $0.3 million increase in financing cash outflows.

3. SIGNIFICANT 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 months ended March 31, 2019, the Company applied the critical judgments and estimates disclosed in note 3 of its audited consolidated financial statements for the year ended December 31, 2018 and the following critical judgments and estimates in applying accounting policies:

Leases as a result of adopting IFRS 16

Identifying Whether a Contract Includes a Lease

IFRS 16 applies a control model to the identification of leases, distinguishing between a lease and a service contract on the basis of whether the customer controls the asset. The Company had to apply judgment on certain factors, including whether the supplier has substantive substitution rights, does the Company obtain substantially all of the economic benefits and who has the right to direct the use of that asset.

Estimate of Lease Term

When the Company recognizes a lease, it assesses the lease term based on the conditions of the lease and determines whether it will extend the lease at the end of the lease contract, or exercise an early termination option. As it is not reasonably certain that the extension or early termination options will be exercised, the Company determined that the term of its leases are the lesser of original lease term or the life of the mine. This significant estimate could affect future results if the Company extends the lease or exercises an early termination option.

Determining the Discount Rate for Leases

Determining the discount rate for leases IFRS 16 requires the Company to discount the lease payments using the rate implicit in the lease if that rate is readily available. If that rate cannot be readily determined, the lessee is required to use its incremental borrowing rate (“IBR”). The Company generally used its IBR rate when recording leases initially, since the implicit rates were not readily available due to information not being available from the lessor regarding the fair value of underlying assets and direct costs incurred by the lessor related to the leased assets. The IBR for each lease was determined on the commencement date of the lease and recalculated at the re-measurement date, where applicable.

The accompanying notes are an integral part of the condensed interim consolidated financial statements
First Majestic Silver Corp. 2019 First 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)

4. ACQUISITION OF PRIMERO MINING CORP.

Description of the Transaction

On May 10, 2018, First Majestic completed the acquisition of all of the issued and outstanding common shares (the "Arrangement") of Primero Mining Corp. pursuant to the terms and conditions of an arrangement agreement (the “Arrangement Agreement”) between First Majestic and Primero dated January 11, 2018. Under the terms of the Arrangement Agreement, First Majestic issued an aggregate of 6,418,594 common shares to Primero shareholders, on the basis of 0.03325 of a First Majestic common share for each Primero common share (the "Exchange Ratio").

The Arrangement also provided for the issuance by First Majestic of an aggregate of 221,908 replacement stock options (the "Replacement Options") to the holders of outstanding Primero stock options, at exercise prices adjusted by the Exchange Ratio. Under the Arrangement, all existing warrants of Primero also became exercisable to acquire First Majestic shares at exercise prices adjusted by the Exchange Ratio ("Replacement Warrants"). After the effective date of the Arrangement, such warrants are exercisable for an aggregate of 366,124 common shares of the Company. The fair value of the Replacement Options and Replacement Warrants, determined using a Black-Scholes valuation model, resulted in a nominal value as the exercise prices of the options and warrants are significantly out-of-the-money based on the Exchange Ratio and underlying share price.

With this transaction, First Majestic added the San Dimas Silver/Gold Mine which is located approximately 130 km northwest of Durango, Durango State, Mexico. The mine is accessible via a 40 minute flight from Durango to the mine’s airstrip. The operation consists of an underground mine and a mill with a 2,500 tpd capacity.

Concurrently and in connection and as part of the Arrangement, First Majestic terminated the pre-existing silver purchase agreement with Wheaton Precious Metals Corp. and its subsidiary, Wheaton Precious Metals International Ltd. (“WPMI”), relating to the San Dimas Mine and entered into a new precious metal purchase agreement (the “New Stream Agreement”) with WPMI and FM Metal Trading (Barbados) Inc., a wholly-owned subsidiary of First Majestic. Pursuant to the New Stream Agreement, WPMI is entitled 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 ounce delivered under the New Stream Agreement. As part of the restructuring of the stream agreement, WPMI received 20,914,590 common shares of First Majestic with an aggregate fair market value of approximately $143.1 million based on the closing price of First Majestic common shares on May 9, 2018 of $6.84. The final common share purchase consideration was determined based on the closing market price of First Majestic’s common shares on the day before the closing date of the Arrangement.

Management has concluded that Primero constitutes a business and, therefore, the acquisition is accounted for in accordance with IFRS 3 - Business Combinations. For the purpose of these consolidated financial statements, the purchase consideration has been allocated on a preliminary basis based on management’s best estimates at the time these condensed interim consolidated financial statements were prepared. The Company is continuing its review to determine the recoverability of value added tax receivables that are in arrears and the outcome of the APA Ruling (see Note 24 of the Company’s audited consolidated financial statements as at and for the year ended December 31, 2018) during the allowable measurement period, which shall not exceed one year from the acquisition date. Any future changes to the purchase price allocation may also result in adjustments to mining interests and deferred income taxes.

The accompanying notes are an integral part of the condensed interim consolidated financial statements
First Majestic Silver Corp. 2019 First 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)

4. ACQUISITION OF PRIMERO MINING CORP. (continued)

Consideration and Purchase Price Allocation

Total consideration for the acquisition was valued at $187.0 million on the acquisition date. The preliminary purchase price allocation, which is subject to final adjustments, is estimated as follows:

Total Consideration
6,418,594 First Majestic shares to Primero shareholders at $6.84 (CAD$8.80) per share	$	43,903
20,914,590 First Majestic shares to Wheaton Precious Metals Corp. at $6.84 (CAD$8.80) per share	143,056
	$	186,959
Allocation of Purchase Price
Cash and cash equivalents	$	3,871
Value added taxes receivable	27,508
Inventories	15,628
Mining interests	178,183
Property, plant and equipment	122,815
Deposit on non-current assets	60
Non-current income taxes receivable	19,342
Other working capital items	(23,792		)
Income taxes payable	(2,888		)
Debt facilities	(106,110		)
Decommissioning liabilities	(4,095		)
Other non-current liabilities	(4,678		)
Deferred tax liabilities	(38,885		)
Net assets acquired	$	186,959

Total transaction costs of $4.9 million related to the acquisition were expensed in the year ended December 31, 2018.

