Welcome to the First Majestic Silver, Second Quarter 2014 Earnings Conference Call. As a reminder, all participants are in listen-only mode and the conference is being recorded. After the presentation there will be an opportunity to ask questions. (Operator Instructions) At this time I would like to turn the conference over to Keith Neumeyer, President and CEO for First Majestic Silver. Please go ahead.

Thank you and welcome everyone. Thanks for showing up at the conference call today. Our second quarter financials were announced, as you know. We have in the room with me today Ray Polman, the company’s Chief Financial Officer; Todd Anthony, the company’s VP of Investor Relations. Also Connie Lillico, the company’s Corporate Secretary. I’ll pass the call over to Connie just to discuss the disclaimer.

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

Thanks Connie. So I’m not going to read the News Release to go through it in detail. I’m just going to cover some highlights and then I’m going to open the call up to questions. So if there are people that would like to be in the queue, I would recommend to start showing yourself now. We can line you up for questions once I just finish my short little introduction. So obviously, the second quarter as you know was our ninth continuity quarter of record production. Interestingly enough there is one quarter going back that was a slight dip, but you have to go back the previous two years before you actually saw a previous dip. So we’ve been on quite on the growth spur or quite the growth path for the last several years as most of our shareholders are aware. The revenues increased slightly in the first quarter, primarily attributed to the increase in production, earnings per share of $0.06. Cash flows were at $0.16, which was a decrease obviously, primarily due to the silver price and some other issues, which can talk about today. The total cash cost came in at $9.63, down 3%, so going in the right direction. All in sustaining costs, $18.18, also going in the right direction, down a couple of points with 3%. We have realized silver price in the quarter as the news release has pointed out, $19.59, a decrease from the prior quarter. Cash is strong. We’ve got $66 million in the bank, which is quite good and we continue to buyback stock on a very small basis, but in a very opportune basis. So we see the shares being over solid on a daily basis. We will step in as we did in the second quarter. So that’s really it from me. I think the rest of the news release pretty well speaks for itself and I see that there are a couple of individuals already in queue here. Why don’t we take one. Operator.

Okay, yes, so we’ll head to questions. We will now being the question-and-answer session. (Operator Instructions). The first question is from Dave Forster with Merrill Lynch. Please go ahead.

Good afternoon guys. My question is to do with the increase in all-in sustaining costs and it was sighted that it was the higher sustaining at La Encantada due to the delays in the mine improvements there until the mid part of next year. Can you give us a little bit of flavor as to what’s going on and what you expect the impact is going to be post improvement to the sustaining cost.

Are you referring to the increase in guidance?

Yes, that’s right.

Okay, go ahead Ray.

What’s going on at La Encantada is with the mining from the underground ore there is certain amount of development that’s required for us to produce at the higher rates. What we anticipate happening is that as we get through the second half of this year and into next year we will then begin working on the expansion of the question of grinding areas and during this period, leading into the first half of the next year we need to ensure that we have sufficient development achieved, to be able to product at the higher feed rate for the mine.

Okay, and what you expect the improvement is going to be once those improvements have been completed. So is there going to be an impact to sustaining CapEx, that’s what I’m getting at?

On a per ounce basis, we would anticipate there to be some economies of scale as we scale up. So a minor reduction I would think in the costs on a per ounce basis. Although we are doing a number of things to improve the efficiencies through the use of additional automation lime feed, various measures of technology to improve the cost. So we would expect some cost savings in the sustaining costs, as well as production costs going forward.

Okay. So once, if you just look at where the ore and sustaining costs were before the guidance change and where they are now, what has changed? Is that new run rate or is that something that’s going to be resolved once you’ve instituted these improvements.

Well, the anticipated run rate that we had when we had originally budgeted the outlook for the year, for La Encantada related to a scaling up of operations and a reduction of costs, that scaling up has been delayed into the first half of next year. So that’s basically what’s occurring, as the scaling up of operations did not occur in the second half and its differed into 2015.

