Keith Neumeyer - President & CEO Todd Anthony - VP, IR Ray Polman - CFO Connie Lillico - Corporate Secretary Salvador Garcia - VP, Operations

Matthew O'Keefe - Dundee Capital Markets Adam Graf - Cowen Securities Ovais Habib - Scotiabank Howie Flinker - Flinker & Company

At this time I would like to turn the conference over to Keith Neumeyer, President and CEO for First Majestic Silver. Please go ahead.

Thank you. Welcome everyone, I'm sitting here with Todd Anthony the Vice President, Investor Relations at the VMO Conference and in Vancouver we have Ray Polman, the company's CFO and Connie Lillico, the Corporate Secretary of the company and also in Mexico we have Salvador Garcia on the line. Before I start talking I will just pass this over to Connie.

Thanks, Keith. Prior to us beginning today, I'll read our disclaimer and forward-looking statement. Certain statements contained in this conference call regarding the company and its operations constitute forward-looking statements within the meaning of the United States Private Securities Litigation Reform Act of 1995 and Section 21E of the United States Securities Exchange Act of 1934 as amended. All statements that are not historical facts including without limitation, statements regarding future estimate, plans, objectives, assumptions or expectations of future performance constitute forward-looking statements. We caution you that such forward-looking statements involve known and unknown risks and uncertainties that could cause actual results and future events to differ materially from those anticipated in such statements. Such risks and uncertainties include fluctuations in precious metal prices; unpredictable results of exploration activities; uncertainties inherent in the estimation of mineral reserves and resources; fluctuations in the cost of goods and services; problems associated with exploration and mining operations; changes in legal, social or political conditions in the jurisdictions where the company operates; lack of appropriate funding and other risk factors as discussed in the company's filings with the Canadian Securities regulatory agencies. Resources and production goals and forecasts may be based on data insufficient to support them. The company expressly disclaims any obligation to update any forward-looking statements. Back to you, Keith.

So I'm not going to read the new release or bore anyone by going through points of the new release, I'm sure everyone on this call has seen our fourth quarter. It's obviously quite a good quarter, quite a nice way to end the year. 2014 we had double digit growth in silver ounces as well as double-digit growth in equivalency which is obviously a very good thing. Also I think most importantly the all-in sustaining cost dropped by 27% from Q3 to Q4, a big achievement. Many of the cost cutting efforts that we started in 2013 finally started to take hold. We have reduced our workforce by unfortunately almost 1300 people and there is automation and SAP and many other things that we have done internally to assist in bringing this cost down. We have put our cost guidance for 2015 which is available on our website as well as in our new release, we can talk about that [inaudible]. Now we’re also hoping to even improve on the numbers that we put out publically and we’re working obviously aggressively on even improving the current situation. So some of the big drivers in the quarter was Del Toro, I know the shareholders have been waiting over a year or two seen Del Toro finally start contributing to our bottom-line. It's been a little bit of a challenge over the last year due to the fact that we had to make some changes to the mill. We put to two bar mills and series versus in parallel which helped with the grinding [ph] size and recoveries went from 60% to 75% which obviously made a big difference. We also finally hooked up to the power line a year after we had originally scheduled it due to all kinds of challenges we had with that particular power line but it did finally get hooked up on September 29th and our all-in sustaining cost drop from quite a high $25 an ounce to a $10 an ounce. So we had a $15 reduction in all-in sustaining cost quarter-over-quarter at Del Toro. Looking at cat [ph] something to look forward to for the year and really it's only a major expansion project going on right now is looking data [ph] where we launched a $12 million investment there back in Q3 of 2014 and we’re about half way through that now. We’re putting in a brand new circuit with a new ball mill bringing production there upto 3000 tons a day. We expect to hit 3000 tons a day on July 1 of this year and that should reduce the cost of that mine by about $5 an ounce so something we’re quite excited about and then something obviously is a high priority for the company. We did unfortunately take a write-down in the quarter due to the metal prices and the auditors require us to make changes to the valuation of our balance sheet and that was done. We took a $102 million write-down in the quarter. Nevertheless that’s obviously non-cash, on a cash flow basis we made $0.18 a share in cash and on an earnings basis we had $0.04. So for those of you who have questions please start queueing up. I'm pretty well done with my highlights and we will just check here if there is anyone in the queue.