5. SEGMENTED INFORMATION

All of the Company’s operations are within the mining industry and its major products are precious metals doré and precious and base metals concentrates which are refined or smelted into pure silver, gold, lead and zinc 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.

A reporting 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 three months ended March 31, 2019, the Company's reporting segments includes its six operating mines in Mexico. Effective January 1, 2019, the Company no longer considers the La Guitarra mine, which was placed on care and maintenance on August 3, 2018 as a significant reporting segment. Accordingly, it has been grouped in the “others” category for the three months ended March 31, 2019 and 2018. “Others” also consists primarily of the Company’s corporate assets including cash and cash equivalents, other development and exploration properties (Note 15), debt facilities (Note 19), intercompany eliminations, and corporate expenses which are not allocated to operating segments. Management evaluates segment performance based on mine operating earnings. Therefore, other income and expense items are not allocated to the segments. The segmented information for the comparative periods have been adjusted to reflect the Company's reporting segments for the period ended March 31, 2019 for consistency.

The accompanying notes are an integral part of the condensed interim consolidated financial statements
First Majestic Silver Corp. 2019 First 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)

5. SEGMENTED INFORMATION

Significant information relating to the Company’s reportable operating segments is summarized in the tables below:

Three Months Ended March 31, 2019 and 2018		Revenue		Cost of sales		Depletion, depreciation, and amortization		Mine operating earnings (loss)			Capital expenditures
Mexico
San Dimas	2019		$40,885		$23,382		$6,272		$11,231			$8,197
	2018	—		—		—		—			—
Santa Elena	2019	20,133		12,767		2,288		5,078			4,821
	2018	23,730		12,582		2,840		8,308			4,842
La Encantada	2019	11,573		9,035		3,484		(946		)	2,850
	2018	7,597		7,627		3,508		(3,538		)	3,457
San Martin	2019	6,526		5,271		3,254		(1,999		)	2,446
	2018	9,637		5,331		2,162		2,144			2,098
La Parrilla	2019	5,457		5,718		1,300		(1,561		)	2,825
	2018	8,196		6,455		6,220		(4,479		)	3,130
Del Toro	2019	2,055		2,957		354		(1,256		)	981
	2018	5,506		4,821		2,285		(1,600		)	2,399
Others	2019	181		217		258		(294		)	6,590
	2018	3,927		2,865		2,320		(1,258		)	4,180
Consolidated	2019		$86,810		$59,347		$17,210		$10,253			$28,710
	2018		$58,593		$39,681		$19,335		($423	)		$20,106

At March 31, 2019 and December 31, 2018		Mining Interests				Property, plant and equipment		Total mining assets		Total assets		Total liabilities
		Producing		Exploration
Mexico
San Dimas	2019		$186,541		$3,021		$118,641		$308,203		$350,824		$50,055
	2018	182,434		3,705		120,218		306,357		368,460		59,990
Santa Elena	2019	41,940		9,283		38,817		90,040		112,683		18,874
	2018	33,447		14,316		39,664		87,427		104,955		16,753
La Encantada	2019	44,973		334		42,452		87,759		109,979		10,575
	2018	39,564		5,660		43,060		88,284		111,887		13,972
San Martin	2019	49,452		13,244		17,876		80,572		92,912		28,101
	2018	50,406		12,538		18,373		81,317		92,835		23,386
La Parrilla	2019	17,745		4,241		7,853		29,839		55,168		7,523
	2018	17,172		3,486		7,603		28,261		52,383		9,784
Del Toro	2019	9,728		3,570		5,838		19,136		35,879		6,821
	2018	9,601		3,082		5,775		18,458		36,760		7,624
Others	2019	21,027		39,560		21,882		82,469		210,162		212,361
	2018	21,027		39,175		16,391		76,593		158,830		200,028
Consolidated	2019		$371,406		$73,253		$253,359		$698,018		$967,605		$334,310
	2018		$353,651		$81,962		$251,084		$686,697		$926,110		$331,537

During the three months ended March 31, 2019, the Company had six (March 31, 2018 - four) customers that accounted for 100% of its doré and concentrate sales revenue, with one major customer accounting for 82% of total revenue (2018 - two major customers for 63% and 22%).

The accompanying notes are an integral part of the condensed interim consolidated financial statements
First Majestic Silver Corp. 2019 First 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)

6. REVENUES

The Company sells metals in the form of doré and concentrates. The Company’s primary product is silver and other metals produced as part of the extraction process, such as gold, lead and zinc, are considered as by-products. Revenues from 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 March 31,
	2019					2018
Gross revenue by material:
Doré		$80,363		91	%		$43,864		72	%
Concentrate	7,920			9	%	17,389			28	%
Gross revenue		$88,283		100	%		$61,253		100	%
Grossrevenuefrompayablemetals:
Silver		$52,488		59	%		$36,107		59	%
Gold	32,031			36	%	18,690			31	%
Lead	2,529			3	%	4,437			7	%
Zinc	1,235			1	%	2,019			3	%
Gross revenue	88,283			100	%	61,253			100	%
Less: smelting and refining costs	(1,473		)			(2,660		)
Revenues		$86,810					$58,593

As at March 31, 2019, $4.2 million of revenues that have not satisfied performance obligations were recorded as unearned revenue (December 31, 2018 - $3.8 million) and will be recorded as revenue in the subsequent period. During the three months ended March 31, 2019, revenue related to provisional pricing adjustments on concentrate sales was $0.2 million (2018 - $0.2 million).

