CONDENSED INTERIM CONSOLIDATED FINANCIAL …

CONDENSEDINTERIMCONSOLIDATEDFINANCIALSTATEMENTS

FORTHETHREEMONTHSENDEDMARCH31,2021AND2020

(UNAUDITED)

925WestGeorgiaStreet,Suite1800,Vancouver,B.C.,CanadaV6C3L2Phone:604.688.3033|Fax:604.639.8873|TollFree:1.866.529.2807|Email:[email protected]

www.firstmajestic.com

Management’sResponsibilitiesoverFinancialReporting

ThecondensedinterimconsolidatedfinancialstatementsofFirstMajesticSilverCorp.(the“Company”)aretheresponsibilityof theCompany’smanagement.Thecondensed interimconsolidated financial statementsareprepared inaccordancewithInternational Accounting Standard 34, "Interim Financial Reporting", as issued by the International Accounting StandardsBoardandreflectmanagement’sbestestimatesandjudgmentbasedoninformationcurrentlyavailable.

Management has developed and maintains a system of internal controls to ensure that the Company’s assets aresafeguarded,transactionsareauthorizedandproperlyrecorded,andfinancialinformationisreliable.

TheBoardofDirectors isresponsibleforensuringmanagementfulfills itsresponsibilities.TheAuditCommitteereviewstheresults of the condensed interim consolidated financial statements prior to their submission to the Board ofDirectors forapproval.

Thecondensedinterimconsolidatedfinancialstatementshavenotbeenaudited.

KeithNeumeyer RaymondPolman,CPA,CA

President&CEO ChiefFinancialOfficer

May5,2021 May5,2021

TABLEOFCONTENTS

CONDENSEDINTERIMCONSOLIDATEDFINANCIALSTATEMENTS

CondensedInterimConsolidatedStatementsofEarnings(Loss).................................................................................. 1

CondensedInterimConsolidatedStatementsofComprehensiveIncome(Loss)........................................................... 2

CondensedInterimConsolidatedStatementsofCashFlows.......................................................................................... 3

CondensedInterimConsolidatedStatementsofFinancialPosition................................................................................ 4

CondensedInterimConsolidatedStatementsofChangesinEquity................................................................................ 5

NOTESTOCONSOLIDATEDFINANCIALSTATEMENTS

General

Note1.NatureofOperations......................................................................................................................................... 6

Note2.BasisofPresentation.......................................................................................................................................... 6

Note3.SignificantAccountingPolicies,EstimatesandJudgments................................................................................ 6

StatementsofEarnings(Loss)

Note4.SegmentedInformation..................................................................................................................................... 7

Note5.Revenues............................................................................................................................................................ 9

Note6.CostofSales....................................................................................................................................................... 10

Note7.GeneralandAdministrativeExpenses................................................................................................................ 10

Note8.MineHoldingCosts............................................................................................................................................ 11

Note9.InvestmentandOtherIncome(Loss)................................................................................................................. 11

Note10.FinanceCosts.................................................................................................................................................... 11

Note11.EarningsorLossperShare............................................................................................................................... 12

StatementsofFinancialPosition

Note12.Inventories....................................................................................................................................................... 12

Note13.OtherFinancialAssets...................................................................................................................................... 12

Note14.MiningInterests............................................................................................................................................... 13

Note15.Property,PlantandEquipment........................................................................................................................ 16

Note16.Right-of-UseAssets.......................................................................................................................................... 18

Note17.TradeandOtherPayables................................................................................................................................ 18

Note18.DebtFacilities................................................................................................................................................... 19

Note19.LeaseLiabilities................................................................................................................................................. 21

Note20.ShareCapital.................................................................................................................................................... 22

Otheritems

Note21.FinancialInstrumentsandRelatedRiskManagement..................................................................................... 25

Note22.SupplementalCashFlowInformation.............................................................................................................. 29

Note23.ContingenciesandOtherMatters.................................................................................................................... 30

Note24.SubsequentEvents........................................................................................................................................... 32

The Condensed Interim Consolidated Statements of Earnings (Loss) provide a summary of the Company’s financialperformanceandnetearningsorlossoverthereportingperiods.

ThreeMonthsEndedMarch31,

Note 2021 2020

Revenues 5 $100,522 $86,065MineoperatingcostsCostofsales 6 57,061 49,835Costofsales-standbycosts 6 — 946Depletion,depreciationandamortization 15,345 14,169

72,406 64,950

Mineoperatingearnings 28,116 21,115

Generalandadministrativeexpenses 7 6,961 6,284Share-basedpayments 3,594 2,378Mineholdingcosts 8 3,868 4,779Lossondivestitureofexplorationprojects — 10,106Foreignexchangegain (1,797) (2,826)Operatingearnings 15,490 394

Unrealizedlossonforeigncurrencyderivatives — (22,654)Investmentandotherincome 9 (3,150) (540)Financecosts 10 (3,773) (3,856)Earnings(loss)beforeincometaxes 8,567 (26,656)

Incometaxes Currentincometaxexpense 8,537 1,214Deferredincometax(recovery)expense (1,825) 4,566

6,712 5,780

Netearnings(loss)fortheperiod $1,855 ($32,436)

Earnings(loss)percommonshare Basic 11 $0.01 ($0.15)Diluted 11 $0.01 ($0.15)

Weightedaveragesharesoutstanding Basic 11 222,544,712 209,396,052Diluted 11 225,772,720 209,396,052

ApprovedbytheBoardofDirectors

KeithNeumeyer,Director DouglasPenrose,Director

CONDENSEDINTERIMCONSOLIDATEDSTATEMENTSOFEARNINGS(LOSS)FORTHETHREEMONTHSENDEDMARCH31,2021and2020CondensedInterimConsolidatedFinancialStatements-Unaudited (InthousandsofUSdollars,exceptshareandpershareamounts)

TheaccompanyingnotesareanintegralpartofthecondensedinterimconsolidatedfinancialstatementsFirstMajesticSilverCorp.2021FirstQuarterReport Page1

TheCondensedInterimConsolidatedStatementsofComprehensiveIncome(Loss)provideasummaryoftotalcomprehensiveearnings or loss and summarizes items recorded in other comprehensive income that may or may not be subsequentlyreclassifiedtoprofitorlossdependingonfutureevents.

Note ThreeMonthsEndedMarch31,

2021 2020

Netearnings(loss)fortheperiod $1,855 ($32,436)

Othercomprehensive(loss)income Itemsthatwillnotbesubsequentlyreclassifiedtonetearnings(loss):

Unrealized(loss)gainonfairvalueofinvestmentsinmarketablesecurities,netoftax 13(b) (4,726) 293Realizedlossoninvestmentsinmarketablesecurities,netoftax 13(b) (651) —

Remeasurementofretirementbenefitplan — (455)

Othercomprehensiveloss (5,377) (162)

Totalcomprehensiveloss ($3,522) ($32,598)

CONDENSEDINTERIMCONSOLIDATEDSTATEMENTSOFCOMPREHENSIVEINCOME(LOSS)FORTHETHREEMONTHSENDEDMARCH31,2021and2020CondensedinterimConsolidatedFinancialStatements-Unaudited (InthousandsofUSdollars)


The Condensed Interim Consolidated Statements of Cash Flows provide a summary of movements in cash and cashequivalentsduringthereportingperiodsbyclassifyingthemasoperating,investingorfinancingactivities.


Note 2021 2020

OperatingActivities Netearnings(loss)fortheperiod $1,855 ($32,436)

Adjustmentsfor:

Depletion,depreciationandamortization 15,805 14,625

Share-basedpayments 3,594 2,378

Incometaxexpense 6,712 5,780

Financecosts 10 3,773 3,856

Write-downonassetsheld-for-sale 9 2,081 —

Lossondivestitureofexplorationprojects 14 — 10,176

Fairvalueadjustmentonforeigncurrencyderivatives — 22,654

Unrealizedlossfrommarketablesecuritiesandsilverfuturesderivatives 1,289 1,079

Unrealizedforeignexchangegain (3,980) (4,799)

Operatingcashflowsbeforemovementsinworkingcapitalandtaxes 31,129 23,313

Netchangeinnon-cashworkingcapitalitems 22 (13,766) (10,763)

Incometaxespaid (9,932) (502)

Cashgeneratedbyoperatingactivities 7,431 12,048

InvestingActivities

Expendituresonmininginterests (33,416) (19,772)

Acquisitionofproperty,plantandequipment (10,806) (12,016)Depositspaidforacquisitionofnon-currentassets (2,292) (1,518)

Proceedsfromsaleofmarketablesecurities 250 —

Cashusedininvestingactivities (46,264) (33,306)

FinancingActivities

Proceedsfromprospectusofferings,netofshareissuecosts 20(a) — 13,792

Proceedsfromexerciseofstockoptions 4,363 1,841

Repaymentofleaseliabilities 19 (1,328) (1,779)

Financecostspaid (1,759) (1,956)

Repaymentofdebtfacilities 18(b) — (10,000)Sharesrepurchasedandcancelled 20(f) — (1,694)

Cashprovidedbyfinancingactivities 1,276 204

Effectofexchangerateoncashandcashequivalentsheldinforeigncurrencies 663 (2,768)Decreaseincashandcashequivalents (37,557) (21,054)

Cashandcashequivalents,beginningoftheperiod 238,578 169,009

Cashandcashequivalents,endofperiod $201,684 $145,187

Cash $169,818 $138,065

Short-terminvestments 31,866 7,122


Supplementalcashflowinformation 22

CONDENSEDINTERIMCONSOLIDATEDSTATEMENTSOFCASHFLOWSFORTHETHREEMONTHSENDEDMARCH31,2021and2020CondensedInterimConsolidatedFinancialStatements-Unaudited (InthousandsofUSdollars)


TheCondensedInterimConsolidatedStatementsofFinancialPositionprovidesasummaryofassets,liabilitiesandequity,aswellastheircurrentversusnon-currentnature,asatthereportingdate.

Note March31,2021 December31,2020Assets

Currentassets Cashandcashequivalents $201,684 $238,578Tradeandotherreceivables 3,780 4,271Valueaddedtaxesreceivable 21(c) 48,256 41,641Inventories 12 36,079 32,512Otherfinancialassets 13 31,681 36,319Prepaidexpensesandother 4,826 2,725Assetsheld-for-sale 9 3,432 —Totalcurrentassets 329,738 356,046

Non-currentassets Mininginterests 14 537,547 509,730Property,plantandequipment 15 257,717 258,220Right-of-useassets 16 13,297 14,330Depositsonnon-currentassets 11,349 14,246Non-currentvalueaddedtaxesreceivable 21(c) 17,036 15,301Deferredtaxassets 68,014 69,644Totalassets $1,234,698 $1,237,517

LiabilitiesandEquity

Currentliabilities Tradeandotherpayables 17 $69,344 $76,002Advanceforassetsheld-for-sale 9 4,449 —Unearnedrevenue 5 2,025 2,717Currentportionofdebtfacilities 18 10,400 10,975Currentportionofleaseliabilities 19 4,944 5,358Incometaxespayable 5,741 6,574Totalcurrentliabilities 96,903 101,626

Non-currentliabilities Debtfacilities 18 143,314 141,733Leaseliabilities 19 14,272 15,217Decommissioningliabilities 50,347 51,471Otherliabilities 5,503 5,406Non-currentincometaxespayable 21,707 23,099Deferredtaxliabilities 43,505 48,729Totalliabilities $375,551 $387,281

Equity Sharecapital 1,097,140 1,087,139Equityreserves 99,052 101,997Accumulateddeficit (337,045) (338,900)Totalequity $859,147 $850,236

Totalliabilitiesandequity $1,234,698 $1,237,517

Commitments(Note14;Note21(c));Subsequentevent(Note24)

CONDENSEDINTERIMCONSOLIDATEDSTATEMENTSOFFINANCIALPOSITIONASATMARCH31,2021ANDDECEMBER31,2020CondensedInterimConsolidatedFinancialStatements-Unaudited (InthousandsofUSdollars)


TheConsolidatedStatementsofChangesinEquitysummarizesmovementsinequity,includingcommonshares,sharecapital,equityreservesandretainedearningsoraccumulateddeficit.

ShareCapital EquityReserves

AccumulateddeficitShares Amount

Share-basedpayments(a)

Othercomprehensiveincome(loss)(b)

Equitycomponent

ofconvertibledebenture(c)

Totalequityreserves Totalequity

BalanceatDecember31,2019 208,112,072 $933,182 $74,060 ($2,532) $19,164 $90,692 ($361,553) $662,321

Netlossfortheperiod — — — — — — (32,436) (32,436)

Othercomprehensiveloss — — — (162) — (162) — (162)

Totalcomprehensiveloss — — — (162) — (162) (32,436) (32,598)

Share-basedpayments — — 2,378 — — 2,378 — 2,378

Sharesissuedfor:

Prospectusofferings(Note20(a)) 1,304,338 13,792 — — — — — 13,792

Exerciseofstockoptions(Note20(b)) 295,816 2,549 (708) — — (708) — 1,841

Settlementofrestrictedshareunits(Note20(c)) 112,000 879 (879) — — (879) — —

Sharesrepurchasedandcancelled(Note20(f)) (275,000) (1,260) — — — — (434) (1,694)

BalanceatMarch31,2020 209,549,226 $949,142 $74,851 ($2,694) $19,164 $91,321 ($394,423) $646,040

BalanceatDecember31,2020 221,965,011 $1,087,139 $75,420 $7,413 $19,164 $101,997 ($338,900) $850,236

Netearningsfortheperiod — — — — — — 1,855 1,855

Othercomprehensiveloss — — — (5,377) — (5,377) — (5,377)

Totalcomprehensiveloss — — — (5,377) — (5,377) 1,855 (3,522)

Share-basedpayments — — 4,345 — — 4,345 — 4,345

Sharesissuedfor:

Exerciseofstockoptions(Note20(b)) 543,864 6,146 (1,783) — — (1,783) — 4,363

AcquisitionofSpringpoleSilverStream(Note14(c)) 287,300 3,750 — — — — — 3,750

Settlementofrestrictedshareunits(Note20(c)) 8,301 105 (130) — — (130) — (25)

BalanceatMarch31,2021 222,804,476 $1,097,140 $77,852 $2,036 $19,164 $99,052 ($337,045) $859,147

(a) Share-basedpaymentsreserverecordsthecumulativeamountrecognizedunderIFRS2share-basedpayments inrespectofstockoptionsgranted,restrictedshareunitsandsharespurchasewarrantsissuedbutnotexercisedorsettledtoacquiresharesoftheCompany.

(b) Othercomprehensiveincomereserveprincipallyrecordstheunrealizedfairvaluegainsorlossesrelatedtofairvaluethroughothercomprehensiveincome ("FVTOCI") financial instruments and re-measurements arising from actuarial gains or losses and return on plan assets in relation to SanDimas'retirementbenefitplan.

(c) Equitycomponentofconvertibledebenturereserverepresentstheestimatedfairvalueofitsconversionoptionof$26.3million,netofdeferredtaxeffectof$7.1million.Thisamountisnotsubsequentlyremeasuredandwillremaininequityuntiltheconversionoptionisexercised,inwhichcase,thebalancerecognizedinequitywillbetransferredtosharecapital.Wheretheconversionoptionremainsunexercisedatthematuritydateoftheconvertiblenote,thebalancewillremaininequityreserves.

CONDENSEDINTERIMCONSOLIDATEDSTATEMENTSOFCHANGESINEQUITYFORTHETHREEMONTHSENDEDMARCH312021AND2020CondensedInterimConsolidatedFinancialStatements-Unaudited (InthousandsofUSdollars,exceptshareandpershareamounts)


1.NATUREOFOPERATIONS

First Majestic Silver Corp. (the “Company” or “First Majestic”) is in the business of silver production, development,exploration,andacquisitionofmineralpropertieswithafocusonsilverandgoldproductioninNorthAmerica.TheCompanyownsthreeproducingmines:theSanDimasSilver/GoldMine,theSantaElenaSilver/GoldMineandtheLaEncantadaSilverMine,fourminesinsuspension:theSanMartinSilverMine,theDelToroSilverMine,theLaParrillaSilverMineandtheLaGuitarra Silver/GoldMine, and several exploration stage projects. The Company acquired the Jerritt CanyonGoldMine inNevada,USAonApril30,2021.

FirstMajesticis incorporatedinCanadawithlimitedliabilityunderthelegislationoftheProvinceofBritishColumbiaandispubliclylistedontheNewYorkStockExchangeunderthesymbol“AG”,ontheTorontoStockExchangeunderthesymbol“FR”andontheFrankfurtStockExchangeunderthesymbol“FMV”.TheCompany’sheadofficeandprincipaladdressislocatedat925WestGeorgiaStreet,Suite1800,Vancouver,BritishColumbia,Canada,V6C3L2.

2.BASISOFPRESENTATION

ThesecondensedinterimconsolidatedfinancialstatementshavebeenpreparedinaccordancewithInternationalAccountingStandard(“IAS”)34,“InterimFinancialReporting”.Thesecondensedinterimconsolidatedfinancialstatementsshouldbereadin conjunctionwith the Company’s audited consolidated financial statements as at and for the year endedDecember 31,2020,assomedisclosuresfromtheannualconsolidatedfinancialstatementshavebeencondensedoromitted.

Thesecondensedinterimconsolidatedfinancialstatementshavebeenpreparedonahistoricalcostbasisexceptforcertainitems that are measured at fair value including derivative financial instruments (Note 21(a)) and marketable securities(Note13).AlldollaramountspresentedareinthousandsofUnitedStatesdollarsunlessotherwisespecified.

These condensed interim consolidated financial statements incorporate the financial statements of the Company and itscontrolled subsidiaries.Controlexistswhen theCompanyhas thepower,directlyor indirectly, togovern the financial andoperatingpoliciesofanentitysoastoobtainbenefits fromitsactivities.Theconsolidatedfinancialstatements includetheaccountsoftheCompanyanditssubsidiaries.Intercompanybalances,transactions,incomeandexpensesareeliminatedonconsolidation.

ThesecondensedinterimconsolidatedfinancialstatementswerepreparedusingaccountingpoliciesconsistentwiththoseintheauditedconsolidatedfinancialstatementsasatandfortheyearendedDecember31,2020exceptasoutlinedinNote3.

3.SIGNIFICANTACCOUNTINGPOLICIES,ESTIMATESANDJUDGMENTS

TheCompany’smanagementmakesjudgmentsinitsprocessofapplyingtheCompany’saccountingpoliciesinthepreparationof its unaudited condensed interim consolidated financial statements. In addition, the preparation of the financial datarequiresthattheCompany’smanagementtomakeassumptionsandestimatesoftheimpactsofuncertainfutureeventsonthecarryingamountsoftheCompany’sassetsandliabilitiesattheendofthereportingperiod,andthereportedamountsofrevenuesandexpensesduringthereportingperiod.Actualresultsmaydifferfromthoseestimatesastheestimationprocessisinherentlyuncertain.Estimatesarereviewedonanongoingbasisbasedonhistoricalexperienceandotherfactorsthatareconsideredtoberelevantunderthecircumstances.RevisionstoestimatesandtheresultingimpactsonthecarryingamountsoftheCompany’sassetsandliabilitiesareaccountedforprospectively.

In preparing the Company’s unaudited condensed interim consolidated financial statements for the threemonths endedMarch 31, 2021, the Company applied the accounting policies, critical judgments and estimates disclosed in note 3 of itsaudited consolidated financial statements for the year ended December 31, 2020 and the following accounting policies,criticaljudgmentsandestimatesinapplyingaccountingpolicies:

NOTESTOCONDENSEDINTERIMCONSOLIDATEDFINANCIALSTATEMENTS

CondensedInterimConsolidatedFinancialStatements-Unaudited (TabularamountsareexpressedinthousandsofUSdollars)


3.SIGNIFICANTACCOUNTINGPOLICIES,ESTIMATESANDJUDGMENTS(continued)

NewandamendedIFRSstandardsthatareeffectiveforthecurrentyear:

InterestRateBenchmarkReform—Phase2(AmendmentstoIFRS9,IAS39,IFRS7,IFRS4andIFRS16)

TheamendmentsinInterestRateBenchmarkReform—Phase2(AmendmentstoIFRS9,IAS39,IFRS7,IFRS4andIFRS16)introduceapracticalexpedient formodifications requiredby the reform,clarify thathedgeaccounting isnotdiscontinuedsolelybecauseofthe IBORreform,and introducedisclosuresthatallowuserstounderstandthenatureandextentofrisksarisingfromtheIBORreformtowhichtheentityisexposedtoandhowtheentitymanagesthoserisksaswellastheentity’sprogressintransitioningfromIBORstoalternativebenchmarkrates,andhowtheentityismanagingthistransition.

The amendmentswere applied effective January 1, 2021 and did not have amaterial impact on the Company’s financialstatements.

FutureChangesinAccountingPoliciesNotYetEffectiveasatMarch31,2021:

Property,PlantandEquipment—ProceedsbeforeIntendedUse(AmendmentstoIAS16)Theamendmentsprohibitdeducting fromthecostofan itemofproperty,plantandequipmentanyproceeds fromsellingitems producedwhile bringing that asset to the location and condition necessary for it to be capable of operating in themanner intended by management. Instead, an entity recognises the proceeds from selling such items, and the cost ofproducingthoseitems,inprofitorloss.

TheamendmentsareappliedonorafterthefirstannualreportingperiodbeginningonorafterJanuary1,2022,withearlyapplicationpermitted.Theamendmentsareappliedretrospectively,butonlytoitemsofproperty,plantandequipmentthatare brought to the location and condition necessary for them to be capable of operating in the manner intended bymanagementonorafterthebeginningoftheearliestperiodpresentedinthefinancialstatementsinwhichtheCompanyfirstapplies the amendments. The Company will recognise the cumulative effect of initially applying the amendments as anadjustmenttotheopeningbalanceofretainedearningsatthebeginningofthatearliestperiodpresented.Thisamendmentwill impact the Company’s accounting for proceeds from mineral sales prior to reaching commercial production levelsintendedbymanagement.

ClassificationofLiabilitiesasCurrentorNon-Current(AmendmentstoIAS1)

Theamendmentsaimtopromoteconsistencyinapplyingtherequirementsbyhelpingcompaniesdeterminewhether,inthestatementof financialposition,debtandother liabilitieswithanuncertain settlementdate shouldbeclassifiedas current(dueorpotentiallyduetobesettledwithinoneyear)ornon-current.

TheamendmentsareappliedonorafterthefirstannualreportingperiodbeginningonorafterJanuary1,2023,withearlyapplicationpermitted.ThisamendmentisnotexpectedtohaveamaterialimpactontheCompany’sfinancialstatements.

4.SEGMENTEDINFORMATION

Allof theCompany’soperationsarewithin themining industryand itsmajorproductsarepreciousmetalsdoréwhicharerefinedorsmeltedintopuresilverandgoldandsoldtoglobalmetalbrokers.Transferpricesbetweenreportingsegmentsaresetonanarms-lengthbasisinamannersimilartotransactionswiththirdparties.Coinsandbullioncostofsalesarebasedontransferprices.

AreportingsegmentisdefinedasacomponentoftheCompanythat:• engagesinbusinessactivitiesfromwhichitmayearnrevenuesandincurexpenses;• whoseoperatingresultsarereviewedregularlybytheentity’schiefoperatingdecisionmaker;and• forwhichdiscretefinancialinformationisavailable.

ForthethreemonthsendedMarch31,2021,theCompany'sreportingsegmentsincludesitsthreeoperatingminesinMexicoandits"non-producingproperties"whichincludetheLaParrilla,DelToro,SanMartinandLaGuitarramines,whichhavebeenplaced on suspension, as significant reporting segments. “Others” consists primarily of the Company’s corporate assetsincludingcashandcashequivalents,otherdevelopmentandexplorationproperties(Note14),debtfacilities(Note18),coinsand bullion sales, and corporate expenseswhich are not allocated to operating segments. The Company’s chief operatingdecisionmaker(“CODM”)evaluatessegmentperformancebasedonmineoperatingearnings.Therefore,other incomeandexpenseitemsarenotallocatedtothesegments.




4.SEGMENTEDINFORMATION(continued)

SignificantinformationrelatingtotheCompany’sreportableoperatingsegmentsissummarizedinthetablesbelow:

ThreeMonthsEndedMarch31,2021and2020 Revenue Costofsales

Depletion,depreciation,

andamortization

Mineoperating

earnings(loss)Capital

expenditures

Mexico

SanDimas 2021 $61,789 $31,323 $9,804 $20,662 $14,4822020 48,065 26,067 8,781 13,217 12,802

SantaElena 2021 22,183 17,885 3,112 1,186 14,3342020 22,635 13,928 2,791 5,916 7,402

LaEncantada 2021 19,702 10,043 1,833 7,826 2,7292020 15,294 9,318 2,140 3,836 2,791

Non-producingProperties 2021 — 17 123 (140) 9322020 183 1,361 191 (1,369) 2,095

Others(1) 2021 4,793 1,720 473 2,600 12,5832020 239 321 266 (348) 4,966

Intercompanyelimination(2) 2021 (7,945) (3,927) — (4,018) —2020 (351) (214) — (137) —

Consolidated 2021 $100,522 $57,061 $15,345 $28,116 $45,0602020 $86,065 $50,781 $14,169 $21,115 $30,056

(1)The"Others"segmentincludesrevenuesof$4.8millionfromcoinsandbullionsalesof146,827silverouncesatanaveragepriceof$32.65perounce.(2)EffectiveJanuary1,2021,theCompanyispresentingitssegmentrevenue,costofsalesandmineoperatingearnings(loss)onagrossbasis,withanewlineitemtoreflectintercompanyeliminations.Thesegmentedinformationforthecomparativeperiodshavebeenadjustedtoreflectthischangeforconsistency.DuringthethreemonthsendedMarch31,2021,theCompanyhadthree(March31,2020-three)customersthataccountedfor100%(2020-100%)ofitssalesrevenue,withonemajormetalbrokeraccountingfor88%oftotalrevenue(2020-90%).