[Operator Instructions]. The first question is from Matthew O'Keefe of Dundee Capital Markets. Please go ahead. Matthew O'Keefe: Just out of question the one thing that stood out to us was that your working capital slipped slightly just to a little bit of a negative territory here. I was wondering if you could remind the measures you’re taking to address that?

Yes the measures that we’re currently taking, we have a number of financial partners those working with us on the prepayments, those working with us on our leases. They are all friendly parties, we’re working with them to do some rescheduling to push out some of the debt to future years rather than the current year and that will help us with trimming down and moving some of the current liabilities to long term liabilities and we expect to have something in place no later than reporting for the first quarter. Matthew O'Keefe: And you don’t have an operating line of credit, or do you have any plans to do anything like that.

Yes, that’s a good question. We have a number of banks that are negotiating with us at this time to address, align of appropriate size that would assist us with any downside protection. Again that figures into the financial partners that are working with us and putting proposals to get it for the line of credit. We are just going to make sure that we have the best deal with the least covenants and the least restrictions in the company. Matthew O'Keefe: And if I could just ask one more question maybe back to Keith, on some of the -- obviously still some expansions that [inaudible] work going on but can you just give me an idea, is there money allotted to exploration and what areas can we be looking for some news maybe this year some blue sky if you will?

Well the exploration budget for the year is about 8 million it's quite small for company our size, there are lots of things we would love to be doing but exploration is really focused on delineating resources and reserves to update not only mine plans but also to update 43-101s. We have our first ever 43-101 coming out on [inaudible], we hope to have it out by the end of the quarter. So that will be a baseline starting point for reserves and resources at that mine so something that we’re looking forward to getting out there and then from there we will start building on over the next few years. We have been also doing quite a bit of drilling at Lincoln over the last year and we will continue to do that this year and focus there is also to update the reserve and resource in the form of 43-101 and we hope to have that 43-101 out by mid-year.

Your next question is from Adam Graf of Cowen Securities. Please go ahead.

I had a couple of questions, the cyanidation mill at Del Toro at current metal prices, what's your guess on when you might start moving back on that initiative?

Right now the ore that we’re mining is all going through floatation and originally it wasn’t the plan to do that and due to the fact the shaft is not there and the change of mine plant and so on. We’re forced into doing what we’re doing. The investment to change plan is about $35 million and quite honestly I think that $35 million is better in our bank account than spending it at Del Toro. Over the next couple of years we will be doing underground development and exploration like we do in all the mines but that money I would rather spend at La Encantada for example because that mine 500 tons a day it really needs to be doubled in size. So after we finish the investment at La Guitarra not Del Toro.

Okay and on the same vein talking about the new projects, are you guys going to be able to get a study together in a 43-101 for Plomosa's this year?

I think this year is probably a little bit aggressive. We originally for our 2015 budget we had $3.5 million in the budget due to exploration and some underground development at Plomosa but at the last minute we took it. So currently there is no money allocated for Plomosa in 2015. As metal prices change over the next few quarters and we start to see some decent treasury growth, it is a high property asset for us. It will become our next mine but it's really going to take probably years' worth of drilling and development to put up preliminary economic assessment together in order to start breaking ground on new operation. So it's likely 2017-2018 story before Plomosa is actually starting to produce ounces

And there is a quite bit of zinc there at Plomosa, is there a zinc price that would get you guys more excited and try to fast track that asset?

I haven't actually looked at the zinc at Plomosa, maybe I can just ask Salvador quick question, Salvador are you aware of zinc at Plomosa?

We have been -- Plomosa, it's mainly lead.

I'm not aware of any zinc being there.

I might be thinking of another asset. I apologize.