(a) Gold Stream Agreement with Sandstorm Gold Ltd.

The Santa Elena mine has a purchase 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. 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 months ended March 31, 2019, the Company delivered 1,500 ounces of gold (2018 - 2,715 ounces) to Sandstorm at an average price of $455 per ounce (2018 - $450 per ounce). In September 2017, the Company exceeded 50,000 cumulative ounces delivered to Sandstorm which increased the base selling price from $350 per ounce to $450 per ounce.

(b) Gold Stream Agreement with Wheaton Precious Metals Corporation

The San Dimas mine has a purchase 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) and the prevailing market price, for each gold equivalent ounce delivered under the New Stream Agreement.

During the three months ended March 31, 2019, the Company delivered 11,510 ounces of gold equivalent to WPMI at $600 per ounce.

The accompanying notes are an integral part of the condensed interim consolidated financial statements
First Majestic Silver Corp. 2019 First 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)

7. 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 March 31,
	2019		2018
Consumables and materials		$12,424		$8,312
Labour costs	28,187		17,783
Energy	9,261		8,153
Other costs	4,285		3,714
Production costs		$54,157		$37,962
Transportation and other selling costs	807		902
Workers participation costs	1,595		341
Environmental duties and royalties	336		255
Inventory changes	2,452		221
		$59,347		$39,681

8. 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 March 31,
	2019		2018
Corporate administration		$1,040		$1,107
Salaries and benefits	3,523		2,263
Audit, legal and professional fees	1,161		977
Filing and listing fees	133		150
Directors fees and expenses	189		184
Depreciation	454		187
		$6,500		$4,868

9. INVESTMENT AND OTHER INCOME (LOSS)

The Company’s investment and other income (loss) are comprised of the following:

	Three Months Ended March 31,
	2019			2018
Gain (loss) from investment in marketable securities (Note 14)		$1,153			($2,149	)
Loss from investment in silver futures derivatives	(536		)	—
Interest income and other	1,401			690
		$2,018			($1,459	)

The accompanying notes are an integral part of the condensed interim consolidated financial statements
First Majestic Silver Corp. 2019 First 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)

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 period are summarized as follows:

	Three Months Ended March 31,
	2019		2018
Debt facilities (Note 19)		$2,707		$1,883
Lease liabilities (Note 20)	208		148
Accretion of decommissioning liabilities	604		329
Silver sales and other	186		99
		$3,705		$2,459

11. EARNINGS (LOSS) PER SHARE

Basic net earnings (loss) per share is the net earnings (loss) available to common shareholders divided by the weighted average number of common shares outstanding during the period. Diluted net earnings (loss) per share adjusts basic net earnings per share for the effects of dilutive potential common shares.

The calculations of basic and diluted (loss) earnings per share for the period ended March 31, 2019 and 2018 are as follows:

	Three Months Ended March 31,
	2019		2018
Net earnings (loss) for the period		$2,880		($5,592	)
Weighted average number of shares on issue - basic	195,832,712		165,819,786
Dilutive impact of stock options	912,800		—
Weighted average number of shares on issue - diluted(1)	196,745,512		165,819,786
Earnings (loss) per share - basic		$0.01		($0.03	)
Earnings (loss) per share - diluted		$0.01		($0.03	)

(1) Diluted weighted average number of shares excluded 7,680,435 (2018 - 10,398,095) options and 16,327,598 common shares issuable under the convertible debentures (Note 19(a)) that were anti-dilutive for the three months ended March 31, 2019.

12. TRADE AND OTHER RECEIVABLES

Trade and other receivables of the Company are comprised of:

	March 31, 2019		December 31, 2018
Trade receivables		$6,136		$4,671
Other	1,793		928
		$7,929		$5,599

The accompanying notes are an integral part of the condensed interim consolidated financial statements
First Majestic Silver Corp. 2019 First 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)

13. 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. Inventories of the Company are comprised of:

	March 31, 2019		December 31, 2018
Finished goods - doré and concentrates		$1,762		$2,538
Work-in-process	2,545		4,626
Stockpile	1,220		1,257
Silver coins and bullion	333		351
Materials and supplies	21,498		23,696
		$27,358		$32,468

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 March 31, 2019, mineral inventories, which consist of stockpile, work-in-process and finished goods, includes a $0.5 million (December 31, 2018 - $3.0 million) net realizable value write-down which was recognized in cost of sales during the period.

14. OTHER FINANCIAL ASSETS

As at March 31, 2019, other financial assets consists of the Company’s investment in marketable securities and foreign exchange derivatives comprised of the following:

	March 31, 2019		December 31, 2018
First Mining Gold Corp. (TSX: FF)		$3,957		$2,753
Sprott Physical  Silver Trust (NYSE: PSLV)	2,216		2,236
FVTPL marketable securities		$6,173		$4,989
FVTOCI marketable securities	1,581		1,431
Total marketable securities		$7,754		$6,420
Silver future derivatives	—		2,038
Foreign exchange derivatives	625		—
Total other financial assets		$8,379		$8,458

(a) Marketable Securities

Changes in fair value of marketable securities designated as fair value through profit or loss ("FVTPL") for the period ended March 31, 2019 totalling $1.2 million (2018 - $2.1 million) are recorded through profit or loss.

Changes in fair value of marketable securities designated as fair value through other comprehensive income ("FVTOCI") for the period ended March 31, 2019 totalling $0.2 million (2018 - $0.3 million) are recorded through other comprehensive income and will not be transferred into profit or loss upon disposition or impairment.