AtMarch31,2021andDecember31,2020

MiningInterests Property,plantandequipment

Totalminingassets

Totalassets

TotalliabilitiesProducing Exploration

Mexico SanDimas 2021 $208,452 $20,485 $109,903 $338,840 $447,150 $106,561

2020 204,592 17,179 112,105 333,876 439,145 105,462SantaElena 2021 67,458 30,717 51,430 149,605 180,719 36,182

2020 52,892 33,951 49,245 136,088 166,525 33,467LaEncantada 2021 27,076 2,393 17,466 46,935 97,908 26,642

2020 25,865 2,955 16,555 45,375 99,185 29,354Non-producingProperties 2021 108,837 37,893 28,258 174,989 217,685 34,683

2020 108,837 37,004 29,888 175,730 219,109 40,274Others 2021 — 34,235 50,660 84,895 291,235 171,483

2020 — 26,455 50,427 76,882 313,553 178,724Consolidated 2021 $411,823 $125,724 $257,717 $795,263 $1,234,698 $375,551

2020 $392,185 $117,545 $258,220 $767,950 $1,237,517 $387,281




5.REVENUES

ThemajorityoftheCompany’srevenuesarefromthesaleofpreciousmetalscontainedindoréform.TheCompany’sprimaryproducts are preciousmetals of silver and gold. Revenues from sale ofmetal, including by-products, are recorded net ofsmeltingandrefiningcosts.

Revenuesfortheperiodaresummarizedasfollows:

ThreeMonthsEndedMarch31, 2021 2020Grossrevenuefrompayablemetals: Silver $72,852 72% $52,014 60%Gold 28,338 28% 34,702 40%Lead — —% 74 —%Grossrevenue 101,190 100% 86,790 100%Less:smeltingandrefiningcosts (668) (725)Revenues $100,522 $86,065

AsatMarch31,2021,theCompanyhad$2.0millionofunearnedrevenue(December31,2020-$2.7million)thathasnotsatisfiedperformanceobligations.

(a) GoldStreamAgreementwithSandstormGoldLtd.

TheSantaElenaminehasapurchaseagreementwithSandstormGoldLtd.(“Sandstorm”),whichrequirestheCompanytosell20%ofitsgoldproductionoverthelifeofminefromitsleachpadandadesignatedareaofitsundergroundoperations.Thesellingprice toSandstorm is the lesserof theprevailingmarketpriceor$450perounce, subject toa1%annual inflation.During the threemonths endedMarch 31, 2021, the Company delivered 1,201 ounces (2020 - 2,161 ounces) of gold toSandstormatanaveragepriceof$464perounce(2020-$459perounce).

(b)GoldStreamAgreementwithWheatonPreciousMetalsCorporation

In2018, theSanDimasmineentered intoapurchaseagreementwithWheatonPreciousMetals International ("WPMI"),awholly owned subsidiary ofWheaton PreciousMetals Corp., which entitlesWPMI to receive 25% of the gold equivalentproduction (based on a fixed exchange ratio of 70 silver ounces to 1 gold ounce) at San Dimas in exchange for ongoingpaymentsequaltothelesserof$600(subjecttoa1%annualinflationadjustment)andtheprevailingmarketprice,foreachgoldequivalentouncedelivered.Should theaveragegold to silver ratioovera sixmonthperiodexceed90:1or fallbelow50:1,thefixedexchangeratiowouldbeincreasedto90:1ordecreasedto50:1,respectively.ThefixedgoldtosilverexchangeratioasatMarch31,2021was70:1.

During the threemonthsendedMarch31,2021, theCompanydelivered10,273ounces (2020 -11,357ounces)of gold toWPMIat$612(2020-$606)perounce.




6.COSTOFSALES

Cost of sales excludes depletion, depreciation and amortization and are costs that are directly related to production andgenerationofrevenuesattheoperatingsegments.Significantcomponentsofcostofsalesarecomprisedofthefollowing:


2021 2020

Consumablesandmaterials $10,776 $9,920

Labourcosts 32,847 27,323

Energy 8,632 7,778

Othercosts 3,040 4,361

Productioncosts $55,295 $49,382

Transportationandothersellingcosts 662 522

Workersparticipationcosts 3,667 1,998

Environmentaldutiesandroyalties 573 396

Inventorychanges (3,136) (2,463)

CostofSales $57,061 $49,835

CostofSales-StandbyCosts(1) $— $946

(1)StandbycostsinthepriorperiodrelatestomineholdingcostsfortheSanMartinmine,whichwastemporarilysuspendedeffectivefromJuly2019due toagrowing insecurity in theareaandsafetyconcerns for itsworkforce.TheCompany isworkingwithauthorities tosecuretheareaandisuncertainofarestartdate.FromApril1,2020,suchcostswereclassifiedasmineholdingcosts(Note8)duetocontinueduncertaintywithrespecttothetimingofrestartatSanMartin.

7.GENERALANDADMINISTRATIVEEXPENSES

Generalandadministrativeexpensesareincurredtosupporttheadministrationofthebusinessthatarenotdirectlyrelatedtoproduction.Significantcomponentsofgeneralandadministrativeexpensesarecomprisedofthefollowing:


2021 2020

Corporateadministration $1,484 $1,277

Salariesandbenefits 3,096 3,165

Audit,legalandprofessionalfees 1,656 1,047

Filingandlistingfees 88 155

Directorsfeesandexpenses 177 184

Depreciation 460 456

$6,961 $6,284




8.MINEHOLDINGCOSTS

The Company’s mine holding costs are primarily comprised of labour costs associated with care andmaintenance staffs,electricity, security, environmental and community support costs for the following mines which are currently undertemporarysuspension:


2021 2020

DelToro $969 $2,182

LaParrilla 1,033 1,719

SanMartin 1,019 —

LaGuitarra 848 878

$3,868 $4,779

9.INVESTMENTANDOTHER(LOSS)INCOME

TheCompany’sinvestmentandother(loss)incomearecomprisedofthefollowing:


2021 2020Lossfrominvestmentinmarketablesecurities(Note13(a)) ($1,289) ($1,368)

Lossonwrite-downofassetsheld-for-sale(1) (2,081) —

Gainfrominvestmentinsilverfuturesderivatives — 290

Interestincomeandother 220 538

($3,150) ($540)

(1)InMarch2021,theCompanyenteredintoanagreementwithCondorGoldPLC("Condor")tosellitsAGMillequipmentforgrossproceedsof$6.5million,including$3.5million incashand$3.0million incommonsharesofCondor.Thetransaction isexpectedtoclose in thesecondquarterof2021uponshipmentofallrelatedequipmenttoCondor'slaIndiaProjectinNicaragua.DuringthethreemonthsendedMarch31,2021,theCompanyrecognizedalossof$2.1million,beingthedifferencebetweentheproceedsofdisposalandthecarryingamountoftheproject'snetassets,aslossonwrite-downofassetsheld-for-sale.AsatMarch31,2021,theCompanyhasreclassified$3.4millionofitsnon-currentassetsasassetsheld-for-sale,and$4.4millionofproceedsfromCondorasadvanceonassetsheld-for-sale.

10.FINANCECOSTS

Finance costs areprimarily related to interest andaccretionexpenseon theCompany’sdebt facilities, lease liabilities andaccretionofdecommissioningliabilities.TheCompany’sfinancecostsintheperiodaresummarizedasfollows:

ThreeMonthsEndedMarch31, 2021 2020Debtfacilities(1)(Note18) $2,670 $2,640Leaseliabilities(Note19) 371 403Accretionofdecommissioningliabilities 640 623Silversalesandother 92 190 $3,773 $3,856

(1)Financecostsfordebtfacilitiesinclude$1.8millionofnon-cashaccretionexpensefortheperiodendedMarch31,2021(2020-$1.7million).




11.EARNINGSORLOSSPERSHARE

Basicearningsorlosspershareisthenetearningsorlossavailabletocommonshareholdersdividedbytheweightedaveragenumberofcommonsharesoutstandingduringtheperiod.Dilutednetearningsorlosspershareadjustsbasicnetearningspersharefortheeffectsofpotentialdilutivecommonshares.

ThecalculationsofbasicanddilutedearningsorlosspersharefortheperiodendedMarch31,2021and2020areasfollows:

ThreeMonthsEndedMarch31, 2021 2020Netearnings(loss)fortheperiod $1,855 ($32,436)

Weightedaveragenumberofsharesonissue-basic 222,544,712 209,396,052Impactofeffectondilutivesecurities:Stockoptions 2,477,161 —Restricted,performanceanddeferredshareunits 750,847 —

Weightedaveragenumberofsharesonissue-diluted(1) 225,772,720 209,396,052

Earnings(loss)pershare-basicanddiluted $0.01 ($0.15)

(1) ForthethreemonthsendedMarch31,2021,dilutedweightedaveragenumberofsharesexcluded588,773(2020-8,763,331)options,nilrestrictedandperformanceshareunits(2020-345,243)and16,327,598(2020-16,327,598)commonshares issuableundertheconvertibledebentures(Note18(a))thatwereanti-dilutive.

12.INVENTORIES

Inventories consist primarilyofmaterials and supplies andproductsof theCompany’soperations, in varying stagesof theproductionprocess,andarepresentedatthelowerofweightedaveragecostornetrealizablevalue.

March31,

2021December31,

2020

Finishedgoods-doré $2,642 $2,812Work-in-process 2,615 2,780Stockpile 2,136 1,336Silvercoinsandbullion 5,025 956Materialsandsupplies 23,661 24,628 $36,079 $32,512

Theamountofinventoriesrecognizedasanexpenseduringtheperiodisequivalenttothetotalofcostofsalesplusdepletion,depreciationandamortizationfortheperiod.

13.OTHERFINANCIALASSETS

As at March 31, 2021, other financial assets consists of the Company’s investment in marketable securities and foreignexchangederivativescomprisedofthefollowing:

March31,

2021December31,

2020

FVTPLmarketablesecurities(a) $12,702 $13,876

FVTOCImarketablesecurities(b) 16,187 22,443

Totalotherfinancialassets $31,681 $36,319

(a) FairValuethroughProfitorLoss("FVTPL")MarketableSecurities

LossinmarketablesecuritiesdesignatedasFVTPLforthethreemonthsendedMarch31,2021was$1.3million(2020-lossof$1.4million)andwasrecordedthroughprofitorloss.




13.OTHERFINANCIALASSETS(continued)

(b) FairValuethroughOtherComprehensiveIncome("FVTOCI")MarketableSecurities

Changes in fair valueofmarketable securitiesdesignatedas FVTOCI for the threemonthsendedMarch31, 2021was$5.4million (2020 - $0.3million), net of tax, andwas recorded throughother comprehensive incomeandwill not betransferredintoearningsorlossupondispositionorimpairment.

14.MININGINTERESTS

Mining interests primarily consist of acquisition, development and exploration costs directly related to the Company’soperations and projects. Upon commencement of commercial production, mining interests for producing properties aredepletedon aunits-of-productionbasis over theestimatedeconomic life of themine. In applying theunits of productionmethod, depletion is determined using quantity of material extracted from the mine in the period as a portion of totalquantityofmaterial,basedonreservesandresources,consideredtobehighlyprobabletobeeconomicallyextractedoverthelifeofmineplan.

TheCompany’smininginterestsarecomprisedofthefollowing:

March31,2021

December31,2020

Depletableproperties $411,823 $392,185Non-depletableproperties(explorationandevaluationcosts) 125,724 117,545 $537,547 $509,730

Depletablepropertiesareallocatedasfollows:

Depletableproperties SanDimas SantaElena LaEncantadaNon-producingProperties(1) Total

Cost

AtDecember31,2019 $220,658 $61,654 $111,590 $494,132 $888,034

Additions 21,263 6,218 4,201 — 31,682

Changeindecommissioningliabilities 4,527 1,191 2,049 3,059 10,826

Transferfromexplorationproperties 3,645 4,229 472 — 8,346

AtDecember31,2020 $250,093 $73,292 $118,312 $497,191 $938,888

Additions 10,001 4,530 895 — 15,426

Transferfromexplorationproperties — 11,402 1,293 — 12,695

AtMarch31,2021 $260,094 $89,223 $120,500 $497,191 $967,009

Accumulateddepletion,amortizationandimpairment

AtDecember31,2019 ($27,225) ($16,608) ($88,499) ($388,354) ($520,686)

Depletionandamortization (18,277) (3,792) (3,948) — (26,017)

AtDecember31,2020 ($45,502) ($20,400) ($92,447) ($388,354) ($546,703)

Depletionandamortization (6,141) (1,365) (977) — (8,483)

AtMarch31,2021 ($51,643) ($21,765) ($93,424) ($388,354) ($555,186)

Carryingvalues

AtDecember31,2020 $204,592 $52,892 $25,865 $108,837 $392,185

AtMarch31,2021 $208,452 $67,458 $27,076 $108,837 $411,823

(1)Non-producingpropertiesincludetheSanMartin,DelToro,LaParrillaandLaGuitarramines.




14.MININGINTERESTS(continued)

Non-depletablepropertiescostsareallocatedasfollows:

Non-depletableproperties SanDimas(a) SantaElena(b) LaEncantadaNon-producingProperties(1)

ExplorationProjects(2)

SpringpoleStream(c) Total

AtDecember31,2019 $8,699 $18,592 $1,104 $32,938 $34,710 $— $96,043

Explorationandevaluationexpenditures 12,125 19,588 2,323 4,066 1,142 4,356 43,601

Changeindecommissioningliabilities(Note20) — — — — 59 — 59

Saleofexplorationproject — — — — (13,812) — (13,812)

Transfertoproducingproperties (3,645) (4,229) (472) — — — (8,346)

AtDecember31,2020 $17,179 $33,951 $2,955 $37,004 $22,099 $4,356 $117,545

Explorationandevaluationexpenditures 3,306 8,168 731 889 280 7,500 20,874

Transfertoproducingproperties — (11,402) (1,293) — — — (12,695)

AtMarch31,2021 $20,485 $30,717 $2,393 $37,893 $22,379 $11,856 $125,724


(2)ExplorationprojectsincludetheLaLuz,LaJoya,LosAmoles,JaliscoGroupofPropertiesandJimenezdelTuelprojects,aswellasthePlomosasprojectwhichwassoldduring2020.

(a) SanDimasSilver/GoldMine,DurangoState

In 2018, the SanDimasMine is subject to a gold and silver streaming agreementwithWPMIwhichentitlesWPMI toreceive25%ofthegoldequivalentproduction(basedonafixedexchangeratioof70silverouncesto1goldounce)atSanDimas in exchange for ongoing payments equal to the lesser of $600 (subject to a 1% annual inflation adjustmentcommencing inMay2019)and theprevailingmarketprice, foreachgoldouncedelivered.Should theaveragegold tosilverratiooverasixmonthperiodexceed90:1orfallbelow50:1,thefixedexchangeratiowouldbeincreasedto90:1ordecreasedto50:1,respectively.ThefixedgoldtosilverexchangeratioasatMarch31,2021was70:1.

(b) SantaElenaSilver/GoldMine,SonoraState

TheSantaElenaMineissubjecttoagoldstreamingagreementwithSandstorm,whichrequirestheminetosell20%ofitslifeofminegoldproductionfromitsleachpadandadesignatedareaofitsundergroundoperationstoSandstorm.ThesellingpricetoSandstormiscurrentlythelesserof$464perounce,subjecttoa1%annualinflationincreaseeveryApril,andtheprevailingmarketprice.

(c)SpringpoleSilverStream,Ontario,Canada

OnJuly2,2020,theCompanycompletedanagreementwithFirstMiningGoldCorp.(“FirstMining”)topurchase50%ofthe lifeofminepayablesilverproduced fromtheSpringpoleGoldProject ("SpringpoleSilverStream"),adevelopmentstageminingproject located inOntario,Canada.Pursuant to theagreement, FirstMajesticagreed topayFirstMiningconsiderationof$22.5millionincashandshares,inthreemilestonepayments,fortherighttopurchasesilveratapriceof33%ofthesilverspotpriceperounce,toamaximumof$7.50perounce(subjecttoannualinflationescalationof2%,commencingatthestartofthethirdanniversaryofproduction).Commencingwithitsproductionofsilver,FirstMiningmustdeliver50%ofthepayablesilverwhich itreceivesfromtheofftakerwithinfivebusinessdaysoftheendofeachquarter.




14.MININGINTERESTS(continued)

(c)SpringpoleSilverStream,Ontario,Canada(continued)

TransactionconsiderationpaidandpayablebyFirstMajesticissummarizedasfollows:• Thefirstpaymentof$10.0million,consistingof$2.5millionincashand$7.5millioninFirstMajesticshares(805,698

commonshares)waspaidtoFirstMiningonJuly2,2020;

• Thesecondpaymentconsistingof$3.75millionincashand$3.75millioninFirstMajesticshares(287,300commonshares)waspaidonJanuary21,2021uponthecompletionandpublicannouncementbyFirstMiningoftheresultsofaPre-FeasibilityStudyforSpringpole;and

• The third payment consisting of $2.5million in cash and $2.5million in FirstMajestic shares (based on 20 daysvolumeweightedaverageprice)willbepaiduponreceiptbyFirstMiningofaFederalorProvincialEnvironmentalAssessmentapprovalforSpringpole.

Inconnectionwiththeagreement,FirstMiningalsograntedFirstMajestic30millioncommonsharepurchasewarrants,eachofwhichwillentitletheCompanytopurchaseonecommonshareofFirstMiningatCAD$0.40overaperiodoffiveyears.Thefairvalueofthewarrantswasmeasuredat$5.7millionusingtheBlack-Scholesmodel.

First Mining shall have the right to repurchase 50% of the silver stream for $22.5 million at any time prior to thecommencementofproductionat Springpole leaving theCompanywitha reduced silver streamof25%of lifeofminepayablesilverproduction.

AsatMarch31,2021,theCompanyhaspaid$17.5millioninconsiderationtoFirstMiningaspartoftheagreement,ofwhich$5.7millionwasallocatedtootherfinancialassetsand$11.8millionwasallocatedtotheSpringpoleSilverStreamrecognizedwithinexplorationandevaluationassets.

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




15.PROPERTY,PLANTANDEQUIPMENT

ThemajorityoftheCompany'sproperty,plantandequipmentisusedintheCompany'soperatingminesegments.Property,plant and equipment is depreciated using either the straight-line or units-of-production method over the shorter of theestimatedusefullifeoftheassetortheexpectedlifeofmine.Whereanitemofproperty,plantandequipmentcomprisesofmajor componentswithdifferentuseful lives, the componentsareaccounted foras separate itemsofproperty,plantandequipment.Assetsunderconstructionarerecordedatcostandre-allocatedtolandandbuildings,machineryandequipmentorotherwhentheybecomeavailableforuse.

Property,plantandequipmentarecomprisedofthefollowing:

LandandBuildings(1)

Machineryand

EquipmentAssetsunderConstruction(2) Other Total

Cost

AtDecember31,2019 $198,412 $456,655 $27,645 $24,438 $707,150

Additions — 2,096 47,266 391 49,753

Transfersanddisposals 917 9,873 (19,242) 3,822 (4,630)

AtDecember31,2020 $199,329 $468,624 $55,669 $28,651 $752,273

Additions — 344 8,363 53 8,760

Transfersanddisposals 1,005 1,355 (4,988) 2,237 (391)

AtMarch31,2021 $200,334 $470,323 $59,044 $30,941 $760,642

Accumulateddepreciation,amortizationandimpairment

AtDecember31,2019 ($129,040) ($326,300) $— ($15,171) ($470,511)

Depreciationandamortization (4,188) (19,833) — (2,555) (26,576)

Transfersanddisposals 72 2,754 — 208 3,034

AtDecember31,2020 ($133,156) ($343,379) $— ($17,518) ($494,053)

Depreciationandamortization (1,227) (4,959) — (748) (6,934)

Transfersanddisposals — 119 — 24 143

Write-downonassets-held-for-sale — — — (2,081) (2,081)

AtMarch31,2021 ($134,383) ($348,219) $— ($20,323) ($502,925)

Carryingvalues

AtDecember31,2020 $66,173 $125,245 $55,669 $11,133 $258,220

AtMarch31,2021 $65,951 $122,104 $59,044 $10,618 $257,717

(1)Includedinlandandbuildingsis$11.2million(2020-$11.2million)oflandwhichisnotsubjecttodepreciation.(2) Assets under construction includes certain innovation projects, such as high-intensity grinding ("HIG") mills and related modernization, plant

improvements,othermineinfrastructuresandequipmentoverhauls.




15.PROPERTY,PLANTANDEQUIPMENT(continued)

Property,plantandequipment,includinglandandbuildings,machineryandequipment,assetsunderconstructionandotherassetsaboveareallocatedbymineasfollow:

SanDimas SantaElena LaEncantadaNon-producingProperties(1) Other Total

Cost

AtDecember31,2019 $136,303 $90,762 $137,302 $297,240 $45,543 $707,150

Additions 10,384 7,933 4,209 272 26,955 49,753

Transfersanddisposals 41 (1,364) 1,999 (3,751) (1,555) (4,630)

AtDecember31,2020 $146,728 $97,331 $143,510 $293,761 $70,943 $752,273

Additions(2) 1,175 1,636 1,102 43 4,804 8,760

Transfersanddisposals 1,646 4,732 836 (5,733) (1,872) (391)

AtMarch31,2021 $149,549 $103,699 $145,448 $288,071 $73,875 $760,642

Accumulateddepreciation,amortizationandimpairment

AtDecember31,2019 ($19,747) ($42,975) ($122,566) ($266,190) ($19,033) ($470,511)

Depreciationandamortization (15,032) (6,451) (2,646) (592) (1,855) (26,576)

Transfersanddisposals 156 1,340 (1,743) 2,909 372 3,034

AtDecember31,2020 ($34,623) ($48,086) ($126,955) ($263,873) ($20,516) ($494,053)

Depreciationandamortization (3,949) (1,608) (647) (66) (664) (6,934)

Transfersanddisposals (1,074) (2,575) (380) 4,126 46 143

Write-downonassetsheld-for-sale — — — — (2,081) (2,081)

AtMarch31,2021 ($39,646) ($52,269) ($127,982) ($259,813) ($23,215) ($502,925)

Carryingvalues

AtDecember31,2020 $112,105 $49,245 $16,555 $29,888 $50,427 $258,220

AtMarch31,2021 $109,903 $51,430 $17,466 $28,258 $50,660 $257,717


(2)Additionsclassifiedin"Other"primarilyconsistofinnovationprojectsandconstruction-in-progress.




16.RIGHT-OF-USEASSETS

TheCompanyenteredintooperatingleasestousecertainland,building,miningequipmentandcorporateequipmentforitsoperations. TheCompany is required to recognize right-of-use assets representing its right to use theseunderlying leasedassetovertheleaseterm.

Right-of-use asset is initiallymeasured at cost, equivalent to its obligation for payments over the termof the leases, andsubsequentlymeasuredatcostlessaccumulateddepreciationandimpairmentlosses.Depreciationisrecordedonastraight-linebasisovertheshorterperiodofleasetermandusefullifeoftheunderlyingasset.

Right-of-useassetsarecomprisedofthefollowing:

LandandBuildings

MachineryandEquipment Other Total

AtDecember31,2019 $4,207 $7,812 $15 $12,034Additions 1,939 554 — 2,494Remeasurements 2,789 (10) — 2,779Depreciationandamortization (848) (2,106) (7) (2,961)Impairment — (16) — (16)AtDecember31,2020 $8,087 $6,234 $8 $14,330Remeasurements 45 (115) — (70)Depreciationandamortization (247) (399) (2) (648)Disposals (186) (130) — (315)AtMarch31,2021 $7,700 $5,590 $7 $13,297

17.TRADEANDOTHERPAYABLES

TheCompany’s tradeandotherpayablesareprimarilycomprisedofamountsoutstanding forpurchases relating tominingoperations, exploration and evaluation activities and corporate expenses. The normal credit period for these purchases isusuallybetween30to90days.

Tradeandotherpayablesarecomprisedofthefollowingitems:

March31,2021

December31,2020

Tradepayables $18,523 $31,262Traderelatedaccruals 23,503 18,635

Payrollandrelatedbenefits 25,221 21,427Environmentalduty 584 2,156Otheraccruedliabilities 1,513 2,522 $69,344 $76,002




18.DEBTFACILITIES

The movement in debt facilities during the three months ended March 31, 2021 and year ended December 31, 2020,respectively,arecomprisedofthefollowing:

ConvertibleDebentures

(a)

RevolvingCreditFacility

(b) Total

BalanceatDecember31,2019 $136,607 $19,211 $155,818

Financecosts

Interestexpense 2,984 763 3,747

Accretion 6,168 678 6,846

ProceedsfromdrawdownofRevolvingCreditFacility — 10,000 10,000

Repaymentsofprincipal — (19,969) (19,969)

Paymentsoffinancecosts (2,934) (800) (3,734)


Financecosts

Interestexpense 733 183 916

Accretion 1,582 172 1,754

Paymentsoffinancecosts (1,467) (197) (1,664)

BalanceatMarch31,2021 $143,673 $10,041 $153,714

StatementsofFinancialPositionPresentation

Currentportionofdebtfacilities $1,092 $9,883 $10,975

Non-currentportionofdebtfacilities 141,733 — 141,733


Currentportionofdebtfacilities $359 $10,041 $10,400

Non-currentportionofdebtfacilities 143,314 — 143,314

BalanceatMarch31,2021 $143,673 $10,041 $153,714

(a) ConvertibleDebentures

Duringthefirstquarterof2018,theCompanyissued$156.5millionofunsecuredseniorconvertibledebentures(the“Notes”).TheCompanyreceivednetproceedsof$151.1millionaftertransactioncostsof$5.4million.TheNotesmatureonMarch1,2023andbearaninterestrateof1.875%perannum,payablesemi-annuallyinarrearsinMarchandSeptemberofeachyear.

TheNotesareconvertibleintocommonsharesoftheCompanyatanytimepriortomaturityataconversionrateof104.3297common shares per $1,000 principal amount of Notes converted, representing an initial conversion price of $9.59 percommonshare,subjecttocertainanti-dilutionadjustments.Inaddition,ifcertainfundamentalchangesoccur,holdersoftheNotesmaybeentitledtoanincreasedconversionrate.