Okay, that’s great. That’s it from me. Thanks guys.

Okay.

Our next question is from Andrew Kaip with BMO Capital Markets. Please go ahead.

Hi guys.

Hi Andrew.

Look, I was just focusing in on the operating costs. I noticed that the milling cost at Del Toro rose substantially year-over-year. Can you give us an indication of what that relates to and then also where you see improvements in those costs on a go forward basis?

The cyanide consumption was very high due to the type of ore that was being used, the transition ore. And so we were using something in the order of four or five kilos of cyanide per tone, which is obviously extremely high. You are going to see that change in the third quarter, because of some things we are doing differently now. We are using the flotation circuit more than the cyanidation circuit with this particular type of ore, so the cyanide consumption actually drops. We’ve also got the electrical consumption as well, which is unusually high and the change from the prior year, the run rate was only 1,000 tones a day compared to the current rate of almost 2,000 tones. So your electrical consumption is much higher due to the amount of diesel we are burning, due to the generators, the seven gen sets there. So we did hook into the power line in Q2, but it was only a reduction of two of the gen sets and Q3 we are hopping in September, we’ll news release it once its completed. So September was a question mark, but hoping September will actually get rid of all the gen sets and the 115-kilowatt line will be completed and you will see the cost of gain notch down.

And just can you give us a sense of where you see them by year-end?

The actual mining cost?

Processing costs in particular. I mean, they were quite high. So give the fact that you are going to see the benefits of the power, switch over and you are going to see reduced cyanide consumption. I mean can you give us a sense of where you think those are going to be on a per ton basis at year-end.

Well, we didn’t give guidance on a per mine basis Andrew. We did give guidance on a per mine basis in January. We decided not to make that adjustment, because we felt the changes on a per mine basis weren’t really that material. On a global number, which is the number that we put in the news release is basically flat and we didn’t want to confuse the market by throwing out a bunch of numbers. So I think we could probably differ to that and maybe we can get back to you at a later date.

Okay, thanks.

The next question is from Ovais Habib with Scotiabank. Please go ahead. Ovais Habib – Scotiabank: Hi guys. Just a quick question on La Guitarra, in terms of you guys providing an updated 43-101. Is that sort of expected in early 2015 and are you still looking to submit a permit for the 1,000 tone per day cyanidation circuit.

Well, there is lots going on there. The permitting is focusing right now in the Mina de Agua and Rincon areas. We think we are close to getting that permit. It’s really the future of this operations, at least the short-term future. That’s going to dictate what we are going to do with the mill. There is two potentials. One is to expand the current mill and one is to build a brand new mill down in the Mina de Agua area, and that decision has been made. So we basically put it on hold, also due to market conditions as well. But we put that final decision on hold until we had the resolution with the community and then the permits. We are pretty optimistic it will be done in the next couple of months and I say its impact that does happen, there is some potential of that mill showing up. I mean the Mina de Agua versus the current mill being expanded. And the 43-101, we’ll likely put out a PEA on the expansion. At the same time it will be a combined 43-101 NPA and our internal target and again, I hate putting these things out to the market, because I don’t want to be held to them in the future, but I know its kind of hard to avoid. But our internal goal is to get that out by the end of the second quarter 2015, and that includes the PA with the 43-101. Ovais Habib – Scotiabank: Okay, that’s it from me. Thank you.

Okay. Thanks Ovais.

(Operator Instructions). The next question is from Andy Shilpeck (ph) a Private Investor. Please go ahead.

I’ll pass that on to Ray.

