Ermitaño

Ermitaño is approximately 145 kilometres northeast of Hermosillo and contiguous with Santa Elena Mine near the intersection of 29° 59´ 29.25” north latitude and 110° 05´24.95” west longitude and 12km west of Banamichi.  

1. Mineral Resources have been classified in accordance with the Canadian Institute of Mining, Metallurgy and Petroleum (“CIM”) Definition Standards on Mineral Resources and Mineral Reserves, whose definitions are incorporated by reference into National Instrument NI 43-101.
2. The Mineral Resources information provided above is based on mineral resource estimates prepared as of December 31, 2019 by FMS Internal QPs, who have the appropriate relevant qualifications, and experience in geology and resource estimation. The information provided was compiled by David Rowe, CPG, Internal QP for First Majestic, and reviewed by Ramon Mendoza Reyes, PEng, Internal QP for First Majestic.
3. Metal prices considered for Mineral Resources estimates were $18.50/oz Ag, $1,450/oz Au.

The Ermitaño West area contains a network of east–west trending low sulphidation epithermal veins and stockwork within an area of 1,200 metres long 600 metres wide.   Vein textures suggest a shallower level of exposure in the low sulphidation epithermal environment compared to Santa Elena. Surface sampling includes 946 chip and channel samples which average 0.12 gpt Au and ranging up to 6.67 gpt Au

Low sulphidation epithermal silver and gold mineralization is hosted in the steep dipping Ermitaño and Ermitaño Splay structures. The structures host green and white massive, banded, and bladed and stockwork quartz, calcite, and adularia. The veins are commonly brecciated and are associated with argillic alteration. Sulphide and iron oxide after sulphide and pyrolusite occur locally. The bulk of Inferred mineralization disclosed in 2018 is hosted in the Ermitaño Splay. Drilling of the Ermitaño Splay has delineated an east-west striking structure approximately 500 metres long, 400 metres down dip, with mineralized true thicknesses ranging from 0.9 to 30.0 metres, averaging 11.0 metres. Mineralization in the Splay remains open up-dip and down-dip to the west. The Ermitaño Splay separates from the Ermitaño structure which is delineated by drilling over an approximate 1,000 metre southwest strike length and 400 metre dip length.  Mineralized true thickness range from 0.8 to 11.0 metres, averaging 4.0 metres.

Oblique view of Ermitaño and Ermitaño Splay

Plan view of Ermitaño and Ermitaño Splay

In October 2016, First Majestic began a diamond drilling campaign at Ermitaño West. Ten drill holes were completed over a total of 3,156 metres which defined an initial maiden resource of 40.8 million silver equivalent. By the end of the 2018, a total of 50 drill holes had been completed on the property.  The 2018 exploration program added 17,447 metres in 40 drill holes consisting of nine infill holes designed to increase the confidence and size of the resource and 31 step out holes to target areas to the West and East of the known mineralization.  The 2019 exploration program totalled 33,767 metres in 103 drill holes primarily consisting of infill holes designed to increase the confidence and overall size of the resource.

In 2020, the Company is planning to drill approximately 15,000 metres in 50 drill holes. This drilling will focus on infill of the main resource area, including resource expansion in the eastern Ermitaño vein area, the Aitana vein, and several nearby newly identified targets.

In addition, the Company is currently working on several engineering studies, including geotechnical and geohydrological investigations, a detailed metallurgical testing and a series of trade-offs analysis to define the materials handling infrastructure. These studies will support a pre-feasibility study expected to be released in the fourth quarter of 2020.

Furthermore, the Company is expected to complete 3,800 metres of underground development in 2020. This development program, which began in late 2019, is designed to complete the main access ramp to reach the mineralized area and prepare five production levels with all associated mining infrastructure. Production from Ermitaño is expected to displace the current feed from the old heap pads which is currently making up approximately 40% of the feed to the mill.

Ermitaño Splay Grade x Thickness Long Section

Note: Holes EW16-01 to EW16-04 were announced on January 17, 2017 (see press release at https://www.firstmajestic.com/news/2017/index.php?content_id=312). Holes EW16-06 and EW 17-09 were announced on January 9, 2018 (see press release at https://www.firstmajestic.com/news/index.php?content_id=340). Gold equivalent (“Gold-Equiv”) is calculated using a gold to silver ratio of 1:80.

After detailed geological logging, all drill core samples were split on site by diamond saw. One half of the core was submitted to Bureau Veritas Mineral Laboratories at the laboratory in Vancouver, British Columbia, Canada and to SGS Laboratories at the laboratories in Durango and Hermosillo, Mexico. The remaining half core is retained on-site for verification and reference purposes.