TheCompanymaynotredeemtheNotesbeforeMarch6,2021,exceptintheeventofcertainchangesinCanadiantaxlaw.AtanytimeonorafterMarch6,2021anduntilmaturity,theCompanymayredeemallorpartoftheNotesforcashifthelastreportedsharepriceoftheCompany’scommonsharesfor20ormoretradingdaysinaperiodof30consecutivetradingdaysexceeds130%oftheconversionpriceor$12.47percommonshare.Theredemptionpriceisequaltothesumof:(i)100%oftheprincipalamountofthenotestoberedeemedand(ii)accruedandunpaidinterest,ifany,totheredemptiondate.

TheCompany is required tooffer topurchase forcashallof theoutstandingNotesupona fundamentalchange,atacashpurchasepriceequalto100%oftheprincipalamountoftheNotestobepurchased,plusaccruedandunpaidinterest,ifany,tothefundamentalchangepurchasedate.




18.DEBTFACILITIES(continued)

(a) ConvertibleDebentures(continued)

Thecomponentpartsoftheconvertibledebentures,acompoundinstrument,areclassifiedseparatelyasfinancial liabilitiesandequityinaccordancewiththesubstanceofthecontractualarrangementandthedefinitionsofafinancialliabilityandanequity instrument.Aconversionoptionthatwillbesettledby theexchangeofa fixedamountofcashoranother financialassetforafixednumberoftheCompany'sownequityinstrumentisanequityinstrument.

Atinitialrecognition,netproceedsof$151.1millionfromtheNoteswereallocatedintoitsdebtandequitycomponents.Thefairvalueofthedebtportionwasestimatedat$124.8millionusingadiscountedcashflowmodelmethodwithanexpectedlifeoffiveyearsandadiscountrateof6.14%.Thisamountisrecordedasafinancialliabilityonanamortizedcostbasisusingtheeffectiveinterestmethodusinganeffectiveinterestrateof6.47%untilextinguisheduponconversionorat itsmaturitydate.

Theconversionoptionisclassifiedasequityandwasestimatedbasedontheresidualvalueof$26.3million.Thisamountisnotsubsequentlyremeasuredandwill remain inequityuntil theconversionoption isexercised, inwhichcase,thebalancerecognized inequitywillbetransferredtosharecapital.Wheretheconversionoptionremainsunexercisedatthematuritydateoftheconvertiblenote,thebalancewillremaininequityreserves.Deferredtaxliabilityof$7.1millionrelatedtotaxabletemporarydifferencearisingfromtheequityportionoftheconvertibledebenturewasrecognizedinequityreserves.

Transactioncostsof$5.4millionthatrelatetotheissuanceoftheconvertibledebentureswereallocatedtotheliabilityandequitycomponentsinproportiontotheallocationofthegrossproceeds.Transactioncostsrelatingtotheequitycomponentarerecognizeddirectlyinequity.Transactioncostsrelatingtotheliabilitycomponentareincludedinthecarryingamountoftheliabilitycomponentandareamortizedoverthelifeoftheconvertibledebenturesusingtheeffectiveinterestmethod.

(b) RevolvingCreditFacility

OnApril1,2021,theCompanyreneweditsseniorsecuredrevolvingcreditfacility("RevolvingCreditFacility")withtheBankofNovaScotiaandBankofMontrealbyextendingthematuritydatefromMay10,2021toNovember30,2022andreducingthecreditlimitfrom$75.0millionto$50.0million.InterestonthedrawnbalancewillaccrueatLIBORplusanapplicablerangeof2.25% to 3.5% while the undrawn portion is subject to a standby fee with an applicable range of 0.5625% to 0.875%,dependentoncertainfinancialparametersofFirstMajestic.AsatMarch31,2021,theapplicablerateswere2.9%to0.6875%,respectively.

Thesedebt facilities are guaranteedby certain subsidiariesof theCompanyandarealso securedbya firstpriority chargeagainsttheassetsoftheCompany,andafirstprioritypledgeofsharesoftheCompany’ssubsidiaries.

The Revolving Credit Facility includes financial covenants, to be tested quarterly on a consolidated basis, requiring FirstMajestictomaintainthefollowing:(a)aleverageratiobasedonnetindebtednesstorollingfourquartersadjustedEBITDAofnotmorethan3.00to1.00;(b)aninterestcoverageratio,basedonrollingfourquartersadjustedEBITDAdividedbyinterestpayments,ofnot less than4.00 to1.00;and (c) tangiblenetworthofnot less than$563.5millionplus50%of itspositiveearningssubsequentto June30,2018.Thedebt facilitiesalsoprovide fornegativecovenantscustomary for thesetypesoffacilities and allows the Company to enter into finance leases, excluding any leases that would have been classified asoperatingleasesineffectimmediatelypriortotheimplementationofIFRS16-Leases,ofupto$30.0million.AsatMarch31,2021andDecember31,2020,theCompanywasincompliancewiththesecovenants.




19.LEASELIABILITIES

TheCompanyhasfinanceleases,operatingleasesandequipmentfinancingliabilitiesforvariousmineandplantequipment,officespaceandland.FinanceleasesandequipmentfinancingobligationsrequireunderlyingassetstobepledgedassecurityagainsttheobligationsandalloftherisksandrewardsincidentaltoownershipoftheunderlyingassetbeingtransferredtotheCompany.Foroperatingleases,theCompanycontrolsbutdoesnothaveownershipoftheunderlyingright-of-useassets.

Lease liabilitiesare initiallymeasuredat thepresentvalueof the leasepayments thatarenotpaidat thecommencementdate, discountedusing the interest rate implicit in the lease or, if that rate cannot be readily determined, theCompany'sincrementalborrowing rate. Lease liabilitiesare subsequentlymeasuredatamortized costusing theeffective interest ratemethod.

Certain leaseagreementsmaycontain leaseandnon-leasecomponents,whicharegenerallyaccounted for separately.Forcertainequipmentleases,suchasvehicles,theCompanyhaselectedtoaccountfortheleaseandnon-leasecomponentsasasingleleasecomponent.

Themovement in lease liabilitiesduring the threemonthsendedMarch31,2021andyearendedDecember31,2020arecomprisedofthefollowing:

FinanceLeases

OperatingLeases(a)

EquipmentFinancing

(c) TotalBalanceatDecember31,2019 $50 $18,951 $2,935 $21,936Additions — 2,494 — 2,494Remeasurements — 2,779 — 2,779Financecosts — 1,396 83 1,479Repaymentsofprincipal (50) (5,353) (2,303) (7,706)Paymentsoffinancecosts — — (126) (126)Foreignexchangeloss — (281) — (281)BalanceatDecember31,2020 $— $19,986 $589 $20,575Remeasurements — (70) — (70)Disposals — (126) — (126)Financecosts — 367 4 371Repaymentsofprincipal — (1,112) (216) (1,328)Paymentsoffinancecosts — — (3) (3)Foreignexchangegain — (203) — (203)BalanceatMarch31,2021 $— $18,842 $374 $19,216StatementsofFinancialPositionPresentationCurrentportionofleaseliabilities $— $4,820 $538 $5,358Non-currentportionofleaseliabilities — 15,166 51 15,217BalanceatDecember31,2020 $— $19,986 $589 $20,575Currentportionofleaseliabilities $— $4,570 $374 $4,944Non-currentportionofleaseliabilities — 14,272 — 14,272BalanceatMarch31,2021 $— $18,842 $374 $19,216

(a)OperatingLeases

Operatingleasesprimarilyrelatetoequipmentandbuildingrentalcontracts,landeasementcontractsandservicecontractsthatcontainembeddedleasesforproperty,plantandequipment.Theseoperatingleaseshaveremainingleasetermsofonetotenyears,someofwhichincludeoptionstoterminatetheleaseswithinayear,withincrementalborrowingratesrangingfrom5.8%to12.4%.




19.LEASELIABILITIES(continued)

(b)EquipmentFinancing

During 2017, the Company entered into a $7.9million credit facility with repayment terms ranging from 12 to 16 equalquarterlyinstallmentsinprincipalplusrelatedinterest.ThefacilitybearsaninterestrateofLIBORplus4.60%.Proceedsfromthe equipment financing were primarily used for the purchase and rehabilitation of property, plant and equipment. Theequipment financing is secured by certain equipment of the Company and is subject to various covenants, including therequirementforFirstMajestictomaintainaleverageratiobasedontotaldebttorollingfourquartersadjustedEBITDA.AsatMarch31,2021andyearendedDecember31,2020,theCompanywasincompliancewiththesecovenants.

As atMarch 31, 2021, the net book value of property, plant and equipment includes $1.2million (December 31, 2020 -$1.9million)ofequipmentpledgedassecurityfortheequipmentfinancing.

20.SHARECAPITAL

(a) Authorizedandissuedcapital

TheCompanyhasunlimitedauthorizedcommonshareswithnoparvalue.

Themovement in theCompany’s issuedandoutstandingcapitalduring theperiods is summarized in theconsolidatedstatementsofchangesinequity.

ThreeMonthsEnded

March31,2021ThreeMonthsEnded

March31,2020

NumberofShares

NetProceeds

NumberofShares

NetProceeds

ATMprogram(1) — $— 1,304,338 $13,792

(1) InDecember2018,andsubsequentlyamended inAugust2019andJune2020,theCompanyfiledprospectussupplementsto itsshortformbaseshelfprospectus,pursuanttowhichtheCompanymay,atitsdiscretionandfromtime-to-time,sellcommonsharesoftheCompanyforaggregategrossproceedsofupto$200.0million.Thesaleofcommonsharesistobemadethrough“at-the-market distributions” ("ATM"), as defined in the Canadian Securities Administrators’ National Instrument 44-102 ShelfDistributions, directly on the New York Stock Exchange. During the three months ended March 31, 2020, First Majestic sold1,304,338 common shares of the Company under the ATM program at an average price of $10.79 for gross proceeds of$14.1million,ornetproceedsof$13.8millionaftercosts.AtDecember31,2020,theCompanycompleted$154.0millionoftheATMprogramandtheremaining$46.0millionbalanceoftheprogramhasbeencancelled.NoshareswereissuedundertheATMprogramduringthreemonthsendedMarch31,2021.

(b) Stockoptions

UnderthetermsoftheCompany’s2020Long-TermIncentivePlan("LTIP"),themaximumnumberofsharesreservedforissuanceundertheLTIPis8%oftheissuedsharesonarollingbasis.OptionsmaybeexercisableoverperiodsofuptotenyearsasdeterminedbytheBoardofDirectorsoftheCompanyandtheexercisepriceshallnotbelessthantheclosingpriceof thesharesonthedayprecedingtheawarddate,subject toregulatoryapproval.All stockoptionsgrantedaresubject to vesting with 25% vesting on first anniversary from the date of grant, and 25% vesting each six monthsthereafter.




20.SHARECAPITAL(continued)

(b) Stockoptions(continued)

ThefollowingtablesummarizesinformationaboutstockoptionsoutstandingasatMarch31,2021:

OptionsOutstanding OptionsExercisable

Exerciseprices(CAD$)NumberofOptions

WeightedAverage

ExercisePrice(CAD$/Share)

WeightedAverage

RemainingLife(Years)

NumberofOptions

WeightedAverage

ExercisePrice(CAD$/Share)

WeightedAverage

RemainingLife(Years)

4.80-10.00 2,538,859 8.61 7.62 1,566,640 8.63 7.3010.01-15.00 3,038,993 12.31 4.91 1,694,497 11.18 1.51

15.01-20.00 1,224,696 16.30 8.14 272,674 15.98 5.46

20.01-126.01 76,773 25.21 2.38 64,273 25.85 0.92

6,879,321 11.80 6.46 3,598,084 10.70 4.32

Themovements instockoptions issuedduringthethreemonthsendedMarch31,2021andyearendedDecember31,2020aresummarizedasfollows:

ThreeMonthsEnded YearEnded

March31,2021 December31,2020

NumberofOptions

WeightedAverageExercisePrice(CAD$/Share)

NumberofOptions

WeightedAverageExercisePrice(CAD$/Share)

Balance,beginningoftheyear 7,074,092 12.07 7,583,439 10.70

Granted 422,500 17.15 2,621,924 13.46

Exercised (543,864) 10.17 (2,473,926) 7.50

Cancelledorexpired (73,407) 80.59 (657,345) 18.96

Balance,endoftheperiod 6,879,321 11.80 7,074,092 12.07

During the threemonths endedMarch 31, 2021, the aggregate fair value of stock options granted was $2.6 million(December31,2020-$12.1million),oraweightedaveragefairvalueof$6.18perstockoptiongranted(2020-$4.63).

During the three months ended March 31, 2021, total share-based payments expense related to stock options was$2.3million(December31,2020-$7.0million).

Thefollowingweightedaverageassumptionswereused inestimatingthefairvalueofstockoptionsgrantedusingtheBlack-ScholesOptionPricingModel:

ThreeMonthsEnded YearEnded

Assumption Basedon March31,2021 December31,2020

Risk-freeinterestrate(%) YieldcurvesonCanadiangovernmentzero-couponbondswitharemainingtermequaltothestockoptions’expectedlife

0.59 1.03

Expectedlife(years) Averageoftheexpectedvestingtermandexpirytermoftheoption 5.87 5.83

Expectedvolatility(%) Historicalandimpliedvolatilityofthepreciousmetalsminingsector 49.00 49.00

Expecteddividendyield(%) Annualizeddividendrateasofthedateofgrant — —

TheweightedaverageclosingsharepriceatdateofexerciseforthethreemonthsendedMarch31,2021wasCAD$20.98(December31,2020-CAD$15.61).





(c)RestrictedShareUnits

TheCompanyadopted the2019 LTIP toallow theCompany togrant to itsdirectors, employeesand consultantsnon-transferableRestrictedShareUnits("RSU's")basedonthevalueoftheCompany'ssharepriceatthedateofgrant.Unlessotherwisestated,theawardstypicallyhaveagradedvestingscheduleoverathree-yearperiodandcanbesettledeitherincashorequityuponvestingatthediscretionoftheCompany.TheCompanyintendstosettleallRSU'sinequity.

Theassociatedcompensationcostisrecordedasshare-basedpaymentsexpenseagainstequityreserves.

ThefollowingtablesummarizesthechangesinRSU'sforthethreemonthsendedMarch31,2021andtheyearendedDecember31,2020:

ThreeMonthsEndedMarch31,2021

YearEndedDecember31,2020

Numberofshares

WeightedAverageFairValue(CAD$)

Numberofshares


Outstanding,beginningoftheyear 184,483 15.66 128,944 10.36

Granted 291,697 17.13 211,192 15.72

Settled (9,968) 15.93 (127,000) 10.32

Forfeited — — (28,653) 15.93

Outstanding,endoftheperiod 466,212 16.57 184,483 15.66

DuringthethreemonthsendedMarch31,2021,totalshare-basedpaymentsexpenserelatedtoRSUswas$0.6million(December31,2020-$0.8million).

(d)PerformanceShareUnits

TheCompanyadopted the2019 LTIP toallow theCompany togrant to itsdirectors, employeesand consultantsnon-transferablePerformanceShareUnits("PSU's").Theamountofunitstobeissuedonthevestingdatewillvaryfrom0%to200%ofthenumberofPSU’sgranted,dependingontheCompany’stotalshareholderreturncomparedtothereturnofaselectedgroupofpeercompanies.Unlessotherwisestated, theawards typicallyvest threeyears fromthegrantdate.ThefairvalueofaPSUisbasedonthevalueoftheCompany'ssharepriceatthedateofgrantandwillbeadjustedbasedonactualunitsissuedonthevestingdate.TheCompanyintendstosettleallPSU'sinequity.

ThefollowingtablesummarizesthechangesinPSU'sgrantedtoemployeesandconsultantsforthethreemonthsendedMarch31,2021andtheyearendedDecember31,2020:


YearEndedDecember31,2020

Numberofshares


Numberofshares


Outstanding,beginningoftheyear 109,035 15.61 — —

Granted 175,600 17.08 122,575 15.65

Forfeited — — (13,540) 15.93

Outstanding,endoftheperiod 284,635 16.52 109,035 15.61

DuringthethreemonthsendedMarch31,2021,totalshare-basedpaymentsexpenserelatedtoPSUswas$0.3million(yearendedDecember31,2020-$0.5million).





(e) DeferredShareUnits

TheCompanyadopted the2019 LTIP toallow theCompany togrant to itsdirectors, employeesand consultantsnon-transferrableDeferredShareUnits("DSU's").Unlessotherwisestated,theawardstypicallyvestimmediatelyatthegrantdate. The fair value of aDSU is basedon the value of theCompany's share price at the date of grant. TheCompanyintendstosettleallDSU'sinequity.

ThefollowingtablesummarizesthechangesinDSU'sgrantedtodirectorsforthethreemonthsendedMarch31,2021:


Numberofshares


Outstanding,beginningoftheyear — —

Granted 28,869 17.97

Outstanding,endoftheperiod 28,869 17.97

DuringthethreemonthsendedMarch31,2021,totalshare-basedpaymentsexpenserelatedtoDSUswas$0.4million(yearendedDecember31,2020-$nil).

(f) ShareRepurchaseProgram

The Company has an ongoing share repurchase program to repurchase up to 5% of the Company’s issued andoutstandingshares.ThenormalcourseissuerbidswillbecarriedthroughthefacilitiesoftheTorontoStockExchangeandalternativeCanadianmarketplaces.DuringtheyearendedDecember31,2020,theCompanyrepurchasedandcancelled275,000commonsharesforatotalconsiderationof$1.7millionthroughanormalcourseissuerbidintheopenmarketasapprovedbytheTorontoStockExchange.NoshareswererepurchasedduringthethreemonthsendedMarch31,2021.

21.FINANCIALINSTRUMENTSANDRELATEDRISKMANAGEMENT

TheCompany’s financial instrumentsandrelatedriskmanagementobjectives,policies,exposuresandsensitivity relatedtofinancialrisksaresummarizedbelow.

(a) Fairvalueandcategoriesoffinancialinstruments

Financial instruments included intheconsolidatedstatementsoffinancialpositionaremeasuredeitheratfairvalueoramortized cost. Estimated fair values for financial instruments are designed to approximate amounts for which theinstrumentscouldbeexchangedinanarm’s-lengthtransactionbetweenknowledgeableandwillingparties.

TheCompanyusesvariousvaluationtechniquesindeterminingthefairvalueoffinancialassetsandliabilitiesbasedontheextenttowhichthefairvalueisobservable.ThefollowingfairvaluehierarchyisusedtocategorizeanddisclosetheCompany’sfinancialassetsandliabilitiesheldatfairvalueforwhichavaluationtechniqueisused:

Level1:Unadjustedquotedpricesinactivemarketsthatareaccessibleatthemeasurementdateforidenticalassetsorliabilities.

Level 2: All inputs which have a significant effect on the fair value are observable, either directly or indirectly, forsubstantiallythefullcontractualterm.Level3:Inputswhichhaveasignificanteffectonthefairvaluearenotbasedonobservablemarketdata.




21.FINANCIALINSTRUMENTSANDRELATEDRISKMANAGEMENT(continued)

(a) Fairvalueandcategoriesoffinancialinstruments(continued)

Thetablebelowsummarizesthevaluationmethodsusedtodeterminethefairvalueofeachfinancialinstrument:

FinancialInstrumentsMeasuredatFairValue ValuationMethod

Tradereceivables(relatedtoconcentratesales) Receivablesthataresubjecttoprovisionalpricingandfinalpriceadjustmentat theendof thequotationalperiodareestimatedbasedonobservable forwardpriceofmetalper LondonMetalExchange(Level2)

Marketablesecurities-commonshares Marketable securities and silver future derivatives are valuedbasedonquotedmarketprices for identicalassets inanactivemarket (Level 1) as at the date of statements of financialposition.Marketablesecurities-stockwarrantsarevaluedusingtheBlackScholesmodelbasedontheobservablemarketinputs.

Marketablesecurities-stockwarrants

Silverfuturesderivatives

FinancialInstrumentsMeasuredatAmortizedCost ValuationMethod

Cashandcashequivalents Approximatedcarryingvalueduetotheirshort-termnature

Tradeandotherreceivables

Tradeandotherpayables

Debtfacilities Approximatedcarryingvalueasdiscountrateonthese

instrumentsapproximatetheCompany'screditrisk.

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

March31,2021 December31,2020 Fairvaluemeasurement Fairvaluemeasurement

Carryingvalue Level1 Level2

Carryingvalue Level1 Level2

Financialassets

Marketablesecurities(Note13) $ 31,681 $ 26,880 $ 4,802 $ 36,319 $ 30,996 $ 5,323

Therewere no transfers between levels 1, 2 and 3 during the threemonths ended March 31, 2021 and year endedDecember31,2020.

TheCompany’sobjectiveswhenmanagingcapitalaretomaintainfinancialflexibilitytocontinueasagoingconcernwhileoptimizinggrowthandmaximizingreturnsofinvestmentsfromshareholders.

(b)Capitalriskmanagement

TheCompanymonitorsitscapitalstructureand,basedonchangesinoperationsandeconomicconditions,mayadjustthestructurebyrepurchasingshares,issuingnewshares,issuingnewdebtorretiringexistingdebt.TheCompanypreparesannual budget andquarterly forecasts to facilitate themanagement of its capital requirements. The annual budget isapprovedbytheCompany’sBoardofDirectors.

The capital of the Company consists of equity (comprising of issued capital, equity reserves and retained earnings oraccumulateddeficit),debtfacilities,leaseliabilities,netofcashandcashequivalentsasfollows:

March31,2021

December31,2020

Equity $859,147 $850,236Debtfacilities 153,714 152,708Leaseliabilities 19,216 20,575Less:cashandcashequivalents (201,684) (238,578)

$830,393 $784,941





(b)Capitalriskmanagement(continued)

TheCompany’sinvestmentpolicyistoinvestitscashinhighlyliquidshort-terminvestmentswithmaturitiesof90daysorless, selected with regards to the expected timing of expenditures from operations. The Company expects that itsavailablecapital resourceswillbesufficient tocarryout itsdevelopmentplansandoperations forat least thenext12months.

The Company is not subject to any externally imposed capital requirements with the exception of complying withcovenants under the debt facilities (Note 18) and lease liabilities. As atMarch 31, 2021 andDecember 31, 2020, theCompanywasincompliancewiththesecovenants.

(c)Financialriskmanagement

TheCompany thoroughlyexamines thevarious financial instrumentsand risks towhich it isexposedandassesses theimpactandlikelihoodofthoserisks.Theserisksmayincludecreditrisk,liquidityrisk,currencyrisk,commoditypricerisk,andinterestraterisk.Wherematerial,theserisksarereviewedandmonitoredbytheBoardofDirectors.

CreditRisk

Credit risk is the risk of financial loss if a customer or counterparty fails to meet its contractual obligations. TheCompany’s credit risk relatesprimarily to charteredbanks, trade receivables in theordinary courseof business, valueaddedtaxesreceivableandotherreceivables.

AsatMarch31,2021,valueaddedtaxes (“VAT”) receivablewas$65.3million (December31,2020 -$56.9million),ofwhich$44.6million(December31,2020-$37.9million)relatestoPrimeroEmpresaMinera,S.A.deC.V.("PEM").ServiciodeAdministraciónTributaria (“SAT”)hasbeenunresponsive toVAT refund requestsbyPEMwithoutprovidinga legalbasisforwithholdingtheseVATreceivables.TheCompanybelievesthatithasfulllegalrightstotheseVATrefundsandexpects the amounts to be refunded in the future. As atMarch 31, 2021, VAT receivables totaling $17.0million arecurrentlybeingpursuedinMexicanCourts.Duetotheuncertaintimelineassociatedwithrecoveryoftheseamounts,theCompanyreclassifiedsuchamountsasnon-currentassetsthough,intheCompany'sopinion,suchamountsarecurrentlydueandpayabletotheCompany.

The Company sells and receives payment upon delivery of its silver doré and by-products primarily through threeinternationalcustomers.AlloftheCompany'scustomershavegoodratingsandpaymentsofreceivablesarescheduled,routineandfullyreceivedwithin60daysofsubmission;therefore,thebalanceoftradereceivablesowedtotheCompanyintheordinarycourseofbusinessisnotsignificant.

The carrying amount of financial assets recorded in the consolidated financial statements represents the Company’smaximumexposuretocreditrisk.Withtheexceptiontotheabove,theCompanybelievesitisnotexposedtosignificantcreditrisk.

LiquidityRisk

Liquidityrisk is theriskthattheCompanywillnotbeabletomeet its financialobligationsastheyarise.TheCompanymanagesliquidityriskbymonitoringactualandprojectedcashflowsandmatchingthematurityprofileoffinancialassetsandliabilities.Cashflowforecastingisperformedregularlytoensurethatthereissufficientcapitalinordertomeetshort-term business requirements, after taking into account cash flows from operations and our holdings of cash and cashequivalents.





(c)Financialriskmanagement(continued)

ThefollowingtablesummarizesthematuritiesoftheCompany’sfinancial liabilitiesasatMarch31,2021basedontheundiscountedcontractualcashflows:

CarryingAmount

ContractualCashFlows

Lessthan1year

2to3years

4to5years

After5years

Tradeandotherpayables $69,344 $69,344 $69,344 $— $— $—

Debtfacilities 153,714 172,429 12,995 159,434 — —

Leaseliabilities 19,216 19,066 4,888 7,148 5,994 1,036

Otherliabilities 5,503 5,493 — — — 5,493

$247,777 $266,332 $87,227 $166,582 $5,994 $6,529

AtMarch 31, 2021, the Company hadworking capital of $232.8million (December 31, 2020 – $254.4million). TotalavailableliquidityatMarch31,2021was$297.8million,including$65.0millionofundrawnrevolvingcreditfacility.

The Company believes it has sufficient cash on hand, combinedwith cash flows from operations, tomeet operatingrequirementsastheyariseforatleastthenext12months.IftheCompanyneedsadditionalliquiditytomeetobligations,theCompanymayconsiderdrawingonitsdebtfacility,securingadditionaldebtfinancingand/orequityfinancing.