(b) Silver Future Derivatives

As at March 31, 2019, the Company carried a long position of 200 silver future contracts for 1,000,000 ounces of silver. The silver future derivatives carried a $nil balance (December 31, 2018 ‐$2.0 million) consisting of an unrealized loss of $0.7 million, net of $0.7 million in deposits. For the period ended March 31, 2019, the Company recognized a $0.5 million net loss on its investment in silver future derivatives (2018 - $nil).

The accompanying notes are an integral part of the condensed interim consolidated financial statements
First Majestic Silver Corp. 2019 First 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)

15. MINING INTERESTS

Mining interests primarily consist of acquisition, development and exploration 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:

	March 31, 2019		December 31, 2018
Producing properties		$371,406		$353,651
Exploration properties (non-depletable)	73,253		81,962
		$444,659		$435,613

Producing properties are allocated as follows:

Producing properties	San Dimas			Santa Elena			La Encantada			La Parrilla			Del Toro			San Martin			La Guitarra			Total
Cost
At December 31, 2017		$—			$36,371			$88,627			$155,351			$104,635			$90,955			$106,691			$582,630
Additions	11,030			7,609			5,787			8,336			6,241			3,988			2,686			45,677
Acquisition of Primero (Note 4)	178,183			—			—			—			—			—			—			178,183
Change in decommissioning liabilities	4,092			(633		)	3,122			—			—			—			—			6,581
Transfer from exploration properties	—			1,694			1,900			—			—			—			—			3,594
At December 31, 2018		$193,305			$45,041			$99,436			$163,687			$110,876			$94,943			$109,377			$816,665
Additions	5,284			1,966			1,275			1,815			382			1,134			—			11,856
Transfer from exploration properties	2,456			7,462			5,659			—			—			—			—			15,577
At March 31, 2019		$201,045			$54,469			$106,370			$165,502			$111,258			$96,077			$109,377			$844,098
Accumulated depletion, amortization and impairment
At December 31, 2017		$—			($7,639	)		($55,564	)		($62,144	)		($67,154	)		($40,317	)		($62,594	)		($295,412	)
Depletion and amortization	(10,871		)	(3,955		)	(4,308		)	(16,470		)	(4,850		)	(4,220		)	(3,102		)	(47,776		)
Impairment	—			—			—			(67,901		)	(29,271		)	—			(22,654		)	(119,826		)
At December 31, 2018		($10,871	)		($11,594	)		($59,872	)		($146,515	)		($101,275	)		($44,537	)		($88,350	)		($463,014	)
Depletion and amortization	(3,633		)	(935		)	(1,525		)	(1,242		)	(255		)	(2,088		)	—			(9,678		)
At March 31, 2019		($14,504	)		($12,529	)		($61,397	)		($147,757	)		($101,530	)		($46,625	)		($88,350	)		($472,692	)
Carrying values
At December 31, 2018		$182,434			$33,447			$39,564			$17,172			$9,601			$50,406			$21,027			$353,651
At March 31, 2019		$186,541			$41,940			$44,973			$17,745			$9,728			$49,452			$21,027			$371,406

The accompanying notes are an integral part of the condensed interim consolidated financial statements
First Majestic Silver Corp. 2019 First 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)

15. MINING INTERESTS (continued)

Exploration properties are allocated as follows:

Explorationproperties	San Dimas			SantaElena			La Encantada			La Parrilla			DelToro			SanMartin		La Guitarra			Other		Total
Cost
AtDecember31,2017		$—			$7,777			$5,221			$13,982			$10,117			$9,599		$10,385			$29,847		$86,928
Exploration and evaluation expenditures	3,705			8,233			2,339			3,291			2,363			2,939		1,337			3,593		27,800
Impairment	—			—			—			(13,787		)	(9,398		)	—		(5,987		)	—		(29,172		)
Transfer to producing properties	—			(1,694		)	(1,900		)	—			—			—		—			—		(3,594		)
AtDecember31,2018		$3,705			$14,316			$5,660			$3,486			$3,082			$12,538		$5,735			$33,440		$81,962
Exploration and evaluation expenditures	1,772			2,429			333			755			488			706		—			385		6,868
Transfer to producing properties	(2,456		)	(7,462		)	(5,659		)	—			—			—		—			—		(15,577		)
At March 31, 2019		$3,021			$9,283			$334			$4,241			$3,570			$13,244		$5,735			$33,825		$73,253

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

The San Dimas Mine has 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) and the prevailing market price, for each gold equivalent ounce delivered under the New Stream Agreement.

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

The Santa Elena Mine has 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 to Sandstorm. The selling price to Sandstorm is the lesser of $450 per ounce, subject to a 1% annual inflation increase commencing in April 2018, and the prevailing market price.

In December 2016, the Company entered into an option agreement with Compania Minera Dolores, S.A. de C.V., a subsidiary of Pan American Silver Corp., to acquire the Los Hernandez Property, consisting of 5,802 hectares of mining concessions north of the Santa Elena mine. In exchange, First Majestic has agreed to incur $1.6 million in exploration costs on the property over four years, grant a 2.5% NSR royalty on the related concessions, and to pay $1.4 million in option payments, of which $0.5 million has been paid, $0.2 million due in December 2019 and $0.7 million in December 2020.

(c) Del Toro Silver Mine, Zacatecas State

In October 2016, the Company entered into an agreement to acquire 7,205 hectares of mining concessions adjacent to the Del Toro Silver Mine. The total purchase price amounted to $1.5 million, payable over six equal payments every six months. As at March 31, 2019, $1.2 million (December 31, 2018 - $1.2 million) has been paid.