Yes well there are two zinc ore bodies that we’re focused on just to let you know because we’re -- there is some positive expectations about future zinc prices. There is two large zinc ore bodies at Del Toro while one is in the Saint Nicholas area and one is in the just under the San Juan ore body and we have a two year plan to develop and bring those two ore bodies into production.

So at Del Toro maybe we will some significant zinc production by 2017?

That’s correct, yes.

And then I hate to be dominating the call here but just one quick question, after you guys are ramped up at Encantada, how do you see that positively impacting your processing cost per ton?

Per ounce we expect to bring it down to around $12 all-in sustaining from the current level so it's about a $5 savings, I'm just trying to pull up the per ton number right now and see if I can find it. So we’re at -- or it's blended for the year. So our blended for the year is basically $40 but the difference between H1 and H2 I don’t have it in front of me. She goes from 45 to 40 basically it looks like.

[Operator Instructions]. The next question is from Ovais Habib of Scotiabank. Please go ahead.

Just a couple of questions for you, just in terms of Del Toro you had the power line now of four quarter or so. What kind of availability are you guys getting? Is it consistent and are you still using your gensets [ph] there?

No all seven gensets have been shut down and we have not had one single day of electrical disruption since we hooked it up on September 29.

And so basically in terms of cash cost coming down that’s definitely sustainable then going forward?

While we’re expecting it's going to be, that’s where it should have been originally quite frankly but January the recoveries were quite good as well and I don’t see any reason why. Of course 10% fluctuations month over month is normal, so things do change, but dramatic changes no I think Del Toro is on track and you can look at it to trend this way for the rest of this year.

Now just moving to La Parrilla, you guys are working on the underground haulage system that you’re building. Is that on track? Where is the projection on that project?

While we’re doing about a 100 meters a month so it's pretty slow snail's pace, we’re about 2 kilometers into it, it's a 5 kilometer project to complete it. We’re currently expecting it to complete it by the end of 2016 originally when we started it we had hoped to finish it by the end of 2014 so it's been delayed but it hasn’t been stopped it's just been done in at a slow pace.

And just Keith, if you could just remind us all in terms of you mentioned that you guys are going to be coming out with the reserves of La Guitarra. Are there any other catalyst that we should be aware of coming down the line?

Meaning for the year?

For the year, yes.

I think that the biggest thing we’re looking forward to is really the La Encantada expansion, you know that [inaudible] is going to increase the capacity there by 30% or the production by 30%. So that’s a big deal. The 43-101s are normal course and La Guitarra is one that we have been working on for a while so it will be good to finally get that out and that likely will pave the way for further expansion and La Guitarra we want to increase the size of that mill and this new 43-101 will set the ground work in order to be able to accomplish that. Well in Encantada 43-101 also will be coming out middle of the year and that will show all the drilling that we have been doing over the last couple of years and there is some new discoveries that we have had as well that it will be discussed in that report. So I think it's a quite positive, what's been going on there and we will be able to finally talk about it.

The next question is from Howie Flinker of Flinker & Company. Please go ahead.

Of the 1300 people fired, were any fired in the fourth quarter or was it all done earlier in the year?

No there was about 100 in the fourth quarter. 300 in the third quarter, there is about 100 in the first quarter as well, approximate 100.

[Operator Instructions].

Okay, if there is any other questions please queue yourself up, it's not -- we will be ending the call.

There appears to be no more questions at this time. I will hand the call back over to you Keith for closing remarks.

Okay. Thank you. Well thanks everyone for coming onto the call and we’re going to be working hard obviously to continually keep our costs in-line and waiting for higher silver prices so we can start growing the business again and can tell you it's a lot fun growing the business and building mines than it is to be looking for every penny to save, but it is what it is and we just have to build the business at current metal prices and I think our team in Mexico has done a fantastic job and the team in Vancouver led by Ray and Martin Palacios, our CIO also has done a fantastic job. So thank you again and best wishes to all of you.

This concludes today's conference call. You may disconnect your lines. Thank you for participating and have a pleasant day.