CurrencyRisk

The Company is exposed to foreign exchange risk primarily relating to financial instruments that are denominated inCanadiandollarsorMexicanpesos,whichwouldimpacttheCompany’snetearningsorloss.Tomanageforeignexchangerisk,theCompanymayoccasionallyenterintoshort-termforeigncurrencyderivatives,suchasforwardsandoptions,tohedgeitscashflows.

ThesensitivityoftheCompany’snetearningsorlossandcomprehensiveincomeorlossduetochangesintheexchangeratesoftheCanadiandollarandtheMexicanpesoagainsttheU.S.dollarisincludedinthetablebelow:

March31,2021

Cashandcash

equivalents

Tradeandother

receivables

Valueaddedtaxes

receivable

Otherfinancialassets

Tradeandother

payables

Netassets(liabilities)exposure

Effectof+/-10%changeincurrency

Canadiandollar $78,777 $62 $— $9,192 ($2,682) $85,349 $8,535

Mexicanpeso 9,970 — 65,811 — (41,050) 34,731 3,473

$88,747 $62 $65,811 $9,192 ($43,732) $120,080 $12,008

The Company utilizes certain derivatives tomanage its foreign exchange exposures to theMexican Peso. During thequarterendedMarch31,2021,theCompanydidnothaveanygainor loss(2020-unrealizedlossof$22.7millionandunrealizedgainof$1.0million)onfairvalueadjustmentsto its foreigncurrencyderivatives.AsatMarch31,2021,theCompanydoesnotholdanyforeigncurrencyderivatives(2020-$78.1million).

CommodityPriceRisk

TheCompanyisexposedtocommoditypriceriskonsilverandgold,whichhaveadirectandimmediateimpactonthevalue of its related financial instruments and net earnings. The Company’s revenues are directly dependent oncommodity prices that have shown volatility and are beyond the Company’s control. The Company does not usederivativeinstrumentstohedgeitscommoditypricerisktosilver.





(c)Financialriskmanagement(continued)

ThefollowingtablesummarizestheCompany’sexposuretocommoditypriceriskandtheirimpactonnetearnings:

March31,2021 Effectof+/-10%changeinmetalprices Silver Gold TotalMetalsindoréinventory $245 $282 $527 $245 $282 $527

InterestRateRisk

The Company is exposed to interest rate risk on its short-term investments, debt facilities and lease liabilities. TheCompanymonitors itsexposuretointerestratesandhasnotenteredintoanyderivativecontractstomanagethisrisk.TheCompany’sinterestbearingfinancialassetscompriseofcashandcashequivalentswhichbearinterestatamixtureofvariableandfixedratesforpre-setperiodsoftime.

AsatMarch31,2021, theCompany’sexposure to interest rate riskon interestbearing liabilities is limited to itsdebtfacilities and lease liabilities.Basedon theCompany’s interest rateexposureatMarch31,2021, a changeof25basispointsincreaseordecreaseofmarketinterestratedoesnothaveasignificantimpactonnetearningsorloss.

22.SUPPLEMENTALCASHFLOWINFORMATION


2021 2020

Netchangeinnon-cashworkingcapitalitems:

Decreaseintradeandotherreceivables $491 $751

(Increase)decreaseinvalueaddedtaxesreceivable (8,350) 819

Increaseininventories (3,156) (1,700)

Increaseinprepaidexpensesandother (2,101) (4,036)

Increase(decrease)inincometaxespayable 292 (482)

Decreaseintradeandotherpayables (942) (6,115)

($13,766) ($10,763)

Non-cashinvestingandfinancingactivities:

Transferofshare-basedpaymentsreserveuponsettlementofRSUs $130 $879

Transferofshare-basedpaymentsreserveuponexerciseofoptions 1,783 708

Acquisitionofmininginterests (3,750) —

AsatMarch31,2021,cashandcashequivalentsinclude$6.6million(December31,2020-$6.4million)thatareheldin-trustasbondsfortaxauditsinMexicothatareexpectedtoberesolvedwithinthenext12months.




23.CONTINGENCIESANDOTHERMATTERS

Duetothesize,complexityandnatureoftheCompany’soperations,variouslegalandtaxmattersariseintheordinarycourseofbusiness.TheCompanyaccruesforsuchitemswhenaliabilityisprobableandtheamountcanbereasonablyestimated.Intheopinionofmanagement, thesematterswill nothaveamaterial effecton the consolidated financial statementsof theCompany.

ClaimsandLegalProceedingsRisks

TheCompanyissubjecttovariousclaimsandlegalproceedingscoveringawiderangeofmattersthatarise intheordinarycourse of business activities. Many factors, both known and unknown, could cause actual results, performance orachievements to bematerially different from the results, performance or achievements that are ormay be expressed orimpliedbysuchforward-lookingstatementsorinformationandtheCompanyhasmadeassumptionsandestimatesbasedonorrelatedtomanyofthesefactors.Suchfactorsinclude,withoutlimitation:availabilityoftimeoncourtcalendarsinCanadaandelsewhere;therecognitionofCanadianjudgmentsunderMexicanlaw;thepossibilityofsettlementdiscussions;theriskofappealofjudgment;andtheinsufficiencyofthedefendant’sassetstosatisfythejudgmentamount.EachofthesemattersissubjecttovariousuncertaintiesanditispossiblethatsomeofthesemattersmayberesolvedunfavourablytotheCompany.First Majestic carries liability insurance coverage and establishes provisions for matters that are probable and can bereasonablyestimated.Inaddition,theCompanymaybeinvolvedindisputeswithotherpartiesinthefuturewhichmayresultinasignificantimpactonourfinancialcondition,cashflowandresultsofoperations.

AlthoughtheCompanyhastakenstepstoverifyownershipand legaltitletomineralproperties inwhich ithasan interest,according to the usual industry standards for the stage ofmining, development and exploration of such properties, theseproceduresdonotguaranteetheCompany’stitle.Suchpropertiesmaybesubjecttoprioragreementsortransfers,andtitlemaybeaffectedbyundetecteddefects.However,managementisnotawareofanysuchagreements,transfersordefects.

PrimeroTaxRulings

WhenPrimeroMiningCorp.("Primero")thepreviousownerofSanDimasacquiredtheSanDimasMineinAugust2010,ithad a Silver Purchase Agreement (“Old Stream Agreement”) that required its subsidiary PEM to sell 100% of the silverproducedfromtheSanDimasminetoWPMI,upto6millionouncesand50%ofsilverproducedthereafter,atthelowerof:(i)thespotmarketpriceand(ii)$4.04perounceplusanannualincreaseof1%.

InordertoreflectcommercialrealitiesandtheeffectsoftheOldStreamAgreement,forMexicanincometaxpurposes,PEMrecognizedtherevenueonthesesilversalesbasedonitsactualrealizedrevenue(“PEMRealizedPrice”)insteadofatspotmarketprices.

ToobtainassurancethattheSATwouldacceptthePEMRealizedPriceasthepricetousetocalculateMexicanincometaxes,Primeroapplied forandreceivedanAdvancePricingAgreement (“APA”) fromtheSAT.TheAPAconfirmedthat thePEMRealizedPricewouldbeusedasPrimero’sbasisforcalculatingtaxesowedbyPEMonthesilversoldundertheOldStreamAgreement.PEMbelievedthattheintentofanAPAwastohaveSATprovidetaxcertaintyandasaresultmadesignificantinvestmentsinMexicobasedonthatcertainty.OnOctober4,2012,PEMreceivedtheAPARulingfromSATwhichconfirmedtheappropriatepriceforsalesofsilverundertheOldStreamAgreementwasthePEMRealizedPrice.UnderMexicantaxlaw,anAPArulingisgenerallyapplicableforafiveyearperiodandthisrulingwasmadeeffectivefor2010to2014.

In February 2016, PEM received a legal claim from the SAT seeking to nullify the APA. The legal claim initiated did notidentifyanydifferentbasisforpayingtaxes.

In2019, theSAT issued reassessments for the2010 to2012 taxyears in the totalamountof$238.7million (4,919millionMXN)inclusiveofinterest,inflation,andpenalties.In2021,theSATalsoissuedareassessmentagainstPEMforthe2013taxyearinthetotalamountof$132.1million(2,869millionMXN)(collectively,the"Reassessments").TheCompanybelievesthatthe Reassessments were issued in violation of the terms of the APA. The key items in the Reassessments includereassessments based on the market price of silver, denial of the deductibility of interest expense and service fees, SATtechnicalerrorrelatedtodoublecountingoftaxes,andinterestandpenalties.




23.CONTINGENCIESANDOTHERMATTERS(continued)

PrimeroTaxRulings(continued)

TheCompanycontinues todefend theAPA in theMexican legalproceedings,and initiatedproceedingsunder relevant taxtreaties between the competent tax authorities of Mexico, Canada, Luxembourg and Barbados, all of which weresubsequentlydismissedonaunilateralbasisbytheSAT("Dismissals")inMay2020.TheCompanybelievesthattheDismissalshaveno legalbasisandbreach internationalobligationsregardingdoubletaxationtreaties,andthat theAPAremainsvalidand legally binding. The Company will continue disputing the Reassessments, exhausting its domestic and internationalremedies.

WhiletheCompanycontinuestovigorouslydefendthevalidityoftheAPAanditstransferpricingposition,itisalsoengagingin various proceedings with the SAT seeking to resolve matters and bring tax certainty through a negotiated solution.Despite theseextensiveefforts andongoing legal challenges to theReassessments and theDismissals, inApril 2020andFebruary 2021, SAT issued notifications to PEM to attempt to secure amounts it claims are owed pursuant to itsreassessmentsissued.ThesenotificationsimposecertainrestrictionsonPEMincludingitsabilitytodisposeitsconcessionsandrealproperties.

The Company has challenged SAT’s Reassessments and Dismissals through all domestic means available to it, includingannulment suits before theMexican Federal TaxCourtonAdministrativeMatters ("Federal Court"),whichhas yet toberesolved, and a complaint beforeMexico’s Federal Taxpayer Defense Attorney's Office (known as “PRODECON”), whichdeterminedthatPEMhasall legalremediesatitsdisposalandithasalreadychallengedeverySATruling,thusthemattermust be decided by Mexican Courts. The Company believes that these actions are neither fair nor equitable and arediscriminatory against the Company as a foreign investor and amount to a denial of justice under international law, inadditiontoviolatingvariousprovisionsoftheFederalConstitutionoftheUnitedMexicanStatesandMexicandomesticlaw,andMexicancourtprecedents.Asaresult,onMay13,2020,theCompanyprovidedtotheGovernmentofMexiconoticeofits intention to initiate an international arbitration proceeding (“Notice of Intent”) pursuant to theNorthAmerican FreeTradeAgreement(“NAFTA”).TheNoticeofIntentinitiateda90-dayperiodfortheGovernmentofMexicotoenterintogoodfaithandamicablenegotiationswiththeCompanytoresolvethedispute.OnAugust11,2020,the90-dayperiodexpiredwithoutanyresolutionofthedispute.

InSeptember2020,theCompanywasservedwithadecisionmadebytheFederalCourttonullifytheAPAgrantedtoPEM.TheFederalCourt’sdecisiondirectsSATtore-examinetheevidenceandbasisfortheissuanceoftheAPAwithretroactiveeffect,forthefollowingkeyreasons:(i)SAT’serrorsinanalyzingPEM’srequestfortheAPAandtheevidenceprovidedinsupportoftherequest;and(ii)SAT’sfailuretorequestfromPEMcertainadditionalinformationbeforeissuingtheAPA.

TheCompany’s legaladvisors reviewedthewrittenreasonsandareof theviewthat theFederalCourt’sdecision is flawedbothduetoSAT'sproceduralirregularitiesandfailuretoaddresstherelevantevidenceandlegalauthorities.Inaddition,theyconsiderthatthe lawsappliedtoPEMinthedecisionareunconstitutional.Asaresult, theCompanyfiledanappealofthedecision to theMexicanCircuitCourtsonNovember30,2020. Since twowritsof certiorariwere filedbefore theMexicanSupremeCourtofJustice,onApril15,2021,thePlenaryoftheSupremeCourti)admittedoneofthosewrits,ii)requestedtheCircuitCourttosendtheamparofileandiii)assignedsuchwrittotheSecondChamberoftheSupremeCourtforissuingthecorrespondingdecision.TheotherwritofcertiorarihasnotbeenadmittedbythePlenaryoftheSupremeCourt.Therefore,theCompanyiscurrentlywaitingfortheSupremeCourttoissuearesolutiontowardssuchwritsofcertiorari.

The Company intends to continue to challenge the actions of the SAT in Mexican courts, however due to the ongoingCOVID-19crisis,theMexicancourtsarecurrentlyavailableonlyonarestrictedbasisforfurtherhearingsonthesematters.OnMarch 2, 2021, the Company announced that it has submitted a Request for Arbitration to the International Centre forSettlement of Investment Disputes ("ICSID"), on its own behalf and on behalf of PEM, based on Chapter 11 of theNorthAmericanFreeTradeAgreement("NAFTA").




23.CONTINGENCIESANDOTHERMATTERS(continued)

PrimeroTaxRulings(continued)

IftheSATweresuccessful inretroactivelynullifyingtheAPA,theSATmayseektoauditandreassessPEMinrespectof itssalesofsilverinconnectionwiththeOldStreamAgreementfor2010through2014.IftheSATweresuccessfulinretroactivelynullifying the APA and issuing reassessments, it would likely have amaterial adverse effect on the Company’s results ofoperations,financialconditionandcashflows.ShouldtheCompanyultimatelyberequiredtopaytaxonitssilverrevenuesbasedonmarketpriceswithoutanymitigatingadjustments,theincremental incometaxfortheyears2010-2018wouldbeapproximately$198.1million(4,083millionMXN),beforeinterestorpenalties.

Basedon theCompany’sassessmentswith thirdpartyadvisors, theCompanybelievesPEM filed its tax returns compliantwithapplicableMexicanlawand,therefore,noliabilityhasbeenrecognizedinthefinancialstatements.

To the extent it is ultimately determined that the appropriate price of silver sales under the Old Stream Agreement issignificantly different from the PEM Realized Price and while PEM would have rights of appeal in connection with anyreassessments,itislikelytohaveamaterialeffectontheCompany’sbusiness,financialpositionandresultsofoperations.

24.SUBSEQUENTEVENTS

CompletionoftheAcquisitionofJerrittCanyon

OnApril30,2021, theCompanycompletedtheacquisitionof100%of the issuedandoutstandingsharesof JerrittCanyonCanadaLtd.("JerrittCanyon")fromSprottMiningInc.("SprottMining") inexchangefor26,719,727commonsharesofFirstMajestic(the"ConsiderationShares"),fivemillioncommonsharepurchasewarrants,eachexercisableforonecommonshareoftheCompanyatapriceof$20pershareforaperiodofthreeyears(the"ConsiderationWarrants").Concurrentwithclosingoftheacquisition,SprottMiningalsocompletedaprivateplacementconsistingof$30.0millionatapriceof$17.59persharefor a total of 1,705,514 common shares of the Company (the "Private Placement Shares") (together, the "AcquisitionAgreement").

Pursuant to closing of theAcquisitionAgreement, the Company deposited into escrow an aggregate of $60.0million (the"EscrowedFunds"),including$30.0millionfromFirstMajesticand$30.0millionproceedsfromthePrivatePlacementShares,representing the estimated tax dueby Jerritt Canyon as a result of a reorganization completedprior to the acquisitionofJerrittCanyon.Thepartieshaveagreedthattheamountofsuchtaxliabilityisapproximately$46.3million,whichamountwillbepaid fromtheEscrowedFundsand thePurchasePricewillbe increasedby$13.7million,being thedifferencebetweensuchamountand$60million("TriggeredTaxAdjustment").Inaddition,thepurchasepricewillbeadjustedbytheamount,ifany,bywhichtheclosingworkingcapitalofJerrittCanyonisgreaterorlessthanzero(the“WorkingCapitalAdjustment”).

JerrittCanyonownsandoperatestheJerrittCanyonGoldMinelocatedinElkoCounty,Nevada.JerrittCanyonwasdiscoveredin1972andhasbeeninproductionsince1981havingproducedover9.5millionouncesofgoldoverits40-yearproductionhistory. The mine currently operates as an underground mine and has one of three permitted gold processing plants inNevadathatusesroastinginitstreatmentofore.Thisprocessingplanthasacapacityof4,500tonnesperday(“tpd”)andiscurrently operating at an average rate of approximately 2,200 tpd due to limited ore production from two undergroundmines.Thepropertyconsistsofalarge,underexploredlandpackageconsistingof30,821hectares(119squaremiles).In2020,Jerritt Canyon produced 112,749 ounces of gold at a cash cost of $1,289 per ounce. FirstMajestic has identified severalopportunities toenhanceboth the cost andproductionprofileof JerrittCanyonaswell asnear-termbrownfieldpotentialbetweentheSSXandSmithminesandlong-termpropertywideexplorationpotential.

TogetherwithFirstMajestic'sexistingthreeoperatingsilverminesinMexico,thecombinedcompanywillbeapremierNorthAmerican silver and gold producer with expected pro forma annualized attributable production of 30 to 33million silverequivalentouncesbasedonhistoricalproductionrates.

ManagementhasconcludedthatJerrittCanyonconstitutesabusinessand,therefore,theacquisitionwillbeaccountedforinaccordancewithIFRS3-BusinessCombinations.Totalconsiderationfortheacquisitionisestimatedtobevaluedat$485.5million,subjecttotheaforementionedTriggeredTaxAdjustmentandWorkingCapitalAdjustment.




24.SUBSEQUENTEVENTS(continued)

CompletionoftheAcquisitionofJerrittCanyon(continued)

Thepreliminarypurchasepriceallocation,whichissubjecttofinaladjustments,isestimatedasfollows:

TotalConsideration

26,719,727ConsiderationSharesissuedtoSprottMiningwithanaccountingfairvalueof$15.59pershare(1) $416,561

1,705,514PrivatePlacementSharesissuedtoSprottMiningwithanaccountingfairvalueof$15.59pershare(1) 26,589

5,000,000ConsiderationWarrantsissuedtoSprottMiningwithanaccountingfairvalueof$4.63perwarrant(2) 23,150

CashpaidforTriggeredTaxAdjustment 13,723

CashpaidforWorkingCapitalAdjustment 5,494

Totalconsideration $485,517

AllocationofPurchasePrice

Cashandcashequivalents $2,226

Inventories 19,324

Tradeandotherreceivables(3) 5,071

Otherfinancialassets 5,101

Prepaidexpenses 1,879

Restrictedcash 96,971

Mininginterestandproperty,plantandequipment 630,504

Tradeandotherpayables (21,538)

Leaseliabilities (2,879)

Incometaxespayable (46,277)

Contingentenvironmentalprovision(4) (17,900)

Decommissioningliabilities (87,345)

Deferredtaxliabilities (99,620)

Netassetsacquired $485,517

(1)FairvaluesofConsiderationSharesandPrivatePlacementShareswereestimatedat$15.59persharesbasedontheopeningpriceofFirstMajestic’scommonshareontheNewYorkStockExchangeonApril30,2021,ascomparedtotheirdeemedpriceof$17.59accordingtotheAcquisitionAgreement.

(2)TheConsiderationWarrantshaveanexercisepriceof$20pershareforathree-yeartermexpiringonApril30,2024.ThefairvalueofConsiderationWarrantswereestimatedusingtheBlack-Scholesmethod.

(3)Tradeandotherreceivablesareexpectedtobefullyrecoverable.

(4)ContingentenvironmentalprovisionrelatestofundsrequiredtoestablishatrustagreementwiththeNevadaDivisionofEnvironmentalProtection(“NDEP”)tocoverpost-closurewatertreatmentcostatJerrittCanyon,ofwhich$5.0millionisexpectedtobefundedoverthenexttwelvemonthswiththeremainingbalanceoverfutureinstalments.Amountaresubjecttomanagementreviewofreclamationplanandcostestimatesaswellasalternativetreatmentoptionsaftertheacquisition.Actualamountmaydiffersignificantlyfromtheamountdisclosedabove.

Thepurchase considerationhasbeenallocatedonapreliminarybasisbasedonmanagement’sbest estimates at the timethese interim consolidated financial statementswere prepared. As the acquisition closed only six days prior to release ofthese interimconsolidatedfinancialstatements,certaindisclosures,suchasrevenueandprofit lossofthecombinedentityduring the current period, purchase price allocation between mining interest and property, plant and equipment, andidentificationofcontingentliabilities,areimpracticableatthistime.TheCompanyiscontinuingitsreviewtodeterminetheidentificationof intangibleassets,assumptionof liabilities, identificationofcontingent liabilities,bondingrequirementsandworkingcapitaladjustmentsduringtheallowablemeasurementperiod,whichshallnotexceedoneyearfromtheacquisitiondate.Anyfuturechangestothepurchasepriceallocationmayresultinadjustmentstomininginterests.

DeclarationofQuarterlyDividend

OnMay5,2021,theCompany'sboardofdirectorsapprovedanddeclareditsinauguralquarterlycommonsharedividendof$0.0045pershare,payableonandafterJune4,2021,tocommonshareholdersofrecordatthecloseofbusinessonMay17,2021.ThesedividendsweredeclaredsubsequenttothequarterendandhavenotbeenrecognizedasdistributionstoownersduringthequarterendedMarch31,2021.




MANAGEMENT’SDISCUSSIONANDANALYSIS

FORTHEQUARTERENDEDMARCH31,2021

925WestGeorgiaStreet,Suite1800,Vancouver,B.C.,CanadaV6C3L2Phone:604.688.3033|Fax:604.639.8873|TollFree:1.866.529.2807|Email:[email protected]

www.firstmajestic.com

TABLEOFCONTENTS

COMPANYOVERVIEW............................................................................................................................................... 3

2021FIRSTQUARTERHIGHLIGHTS............................................................................................................................ 4

OVERVIEWOFOPERATINGRESULTSSummaryofSelectedQuarterlyProductionResults.................................................................................................. 7ConsolidatedOperations............................................................................................................................................ 8SanDimasSilver/GoldMine....................................................................................................................................... 9SantaElenaSilver/GoldMine..................................................................................................................................... 10LaEncantadaSilverMine........................................................................................................................................... 12LaParrillaSilverMine................................................................................................................................................. 13DelToroSilverMine................................................................................................................................................... 13SanMartinSilverMine............................................................................................................................................... 13LaGuitarraSilverMine............................................................................................................................................... 14SpringpoleSilverStream............................................................................................................................................ 14

OVERVIEWOFFINANCIALPERFORMANCEFirstQuarter2021vs2020......................................................................................................................................... 15SummaryofSelectedQuarterlyResults..................................................................................................................... 17

OTHERDISCLOSURESLiquidity,CapitalResourcesandContractualObligations.......................................................................................... 17ManagementofRisksandUncertainties................................................................................................................... 18OtherFinancialInformation....................................................................................................................................... 24SubsequentEvents..................................................................................................................................................... 24AccountingPolicies,JudgmentsandEstimates.......................................................................................................... 24Non-GAAPMeasures.................................................................................................................................................. 25Management'sReportonInternalControlOverFinancialReporting........................................................................ 31CautionaryStatements............................................................................................................................................... 32

FirstMajesticSilverCorp.2021FirstQuarterReport Page2

MANAGEMENT’SDISCUSSIONANDANALYSISOFRESULTSOFOPERATIONSANDFINANCIALCONDITIONThisManagement’sDiscussionandAnalysisofResultsofOperationsandFinancialCondition(“MD&A”)shouldbereadinconjunctionwith the unaudited consolidated financial statements of FirstMajestic Silver Corp. (“FirstMajestic” or “theCompany”)forthethreemonthsendedMarch31,2021whicharepreparedinaccordancewithInternationalAccountingStandard(“IAS”)34,“InterimFinancialReporting”,andauditedconsolidatedfinancialstatementsoftheCompanyasatandfortheyearendedDecember31,2020,assomedisclosuresfromtheannualconsolidatedfinancialstatementshavebeencondensedoromitted.AlldollaramountsareexpressedinUnitedStates(“US”)dollarsandtabularamountsareexpressedinthousandsofUSdollars,unlessotherwiseindicated.CertainamountsshowninthisMD&Amaynotaddexactlytototalamountsduetoroundingdifferences.

ThisMD&Acontains“forward-lookingstatements”thataresubjecttoriskfactorssetoutinacautionarynotecontainedattheendofthisMD&A.AllinformationcontainedinthisMD&AiscurrentandhasbeenapprovedbytheBoardofDirectorsoftheCompanyasofMay5,2021unlessotherwisestated.

COMPANYOVERVIEW

FirstMajesticisamultinationalminingcompanyheadquarteredinVancouver,Canada,focusedonprimarysilverandgoldproduction inNorthAmerica,pursuing theexplorationanddevelopmentof its existingmineralproperties andacquiringnewassets.TheCompanyownsthreeproducingminesinMexico:theSanDimasSilver/GoldMine,theSantaElenaSilver/GoldMine,theLaEncantadaSilverMine,andfourminescurrentlyincareandmaintenance:theSanMartinSilverMine,theDelToroSilverMine, the LaParrilla SilverMineand theLaGuitarraSilver/GoldMine.TheCompanyacquired the JerrittCanyonGoldMineinNevada,USAonApril30,2021.

FirstMajestic ispublicly listedon theNewYorkStockExchangeunder the symbol “AG”,on theTorontoStockExchangeunderthesymbol“FR”andontheFrankfurtStockExchangeunderthesymbol“FMV”.