The accompanying notes are an integral part of the condensed interim consolidated financial statements
First Majestic Silver Corp. 2019 First 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)

16. PROPERTY, PLANT AND EQUIPMENT

The majority of the Company's property, plant and equipment is used in the Company's six 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			Other			Total
Cost
At December 31, 2017		$134,398			$341,899			$21,949			$14,711			$512,957
Additions	9			4,411			28,669			621			33,710
Acquisition of Primero (Note 4)	40,404			70,064			7,169			5,178			122,815
Transfers and disposals	3,053			14,488			(22,114		)	2,900			(1,673		)
At December 31, 2018		$177,864			$430,862			$35,673			$23,410			$667,809
Additions	—			427			9,552			7			9,986
Transfers and disposals	6,437			(536		)	(6,791		)	(34		)	(924		)
At March 31, 2019		$184,301			$430,753			$38,434			$23,383			$676,871
Accumulated depreciation, amortization and impairment
At December 31, 2017		($86,404	)		($223,353	)		$—			($11,148	)		($320,905	)
Depreciation and amortization	(8,215		)	(36,650		)	—			(1,777		)	(46,642		)
Transfers and disposals	—			1,464			—			48			1,512
Impairment	(16,639		)	(33,420		)	—			(631		)	(50,690		)
At December 31, 2018		($111,258	)		($291,959	)		$—			($13,508	)		($416,725	)
Depreciation and amortization	(1,471		)	(5,632		)	—			(593		)	(7,696		)
Transfers and disposals	124			713			—			72			909
At March 31, 2019		($112,605	)		($296,878	)		$—			($14,029	)		($423,512	)
Carrying values
At December 31, 2018		$66,606			$138,903			$35,673			$9,902			$251,084
At March 31, 2019		$71,696			$133,875			$38,434			$9,354			$253,359

(1) Included in land and buildings is $11.5 million (December 31, 2018 - $11.5 million) of land which is not subject to depreciation.

The accompanying notes are an integral part of the condensed interim consolidated financial statements
First Majestic Silver Corp. 2019 First 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)

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 Dimas			Santa Elena			La Encantada			La Parrilla			Del Toro			San Martin			La Guitarra			Other			Total
Cost
At December 31, 2017		$—			$73,684			$124,198			$96,491			$117,201			$47,541			$28,115			$25,727			$512,957
Additions	5,750			3,066			8,812			2,564			3,016			2,375			1,296			6,831			33,710
Acquisition of Primero (Note 4)	122,815			—			—			—			—			—			—			—			122,815
Transfers and disposals	(802		)	(79		)	(864		)	(9		)	1,311			1,784			(2,648		)	(366		)	(1,673		)
At December 31, 2018		$127,763			$76,671			$132,146			$99,046			$121,528			$51,700			$26,763			$32,192			$667,809
Additions	1,141			426			1,242			255			111			606			—			6,205			9,986
Transfers and disposals	(43		)	168			(328		)	(187		)	(218		)	(4		)	(312		)	—			(924		)
At March 31, 2019		$128,861			$77,265			$133,060			$99,114			$121,421			$52,302			$26,451			$38,397			$676,871
Accumulated depreciation, amortization and impairment
At December 31, 2017		$—			($28,898	)		($80,269	)		($52,984	)		($93,579	)		($27,789	)		($21,654	)		($15,732	)		($320,905	)
Depreciation and amortization	(8,179		)	(8,397		)	(9,646		)	(8,489		)	(3,761		)	(4,388		)	(2,161		)	(1,621		)	(46,642		)
Transfers and disposals	—			288			829			92			(804		)	(1,150		)	1,546			77			1,512
Impairment	634			—			—			(30,062		)	(17,609		)	—			(3,019		)	—			(50,690		)
At December 31, 2018		($7,545	)		($37,007	)		($89,086	)		($91,443	)		($115,753	)		($33,327	)		($25,288	)		($17,276	)		($416,725	)
Depreciation and amortization	(2,653		)	(1,297		)	(1,949		)	(37		)	(77		)	(1,149		)	—			(534		)	(7,696		)
Transfers and disposals	(22		)	(144		)	427			219			247			50			132			—			909
At March 31, 2019		($10,220	)		($38,448	)		($90,608	)		($91,261	)		($115,583	)		($34,426	)		($25,156	)		($17,810	)		($423,512	)
Carrying values
At December 31, 2018		$120,218			$39,664			$43,060			$7,603			$5,775			$18,373			$1,475			$14,916			$251,084
At March 31, 2019		$118,641			$38,817			$42,452			$7,853			$5,838			$17,876			$1,295			$20,587			$253,359

The accompanying notes are an integral part of the condensed interim consolidated financial statements
First Majestic Silver Corp. 2019 First 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)

17. RIGHT-OF-USE ASSETS

The Company entered into operating leases to use certain land, building, mining equipment and corporate equipment for its operations. Upon the adoption of IFRS 16, which became effective January 1, 2019 (see note 2), the Company is required to recognize right-of-use assets representing its right to use these underlying leased asset over the lease term.

Right-of-use asset is initially measured at cost, equivalent to its obligation to payments over the term of the respective operating 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 Buildings			Machinery and Equipment			Other			Total
At December 31, 2018		$—			$—			$—			$—
Initial adoption of IFRS 16 (Note 2)	2,624			1,036			22			3,682
Additions	170			307			—			477
Depreciation and amortization	(172		)	(116		)	(2		)	(290		)
At March 31, 2019		$2,622			$1,227			$20			$3,869

18. 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:

	March 31, 2019		December 31, 2018
Trade payables		$18,349		$26,420
Trade related accruals	12,471		9,351
Payroll and related benefits	15,350		11,255
Environmental duty	1,894		1,536
Other accrued liabilities	1,360		1,621
		$49,424		$50,183

The accompanying notes are an integral part of the condensed interim consolidated financial statements
First Majestic Silver Corp. 2019 First 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)

19. DEBT FACILITIES

The movement in debt facilities during the three months ended March 31, 2019 and year ended December 31, 2018, respectively, are comprised of the following:

	Convertible Debentures (a)			Revolving Credit Facility (b)			Scotia Debt Facilities			Primero Debt Facilities			Total
Balance at December 31, 2017		$—			$—			$31,769			$—			$31,769
Net proceeds from convertible debentures	151,079			—			—			—			151,079
Portion allocated to equity reserves	(26,252		)	—			—						(26,252		)
Net proceeds from revolving credit facility	—			34,006			—			—			34,006
Acquisition of Primero (Note 4)	—			—			—			106,111			106,111
Finance costs
Interest expense	2,738			1,170			529			—			4,437
Accretion	4,978			419			555			—			5,952
Repayments of principal	—			(16,000		)	(32,072		)	(106,111		)	(154,183		)
Payments of finance costs	(1,736		)	(890		)	(781		)	—			(3,407		)
Balance at December 31, 2018		$130,807			$18,705			$—			$—			$149,512
Finance costs
Interest expense	734			424			—			—			1,158
Accretion	1,387			162			—			—			1,549
Payments of finance costs	(1,466		)	(528		)	—			—			(1,994		)
Balance at March 31, 2019		$131,462			$18,763			$—			$—			$150,225
Statements of Financial Position Presentation
Current portion of debt facilities		$1,002			$279			$—			$—			$1,281
Non-current portion of debt facilities	129,805			18,426			—			—			148,231
Balance at December 31, 2018		$130,807			$18,705			$—			$—			$149,512
Current portion of debt facilities		$269			$175			$—			$—			$444
Non-current portion of debt facilities	131,193			18,588			—			—			149,781
Balance at March 31, 2019		$131,462			$18,763			$—			$—			$150,225

(a) Convertible Debentures

During the first quarter of 2018, the Company issued $156.5 million of unsecured senior convertible debentures (the “Notes”). The Company received net proceeds of $151.1 million after transaction costs of $5.4 million. The Notes mature on March 1, 2023 and bear an interest rate of 1.875% per annum, payable semi-annually in arrears in March and September of each year.

The Notes are convertible into common shares of the Company at any time prior to maturity at a conversion rate of 104.3297 common shares per $1,000 principal amount of Notes converted, representing an initial conversion price of $9.59 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 March 6, 2021, except in the event of certain changes in Canadian tax law. At any time on or after March 6, 2021 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. The redemption price will 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. 2019 First 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)

19. 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 $151.1 million from the Notes were allocated into its debt and equity components. The fair value of the debt portion was estimated at $124.8 million using a discounted cash flow model method with an expected life of five years and a discount rate of 6.14%. This amount is recorded as a financial liability on an amortized cost basis using the effective interest method using an effective interest rate of 6.47% 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 $26.3 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 $7.1 million related to taxable temporary difference arising from the equity portion of the convertible debenture was recognized in equity reserves.

Transaction costs of $5.4 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 May 10, 2018, the Company entered into a $75.0 million senior secured revolving credit facility ("Revolving Credit Facility") with the Bank of Nova Scotia, Bank of Montreal and Investec Bank PLC, as lenders. The Revolving Credit Facility will mature on its third anniversary date. Interest on the drawn balance will accrue at LIBOR plus an applicable range of 2.25% to 3.5% while the undrawn portion is subject to a standby fee with an applicable range of 0.5625% to 0.875%, dependent on certain financial parameters of First Majestic. As at March 31, 2019, the applicable rates were 6.1% and 0.875%, respectively.

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 total debt to rolling four quarters adjusted EBITDA of not more than 3.00 to 1.00; (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; and (c) tangible net worth of not less than $563.5 million plus 50% of its positive earnings subsequent to June 30, 2018. The debt facilities also provide for negative covenants customary for these types of facilities and allows the Company to enter into finance leases up to $30.0 million. As at March 31, 2019 and December 31, 2018, the Company was in compliance with these covenants.

The accompanying notes are an integral part of the condensed interim consolidated financial statements
First Majestic Silver Corp. 2019 First 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)

20. 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, and adjusted for interest and lease payments.

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 movement in lease liabilities during the three months ended March 31, 2019 and year ended December 31, 2018, respectively, are comprised of the following:

	Finance Leases (a)			Operating Leases (b)			Equipment Financing (c)			Total
Balance at December 31, 2017		$2,109			$—			$7,196			$9,305
Finance costs	80			—			444			524
Repayments of principal	(1,700		)	—			(1,846		)	(3,546		)
Payments of finance costs	(80		)	—			(356		)	(436		)
Balance at December 31, 2018		$409			$—			$5,438			$5,847
Initial adoption of IFRS 16 (Note 2)	—			3,682			—			3,682
Additions	—			478			—			478
Finance costs	8			99			101			208
Repayments of principal	(103		)	(292		)	(611		)	(1,006		)
Payments of finance costs	(8		)	—			(110		)	(118		)
Foreign exchange loss	—			43			—			43
Balance at March 31, 2019		$306			$4,010			$4,818			$9,134
Statements of Financial Position Presentation
Current portion of lease liabilities		$352			$—			$2,552			$2,904
Lease liabilities	57			—			2,886			2,943
Balance at December 31, 2018		$409			$—			$5,438			$5,847
Current portion of lease liabilities		$306			$1,416			$2,547			$4,269
Lease liabilities	—			2,594			2,271			4,865
Balance at March 31, 2019		$306			$4,010			$4,818			$9,134

(a) Finance Leases

From time to time, the Company purchases equipment under finance leases, with terms ranging from 24 to 48 months with interest rates ranging from 6.9% to 7.5%.