2021FIRSTQUARTERHIGHLIGHTS

KeyPerformanceMetrics 2021-Q1 2020-Q4ChangeQ1vsQ4 2020-Q1

ChangeQ1vsQ1

Operational

OreProcessed/TonnesMilled 614,245 625,332 (2%) 599,142 3%

SilverOuncesProduced 2,908,024 3,452,959 (16%) 3,151,980 (8%)

SilverEquivalentOuncesProduced 4,540,296 5,477,492 (17%) 6,195,057 (27%)

CashCostsperSilverEquivalentOunce(1) $12.61 $10.21 24% $8.25 53%

All-inSustainingCostperSilverEquivalentOunce(1) $19.35 $16.12 20% $12.23 58%

TotalProductionCostperTonne(1) $90.03 $85.68 5% $82.41 9%

AverageRealizedSilverPriceperOunce(1) $27.13 $24.88 9% $17.36 56%

Financial(in$millions)

Revenues $100.5 $117.1 (14%) $86.1 17%

MineOperatingEarnings $28.1 $43.7 (36%) $21.1 33%

NetEarnings(Loss) $1.9 $34.5 (95%) ($32.4) NM

OperatingCashFlowsbeforeMovementsinWorkingCapitalandTaxes $31.1 $48.2 (35%) $23.3 33%

CashandCashEquivalents $201.7 $238.6 (15%) $145.2 39%

WorkingCapital(1) $232.8 $254.4 (8%) $139.8 67%

Shareholders

Earnings(Loss)perShare("EPS")-Basic $0.01 $0.16 (95%) ($0.15) NM

AdjustedEPS(1) $0.03 $0.11 (71%) $0.04 (20%)

CashFlowperShare(1) $0.14 $0.22 (36%) $0.11 26%

NM-Notmeaningful

(1) TheCompanyreportsnon-GAAPmeasureswhichincludecashcostspersilverequivalentounceproduced,all-insustainingcostpersilverequivalentounceproduced,totalproductioncostpertonne,averagerealizedsilverpriceperouncesold,workingcapital,adjustedEPSandcashflowpershare.Thesemeasuresarewidelyusedintheminingindustryasabenchmarkforperformance,butdonothaveastandardizedmeaningandthemethodsusedbytheCompanytocalculatesuchmeasuresmaydiffer frommethodsusedbyothercompanieswithsimilardescriptions.See“Non-GAAPMeasures”onpages25to30forareconciliationofnon-GAAPtoGAAPmeasures.

FirstQuarterProductionSummary SanDimas SantaElena LaEncantada Consolidated

OreProcessed/TonnesMilled 199,466 185,358 229,421 614,245

SilverOuncesProduced 1,716,143 453,528 738,354 2,908,024

GoldOuncesProduced 17,448 6,327 97 23,873

SilverEquivalentOuncesProduced 2,910,946 884,332 745,018 4,540,296

CashCostsperSilverEquivalentOunce $10.00 $20.18 $13.77 $12.61

All-inSustainingCostperSilverEquivalentOunce $14.31 $25.66 $16.30 $19.35

TotalProductionCostperTonne $140.29 $94.15 $42.99 $90.03


AcquisitionofJerrittCanyon

OnApril 30, 2021, the Company completed the acquisition of Jerritt Canyon Canada Ltd. ("Jerritt Canyon") from SprottMining Inc. ("SprottMining") in exchange for 26,719,727 common shares of FirstMajestic (the "Consideration Shares")(representing$470.0millioninconsiderationatadeemedpricepershareof$17.59),fivemillioncommonsharepurchasewarrants,eachexercisableforoneCommonShareatapriceof$20pershareforaperiodofthreeyears.Concurrentwithclosingoftheacquisition,SprottMiningalsocompletedaprivateplacementconsistingof$30.0millionatapriceof$17.59per share for a total of 1,705,514 common shares of the Company (the "Private Placement Shares") (together, the"AcquisitionAgreement").

PursuanttoclosingoftheAcquisitionAgreement,theCompanydepositedintoescrowanaggregateof$60.0million(the"Escrowed Funds"), including $30.0 million from First Majestic and $30.0 million proceeds from the Private PlacementShares, representing the estimated tax due by Jerritt Canyon as a result of a reorganization completed prior to theacquisitionofJerrittCanyon.Thepartieshaveagreedthattheamountofsuchtaxliability isapproximately$46.3million,whichamountwillbepaidfromtheEscrowedFundsandthePurchasePricewillbeincreasedby$13.7million,beingthedifference between such amount and $60million ("Triggered Tax Adjustment"). In addition, the purchase price will beadjusted by the amount, if any, bywhich the closingworking capital of Jerritt Canyon is greater or less than zero (the“WorkingCapitalAdjustment”).

JerrittCanyonownsandoperates the JerrittCanyonGoldMine located inElkoCounty,Nevada,USA. JerrittCanyonwasdiscoveredin1972andhasbeeninproductionsince1981havingproducedover9.5millionouncesofgoldoverits40-yearproductionhistory.Theminecurrentlyoperatesasanundergroundmineandhasoneofthreepermittedgoldprocessingplants inNevada thatuses roasting in its treatmentofore.Thisprocessingplanthasacapacityof4,500 tonnesperday(“tpd”)and iscurrentlyoperatingatanaveragerateofapproximately2,200tpddueto limitedoreproductionfromtwounderground mines. The property consists of a large, under-explored land package consisting of 30,821 hectares (119squaremiles).In2020,JerrittCanyonproduced112,749ouncesofgoldatacashcostof$1,289perounce.FirstMajestichasidentifiedseveralopportunitiestoimproveboththecostandproductionprofileofJerrittCanyonaswellasnear-termbrownfieldpotentialbetweentheSSXandSmithminesandlong-termpropertywideexplorationpotential.

Together with First Majestic's existing three operating silver mines in Mexico, the combined company has become apremierNorth American silver and gold producerwith expected pro forma annualized attributable production of 30 to33millionsilverequivalentouncesbasedonhistoricalproductionrates.

OperationalHighlights

• Totalproductioninthefirstquarterwas4.5millionsilverequivalentounces,consistingof2.9millionouncesofsilverand23,873ouncesofgold,representingadecreaseof16%and9%,respectively,comparedtotheCompany'srecordsettingproductioninthepreviousquarter.

• Cashcostpersilverequivalent("AgEq")ounceforthequarterwas$12.61perounce,comparedto$10.21perounceinthe previous quarter. The increase in cash cost per AgEq ounce was due to higher ore development and miningcontractorcostsatSantaElenainpreparationofadditionalorefacestoincreasefutureproduction,aswellashigherenergycostsatSanDimasasaresultoflowerenergycontributionfromthehydroelectricdamduetothedryseason,whichforcedtheminetorelyonthepublicelectricitygridanddieselgenerators.

• AISCperAgEqounceinthefirstquarterwas$19.35perouncecomparedto$16.12perounceinthepreviousquarter.TheincreaseinAISCperAgEqouncewasprimarilyattributedtoincreaseincashcostperAgEqounce,andsustainingcostsbeingdividedby17%lesssilverequivalentouncesproducedcombinedwithincreasedminedevelopmentrates.

• UndergrounddevelopmentactivitiesattheErmitañoprojectnearSantaElenaadvancedanother1,453metresduringthequarter.TheCompanyplanstostartteststopemininginthesecondquarterandexpectstoextractbetweenover30,000 tonnesoforeover thenext sixmonths.On surface, initial constructionactivities commenced for theaccessroadwhichwillconnecttheSantaElenaprocessingplanttotheErmitañoportalareaandsupportsurfaceinfrastructureattheportalarea.

• UndergroundoreproductionandplantthroughputratesatSantaElenasteadilyincreasedthroughoutthequarterandinthemonthofMarchexceededbudgetedlevelsforthefirsttimeinoverayear.Thestrongproductionwasachievedfollowingmultiple improvement initiatives enactedat themineover thepastninemonths. In themonthofMarch,undergroundminingproduced55,266 tonnesofore,orapproximately1,783 tonnesperday, accounting for41%ofSantaElena'stotalundergroundproductionintheentirequarter.


• TheLiquifiedNaturalGas("LNG")facilityatSantaElenasuccessfullycompletedallpre-commissioningactivitiesduringthequarter andwas supplying approximately 85%of power requirements byquarter end. Theplant is expected toramp-up to full capacity in the second quarterwhichwill yield significant energy cost savings andwill substantiallyreducethecarbonfootprintoftheoperation.

• TechnicalReportsfortheCompany'sthreeoperatingmines:SanDimasSilver/GoldMine,SantaElenaSilver/GoldMineandLaEncantadaSilverMinewereupdatedandpublishedinMarch2021.

FinancialHighlights

• Inthefirstquarter,theCompanygeneratedrevenuesof$100.5millioncomparedto$86.1millioninthefirstquarterof2020. The increase in revenueswas attributed primarily to a 56% increase in average realized silver price, partiallyoffsetbya24%decreaseinsilverequivalentouncessold.

• Revenuesinthefirstquarterincludedaquarterlyrecordof$4.8millionfromthesaleof146,827ouncesincoinsandbullionatanaveragesilverpriceof$32.65perounce.Theamountofcoinsandbullionrevenuesinthequartermorethandoubleditsannualrevenueintheprioryear.

• TheCompanyrealizedmineoperatingearningsof$28.1millioncomparedto$21.1millioninthefirstquarterof2020.Theincreaseinmineoperatingearningswasprimarilyattributedtohighermetalprices.

• Netearningsforthequarterwas$1.9million(EPSof$0.01)comparedtonetlossof$32.4million(EPSof($0.15))inthefirst quarter of 2020. The increase in net earnings was primarily attributed to higher metal prices as well as a$22.7 million loss in the first quarter of 2020 related to mark-to-market adjustments on the Company's foreigncurrencyderivatives.

• Adjustednet earnings for thequarter, normalized for non-cashor unusual items such as unrealized gain or loss onmarketable securities, share-basedpayments,write-downonassetsheld-for-saleanddeferred income taxes for thequarter ended March 31, 2021, was $7.0 million (Adjusted EPS of $0.03) compared to adjusted net earnings of$8.2million(AdjustedEPSof$0.04)inthefirstquarterof2020.

• Operatingcashflowbeforemovementsinworkingcapitalandtaxesinthequarterwas$31.1million($0.14pershare)comparedto$23.3million($0.11pershare)inthefirstquarterof2020.

• As of March 31, 2021, the Company had cash and cash equivalents of $201.7 million and working capital of$232.8million.

• OnApril1,2021,theCompanyreneweditsseniorsecuredrevolvingcreditfacilitybyextendingthematuritydatefromMay10,2021toNovember30,2022andreducingthecreditlimitfrom$75.0millionto$50.0million.Thepricinggridwas also revised to calculateexpensesonanetdebt rather thangrossdebtbasis,whichwill reduce future financecosts.


OVERVIEWOFOPERATINGRESULTS

SelectedProductionResultsforthePastEightQuarters

2021 2020 2019

PRODUCTIONHIGHLIGHTS Q1 Q4 Q3 Q2(2) Q1 Q4 Q3 Q2

Oreprocessed/tonnesmilled

SanDimas 199,466 208,648 189,918 114,390 200,109 182,265 173,679 172,368

SantaElena 185,358 168,276 204,577 89,590 177,834 196,640 229,094 229,761

LaEncantada 229,421 248,408 261,425 129,579 221,200 221,049 191,926 207,421

Non-producingproperties(1) — — — — — 26,528 61,268 127,344

Consolidated 614,245 625,332 655,920 333,559 599,142 626,482 655,967 736,896

Silverequivalentouncesproduced

SanDimas 2,910,946 3,477,061 3,125,662 2,395,633 3,672,169 3,516,117 3,502,102 3,641,139

SantaElena 884,332 901,630 1,091,026 595,651 1,593,400 1,592,397 1,859,170 1,461,345

LaEncantada 745,018 1,098,800 984,397 514,092 929,487 991,856 891,205 492,957


Consolidated 4,540,296 5,477,492 5,201,085 3,505,376 6,195,057 6,233,412 6,636,716 6,410,483

Silverouncesproduced

SanDimas 1,716,143 1,941,286 1,678,075 1,102,931 1,677,376 1,658,721 1,639,481 1,603,016

SantaElena 453,528 418,153 502,375 222,100 550,133 619,321 632,216 596,872

LaEncantada 738,354 1,093,521 978,416 509,544 924,472 987,630 885,627 489,194


Consolidated 2,908,024 3,452,959 3,158,866 1,834,575 3,151,980 3,348,424 3,367,740 3,193,566

CashcostperAgEqOunce(3)

SanDimas $ 10.00 $ 8.49 $ 7.74 $ 6.43 $ 7.15 $ 6.86 $ 6.87 $ 6.98

SantaElena $ 20.18 $ 16.50 $ 13.81 $ 11.44 $ 9.25 $ 8.73 $ 7.26 $ 9.49

LaEncantada $ 13.77 $ 10.42 $ 10.16 $ 9.55 $ 10.80 $ 10.15 $ 10.72 $ 16.53

Consolidated $ 12.61 $ 10.21 $ 9.48 $ 7.76 $ 8.25 $ 8.23 $ 8.16 $ 9.43

All-insustainingcostperAgEqOunce(3)

SanDimas $ 14.31 $ 12.32 $ 10.74 $ 10.70 $ 9.86 $ 10.01 $ 9.22 $ 10.00

SantaElena $ 25.66 $ 21.76 $ 16.36 $ 15.02 $ 10.60 $ 10.70 $ 7.96 $ 10.89

LaEncantada $ 16.30 $ 12.39 $ 12.12 $ 11.76 $ 13.33 $ 12.69 $ 12.65 $ 18.82

Consolidated $ 19.35 $ 16.12 $ 14.01 $ 13.95 $ 12.23 $ 12.81 $ 11.68 $ 13.39

Productioncostpertonne

SanDimas $ 140.29 $ 135.13 $ 120.60 $ 129.67 $ 126.33 $ 127.19 $ 135.71 $ 142.42

SantaElena $ 94.15 $ 86.32 $ 71.44 $ 74.50 $ 81.04 $ 68.77 $ 57.78 $ 58.88

LaEncantada $ 42.99 $ 43.72 $ 36.04 $ 36.80 $ 43.82 $ 43.92 $ 47.86 $ 38.29

Consolidated $ 90.03 $ 85.68 $ 71.56 $ 78.78 $ 82.41 $ 78.62 $ 78.87 $ 77.93

1)Non-producingpropertiesincludetheSanMartin,DelToro,LaParrillaandLaGuitarramineswhicharecurrentlyplacedontemporarysuspension.2) InresponsetotheCOVID-19pandemic,theMexicanMinistryofHealth issuedadecreerequiringnon-essentialbusinesses, includingmining,totemporarilysuspendactivitiesuntilMay23,2020.Asaresult,productionandcostswereadverselyaffectedduringthequarter.3)EffectiveJanuary1,2021,theCompanyisreportingitscashcostsandall-insustainingcostsonapersilverequivalent("AgEq")ouncebasis,insteadofperpayablesilverouncebasis.CashcostandAISCperAgEqOunceforpreviouscomparativeperiodswereupdatedbasedonthenewmetric.See"Non-GAAP"section.


OperatingResults–ConsolidatedOperations

CONSOLIDATED 2021-Q1 2020-Q4 2020-Q1ChangeQ1vsQ4

Change'21vs'20

Oreprocessed/tonnesmilled 614,245 625,332 599,142 (2%) 3%

Averagesilvergrade(g/t) 166 194 185 (14%) (10%)

Averagegoldgrade(g/t) 1.26 1.37 1.74 (8%) (28%)

Silverrecovery(%) 89% 89% 89% 0% 0%

Goldrecovery(%) 96% 96% 96% 0% 0%

Production

Silverouncesproduced 2,908,024 3,452,959 3,151,980 (16%) (8%)

Goldouncesproduced 23,873 26,343 32,202 (9%) (26%)

Silverequivalentouncesproduced 4,540,296 5,477,492 6,195,057 (17%) (27%)

Cost

CashcostperAgEqOunce $12.61 $10.21 $8.25 24% 53%

All-InsustainingcostsperAgEqOunce $19.35 $16.12 $12.23 20% 58%

Totalproductioncostpertonne $90.03 $85.68 $82.41 5% 9%

Undergrounddevelopment(m) 13,707 12,004 10,888 14% 26%

Diamonddrilling(m) 39,552 57,147 40,458 (31%) (2%)

Production

Totalproductioninthefirstquarterwas4.5millionsilverequivalentounces,consistingof2.9millionouncesofsilverand23,873ouncesofgold, representingadecreaseof16%and9%, respectively, compared to theCompany's recordsettingproductioninthepreviousquarter.

Totaloreprocessedamountedto614,245tonnesduringthequarter,representinga2%decreasecomparedtothepreviousquarter.ThedecreaseintonnesprocessedwasprimarilyduetoaseverewintericestorminthemonthofFebruarywhichtemporarily reduced plant throughput rates at La Encantada, offset by improved underground ore deliveries and plantproductionratesatSantaElena.

Consolidatedsilvergradesinthequarteraveraged166g/tcomparedto194g/t inthepreviousquarterandconsolidatedgoldgradesaveraged1.26g/tcomparedto1.37g/tinthepriorquarter.ThedecreaseinconsolidatedgradeswasprimarilyduetoloweroregradesattheLaEncantadaandSanDimasmines.Consolidatedsilverandgoldrecoveriesaveraged89%and96%,respectively,consistentwiththepreviousquarter.

CashCostandAll-InSustainingCostperOunce

CashcostperAgEqounceforthequarterwas$12.61perounce,comparedto$10.21perounceinthepreviousquarter.TheincreaseincashcostperAgEqouncewasduetotheloweroregrades,higheroredevelopmentandminingcontractorcostsatSantaElena inpreparationofadditionalore facesto increase futureproduction,aswellashigherenergycostsatSanDimasasaresultoflowerenergycontributionfromthehydroelectricdamduetodryseason,whichforcedtheminetorelyonthepublicelectricitygridanddieselgenerators.

AISCperAgEqounceinthefirstquarterwas$19.35perouncecomparedto$16.12perounceinthepreviousquarter.TheincreaseinAISCperAgEqouncewasprimarilyattributedtoincreaseincashcostperAgEqounce,andsustainingcostsbeingdividedby17%lesssilverequivalentouncesproducedcombinedwithincreasedminedevelopmentrates.

DevelopmentandExploration

Duringthequarter,theCompanycompleted13,707metresofundergrounddevelopmentand39,552metresofdiamonddrilling, compared to 12,004 metres and 57,147 metres, respectively, in the previous quarter. The increased minedevelopmentrateswereaboveplanatSanDimasandSantaElenaandarepartoftheoreandmetalproductionrampupplansfor2021.


Atquarterend,theCompanyhascompletedapproximately21%ofits2021explorationbudgetacrosstheCompany'sminesandprojectsandhadatotalof19activeexplorationdrillrigs,consistingof10rigsatSanDimas,sevenrigsatSantaElenaandtworigsatLaEncantada.

SanDimasSilver/GoldMine,Durango,México

The San Dimas Silver/Gold Mine is located approximately 130 km northwest of Durango, Durango State, Mexico andconsistsof71,868hectaresofminingclaimslocatedinthestatesofDurangoandSinaloa,Mexico.SanDimasisoneofthecountry’smostprominentsilverminesandthelargestproducingundergroundmineinthestateofDurangowithover250yearsofoperatinghistory.TheSanDimasoperatingplan involvesprocessingorefromseveralundergroundminingareaswitha2,500 tpdcapacitymillingoperationwhichproducessilver/golddorébars.Themine isaccessibleviaa40-minuteflightfromtheDurangoInternationalAirporttotheprivateairstripinthetownofTayoltita.TheCompanyowns100%oftheSanDimasmine.

SanDimas 2021-Q1 2020-Q4 2020-Q1ChangeQ1vsQ4

Change'21vs'20

Totaloreprocessed/tonnesmilled 199,466 208,648 200,109 (4%) 0%

Averagesilvergrade(g/t) 285 309 280 (8%) 2%


Silverrecovery(%) 94% 94% 93% 0% 1%

Goldrecovery(%) 96% 96% 96% 0% 0%

Production

Silverouncesproduced 1,716,143 1,941,286 1,677,376 (12%) 2%

Goldouncesproduced 17,448 19,980 21,308 (13%) (18%)

Silverequivalentouncesproduced 2,910,946 3,477,061 3,672,169 (16%) (21%)

Cost




Undergrounddevelopment(m) 8,242 8,454 7,100 (3%) 16%

Diamonddrilling(m) 24,078 26,537 22,087 (9%) 9%

Duringthefirstquarter,SanDimasproduced1,716,143ouncesofsilverand17,448ouncesofgoldforatotalof2,910,946silverequivalentounces,comparedto3,477,061silverequivalentouncesinthepriorquarter.

Themill processed a total of 199,466 tonneswith average silver and gold grades of 285 g/t and 2.83 g/t, respectively,compared to208,648 tonnesmilledwithaveragesilverandgoldgradesof309g/tand3.10g/t in thepreviousquarter.Increasedoredevelopment ratesand loweroregrade fromdevelopmentactivities resulted in loweraverageoregradesprocessedintheplant.TheCentralBlockandSinaloaGrabenareascontributedapproximately79%and16%,respectively,ofthetotalproductionduringthequarter. Inaddition,theTayoltitaandElCristoareascontributedapproximately4%oftotalproductioninthequarterastheseadditionalareasarebeingbroughtintoproduction.

Silverandgold recoveriesaveraged94%and96%, respectively,during thequarterwhichwereconsistentwith thepriorquarter.

Inthefirstquarter,cashcostperAgEqouncewas$10.00perouncecomparedto$8.49perounceinthepriorquarter.Theincreaseincashcostwasprimarilyduetoa16%decreaseinsilverequivalentouncesproduced,combinedwithanincreaseinenergycostsastheminehadtorelyonelectricityfromthepublicgridasaresultfromlowerenergycontributionfromthehydroelectricplantduetothedryseason.


AISCperAgEqounceforthequarterwas$14.31perouncecomparedto$12.32perounceinthepriorquarter,primarilyduetolowersilverequivalentouncesproduced.

TheSanDimasmineissubjecttoagoldandsilverstreamingagreementwithWheatonPreciousMetalsInternationalLtd.("WPMI"),awhollyownedsubsidiaryofWheatonPreciousMetalsCorp.,whichentitlesWPMItoreceive25%ofthegoldequivalentproduction(basedonafixedexchangeratioof70silverouncesto1goldounce)atSanDimasinexchangeforongoingpaymentsequaltothelesserof$600(subjecttoa1%annualinflationadjustmentcommencinginMay2019)andtheprevailingmarketprice,foreachgoldouncedelivered.Shouldtheaveragegoldtosilverratiooverasixmonthperiodexceed90:1orfallbelow50:1,thefixedexchangeratiowouldbeincreasedto90:1ordecreasedto50:1,respectively.Thefixedgold tosilverexchangeratioasatMarch31,2021was70:1. During thethreemonthsendedMarch31,2021, theCompanydelivered10,273ounces(2020-11,358ounces)ofgoldtoWPMIat$612(2020-$606)perounce.

Atotalof8,242metresofundergrounddevelopmentwascompletedinthefirstquarter,consistentwith8,454metresinthepriorquarter.Rehabilitationeffortsonsixkilometresofundergroundrail-cartracksinsidetheTayoltitaminewasmostlycompletedduringthequarter.InitialproductionfromtheTayoltitaminebeganinJune2020andisexpectedtoramp-uptomore than200 tpd in 2021. In addition,minedevelopment andmineral extractionof the El Cristominebegan andwillcontinuetosupplementoredeliveriestotheplantduringtheyear.

Duringthefirstquarter,10undergrounddrillscompleted24,078metresin75holescomparedto26,537metresinthepriorquarter.DrillinginthequartercontinuedtofocusintheCentral,SinaloaandTayoltitaBlocksandWestBlocks.

SantaElenaSilver/GoldMine,Sonora,México

The Santa Elena Silver/GoldMine is located approximately 150 kilometres northeast of the city of Hermosillo, Sonora,Mexico and owns mining concessions totaling over 102,244 hectares. The operating plan for Santa Elena involves theprocessingofore ina3,000tpdcyanidationcircuit fromacombinationofundergroundreservesandspentorefromthepreviousheapleachpad.TheCompanyowns100%oftheSantaElenamine.

SANTAELENA 2021-Q1 2020-Q4 2020-Q1ChangeQ1vsQ4

Change'21vs'20

Totaloreprocessed/tonnesmilled 185,358 168,276 177,834 10% 4%

Undergroundtonnes

Tonnesmilled 122,401 105,591 125,529 16% (2%)



Heapleachtonnes

Tonnesmilled 62,957 62,685 52,305 0% 20%

Averagesilvergrade(g/t) 35 33 36 6% (3%)

Averagegoldgrade(g/t) 0.61 0.61 0.73 0% (16%)

Silverrecovery(%) 93% 93% 94% 0% (1%)

Goldrecovery(%) 96% 96% 96% 0% 0%

Production

Silverouncesproduced 453,528 418,153 550,133 8% (18%)

Goldouncesproduced 6,327 6,294 10,842 1% (42%)

Silverequivalentouncesproduced 884,332 901,630 1,593,400 (2%) (45%)

Cost




Undergrounddevelopment(m) 4,500 2,663 1,940 69% 132%

Diamonddrilling(m) 12,607 16,994 9,474 (26%) 33%


Duringthefirstquarter,SantaElenaproduced884,332silverequivalentounces,consistingof453,528ouncesofsilverand6,327ouncesofgold,representinganincreaseof8%and1%,respectivelycomparedtothepriorquarter.

Themineprocessedatotalof185,358tonnesduringthequarter,consistingof122,401tonnesfromtheundergroundmineoreand62,957tonnesfromtheabovegroundheapleachpad,anincreaseof10%comparedto168,276totaltonnesintheprior quarter. Production rates returned to higher operating levels following multiple improvements made in miningmethodsandincreasedproductionattheMain,AlejandraBajoandAmericaveins.Attheendofthequarter,miningandmilling rates were above budget levels for the first time in over a year as a result of progress made in improvingunderground infrastructure, development and haulage rates over to the previous nine months. Underground oreproductioninMarchtotaled55,266tonnescomparedto34,379tonnesinJanuaryand43,809tonnesinFebruary.

Duringthequarter,silverandgoldgradesfromundergroundoreaveraged106g/tand1.37g/t,respectively,comparedto113g/tand1.58g/tinthepriorquarter.Abovegroundheapleachpadaveraged35g/tand0.61g/trespectivelyduringthequarterandwereconsistentcomparedtothepriorquarter.

Silverandgoldrecoveriesinthefirstquarteraveraged93%and96%,respectively,consistentwiththepreviousquarter.

CashcostperAgEqounceinthefirstquarterwas$20.18perouncecomparedto$16.50perounceinthepreviousquarter.The increase in cash cost was primarily attributed to higher ore development andmining contractor costs incurred toprepareadditionalorefaces,whichhavemorethandoubledinrecentmonthsasimprovementprojectsimplementedoverthe past two quarters begin to materialize. In addition, costs for specialized consulting services were also incurred toestablishamoreeffectiveManagementOperatingSystem(MOS)atthemine.

AISCperAgEqounceforthequarterwas$25.66perouncecomparedto$21.76perounceinthepriorquarter.TheincreasewasprimarilyattributedtoanincreaseincashcostperAgEqounceandincreaseinminedevelopmentmetres.Theincreasein mine development was above budgeted rates and has prepared Santa Elena to increase ore delivery rates for theremainderof2021.

TheLNGfacilityatSantaElenasuccessfullycompletedallpre-commissioningactivitiesduringthequarterandwassupplyingapproximately85%ofpowerrequirementsbyquarterend.Theplantisexpectedtoramp-uptofullcapacityinthesecondquarterwhichwillyieldsignificantenergycostsavingsandwillsubstantiallyreducethecarbonfootprintoftheoperation.

TheSantaElenamineissubjecttoagoldstreamingagreementwithSandstormGoldLtd.(“Sandstorm”),whichrequirestheminetosell20%ofitsgoldproductionfromtheleachpadandadesignatedareaofitsundergroundoperationsoverthelifeofmine to Sandstorm. The sellingprice to Sandstorm is currently the lesserof $450perounce (subject to a 1%annualinflation increaseeveryApril) and theprevailingmarketprice.During thequarter, theCompanydelivered1,201ounces(2020-2,176ounces)ofgoldtoSandstormatanaveragepriceof$464perounce(2020-$459perounce).

Inthefirstquarter,SantaElenacompletedatotalof4,500metresofundergrounddevelopment,including1,453metresattheErmitañoproject,comparedto2,663metresinthepreviousquarter.

Ermitaño'sundergroundmininganddrillingequipmentfleetisexpectedtobedeliveredbytheendofthethirdquarterinadvanceofplannedproduction ramp-up.Onsurface, faunaand floraclearance inpreparation for constructing themainaccess roadway between the processing plant and the portal area was approximately 70% complete, while contractorselectionandmajorearthmovingactionsareexpectedtocommenceinthesecondquarter.TheCompanyisalsoexpectedtobeginundergroundteststopemininginthesecondquarterandplanstoextractover30,000tonnesoforeoverthenextsixmonths.

Atotalofsevendrillrigs,consistingoffoursurfacerigsandthreeundergroundrigs,wereactiveattheendofthequarter,completing12,607metresin32drillholescomparedto16,994metresinthepriorquarter.NearminedrillinginthequarterfocusedontheMainandAmericaveinswhilebrownfielddrillingtargetedtheErmitañoarea.Greenfielddrillingisfollowingupon2020resultsonatarget20kmnorthoftheSantaElenamine.


LaEncantadaSilverMine,Coahuila,México

TheLaEncantadaSilverMine is anundergroundmine located in thenorthernMéxicoStateofCoahuila,708kilometresnortheast of Torreon. La Encantada has 4,076 hectares of mineral concessions and surface land ownership of 1,343hectares.LaEncantadaalsohasa4,000tpdcyanidationplant,acampwith180housesaswellasadministrativeoffices,laboratory,generalstore,hospital,airstripandallinfrastructurerequiredforsuchanoperation.Themineisaccessibleviaatwo-hour flight from theDurango International Airport to themine’s private airstrip, or via an improved road from theclosestcity,Muzquiz,CoahuilaState,which is225kilometresaway.TheCompanyowns100%of theLaEncantadaSilverMine.

LAENCANTADA 2021-Q1 2020-Q4 2020-Q1ChangeQ1vsQ4

Change'21vs'20

Oreprocessed/tonnesmilled 229,421 248,408 221,200 (8%) 4%


Silverrecovery(%) 77% 80% 79% (4%) (3%)

Production

Silverouncesproduced 738,354 1,093,521 924,472 (32%) (20%)

Goldouncesproduced 97 69 52 41% 87%

Silverequivalentouncesproduced 745,018 1,098,800 929,487 (32%) (20%)

Cost



Totalproductioncostpertonne $42.99 $43.72 $43.82 (2%) (2%)

Undergrounddevelopment(m) 965 888 1,024 9% (6%)

Diamonddrilling(m) 2,867 8,101 4,565 (65%) (37%)

Duringthequarter,LaEncantadaproduced738,354silverounces,representinga32%decreaseinproductioncomparedtothepreviousquarter.DuringthemonthofFebruary,theoperationexperiencedaseverewintericestormwhichelevatedmaintenancelevelsandtemporarilyreducedplantthroughputrates.CashcostwasalsoimpactedbythewintericestormwhichdelayedLNGdeliveriestotheplanthencetheminehadtorentadditionaldieselgeneratorswithanincrementalcostof$0.3million.Inaddition,oreextractionfromthehighergradesoutherndraw-pointsoftheLaPrietazoneweredepletedrequiringminingactivitiestomovenorthwardintolowergradesectionsofthedeposit.

Silver grades and recoveries during the quarter averaged 131 g/t and 77%, respectively, compared to 172 g/t and 80%,respectively,inthepreviousquarter.Duringthequarter,theCompanytransitionedundergroundmineproductionfromthehigh-gradeportionoftheLaPrietacavingareaintothe660orebody,MilagrosandLaFeareas.AdditionaldrawpointswerecompletedintheseareastowardstheendofMarchwhichareexpectedtoalloworegradestoreturntoexpectedlevelsinthesecondquarter.

CashcostperAgEqounceforthequarterwas$13.77comparedto$10.42inthepreviousquarter.TheincreaseincashcostperAgEqouncewasprimarilyduetothe32%decreaseinsilverequivalentouncesproduced,astotalproductioncostswereconsistentwiththepreviousquarter.

AISC per AgEq ounce for the quarterwas $16.30 per ounce, an increase of 32% compared to $12.39 per ounce in thepreviousquarterduetodecreaseinproduction.

ThemillmodernizationprojectatLaEncantadaadvancedduringthequarterwiththecompletionofthefactoryacceptancetestforthenewscrubber.Inaddition,twothickenermechanismsareexpectedtobereadyforinstallationbytheendofthesecondquarter.

A totalof965metresofundergrounddevelopmentwerecompleted in the firstquarter compared to888metres in theprior quarter. During the quarter, rampdevelopment continued to access theMilagros breccia to prepare themine forinitialsub-levelcavingproductionin2021.


During the first quarter, two underground drills completed 2,867 metres of drilling compared to 8,101 metres in theprevious quarter. Drilling in the quarter was directed towards nearmine targets at the 660 orebody, La Fe, Skarn andMilagrosareas.

LaParrillaSilverMine,Durango,México

TheLaParrillaSilverMine,locatedapproximately65kilometressoutheastofthecityofDurangoinDurangoState,México,isacomplexofproducingundergroundoperationsconsistingoftheRosarios,LaBlancaandSanMarcosmineswhichareinter-connected through undergroundworkings, and the Vacas andQuebradillasmineswhich are connected via above-groundgravelroads.Thetotalminingconcessionsconsistof69,478hectares.TheCompanyowns60hectares,andleasesanadditional107hectaresof surface rights, fora totalof167hectaresof surface rights. LaParrilla includesa2,000 tpdsequentialprocessingplantconsistingofa1,000tpdcyanidationcircuitanda1,000tpdflotationcircuit,an ISOcertifiedcentrallaboratory,metallurgicalpilotplant,buildings,officesandassociatedinfrastructure.TheCompanyowns100%oftheLaParrillaSilverMine.

OperationsattheLaParrillaminehavebeentemporarilysuspendedsinceSeptember2019.TheCompanyiscurrentlyusingthe La Parrillamill and its ISO Certified Laboratory on site as a research and development facilitywhile continuing theexploration in the district. The company is in discussions with the La Parrilla Ejido to continue the long-term land useagreementatLaParrilla.

DelToroSilverMine,Zacatecas,México

The Del Toro Silver Mine is located 60 kilometres to the southeast of the Company’s La Parrilla mine and consists of3,815 hectares of mining concessions and 219 hectares of surface rights. The Del Toro operation represents theconsolidationofthreehistoricalsilvermines,thePerseverancia,SanJuanandDoloresmines,whichareapproximatelyoneandthreekilometresapart,respectively.DelToroincludesa2,000tpdflotationcircuitanda2,000tpdcyanidationcircuit.FirstMajesticowns100%oftheDelToroSilverMine.

OperationsattheDelTorominehasbeentemporarilysuspendedsinceJanuary2020inordertoimproveoveralloperatingcashflowsandprofitmarginswhilefocusingontheexplorationprograminthearea.Theexplorationprogramwillcontinuetotestnearmine,brownfieldandgreenfieldtargetsinanefforttodevelopnewresourcesnecessarytosupportapotentialreopeninginthefuture,subjecttoasufficientimprovementinmineraleconomicstojustifyarestart.

SanMartinSilverMine,Jalisco,México

TheSanMartinSilverMineisanundergroundminelocatednearthetownofSanMartindeBolañosintheBolañosrivervalley,inthenorthernportionoftheStateofJalisco,México.SanMartinhas33contiguousminingconcessionsintheSanMartindeBolañosminingdistrictcoveringmineralrightsfor12,795hectares,plusanapplicationtoacquireanewminingconcessioncovering24,723hectares.Inaddition,themineowns160hectaresofsurfacelandwheretheprocessingplant,camp,officefacilities,maintenanceshops,andtailingsdamsarelocated,andanadditional640hectaresofsurfacerights.The1,300tpdmillandprocessingplantconsistsofcrushing,grindingandconventionalcyanidationbyagitationintanksanda Merrill-Crowe doré production system. The mine can be accessed via small plane, 150 kilometres from Durango, or250kilometresbypavedroadnorthofGuadalajara,Jalisco.TheSanMartinSilverMineis100%ownedbytheCompany.

InJuly2019,theCompanytemporarilysuspendedallminingandprocessingactivitiesattheSanMartinoperationduetogrowing insecurity in theareaandsafetyconcerns forourworkforce.TheCompanycontinues toworkwithgovernmentauthorities to secure theareaandcontinued tomaintain themineandplant facilities, includingadvancingabuttressingprojectontheTSF2tailing impoundment.There-openingdate iscontingentoneconomicsandsecurityconditions intheregionandcannotbedeterminedatthistime.


LaGuitarraSilverMine,MéxicoState,México

TheLaGuitarraSilverMineislocatedintheTemascaltepecMiningDistrictintheStateofMéxico,México,approximately130kilometressouthwestfromMéxicoCity.TheLaGuitarraminecovers39,714hectaresofminingclaimsandhasa500tpdflotationprocessingplant,buildingsandrelatedinfrastructure.TheCompanyowns100%oftheLaGuitarraSilverMine.

TheLaGuitarramillingandminingoperationswereplacedundercareandmaintenanceeffectiveAugust3,2018andtheCompanyiscurrentlyreviewingstrategicoptionsincludingthepotentialsaleoftheoperation.TheCompanywillcontinuewith remediation programs to prepare the operation for a potential reopening in the future, subject to sufficientimprovement in the economic situation to justify a restart of the operation. Ongoing care and maintenance activitiesincludepumping,de-wateringoftheundergroundmineandwatertreatmentcontinue.

SpringpoleSilverStream,Ontario,Canada

OnJuly2,2020,theCompanycompletedanagreementwithFirstMiningGoldCorp.(“FirstMining”)topurchase50%ofthelifeofminepayable silverproduced fromtheSpringpoleGoldProject ("SpringpoleSilverStream"),adevelopment stagemining project located in Ontario, Canada. Pursuant to the agreement, First Majestic agreed to pay First Miningconsiderationof$22.5millionincashandshares,inthreemilestonepayments,fortherighttopurchasesilveratapriceof33%of the silver spotpriceperounce, to amaximumof $7.50perounce (subject to annual inflationescalationof 2%,commencing at the start of the third anniversaryof production). Commencingwith its productionof silver, FirstMiningmust deliver 50%of the payable silverwhich it receives from the offtakerwithin five business days of the end of eachquarter.

TransactionconsiderationpaidandpayablebyFirstMajesticissummarizedasfollows:• The first payment of $10.0 million, consisting of $2.5 million in cash and $7.5 million in First Majestic shares

(805,698commonshares)waspaidtoFirstMiningonJuly2,2020;

• Thesecondpaymentof$7.5million,consistingof$3.75millionincashand$3.75millioninFirstMajesticshares(287,300commonshares)waspaidinonJanuary21,2021uponthecompletionandpublicannouncementbyFirstMiningoftheresultsofaPre-FeasibilityStudyforSpringpole;and

• The thirdpaymentconsistingof$2.5million in cashand$2.5million inFirstMajestic shares (basedon20daysvolumeweightedaverageprice)willbepaiduponreceiptbyFirstMiningofaFederalorProvincialEnvironmentalAssessmentapprovalforSpringpole.

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

SpringpoleisoneofCanada’slargest,undevelopedgoldprojectswithpermittingunderway.InJanuary2021,FirstMiningannounced positive results of its Pre-Feasibility Study (“PFS”) which supports a 30,000 tonnes-per-day open pit miningoperation over an 11 yearmine life. FirstMining announced resources of 24.3million ounces of silver in the Indicatedcategoryand1.4millionouncesofsilverintheInferredcategory,plus4.6millionouncesofgoldintheIndicatedcategoryand0.3millionouncesofgoldintheInferredcategory.

TheSpringpoleProjectalso includes large landholdingsof41,913hectareswhicharefullyencompassedunderthesilverstreamingagreement.

FirstMiningisarelatedpartywithtwoindependentboardmemberswhoaredirectorsand/orofficersofFirstMajestic.


OVERVIEWOFFINANCIALPERFORMANCE

ForthequartersendedMarch31,2021and2020(inthousandsofdollars,exceptforpershareamounts):

FirstQuarter FirstQuarter

2021 2020 Variance%

Revenues $100,522 $86,065 17% (1)

Mineoperatingcosts

Costofsales 57,061 49,835 14% (2)

Costofsales-standbycosts — 946 (100%)

Depletion,depreciationandamortization 15,345 14,169 8% (3)

72,406 64,950 11%

Mineoperatingearnings 28,116 21,115 33%

Generalandadministrativeexpenses 6,961 6,284 11% (4)

Share-basedpayments 3,594 2,378 51%

Mineholdingcosts 3,868 4,779 (19%) (5)Lossondivestitureofexplorationprojects — 10,106 (100%) (6)

Foreignexchangegain (1,797) (2,826) 36%

Operatingearnings 15,490 394 NM

Fairvalueadjustmentonforeigncurrencyderivatives — (22,654) 100% (7)

Investmentandotherloss (3,150) (540) NM (8)

Financecosts (3,773) (3,856) 2%

Earnings(loss)beforeincometaxes 8,567 (26,656) NM

Currentincometaxexpense 8,537 1,214 NM

Deferredincometax(recovery)expense (1,825) 4,566 NM

Incometaxexpense 6,712 5,780 16% (9)

Netearnings(loss)fortheperiod $1,855 ($32,436) NM (10)

Earnings(loss)pershare(basic) $0.01 ($0.15) NM (10)

Earnings(loss)pershare(diluted) $0.01 ($0.15) NM (10)

NM-Notmeaningful

1. Revenuesinthequarterincreased17%comparedtothesamequarterofthepreviousyearprimarilyattributedto:

• a 57% increase in realized silver price per ounce sold,which averaged$27.13 during the quarter compared to$17.36inthefirstquarterof2020,resultingina$33.1millionincreaseinrevenues;

Partiallyoffsetby:

• a24%decreaseinpayablesilverequivalentouncessoldcomparedtothesamequarteroftheprioryear,resultingina$18.7milliondecreaseinrevenues.

2. Costofsalesinthequarterincreased14%or$7.2millioncomparedtothesamequarterofthepreviousyearprimarilydueto:

• a$5.5millionincreaseinlabourcostsprimarilyduetotheuseofminingcontractorstoreplacevulnerableworkers,aswellasatemporaryincreaseinuseofcontractorsatSantaElenatoexpandandprepareadditionalorefacesforfutureproduction;

• a $1.7million increase in workers participation benefits primarily due to new collective bargaining agreementreachedwithSanDimasunioninthesecondquarterof2020;and

• a$0.9millionincreaseinenergycostsasaresultoflowerenergycontributionfromthehydroelectricdamduetodryseasoninSanDimas,whichforcedtheminetorelyonthepublicelectricitygridanddieselgenerators.


3. Depletion,depreciationandamortizationinthequarterincreased$1.2millionor8%comparedtothesamequarterofthepreviousyear,primarilyattributedtoanincreaseinmininginterestsandproperty,plantandequipmentbalances.

4. Generalandadministrativecostsinthequarterincreased$0.7millionor11%primarilyduetoincreaseinlegalcostsassociatedwithAdvancedPricingAgreementtrialsandtheNAFTAarbitration.

5. Mineholdingcostsdecreasedby$0.9millioncomparedtothesamequarterof2020,primarilydueto:

• adecreaseof$1.9million inDelToroandLaParrilladue to restructuringcosts incurred inQ12020shortlyaftertheminesbeingplacedundertemporarysuspension;

Partiallyoffsetby:

• reclassificationof $1.0million in SanMartin'smineholding costs fromcosts of sales tomineholding costseffectiveApril1,2020duetocontinueduncertaintywithrespecttothetimingofrestartatthemine.

6. Losson saleof explorationproject of $10.1million in the first quarter of 2020 relates to the saleof thePlomosasprojecttoGRSilverMiningLtd.inMarch2020.

7. Fairvalueadjustmentonforeigncurrencyderivativesof$22.7millionlossinthefirstquarterof2020relatestomark-to-market adjustments on theCompany's foreign currency derivatives,whichwere fully settled as atDecember 31,2020. The Company utilizes these foreign currency options and swaps to hedge cash flows relating to miningoperations,explorationandevaluationactivitiesandcorporateexpensesinMexicanPesos.

8. Investmentandotherincomeforthequarterdecreased$2.6millioncomparedtothesamequarterof2020primarilyduetoa$2.1millionwrite-downonassetsheld-for-saleinrelationtothesaleofcertainAGmillequipmenttoCondorGoldPLC.

9. Duringthequarter,theCompanyrecordedanincometaxexpenseof$6.7millioncomparedto$5.8millioninthefirstquarterof2020.Theincreaseinincometaxexpensewasprimarilyduetohigherearningsbeforetax,netoftheforeignexchangeimpactontheCompany'sMexicanPesodenominatedfutureincometaxliabilitybalances.

10. Asa resultof the foregoing,netearnings for thequarterwas$1.9million (EPSof$0.01) compared toanet lossof$32.4million(EPSof($0.15))inthesamequarteroftheprioryear.


SUMMARYOFQUARTERLYRESULTS

Thefollowingtablepresentsselectedfinancialinformationforeachofthemostrecenteightquarters:

2021 2020 2019

SelectedFinancialInformation Q1 Q4 Q3 Q2 Q1 Q4 Q3 Q2

Revenue $100,522 $117,075 $125,881 $34,855 $86,065 $96,476 $96,989 $83,669

Costofsales $57,061 $58,008 $60,275 $26,187 $49,835 $55,033 $54,994 $62,772

Costofsales-standbycosts $— $— $— $9,166 $946 $— $— $—

Depletion,depreciationandamortization $15,345 $15,399 $17,573 $7,264 $14,169 $17,502 $14,181 $16,691

Mineoperatingearnings(loss) $28,116 $43,668 $48,033 ($7,762) $21,115 $23,941 $27,814 $4,206

Netearnings(loss)aftertax $1,855 $34,545 $30,946 ($9,968) ($32,436) ($39,946) $8,559 ($11,967)

Earnings(loss)pershare-basic $0.01 $0.16 $0.14 ($0.05) ($0.15) ($0.19) $0.04 ($0.06)

Earnings(loss)pershare-diluted $0.01 $0.15 $0.14 ($0.05) ($0.15) ($0.19) $0.04 ($0.06)

During the first quarter of 2020,mineoperating earningswere $28.1million compared to $43.7million in thepreviousquarter. The decrease inmine operating earnings was primarily due to 24% less payable silver equivalent ounces soldcomparedtothepreviousquarter.Netearningsforthequarterwas$1.9millioncomparedto$34.5million,primarilyduetodecreaseinsilverequivalentouncessoldandhighertaxes.

LIQUIDITY,CAPITALRESOURCESANDCONTRACTUALOBLIGATIONS

Liquidity

AsatMarch31,2021,theCompanyhadcashandcashequivalentsof$201.7million,comprisedprimarilyofcashheldwithreputablefinancialinstitutionsandisinvestedincashaccountsandinhighlyliquidshort-terminvestmentswithmaturitiesofthreemonthsorless.Withtheexceptionof$6.6millionheldin-trustfortaxauditsinMexico,theCompany'scashandcashequivalentsarenotexposedtoliquidityriskandtherearenorestrictionsontheabilityoftheCompanytousethesefundstomeetitsobligations.

WorkingcapitalasatMarch31,2021was$232.8millioncomparedto$254.4millionatDecember31,2020.TotalavailableliquidityatMarch31,2021was$297.8million,including$65.0millionofundrawnrevolvingcreditfacility.

ThefollowingtablesummarizestheCompany'scashflowactivityduringtheperiod:


2021 2020

Cashflow

Cashgeneratedbyoperatingactivities $7,431 $12,048

Cashusedininvestingactivities (46,264) (33,306)

Cashgeneratedbyfinancingactivities 1,276 204

Increaseincashandcashequivalents ($37,557) ($21,054)Effectofexchangerateoncashandcashequivalentsheldinforeigncurrencies 663 (2,768)Cashandcashequivalents,beginningoftheperiod 238,578 169,009


TheCompany’scashflowsfromoperating,investingandfinancingactivitiesduringthethreemonthsendedMarch31,2021aresummarizedasfollows:

• Cashgeneratedbyoperatingactivitiesof$7.4million,primarilydueto:

• $31.1millioninoperatingcashflowsfromoperatingactivitiesbeforemovementsinworkingcapitalandtaxes;

netof:


• $13.8million in net change in non-cashworking capital itemsduring the period, including $8.4millionincreaseinVATreceivables,$3.2millionincreaseininventories,netof$0.9milliondecreaseintradeandotherpayables;and

• $9.9millioninincometaxespaidduringtheperiod.

• Cashusedininvestingactivitiesof$46.3million,primarilyrelatedto:

• $33.4millionspentonminedevelopmentandexplorationactivities;

• $10.8millionspentonpurchaseofproperty,plantandequipment;and

• $2.3millionspentondepositsonnon-currentassets.

• Cashprovidedbyfinancingactivitiesof$1.3million,primarilyconsistsofthefollowing:

• $4.4millionofnetproceedsfromtheexerciseofstockoptions;and

netof:

• $1.8millionpaymentoffinancingcosts;and

• $1.3milliononrepaymentofleaseobligations.

CapitalResources

TheCompany’s objectivewhenmanaging capital is tomaintain financial flexibility to continue as a going concernwhileoptimizinggrowthandmaximizingreturnsofinvestmentsfromshareholders.

TheCompanymonitorsitscapitalstructureandbasedonchangesinoperationsandeconomicconditions,mayadjustthestructurebyrepurchasingshares,issuingnewshares,issuingnewdebtorretiringexistingdebt.TheCompanypreparesanannual budget and quarterly forecasts to facilitate the management of its capital requirements. The annual budget isapprovedbytheCompany’sBoardofDirectors.

TheCompanyisnotsubjecttoanyexternallyimposedcapitalrequirementswiththeexceptionofcomplyingwithbankingcovenantsdefinedinitsdebtfacilities.AsatMarch31,2021andDecember31,2020,theCompanywasfullyincompliancewiththesecovenants.

ContractualObligationsandCommitments

AsatMarch31,2021,theCompany’scontractualobligationsandcommitmentsaresummarizedasfollows:

ContractualCashFlows

Lessthan1year

2to3years

4to5years

After5years

Tradeandotherpayables $69,344 $69,344 $— $— $—Debtfacilities 172,429 12,995 159,434 — —Leaseliabilities 19,066 4,888 7,148 5,994 1,036Otherliabilities 5,493 — — — 5,493Purchaseobligationsandcommitments 38,906 33,906 5,000 — —

$305,238 $121,133 $171,582 $5,994 $6,529

AtMarch31,2021,theCompanyhadworkingcapitalof$232.8million(2020–$254.4million)andtotalavailableliquidityof$297.8million(2020–$319.4million),including$65.0millionofundrawnrevolvingcreditfacility.

The Company believes it has sufficient cash on hand, combined with cash flows from operations, to meet operatingrequirementsastheyariseforatleastthenext12months.

MANAGEMENTOFRISKSANDUNCERTAINTIES

The Company thoroughly examines the various financial instruments and risks to which it is exposed and assesses theimpactandlikelihoodofthoserisks.Theserisksmayincludecreditrisk, liquidityrisk,currencyrisk,commoditypricerisk,andinterestraterisk.Wherematerial,theserisksarereviewedandmonitoredbytheBoardofDirectors.


CreditRisk

Creditriskistheriskoffinanciallossifacustomerorcounterpartyfailstomeetitscontractualobligations.TheCompany’scredit risk relates primarily to chartered banks, trade receivables in the ordinary course of business, value added taxesreceivableandotherreceivables.

AsatMarch31,2021,valueaddedtaxes(“VAT”)receivablewas$65.3million(December31,2020-$56.9million),ofwhich$44.6million (December 31, 2020 - $37.9million) relates to Primero EmpresaMinera, S.A. de C.V. ("PEM"). Servicio deAdministraciónTributaria(“SAT”)hasbeenunresponsivetoVATrefundrequestsbyPEMwithoutprovidingalegalbasisforwithholdingtheseVATreceivables.TheCompanybelievesthatithasfulllegalrightstotheseVATrefundsandexpectstheamounts to be refunded in the future.As atMarch31, 2021,VAT receivables totaling $17.0million are currently beingpursued in Mexican Courts. Due to the uncertain timeline associated with recovery of these amounts, the Companyreclassified suchamounts asnon-current assets though, in theCompany'sopinion, suchamounts are currentlydueandpayabletotheCompany.