As at March 31, 2019, the net book value of property, plant and equipment includes $0.6 million (December 31, 2018 -$0.6 million) of equipment in property, plant and equipment pledged as security under finance leases.

The accompanying notes are an integral part of the condensed interim consolidated financial statements
First Majestic Silver Corp. 2019 First 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)

20. LEASE LIABILITIES (continued)

(b) Operating Leases

Upon the adoption of IFRS 16, the Company recognized $3.7 million in operating lease liabilities as at January 1, 2019, primarily related to certain 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 10 years, some of which include options to terminate the leases within a year, with incremental borrowing rates ranging from 5.8% to 12.4%.

(c) 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. The facility bears an interest rate of LIBOR plus 4.60%. 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 at March 31, 2019 and year ended December 31, 2018, the Company was in compliance with these covenants.

As at March 31, 2019, the net book value of property, plant and equipment includes $4.6 million (December 31, 2018 - $4.6 million) of equipment pledged as security for the equipment financing.

21. 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 period is summarized in the consolidated statements of changes in equity.

In May 2018, the Company completed an arrangement agreement to acquire all of the issued and outstanding shares of Primero by issuing 27,333,363 common shares at a price of $6.84 (CAD$8.80) based on the Company’s quoted market price as at the acquisition date. See Note 4 for details.

In 2018, the Company filed a prospectus supplement to the 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 for aggregate gross proceeds of up to $50.0 million. The sale of common shares would 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.

During the three months ended March 31, 2019, First Majestic sold 5,250,000 common shares of the Company under the ATM program at an average price of $6.34 per share for gross proceeds of $33.6 million, or net proceeds of $32.5 million after costs.

(b) Stock options

Under the terms of the Company’s Stock Option Plan, the maximum number of shares reserved for issuance under the Plan is 10% 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.

The accompanying notes are an integral part of the condensed interim consolidated financial statements
First Majestic Silver Corp. 2019 First 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)

21. SHARE CAPITAL (continued)

(b) Stock options (continued)

The following table summarizes information about stock options outstanding as at March 31, 2019:

	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)
2.01 - 5.00	1,318,957	4.79	1.76	1,318,957	4.79	1.76
5.01 - 10.00	5,243,026	7.97	7.33	1,609,430	7.03	3.44
10.01 - 15.00	3,203,102	11.04	2.86	2,364,203	11.07	2.62
15.01 - 20.00	125,000	16.36	2.38	125,000	16.36	2.38
20.01 - 250.00	206,913	74.26	1.95	206,913	74.26	1.95
	10,096,998	9.99	5.01	5,624,503	10.88	2.63

The movements in stock options issued during the three months ended March 31, 2019 and year ended December 31, 2018 are summarized as follows:

	Three Months Ended			Year Ended
	March 31, 2019			December 31, 2018
	Number of Options		Weighted Average Exercise Price (CAD $/Share)	Number of Options		Weighted Average Exercise Price (CAD $/Share)
Balance, beginning of the period	9,266,098		10.76	9,431,737		9.35
Granted	1,909,180		8.21	2,552,796		15.95
Exercised	(289,641	)	5.30	(973,948	)	5.28
Cancelled or expired	(788,639	)	16.43	(1,744,487	)	13.78
Balance, end of the period	10,096,998		9.99	9,266,098		10.76

During the three months ended March 31, 2019, the aggregate fair value of stock options granted was $5.9 million (December 31, 2018 - $7.8 million), or a weighted average fair value of $3.08 per stock option granted (December 31, 2018 - $3.07).

The following weighted average assumptions were used in estimating the fair value of stock options granted using the Black-Scholes Option Pricing Model:

		Three Months Ended	Year Ended
Assumption	Basedon	March 31, 2019	December 31, 2018
Risk-free interest rate (%)	Yield curves on Canadian government zero- coupon bonds with a remaining term equal to the stock options’ expected life	2.19	1.87
Expected life (years)	Average of the expected vesting term and expiry term of the option	5.76	5.40
Expected volatility (%)	Historical and implied volatility of the precious metals mining sector	52.00	58.70
Expected dividend yield (%)	Annualized dividend rate as of the date of grant	—	—

The weighted average closing share price at date of exercise for the three months ended March 31, 2019 was CAD$8.70 (December 31, 2018 - CAD$8.86).

The accompanying notes are an integral part of the condensed interim consolidated financial statements
First Majestic Silver Corp. 2019 First 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)

22. 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.

The table below summarizes the valuation methods used to determine the fair value of each financial instrument:

Financial Instruments Measured at Fair Value	Valuation Method
Trade receivables (related to concentrate sales)	Receivables that are subject to provisional pricing and final price adjustment at the end of the quotational period are estimated based on observable forward price of metal per London Metal Exchange (Level 2)
Marketable securities	Based on quoted market prices for identical assets in an active market (Level 1) as at the date of statements of financial position
Silver futures derivatives
Foreign exchange derivatives
Financial Instruments Measured at Amortized Cost	Valuation Method
Cash and cash equivalents	Approximated carrying value due to their short-term nature
Trade and other receivables
Value added taxes receivable
Trade and other payables
Debt facilities	Assumed to approximate carrying value as discount rate on
	these instruments approximate the Company's credit risk.

The accompanying notes are an integral part of the condensed interim consolidated financial statements
First Majestic Silver Corp. 2019 First 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)

22. FINANCIAL INSTRUMENTS AND RELATED RISK MANAGEMENT (continued)

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

The following table presents the Company’s fair value hierarchy for financial assets and financial liabilities that are measured at fair value:

	March 31, 2019						December 31, 2018
			Fair value measurement						Fair value measurement
	Carrying value		Level 1		Level 2		Carrying value		Level 1		Level 2
Financial assets
Trade receivables		$2,972		$—		$2,972		$2,559		$—		$2,559
Marketable securities (Note 14)	7,754		7,754		—		6,420		6,420		—
Silver futures derivatives (Note 14)	—		—		—		2,038		2,038		—

There were no transfers between levels 1, 2 and 3 during the three months ended March 31, 2019 and year ended December 31, 2018.

(b)	Capital risk management
	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.
	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:

	March 31, 2019			December 31, 2018
Equity		$633,295			$594,573
Debt facilities	150,225			149,512
Lease liabilities	9,134			5,847
Less: cash and cash equivalents	(91,457		)	(57,013		)
		$701,197			$692,919

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 continuing 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 19) and lease liabilities (Note 20). As at March 31, 2019 and December 31, 2018, the Company was in compliance with these covenants.

The accompanying notes are an integral part of the condensed interim consolidated financial statements
First Majestic Silver Corp. 2019 First 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)

22. FINANCIAL INSTRUMENTS AND RELATED RISK MANAGEMENT (continued)

(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 trade receivables in the ordinary course of business, value added taxes receivable and other receivables.
	As at March 31, 2019, value added taxes receivable was $49.9 million (2018 - $59.7 million), majority of which relates to Primero Empresa Minera, S.A. de C.V. ("PEM") due to filings in arrears when First Majestic acquired the entity. Since acquisition, the Company has accelerated its filings and reduced PEM's VAT receivables from $33.0 million to $27.6 million. The Company continues supplying additional information requested by the Servicio de Administración Tributaria (“SAT”) in response to the review process and the Company fully expects the amounts to be refunded in the future.
	The Company sells and receives payment upon delivery of its silver doré and by-products primarily through three international customers. Silver-lead concentrates and related base metal by-products are sold 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 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 has in place a planning and budgeting process to help determine the funds required to support the Company’s normal operating requirements and contractual obligations.

The following table summarizes the maturities of the Company’s financial liabilities as at March 31, 2019 based on the undiscounted contractual cash flows:

	Carrying Amount		Contractual CashFlows		Lessthan 1year		1 to 3 years		4 to 5 years		After 5 years
Trade and other payables		$49,424		$49,424		$49,424		$—		$—		$—
Debt facilities	150,225		191,735		4,628		27,673		159,434		—
Lease liabilities	9,134		10,392		4,552		4,478		1,362		—
Other liabilities	3,985		3,985		—		—		—		3,985
		$212,768		$255,536		$58,604		$32,151		$160,796		$3,985

At March 31, 2019, the Company had working capital of $130.9 million (December 31, 2018 – $108.1 million). Total available liquidity at March 31, 2019 was $185.9 million, including $55.0 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.

The accompanying notes are an integral part of the condensed interim consolidated financial statements
First Majestic Silver Corp. 2019 First 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)

22. FINANCIAL INSTRUMENTS AND RELATED RISK MANAGEMENT (continued)

(c) Financial 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. The foreign currency derivatives are not designated as hedging instruments for accounting purposes.

The sensitivity of the Company’s net earnings or loss and comprehensive income or loss due to changes in the exchange rate between the Canadian dollar and the Mexican peso against the U.S. dollar is included in the table below:

	March 31, 2019
	Cash and cash equivalents		Trade and other receivables		Value added taxes receivable		Other financial assets		Trade and other payables			Foreign exchange derivative		Net assets (liabilities) exposure		Effect of +/- 10% change in currency
Canadian dollar		$8,204		$70		$—		$3,958		($2,098	)		$—		$10,134		$1,013
Mexican peso	8,172		—		42,853		—		(29,949		)	35,500		56,576		5,658
		$16,376		$70		$42,853		$3,958		($32,047	)		$35,500		$66,710		$6,671

Commodity Price Risk

The Company is exposed to commodity price risk on silver, gold, lead and zinc, 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 derivative instruments to hedge its commodity price risk to silver.

The following table summarizes the Company’s exposure to commodity price risk and their impact on net earnings:

							March 31, 2019
	Effect of +/- 10% change in metal prices
	Silver		Gold		Lead		Zinc		Total
Metals subject to provisional price adjustments		$161		$—		$84		$124		$369
Metals in doré and concentrates inventory	35		143		16		25		219
		$196		$143		$100		$149		$588

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 March 31, 2019, the Company’s exposure to interest rate risk on interest bearing liabilities is limited to its debt facilities and lease liabilities. The Company’s equipment leases bear interest at fixed rates.

Based on the Company’s interest rate exposure at March 31, 2019, 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. 2019 First 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)

23. SUPPLEMENTAL CASH FLOW INFORMATION

		Three Months Ended March 31,
	Note	2019			2018
Adjustmentstoreconcilenetearningstooperatingcashflowsbeforemovementsinworkingcapital:
Unrealized foreign exchange loss (gain) and other			($674	)		$3,016
Unrealized loss from marketable securities and silver futures derivatives	14	(617		)	2,149
			($1,291	)		$5,165
Netchangeinnon-cashworkingcapitalitems:
(Increase) decrease in trade and other receivables			($2,330	)		$1,058
Decrease (increase) in value added taxes receivable		9,803			(5,178		)
Decrease in inventories		4,554			666
Increase in prepaid expenses and other		(1,712		)	(2,480		)
Decrease in income taxes payable		(1,935		)	(632		)
Increase in trade and other payables		1,866			1,057
			$10,246			($5,509	)
Non-cashinvestingandfinancingactivities:
Transfer of share-based payments reserve upon exercise of options			$270			$112

The accompanying notes are an integral part of the condensed interim consolidated financial statements
First Majestic Silver Corp. 2019 First Quarter Report	Page 29