The Company sells and receives payment upon delivery of its silver doré and by-products primarily through threeinternational customers.All of theCompany's customers have good ratings andpayments of receivables are scheduled,routineandfullyreceivedwithin60daysofsubmission;therefore,thebalanceoftradereceivablesowedtotheCompanyintheordinarycourseofbusinessisnotsignificant.

The carrying amount of financial assets recorded in the consolidated financial statements represents the Company’smaximumexposuretocreditrisk.Withtheexceptiontotheabove,theCompanybelieves it isnotexposedtosignificantcreditrisk.

LiquidityRisk

Liquidity risk is the risk that the Companywill not be able tomeet its financial obligations as they arise. The Companymanagesliquidityriskbymonitoringactualandprojectedcashflowsandmatchingthematurityprofileoffinancialassetsandliabilities.Cashflowforecastingisperformedregularlytoensurethatthereissufficientcapitalinordertomeetshort-term business requirements, after taking into account cash flows from operations and our holdings of cash and cashequivalents.

CurrencyRisk

The Company is exposed to foreign exchange risk primarily relating to financial instruments that are denominated inCanadiandollarsorMexicanpesos,whichwouldimpacttheCompany’snetearningsorloss.Tomanageforeignexchangerisk, theCompanymayoccasionallyenter into short-term foreign currencyderivatives, suchas forwardsandoptions, tohedgeitscashflows.

ThesensitivityoftheCompany’snetearningsor lossandcomprehensive incomeor lossduetochanges intheexchangeratesoftheCanadianDollarandtheMexicanPesoagainsttheU.S.Dollarisincludedinthetablebelow:

March31,2021

Cashandcash

equivalents

Tradeandother

receivables

Valueaddedtaxesreceivable

Otherfinancialassets

Tradeandother

payables

Netassets(liabilities)exposure

Effectof+/-10%changeincurrency

Canadiandollar $78,777 $62 $— $9,192 ($2,682) $85,349 $8,535

Mexicanpeso 9,970 — 65,811 — (41,050) 34,731 3,473

$88,747 $62 $65,811 $9,192 ($43,732) $120,080 $12,008

CommodityPriceRisk

TheCompanyisexposedtocommoditypriceriskonsilverandgold,whichhaveadirectandimmediateimpactonthevalueofitsrelatedfinancialinstrumentsandnetearnings.TheCompany’srevenuesaredirectlydependentoncommoditypricesthathave shownvolatilityandarebeyond theCompany’s control. TheCompanydoesnotusederivative instruments tohedgeitscommoditypricerisktosilver.


ThefollowingtablesummarizestheCompany’sexposuretocommoditypriceriskandtheirimpactonnetearnings:

March31,2021 Effectof+/-10%changeinmetalprices

Silver Gold Total

Metalsindoréinventory $245 $282 $527

$245 $282 $527

PoliticalandCountryRisk

FirstMajesticcurrentlyconductsforeignoperationsprimarilyinMéxico,andassuchtheCompany’soperationsareexposedtovariouslevelsofpoliticalandeconomicrisksbyfactorsoutsideoftheCompany’scontrol.Thesepotentialfactorsinclude,butarenotlimitedto:royaltyandtaxincreasesorclaimsbygovernmentalbodies,expropriationornationalization,foreignexchangecontrols,highratesofinflation,extremefluctuationsinforeigncurrencyexchangerates,importandexporttariffsandregulations,lawlessness,cancellationorrenegotiationofcontractsandenvironmentalandpermittingregulations.TheCompanycurrentlyhasnopoliticalriskinsurancecoverageagainsttheserisks.

The Company is unable to determine the impact of these risks on its future financial position or results of operations.Changes,ifany,inminingorinvestmentpoliciesorshiftsinpoliticalattitudeinforeigncountriesmaysubstantivelyaffecttheCompany’sexploration,developmentandproductionactivities.

UncertaintyintheCalculationofMineralReserves,ResourcesandSilverRecovery

ThereisadegreeofuncertaintyattributabletothecalculationofMineralReservesandMineralResources(asdefinedinNI43-101).UntilMineralReservesorMineralResourcesareactuallymined,extractedandprocessed,thequantityofmineralsandtheirgradesmustbeconsideredestimatesonly.Inaddition,thequantityofMineralReservesandMineralResourcesmay vary depending on, among other things, applicable metal prices. Any material change in the quantity of MineralReserves,MineralResources, gradeorminingwidthsmayaffect theeconomic viabilityof someor all of theCompany’smineralpropertiesandmayhaveamaterialadverseeffectontheCompany'soperationalresultsandfinancialcondition.Mineral Reserves on the Company’s properties have been calculated on the basis of economic factors at the time ofcalculation;variationsinsuchfactorsmayhaveanimpactontheamountoftheCompany’sMineralReserves.Inaddition,therecanbenoassurancethatsilverrecoveriesorothermetalrecoveriesinsmallscalelaboratorytestswillbeduplicatedinlargerscaletestsunderon-siteconditionsorduringproduction,orthattheexistingknownandexperiencedrecoverieswillcontinue.

PublicHealthCrises

Global financial conditions and the global economy in general have, at various times in thepast andmay in the future,experienceextremevolatility in response toeconomic shocksorother events, suchas theongoing situation concerningCOVID-19.Many industries, including themining industry,are impactedbyvolatilemarketconditions in response to thewidespread outbreak of epidemics, pandemics or other health crises. Such public health crises and the responses ofgovernmentsandprivateactorscanresult indisruptionsandvolatility ineconomies, financialmarketsandglobal supplychains as well as declining trade and market sentiment and reduced mobility of people, all of which could impactcommodityprices,interestrates,creditratings,creditriskandinflation.

TheCompany'sbusinesscouldbemateriallyadverselyaffectedbytheeffectsoftheCOVID-19pandemic.AsatthedateofthisMD&A,theglobalreactionstothespreadofCOVID-19haveledto,amongotherthings,significantrestrictionsinmanyjurisdictionsontravelandgatheringsof individuals,quarantines, temporarybusinessclosuresandageneral reduction inconsumeractivity.Althoughquarantineshavebeen lifted inmany jurisdictions, certain jurisdictions thathavepreviouslyliftedquarantineshavebeenrequiredtore-imposethem.Whiletheseeffectsareexpectedtobetemporary,thedurationofthedisruptionstobusinessinternationallyandtherelatedfinancialimpactontheCompanyandtheeconomyingeneralcannotbeestimatedwithanydegreeofcertaintyat this time. Inaddition, the increasingnumberof individuals infectedwithCOVID-19hasresultedinawidespreadglobalhealthcrisisthathasadverselyaffectedglobaleconomiesandfinancialmarketsandcouldresultinaprotractedeconomicdownturnthatcouldhaveanadverseeffectonthedemandforpreciousmetalsandtheCompany'sfutureprospects.

In particular, the continued spreadof COVID-19 globally couldmaterially and adversely impact theCompany's business,includingwithout limitation, employeehealth,workforce availability andproductivity, limitationson travel, supply chaindisruptions,increasedinsurancepremiums,increasedcostsandreducedefficiencies,theavailabilityofindustryexpertsand


personnel, restrictions on the Company's exploration and drilling programs and/or the timing to process drill and othermetallurgicaltestingandtheslowdownortemporarysuspensionofoperationsatsomeoralloftheCompany'sproperties,resulting in reduced production volumes. Although the Company has the capacity to continue certain administrativefunctionsremotely,manyotherfunctions,includingminingoperations,cannotbeconductedremotely.

OnMarch24,2020,theMexicanfederalgovernmentimplementedadecreeimposingcertainpreventivemeasuresaimedatmitigating the impactofCOVID-19.Thedecreetemporarilysuspendedcertainactivities relating tophysicalgatheringsandthetransitormovementofindividualsandwassubsequentlyamendedtorestrictaccessandrequiretheclosureoftheCompany’s mines from April 3, 2020. OnMay 13, 2020, theMexican government officially confirmed thatmining wasdeemed essential and operations were permitted to restart onMay 18, 2020. OnMay 23, 2020,Mexican governmentauthorizedtheCompanytorestartitsminingoperations,however,therecanbenoguaranteethatthedecreewillnotbeamendedinthefuturetoimposemoreseveremeasuresorrestrictionsorthatstategovernmentsinthosejurisdictionsinwhich theCompany’s facilities are locatedwill notpass similardecrees reducingorpreventingaccess to theCompany’sfacilities,potentiallycausingdisruptionorclosureofoneormoreoftheCompany’smines.

Asaresultofthetemporaryclosuresofitsfacilities,theCompanyexperiencedlossofproductionatitsfacilitiesduringthesecondandthirdfinancialquartersof2020.InearlyNovember2020,theCompany’sthreeoperatingmineshadreturnedtonormaloperations.Workeravailabilityisachallengebuthasbeengraduallyimprovingandisbeingmitigatedbyincreasingtheuseof temporaryworkersandcontractors.TheCompanyconstructedPolymeraseChainReaction ("PCR") laboratorytestfacilitiesonsiteatSanDimasandpartneredwithtestlabsatSantaElenatospeedupCOVID-19testingcapabilitiesatits mine sites. Preventative control measures to protect the safety and health of our employees, contractors andcommunities inwhichweoperate, includingsocialdistancing, remoteworking,cancellationofanynon-essentialvisits tothemines,comprehensivesanitationmeasuresfortheworkplaceandcompanytransportation,aswellaspre-screeningforvirussymptomsremainineffect.

ThereisnoguaranteethattheCompanywillnotexperiencesignificantdisruptionstooradditionalclosuresofsomeorallofits active mining operations due to COVID-19 restrictions in the future. Any such disruptions or closures could have amaterialadverseeffectontheCompany’sproduction,revenue,net incomeandbusiness. Inaddition,partieswithwhomtheCompanydoesbusinessoronwhomtheCompanyisreliant, includingsuppliersandrefineriesmayalsobeadverselyimpactedbytheCOVID-19crisiswhichmayinturncausefurtherdisruptiontotheCompany’sbusiness,includingdelaysorhaltsinavailabilityordeliveryofconsumablesanddelaysorhaltsinrefiningoforefromtheCompany’smines.Anylong-term closures or suspensions may also result in the loss of personnel or the workforce in general as employees seekemploymentelsewhere.

The impact of COVID-19 and government responses thereto may also continue to have a material impact on financialmarkets and could constrain the Company's ability to obtain equity or debt financing in the future, whichmay have amaterialandadverseeffectonitsbusiness,financialconditionandresultsofoperations.

EnvironmentalandHealthandSafetyRisks

TheCompany’sactivitiesaresubjecttoextensivelawsandregulationsgoverningenvironmentalprotectionandemployeehealthandsafety.Environmentallawsandregulationsarecomplexandhavetendedtobecomemorestringentovertime.TheCompanyisrequiredtoobtaingovernmentalpermitsandinsomeinstancesair,waterquality,andminereclamationrulesandpermits.TheCompanyhascompliedwithenvironmentaltaxesappliedtotheuseofcertainfossilfuelsaccordingto the Kyoto Protocol. Although the Companymakes provisions for reclamation costs, it cannot be assured that theseprovisions will be adequate to discharge its future obligations for these costs. Failure to comply with applicableenvironmental and health and safety lawsmay result in injunctions, damages, suspension or revocation of permits andimpositionofpenalties.Whilethehealthandsafetyofourpeopleandresponsibleenvironmentalstewardshipareourtoppriorities,therecanbenoassurancethatFirstMajestichasbeenorwillbeatalltimesincompletecompliancewithsuchlaws,regulationsandpermits,orthatthecostsofcomplyingwithcurrentandfutureenvironmentalandhealthandsafetylaws and permits will not materially and adversely affect the Company’s business, results of operations or financialcondition.

ClaimsandLegalProceedingsRisks

TheCompanyissubjecttovariousclaimsandlegalproceedingscoveringawiderangeofmattersthatariseintheordinarycourse of business activities. Many factors, both known and unknown, could cause actual results, performance orachievements tobemateriallydifferent fromtheresults,performanceorachievements thatareormaybeexpressedorimpliedbysuchforward-lookingstatementsorinformationandtheCompanyhasmadeassumptionsandestimatesbased


onorrelatedtomanyof thesefactors.Suchfactors include,without limitation:availabilityof timeoncourtcalendars inCanadaandelsewhere;therecognitionofCanadianjudgmentsunderMexicanlaw;thepossibilityofsettlementdiscussions;the riskof appeal of judgment; and the insufficiencyof thedefendant’s assets to satisfy the judgment amount. EachofthesemattersissubjecttovariousuncertaintiesanditispossiblethatsomeofthesemattersmayberesolvedunfavourablytotheCompany.FirstMajesticcarriesliabilityinsurancecoverageandestablishesprovisionsformattersthatareprobableandcanbereasonablyestimated. Inaddition, theCompanymaybe involved indisputeswithotherparties in the futurewhichmayresultinasignificantimpactonourfinancialcondition,cashflowandresultsofoperations.

AlthoughtheCompanyhastakenstepstoverifyownershipandlegaltitletomineralpropertiesinwhichithasaninterest,accordingtotheusual industrystandardsforthestageofmining,developmentandexplorationofsuchproperties,theseproceduresdonotguaranteetheCompany’stitle.Suchpropertiesmaybesubjecttoprioragreementsortransfers,andtitlemaybeaffectedbyundetecteddefects.However,managementisnotawareofanysuchagreements,transfersordefects.

PrimeroTaxRulings

WhenPrimeroMiningCorp.("Primero")thepreviousownerofSanDimasacquiredtheSanDimasMineinAugust2010,ithadaSilverPurchaseAgreement (“OldStreamAgreement”) that required its subsidiaryPEMto sell100%of the silverproducedfromtheSanDimasminetoWPMI,upto6millionouncesand50%ofsilverproducedthereafter,atthelowerof:(i)thespotmarketpriceand(ii)$4.04perounceplusanannualincreaseof1%.

InordertoreflectcommercialrealitiesandtheeffectsoftheOldStreamAgreement,forMexicanincometaxpurposes,PEMrecognizedtherevenueonthesesilversalesbasedonitsactualrealizedrevenue(“PEMRealizedPrice”)insteadofatspotmarketprices.

ToobtainassurancethattheSATwouldacceptthePEMRealizedPriceasthepricetousetocalculateMexicanincometaxes,PrimeroappliedforandreceivedanAdvancePricingAgreement(“APA”)fromtheSAT.TheAPAconfirmedthatthePEMRealizedPricewouldbeusedasPrimero’sbasisforcalculatingtaxesowedbyPEMonthesilversoldundertheOldStreamAgreement.PEMbelievedthattheintentofanAPAwastohaveSATprovidetaxcertaintyandasaresultmadesignificant investments inMexicobasedon thatcertainty.OnOctober4,2012,PEMreceived theAPARuling fromSATwhichconfirmedtheappropriatepriceforsalesofsilverundertheOldStreamAgreementwasthePEMRealizedPrice.UnderMexicantaxlaw,anAPArulingisgenerallyapplicableforafiveyearperiodandthisrulingwasmadeeffectivefor2010to2014.

InFebruary2016,PEMreceiveda legal claim fromtheSATseeking tonullify theAPA.The legal claim initiateddidnotidentifyanydifferentbasisforpayingtaxes.

In2019,theSATissuedreassessmentsforthe2010to2012taxyearsinthetotalamountof$238.7million(4,919millionMXN)inclusiveofinterest,inflation,andpenalties.In2021,theSATalsoissuedareassessmentagainstPEMforthe2013tax year in the total amount of $132.1million (2,869millionMXN) (collectively, the "Reassessments"). The Companybelieves that theReassessmentswere issued inviolationof the termsof theAPA.Thekey items in theReassessmentsincludereassessmentsbasedonthemarketpriceofsilver,denialofthedeductibilityofinterestexpenseandservicefees,SATtechnicalerrorrelatedtodoublecountingoftaxes,andinterestandpenalties.

TheCompanycontinuestodefendtheAPAintheMexicanlegalproceedings,andinitiatedproceedingsunderrelevanttaxtreaties between the competent tax authorities of Mexico, Canada, Luxembourg and Barbados, all of which weresubsequently dismissed on a unilateral basis by the SAT ("Dismissals") in May 2020. The Company believes that theDismissalshavenolegalbasisandbreachinternationalobligationsregardingdoubletaxationtreaties,andthattheAPAremainsvalidandlegallybinding.TheCompanywillcontinuedisputingtheReassessments,exhausting itsdomesticandinternationalremedies.

While the Company continues to vigorously defend the validity of the APA and its transfer pricing position, it is alsoengaging in variousproceedingswith the SAT seeking to resolvematters andbring tax certainty through a negotiatedsolution.Despitetheseextensiveeffortsandongoing legalchallengestotheReassessmentsandtheDismissals, inApril2020andFebruary2021,SATissuednotificationstoPEMtoattempttosecureamountsitclaimsareowedpursuanttoitsreassessments issued. These notifications impose certain restrictions on PEM including its ability to dispose itsconcessionsandrealproperties.

TheCompanyhaschallengedSAT’sReassessmentsandDismissals throughalldomesticmeansavailable to it, includingannulmentsuitsbeforetheMexicanFederalTaxCourtonAdministrativeMatters("FederalCourt"),whichhasyettobe


resolved,andacomplaintbeforeMexico’sFederalTaxpayerDefenseAttorney'sOffice (knownas“PRODECON”),whichdeterminedthatPEMhasalllegalremediesatitsdisposalandithasalreadychallengedeverySATruling,thusthemattermust be decided byMexican Courts. The Company believes that these actions are neither fair nor equitable and arediscriminatoryagainst theCompanyasa foreign investorandamount toadenialof justiceunder international law, inadditiontoviolatingvariousprovisionsoftheFederalConstitutionoftheUnitedMexicanStatesandMexicandomesticlaw,andMexicancourtprecedents.Asaresult,onMay13,2020,theCompanyprovidedtotheGovernmentofMexiconotice of its intention to initiate an international arbitration proceeding (“Notice of Intent”) pursuant to the NorthAmericanFreeTradeAgreement(“NAFTA”).TheNoticeofIntentinitiateda90-dayperiodfortheGovernmentofMexicotoenterintogoodfaithandamicablenegotiationswiththeCompanytoresolvethedispute.OnAugust11,2020,the90-dayperiodexpiredwithoutanyresolutionofthedispute.

InSeptember2020, theCompanywas servedwithadecisionmadeby theFederalCourt tonullify theAPAgranted toPEM. The Federal Court’s decision directs SAT to re-examine the evidence and basis for the issuance of theAPAwithretroactiveeffect,forthefollowingkeyreasons:(i)SAT’serrorsinanalyzingPEM’srequestfortheAPAandtheevidenceprovidedinsupportoftherequest;and(ii)SAT’sfailuretorequestfromPEMcertainadditionalinformationbeforeissuingtheAPA.

TheCompany’slegaladvisorsreviewedthewrittenreasonsandareoftheviewthattheFederalCourt’sdecisionisflawedbothduetoSAT'sproceduralirregularitiesandfailuretoaddresstherelevantevidenceandlegalauthorities.Inaddition,theyconsiderthatthelawsappliedtoPEMinthedecisionareunconstitutional.Asaresult,theCompanyfiledanappealofthedecisiontotheMexicanCircuitCourtsonNovember30,2020.SincetwowritsofcertiorariwerefiledbeforetheMexicanSupremeCourtofJustice,onApril15,2021,thePlenaryoftheSupremeCourti)admittedoneofthosewrits,ii)requestedtheCircuitCourt tosendtheamparo fileand iii)assignedsuchwrit to theSecondChamberof theSupremeCourt for issuing the correspondingdecision. Theotherwrit of certiorari hasnotbeenadmittedby thePlenaryof theSupremeCourt.Therefore, theCompany is currentlywaiting for theSupremeCourt to issuea resolution towardssuchwritsofcertiorari.

TheCompany intends to continue to challenge theactionsof the SAT inMexican courts, howeverdue to theongoingCOVID-19crisis,theMexicancourtsarecurrentlyavailableonlyonarestrictedbasisforfurtherhearingsonthesematters.OnMarch2,2021,theCompanyannouncedthatithassubmittedaRequestforArbitrationtotheInternationalCentreforSettlementofInvestmentDisputes("ICSID"),onitsownbehalfandonbehalfofPEM,basedonChapter11oftheNorthAmericanFreeTradeAgreement("NAFTA").

IftheSATweresuccessfulinretroactivelynullifyingtheAPA,theSATmayseektoauditandreassessPEMinrespectofitssales of silver in connection with the Old Stream Agreement for 2010 through 2014. If the SAT were successful inretroactivelynullifyingtheAPAandissuingreassessments,itwouldlikelyhaveamaterialadverseeffectontheCompany’sresults of operations, financial condition and cash flows. Should theCompanyultimately be required topay taxon itssilver revenues based onmarket priceswithout anymitigating adjustments, the incremental income tax for the years2010-2018wouldbeapproximately$198.1million(4,083millionMXN),beforeinterestorpenalties.

BasedontheCompany’sassessmentswiththirdpartyadvisors,theCompanybelievesPEMfileditstaxreturnscompliantwithapplicableMexicanlawand,therefore,noliabilityhasbeenrecognizedinthefinancialstatements.

To theextent it isultimatelydetermined that theappropriatepriceof silver salesunder theOldStreamAgreement issignificantlydifferent from thePEMRealizedPrice andwhilePEMwouldhave rightsof appeal in connectionwith anyreassessments,itislikelytohaveamaterialeffectontheCompany’sbusiness,financialpositionandresultsofoperations.

LaEncantadaTaxRe-assessments

InDecember2019,aspartoftheongoingannualauditsofthetaxreturnsofMineraLaEncantadaS.A.deC.V.(“MLE”),theSAT issued taxassessments for fiscal2012and2013 in theamountof$7.8million (155.5millionMXN)and$6.3million(126.6 million MXN), respectively. The key items relate to a forward silver purchase agreement and denial of thedeductibilityofminedevelopmentcostsandservice fees. TheCompanycontinues todefendthevalidityof the forwardsilverpurchaseagreementandwillvigorouslydisputetheassessmentsthathavebeenissued.TheCompanybelievesMLE’staxfilingswereappropriateanditstaxfilingpositioniscorrect,thereforenoliabilityhasbeenrecognizedinthefinancialstatements.TheCompany’s legaland financialadvisorscontinue tobelieve that theCompanyhas filed its tax returns incompliancewithapplicableMexicanlaw.


OTHERFINANCIALINFORMATION

ShareRepurchaseProgram

TheCompanyhasanongoingsharerepurchaseprogramtorepurchaseupto5%oftheCompany’sissuedandoutstandingshares.Thenormalcourse issuerbidswillbecarriedthroughthefacilitiesoftheTorontoStockExchangeandalternativeCanadianmarketplaces.

DuringtheyearendedDecember31,2020, theCompanyrepurchasedandcancelled275,000commonshares fora totalconsiderationof$1.7million, throughanormal course issuerbid in theopenmarketas approvedby theTorontoStockExchange.NoshareswererepurchasedduringthethreemonthsendedMarch31,2021.

Off-BalanceSheetArrangements

AtMarch 31, 2021, the Company had nomaterial off-balance sheet arrangements such as contingent interest in assetstransferredtoanentity,derivativeinstrumentsobligationsoranyobligationsthatgeneratefinancing,liquidity,marketorcreditrisktotheCompany,otherthancontingentliabilitiesandvendorliabilityandinterest,asdisclosedinthisMD&Aandtheconsolidatedfinancialstatementsandtherelatednotes.

RelatedPartyDisclosures

Amountspaidtorelatedpartieswere incurred in thenormalcourseofbusinessandmeasuredat theexchangeamount,whichistheamountagreeduponbythetransactingpartiesandontermsandconditionssimilartonon-relatedparties.

InJuly2020,theCompanycompletedtheagreementwithFirstMiningGoldCorp.,topurchase50%ofthepayablesilverproducedfromtheSpringpoleGoldProjectfortotalconsiderationof$22.5millionincashandshares,overthreepayments,forthesilverstreamwhichcoversthelifeoftheSpringpoleproject.FirstMiningisarelatedpartywithtwoindependentboardmemberswhoaredirectorsand/orofficersofFirstMajestic.

WiththeexceptionoftheagreementwithFirstMiningGoldCorp.,therewerenotransactionswithrelatedpartiesoutsideoftheordinarycourseofbusinessduringthethreemonthsendedMarch31,2021.

OutstandingShareData

AsatMay4,2021,theCompanyhas251,506,150commonsharesissuedandoutstanding.

SUBSEQUENTEVENTS

ThefollowingsignificanteventsoccurredsubsequenttoMarch31,2021:

DeclarationofQuarterlyDividend

OnMay5,2021,theCompany'sboardofdirectorsapprovedanddeclareditsinauguralquarterlycommonsharedividendof$0.0045pershare,payableonandafterJune4,2021,tocommonshareholdersofrecordatthecloseofbusinessonMay17,2021.ThesedividendsweredeclaredsubsequenttothequarterendandhavenotbeenrecognizedasdistributionstoownersduringthequarterendedMarch31,2021.

ACCOUNTINGPOLICIES,JUDGMENTSANDESTIMATES

CriticalAccountingJudgmentsandEstimates

Thepreparationof consolidated financial statements in conformitywith IFRSas issuedby IASB requiresmanagement tomakejudgments,estimatesandassumptionsaboutfutureeventsthataffectthereportedamountsofassetsandliabilitiesat thedateof the financial statementsand the reportedamountsof revenueandexpensesduring the reportingperiod.Althoughtheseestimatesarebasedonmanagement’sbestknowledgeoftheamount,eventsoractions,actualresultsmaydifferfromtheseestimates.


TheCompany's condensed interimconsolidated financial statements for the threemonthsendedMarch31,2021, therewerenochangesincriticalaccountingjudgmentsandestimatesthatweresignificantlydifferentfromthosedisclosedintheCompany’sannualMD&AasatandfortheyearendedDecember31,2020andthefollowingaccountingpolicies,criticaljudgmentsandestimatesinapplyingaccountingpolicies:

NewandamendedIFRSstandardsthatareeffectiveforthecurrentyear:

InterestRateBenchmarkReform—Phase2(AmendmentstoIFRS9,IAS39,IFRS7,IFRS4andIFRS16)

TheamendmentsinInterestRateBenchmarkReform—Phase2(AmendmentstoIFRS9,IAS39,IFRS7,IFRS4andIFRS16)introduceapracticalexpedientformodificationsrequiredbythereform,clarifythathedgeaccountingisnotdiscontinuedsolelybecauseoftheIBORreform,andintroducedisclosuresthatallowuserstounderstandthenatureandextentofrisksarising from the IBOR reform towhich the entity is exposed to and how the entitymanages those risks aswell as theentity’sprogressintransitioningfromIBORstoalternativebenchmarkrates,andhowtheentityismanagingthistransition.

Theamendmentswereappliedeffective January1,2021anddidnothaveamaterial impactontheCompany’s financialstatements.

FutureChangesinAccountingPoliciesNotYetEffectiveasatMarch31,2021:

Property,PlantandEquipment—ProceedsbeforeIntendedUse(AmendmentstoIAS16)Theamendmentsprohibitdeductingfromthecostofanitemofproperty,plantandequipmentanyproceedsfromsellingitemsproducedwhilebringingthatassettothe locationandconditionnecessary for it tobecapableofoperating inthemanner intended bymanagement. Instead, an entity recognises the proceeds from selling such items, and the cost ofproducingthoseitems,inprofitorloss.

TheamendmentsareappliedonorafterthefirstannualreportingperiodbeginningonorafterJanuary1,2022,withearlyapplicationpermitted.Theamendmentsareapplied retrospectively,butonly to itemsofproperty,plantandequipmentthatarebroughttothelocationandconditionnecessaryforthemtobecapableofoperating inthemanner intendedbymanagementonorafterthebeginningoftheearliestperiodpresentedinthefinancialstatementsinwhichtheCompanyfirstappliestheamendments.TheCompanywillrecognisethecumulativeeffectofinitiallyapplyingtheamendmentsasanadjustmenttotheopeningbalanceofretainedearningsatthebeginningofthatearliestperiodpresented.Thisamendmentwill impact the Company’s accounting for proceeds frommineral sales prior to reaching commercial production levelsintendedbymanagement.

ClassificationofLiabilitiesasCurrentorNon-Current(AmendmentstoIAS1)

Theamendmentsaimtopromoteconsistency inapplyingtherequirementsbyhelpingcompaniesdeterminewhether, inthe statement of financial position, debt and other liabilities with an uncertain settlement date should be classified ascurrent(dueorpotentiallyduetobesettledwithinoneyear)ornon-current.

TheamendmentsareappliedonorafterthefirstannualreportingperiodbeginningonorafterJanuary1,2023,withearlyapplicationpermitted.ThisamendmentisnotexpectedtohaveamaterialimpactontheCompany’sfinancialstatements.

NON-GAAPMEASURES

The Company has included certain non-GAAP measures including “Cash costs per silver equivalents ounce”, "All-insustaining cost per silver equivalent ounce", “Production cost per tonne”, “Average realized silver equivalent price”,“Adjusted earnings per share”, “Cash flow per share” and "Working capital” to supplement its consolidated financialstatements,which are presented in accordancewith IFRS. The terms IFRS and generally accepted accounting principles(“GAAP”)areusedinterchangeablythroughoutthisMD&A.

TheCompanybelievesthatthesemeasures,togetherwithmeasuresdeterminedinaccordancewithIFRS,provideinvestorswithan improvedability toevaluatetheunderlyingperformanceof theCompany.Non-GAAPmeasuresdonothaveanystandardizedmeaningprescribedunderIFRS,andthereforetheymaynotbecomparabletosimilarmeasuresemployedbyothercompanies.ThedataisintendedtoprovideadditionalinformationandshouldnotbeconsideredinisolationorasasubstituteformeasuresofperformancepreparedinaccordancewithIFRS.


Effective January 1, 2021, the Company transitioned its cost reporting from Cost per Silver Ounce to Cost per SilverEquivalent ("AqEq") Ounce basis. Management believes the change to using silver equivalent ounce will providemanagementand investorswithan improvedabilitytoevaluateoperatingperformanceoftheCompany,as iteliminatesvolatilityinCashCostandAISCperounceduetomarketvolatilityinsilverandgoldpricesaswellastimingofby-productcreditsales.PriorperiodcomparativesofCashCostandAISCperouncehavebeenupdatedtobeconsistentwiththenewAgEqouncemetric.

CashCostperAgEqOunce,All-InSustainingCostperAgEqOunceandProductionCostperTonne

CashcostsperAgEqounceandtotalproductioncostpertonnearenon-GAAPmeasuresusedbytheCompanytomanageand evaluate operating performance at each of the Company’s operatingmining units, and are widely reported in theminingindustryasbenchmarksforperformance,butdonothaveastandardizedmeaningandaredisclosedinadditiontoIFRSmeasures.

All-insustainingcost(“AISC”) isanon-GAAPmeasureandwascalculatedbasedonguidanceprovidedbytheWorldGoldCouncil (“WGC”).WGC is not a regulatory industry organization anddoes not have the authority to develop accountingstandardsfordisclosurerequirements.OtherminingcompaniesmaycalculateAISCdifferentlyasaresultofdifferencesinunderlyingaccountingprinciplesandpoliciesapplied,aswellasdifferencesindefinitionsofsustainingversusexpansionarycapital expenditures. AISC is amore comprehensivemeasure than cash cost per ounce for the Company’s consolidatedoperatingperformancebyprovidinggreatervisibility,comparabilityandrepresentationofthetotalcostsassociatedwithproducingsilverfromitscurrentoperations.

TheCompanydefinessustainingcapitalexpendituresas,“costsincurredtosustainandmaintainexistingassetsatcurrentproductivecapacityandconstantplannedlevelsofproductiveoutputwithoutresultinginanincreaseinthelifeofassets,futureearnings,orimprovementsinrecoveryorgrade.Sustainingcapitalincludescostsrequiredtoimprove/enhanceassetstominimum standards for reliability, environmental or safety requirements. Sustaining capital expenditures excludes allexpendituresattheCompany’snewprojectsandcertainexpendituresatcurrentoperationswhicharedeemedexpansionaryinnature.”

Expansionary capital expenditure is defined as, "costs incurred to extend existing assets beyond their current productivecapacityandbeyondtheirplanned levelsofproductiveoutput,resulting inan increase inthe lifeoftheassets, increasingtheirfutureearningspotential,orimprovingtheirrecoveriesorgradeswhichwouldservetoincreasethevalueoftheassetsover their useful lives". Development and exploration work which moves inferred resources to measured or indicatedresourcesandaddstotheNetPresentValueoftheassetsisconsideredexpansionaryinnature.Expansionarycapitalalsoincludescostsrequiredtoimprove/enhanceassetsbeyondtheirminimumstandardforreliability,environmentalorsafetyrequirements.

ConsolidatedAISCincludestotalproductioncashcostsincurredattheCompany’sminingoperations,whichformsthebasisof theCompany’s totalcashcosts.Additionally, theCompany includessustainingcapitalexpenditures,corporategeneralandadministrativeexpense,share-basedpayments,operatingleasepaymentsandreclamationcostaccretion.AISCbyminedoes not include certain corporate and non-cash items such as general and administrative expense and share-basedpayments. The Company believes this measure represents the total sustainable costs of producing silver from currentoperations, andprovides additional informationof theCompany’soperationalperformanceandability to generate cashflows. As the measure seeks to reflect the full cost of silver production from current operations, new project andexpansionary capital at current operations are not included. Certain other cash expenditures, including tax payments,dividendsandfinancingcostsarealsonotincluded.


The following tables provide detailed reconciliations of these measures to cost of sales, as reported in notes to ourconsolidatedfinancialstatements.

(expressedinthousandsofU.S.Dollars,exceptounceandperounceamounts)


SanDimas SantaElena LaEncantada Consolidated

Miningcost $11,577 $6,295 $3,181 $21,054

Millingcost 6,643 7,245 3,937 17,825

Indirectcost 9,761 3,911 2,743 16,416

Totalproductioncost(A) $27,982 $17,451 $9,861 $55,294

Add:transportationandothersellingcost 347 148 111 662

Add:smeltingandrefiningcost 394 119 155 668

Add:environmentaldutyandroyaltiescost 369 112 92 573

Totalcashcost(B) $29,092 $17,830 $10,219 $57,197

Workers’participation 3,469 55 126 3,667

Generalandadministrativeexpenses — — — 6,501

Share-basedpayments — — — 3,594

Accretionofdecommissioningliabilities 177 77 129 639

Sustainingcapitalexpenditures 8,836 4,657 973 15,096

Operatingleasepayments 68 50 644 1,131

All-InSustainingCosts(C) $41,642 $22,669 $12,091 $87,825

Payablesilverequivalentouncesproduced(D) 2,909,490 883,447 741,865 4,534,803

Tonnesmilled(E) 199,466 185,358 229,421 614,245

CashcostperAgEqounce(B/D) $10.00 $20.18 $13.77 $12.61

AISCperAgEqounce(C/D) $14.31 $25.66 $16.30 $19.35

Productioncostpertonne(A/E) $140.29 $94.15 $42.99 $90.03


(expressedinthousandsofU.S.Dollars,exceptounceandperounceamounts)


SanDimas SantaElena LaEncantada Consolidated

Miningcost $11,298 $4,737 $2,625 $18,660

Millingcost 5,493 6,988 4,382 16,862

Indirectcost 8,489 2,686 2,685 13,861

Totalproductioncost(A) $25,279 $14,411 $9,694 $49,383

Add:transportationandothersellingcost 296 72 89 522

Add:smeltingandrefiningcost 395 134 184 725

Add:environmentaldutyandroyaltiescost 257 109 33 397

Totalcashcost(B) $26,227 $14,726 $9,998 $51,026

Workers’participation 1,682 55 74 1,998

Generalandadministrativeexpenses — — — 5,828

Share-basedpayments — — — 2,378

Accretionofdecommissioningliabilities 149 78 126 623

Sustainingcapitalexpenditures 8,000 1,964 1,498 12,659

Operatingleasepayments 127 51 642 1,143

All-InSustainingCosts(C) $36,185 $16,874 $12,338 $75,655

Payablesilverequivalentouncesproduced(D) 3,670,333 1,591,807 925,639 6,187,779

Tonnesmilled(E) 200,109 177,834 221,200 599,142

CashcostperAgEqounce(B/D) $7.15 $9.25 $10.80 $8.25

AISCperAgEqounce(C/D) $9.86 $10.60 $13.33 $12.23

Productioncostpertonne(A/E) $126.33 $81.04 $43.82 $82.41


AverageRealizedSilverPriceperOunce

Revenues are presented as the net sum of invoiced revenues related to delivered shipments of silver doré bars andconcentrates, including associatedmetal by-products of gold, lead and zinc after having deducted refining and smeltingcharges, and after elimination of intercompany shipments of silver, silver being minted into coins, ingots and bullionproducts.

Thefollowingisananalysisofthegrossrevenuespriortorefiningandsmeltingcharges,andshowsdeductedsmeltingandrefiningchargestoarriveat thenetreportablerevenuefortheperiodper IFRS.Grossrevenuesaredivided intopayablesilverequivalentouncessoldtocalculatetheaveragerealizedpriceperounceofsilverequivalentssold.


2021 2020

Revenuesasreported $100,522 $86,065

Addback:smeltingandrefiningcharges 668 725

Grossrevenues 101,190 86,790

Less:Sandstormgoldrevenues (557) (999)

Less:Wheatongoldrevenues (6,288) (6,883)

Grossrevenues,excludingSandstorm,Wheaton(A) $94,345 $78,908

Payablesilverequivalentouncessold 4,249,516 5,556,937

Less:PayablesilverequivalentouncessoldtoSandstorm (82,250) (216,393)

Less:PayablesilverequivalentouncessoldtoWheaton (690,130) (795,050)

Payablesilverequivalentouncessold,excludingSandstormandWheaton(B) 3,477,135 4,545,494

Averagerealizedsilverpriceperounce(A/B) $27.13 $17.36

AveragemarketpriceperounceofsilverperCOMEX $26.25 $16.89

CashFlowperShare

CashFlowperShareisdeterminedbasedonoperatingcashflowsbeforemovementsinworkingcapitalandincometaxes,asillustratedintheconsolidatedstatementsofcashflow,dividedbytheweightedaveragesharesoutstandingduringtheperiod.


2021 2020

OperatingCashFlowsbeforeWorkingCapitalandTaxes $31,129 $23,313

Weightedaveragenumberofsharesonissue-basic 222,544,712 209,396,052

CashFlowperShare $0.14 $0.11

AdjustedEarningsperShare(“AdjustedEPS”)

The Company uses the financial measure “Adjusted EPS” to supplement information in its consolidated financialstatements. The Company believes that, in addition to conventional measures prepared in accordance with IFRS, theCompanyandcertain investorsandanalystsuse this informationtoevaluate theCompany’sperformance.TheCompanyexcludes certain non-cash and unusual items from net earnings to provide a measure which allows the Company andinvestorstoevaluatetheoperatingresultsoftheunderlyingcoreoperations.ThepresentationofAdjustedEPSisnotmeanttobeasubstituteforEPSpresentedinaccordancewithIFRS,butrathershouldbeevaluatedinconjunctionwithsuchIFRSmeasure.


The following table provides a detailed reconciliation of net losses as reported in the Company’s consolidated financialstatementstoadjustednetearningsandAdjustedEPS:

ThreeMonthsEndedMarch31,2021 2020

Netearnings(loss)asreported $1,855 ($32,436)

Adjustmentsfornon-cashorunusualitems:

Deferredincometax(recovery)expense (1,825) 4,566

Share-basedpayments 3,594 2,378

Lossfrominvestmentinderivativesandmarketablesecurities 1,289 1,368

Unrealizedlossonforeigncurrencyderivatives — 22,654

Write-downonassetsheld-for-sale 2,081 —

Recoveryofmineralinventory — (443)

Lossondivestitureofexplorationprojects — 10,106

Adjustednetearnings $6,994 $8,193

Weightedaveragenumberofsharesonissue-basic 222,544,712 209,396,052

AdjustedEPS $0.03 $0.04

WorkingCapitalandAvailableLiquidity

Working capital isdeterminedbasedon currentassetsand current liabilities as reported in theCompany’s consolidatedfinancial statements. TheCompanyusesworking capital as ameasureof theCompany’s short-term financialhealthandoperatingefficiency.AvailableliquidityincludestheCompany'sworkingcapitalandundrawnrevolvingcreditfacility.

March31,2021

December31,2020

CurrentAssets $329,738 $356,046

Less:CurrentLiabilities (96,903) (101,626)

WorkingCapital $232,835 $254,420

AvailableUndrawnRevolvingCreditFacility 65,000 65,000

AvailableLiquidity $297,835 $319,420


MANAGEMENT’SREPORTONINTERNALCONTROLOVERFINANCIALREPORTING

DisclosureControlsandProcedures

TheCompany’smanagement,withtheparticipationofitsPresidentandChiefExecutiveOfficer(“CEO”)andChiefFinancialOfficer (“CFO”), has evaluated the effectiveness of the Company’s disclosure controls and procedures. Based upon theresults of that evaluation, the Company’s CEO and CFO have concluded that, as of March 31, 2021, the Company’sdisclosure controls and procedureswere effective to provide reasonable assurance that the information required to bedisclosedbytheCompanyinreportsitfilesisrecorded,processed,summarizedandreported,withintheappropriatetimeperiodsandisaccumulatedandcommunicatedtomanagement,includingtheCEOandCFO,asappropriatetoallowtimelydecisionsregardingrequireddisclosure.

InternalControloverFinancialReporting

The Company’smanagement,with the participation of its CEO and CFO, is responsible for establishing andmaintainingadequate internalcontroloverfinancialreportingassuchtermisdefined intherulesoftheUnitedStatesSecuritiesandExchangeCommissionandtheCanadianSecuritiesAdministrators.TheCompany’sinternalcontroloverfinancialreportingisaprocessdesignedtoprovidereasonableassuranceregardingthereliabilityoffinancialreportingandthepreparationoffinancialstatementsforexternalpurposes inaccordancewithIFRSas issuedbytheIASB.TheCompany’s internalcontroloverfinancialreportingincludespoliciesandproceduresthat:

• maintainrecordsthataccuratelyandfairlyreflect,inreasonabledetail,thetransactionsanddispositionsofassetsoftheCompany;

• providereasonableassurancethattransactionsarerecordedasnecessaryforpreparationoffinancialstatementsinaccordancewithIFRSasissuedbyIASB;

• provide reasonable assurance that the Company’s receipts and expenditures are made only in accordance withauthorizationsofmanagementandtheCompany’sDirectors;and

• provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, ordisposition of the Company’s assets that could have a material effect on the Company’s consolidated financialstatements.

TheCompany’s internalcontroloverfinancialreportingmaynotpreventordetectallmisstatementsbecauseof inherentlimitations. Additionally, projections of any evaluation of effectiveness for future periods are subject to the risk thatcontrolsmaybecomeinadequatebecauseofchangesinconditionsordeteriorationinthedegreeofcompliancewiththeCompany’spoliciesandprocedures.

TheCompany'smanagementevaluatedtheeffectivenessofour internalcontrolsoverfinancialreportingbaseduponthecriteriasetforthinInternalControl-IntegratedFramework(2013)issuedbytheCommitteeofSponsoringOrganizationsoftheTreadwayCommission.Basedonmanagement'sevaluation,ourCEOandCFOconcludedthatourinternalcontrolsoverfinancial reportingwas effective as ofMarch 31, 2021. There have been no significant changes in our internal controlsduringthequarterendedMarch31,2021thathavemateriallyaffected,orarereasonablylikelytomateriallyaffect,internalcontroloverfinancialreporting.

LimitationsofControlsandProcedures

TheCompany’smanagement,includingthePresidentandChiefExecutiveOfficerandChiefFinancialOfficer,believesthatany disclosure controls and procedures or internal control over financial reporting, nomatter howwell conceived andoperated,maynot preventor detect allmisstatements becauseof inherent limitations. Further, thedesignof a controlsystemmustreflectthefactthatthereareresourceconstraints,andthebenefitsofcontrolsmustbeconsideredrelativetotheir costs. Because of the inherent limitations in all control systems, they cannot provide absolute assurance that allcontrol issues and instances of fraud, if any, within the Company have been prevented or detected. These inherentlimitationsincludetherealitiesthatjudgmentsindecision-makingcanbefaulty,andthatbreakdownscanoccurbecauseofsimpleerrorormistake.Additionally,controlscanbecircumventedbytheindividualactsofsomepersons,bycollusionoftwoormorepeople,orbyunauthorizedoverrideofthecontrol.Thedesignofanycontrolsystemalsoisbasedinpartuponcertainassumptionsaboutthelikelihoodoffutureevents,andtherecanbenoassurancethatanydesignwillsucceedinachieving its statedgoalsunderallpotential futureconditions.Accordingly,becauseof the inherent limitations inacosteffectivecontrolsystem,misstatementsduetoerrororfraudmayoccurandnotbedetected.


CAUTIONARYSTATEMENTS

CautionaryNoteregardingForward-LookingStatements

Certain informationcontainedhereinthisMD&Aconstitutes forward-lookingstatementsunderapplicablesecurities laws(collectively, “forward-looking statements”). These statements relate to future events or the Company’s futureperformance,businessprospectsoropportunities.Forward-lookingstatementsinclude,butarenotlimitedto:commercialmining operations; anticipated mineral recoveries; projected quantities of future mineral production; statements withrespect to theCompany’sbusiness strategy; futureplanningprocesses;anticipateddevelopment,expansion,explorationactivitiesandproductionrates;theestimatedcostandtimingofplantimprovementsattheCompany’soperatingminesanddevelopment of the Company’s development projects; the timing of completion of exploration programs and drillingprograms;therepaymentoftheDebentures;statementswithrespecttotheCompany’sfuturefinancialpositionincludingoperating efficiencies, cash flow, capital budgets, costs and expenditures; the preparation of technical reports andcompletion of preliminary economic assessments; the repurchase of the Company’s shares; viability of the Company’sprojects;potentialmetalrecoveryrates;theconversionoftheCompany’ssecurities.Allstatementsotherthanstatementsofhistorical factmaybe forward-lookingstatements.Anystatements thatexpressor involvediscussionswith respect topredictions,expectations,beliefs,plans,projections,objectives,assumptionsor futureeventsorperformance(often,butnot always, usingwordsor phrases such as “seek”, “anticipate”, “plan”, “continue”, “estimate”, “expect”, “may”, “will”,“project”, “predict”, “forecast”, “potential”, “targeting”, “intend”, “could”, “might”, “should”, “believe” and similarexpressions)arenotstatementsofhistoricalfactandmaybe“forward-lookingstatements”.

Forward-looking statements are based on the opinions and estimates ofmanagement at the dates the statements aremade,andaresubjecttoavarietyofrisksanduncertaintiesandotherfactorsthatcouldcauseactualeventsorresultstodiffermaterially from those projected in the forward-looking statements. These factors include, without limitation: theinherent risks involved in themining, exploration and development ofmineral properties, the uncertainties involved ininterpreting drilling results and other geological data, fluctuating metal prices, the possibility of project delays or costoverrunsorunanticipatedexcessiveoperatingcostsandexpenses,uncertaintiesrelatedtothenecessityoffinancing,theavailabilityofandcostsoffinancingneededinthefuture,andotherfactorsdescribedintheCompany’sAnnualInformationFormundertheheading“RiskFactors”.

The Company believes that the expectations reflected in any such forward-looking statements are reasonable, but noassurance can be given that these expectationswill prove to be correct and such forward-looking statements includedherein this MD&A should not be unduly relied upon. These statements speak only as of the date of this MD&A. TheCompanydoes not intend, anddoes not assumeanyobligation, to update these forward-looking statements, except asrequiredbyapplicablelaws.Actualresultsmaydiffermateriallyfromthoseexpressedorimpliedbysuchforward-lookingstatements.

CautionaryNoteregardingReservesandResources

National Instrument 43-101 (“NI 43-101”), issued by the Canadian Securities Administrators, lays out the standards ofdisclosureformineralprojects.ThisincludesarequirementthatacertifiedQualifiedPerson(“QP”)(asdefinedundertheNI43-101)supervisesthepreparationofthemineralreservesandmineralresources.RamonMendoza,P.Eng.,VicePresidentof Technical Services is a certified QP for the Company and has reviewed this MD&A for QP technical disclosures. AllNI 43-101 technical reports can be found on the Company’s website at www.firstmajestic.com or on SEDAR atwww.sedar.com.

CautionaryNotetoUnitedStatesInvestorsConcerningEstimatesofMineralReservesandResources

ThisManagement’sDiscussionandAnalysishasbeenpreparedinaccordancewiththerequirementsofthesecuritieslawsineffect inCanada,whichdiffer incertainmaterialrespectsfromthedisclosurerequirementsofUnitedStatessecuritieslaws.Theterms“mineralreserve”,“provenmineralreserve”and“probablemineralreserve”areCanadianminingtermsasdefinedinaccordancewithCanadianNI43-101StandardsofDisclosureforMineralProjectsandtheCanadianInstituteofMining,Metallurgy and Petroleum (the “CIM”) - CIM Definition Standards onMineral Resources andMineral Reserves,adopted by the CIM Council, as amended. These definitions differ from the definitions in the disclosure requirementspromulgatedbytheSecuritiesandExchangeCommission(the“Commission”)andcontainedinIndustryGuide7(“IndustryGuide7”).UnderIndustryGuide7standards,a“final”or“bankable”feasibilitystudyisrequiredtoreportmineralreserves,


thethree-yearhistoricalaveragepriceisusedinanymineralreserveorcashflowanalysistodesignatemineralreservesandtheprimaryenvironmentalanalysisorreportmustbefiledwiththeappropriategovernmentalauthority.

In addition, the terms “mineral resource”, “measured mineral resource”, “indicated mineral resource” and “inferredmineralresource”aredefinedinandrequiredtobedisclosedbyNI43-101.However,thesetermsarenotdefinedtermsunderIndustryGuide7andarenotpermittedtobeusedinreportsandregistrationstatementsofUnitedStatescompaniesfiledwith the Commission. Investors are cautioned not to assume that any part or all of themineral deposits in thesecategorieswilleverbeconvertedintomineralreserves.“Inferredmineralresources”haveagreatamountofuncertaintyastotheirexistence,andgreatuncertaintyastotheireconomicandlegalfeasibility.Itcannotbeassumedthatalloranypartof an inferredmineral resourcewill everbeupgraded toahigher category.UnderCanadian rules, estimatesof inferredmineral resources may not form the basis of feasibility or pre-feasibility studies, except in rare cases. Investors arecautionednottoassumethatalloranypartofaninferredmineralresourceexistsoriseconomicallyorlegallymineable.Disclosureof“containedounces”inamineralresourceispermitteddisclosureunderCanadianregulations.Incontrast,theCommission only permits U.S. companies to report mineralization that does not constitute “mineral reserves” byCommissionstandardsasinplacetonnageandgradewithoutreferencetounitmeasures.

Accordingly, information contained in this Management’s Discussion and Analysis may not be comparable to similarinformationmadepublicbyU.S.companiessubjecttothereportinganddisclosurerequirementsundertheUnitedStatesfederalsecuritieslawsandtherulesandregulationsoftheCommissionthereunder.

AdditionalInformation

Additional information on the Company, including the Company’s Annual Information Form and the Company’s auditedconsolidatedfinancialstatementsfortheyearendedDecember31,2020,isavailableonSEDARatwww.sedar.comandontheCompany’swebsiteatwww.firstmajestic.com.


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CONDENSED INTERIM CONSOLIDATED FINANCIAL …