Yes, that’s a very interesting question. We’ve had a number of meetings directly with the tax authorities in Mexico. Obviously we are feeling the effects of the royalty and the environmental duties and the fact that the tax authorities there put in rules with respect to the requirement of deconsolidate your operations. We had established the corporate structure, the consolidated structure and when you do that, you’ve got the benefit of some tax savings from operations when you are building them and they are getting ramped up to offset the income of other operations that are non-taxable. So in short, the effective rate that we are experiencing right now is somewhere in the range of 30% to 35% and we would expect that to continue borrowing any changes. There has been a number of rumors passing around within Mexico about changes that maybe coming to modify these. There is a number of injunctions that are in the court, so working against the tax authorities. We can’t say what the results of them will be. But for the forcible future I expect the effective rate to be in the 30% to 35% range.

Okay, that’s helpful, and one follow up for you. Have you done any kind of modeling on the current financial leverage to the price of sliver? I mean for each dollar increase in sliver, have you kind of factored in what you are overall financial leverage is.

No I think the leverage is quite low and we haven’t focused on that too much. We have a lot of additional leverage if we so choose to use it. But our preference is not to go there. At present we are focusing on the efficient costs and not on the additional leverage.

Okay, thank you very much.

Okay.

Our next question is from Matthew O'Keefe with Dundee Capital Markets. Please go ahead.

Thanks operator. Good afternoon guys. I just had a quick question and I apologize if its already been asked. But on Del Toro, you mentioned the transactional ore as obviously having a change of plans a little bit. Would you mind taking me through again just quickly the extent of that and have you done any drilling or anything to sort of determine which areas you either have to avoid or where you are going to be chasing next.

I was talking about of avoiding the areas. We’ve got the ore there and we can make money mining it, so that’s what we are doing, but it’s more of a blending process and we’re focusing the current exploration of drilling in areas that would allow for more efficient blending and then so it has changed our exploration program to some degree over the last couple of quarters and other than that, its not completely a bad thing. It is just a matter of getting a handle on the metallurgy and it takes time. We’re changing some of the plumbing, we’re changing some of circuitry and it’s all just a matter of just normal course things. Nothing huge in any particular area, but its just refinements of the mill and that’s underway on an ongoing basis and that is included in our whole atomization program as well, which we had launched at the early part of this year. We’re putting some interesting tools in place throughout all our mines, including Del Toro.

Okay, thanks. That clarifies that for me. I appreciate it.

(Operator Instructions) Our next question comes from Stuart McDougall with Jennings Capital. Please go ahead.

Thanks operator. Hi guys. Just a quick question, back to La Encantada. Did you expect these grades to be maintained until you get at the expanded milling rig?

Are you referring to the grades in the second quarter?

Yes, the 300 odd grams.

Yes, the mine has always been around that. If you go back and look at the operation going back five years, you’ll see that their head grades were around 200 grams and that was a combination of blending 300 gram ore from the mine, with 120 grams or 140 gram ore from the tailings. So we’ve now taken that lower grade material out of the processing, and just mining the underground, which is about 300 grams on average I would expect, and also with the increased recovery. So you’ve got better grades and better recoveries and then you’ve got pretty well the same production that we’ve had previously. You’ve got higher cost per ton obviously, but your cost per ounce are basically much the same.

And would you expect at this point, based on what you know at the higher proposed milling rate that that might have any dilution effect on the grade or is your drilling and so forth still showing the same kind of mineralization in similar grades?

When you mean dilution, you mean like during mining or during…

Yes, like is this going to be a cage that we might see the grade come down once at the expanded rates or are you pretty confident that this historic grade is going to be maintained in the fresh ore.

Well, it depends on what grade your using and if you go – we’ve got some long term plans on La Encantada, which we don’t put in any of our guidance obviously, but I’m talking about a guidance out or plans out to 2016, 2017 where we envision La Encantada being a much larger operation and we don’t talk too much about it, just because of the fact that its quite far into the future and the market tends not to looked that far. But if you look at some of the large branches there that contain excess of 20 million ounces and there’s a couple of them and the grades of those branches are in the 200 gram material, 200 gram range and the recoveries of that material is quite good. There is virtually no manganese in those branches, but its going to take a different operation to be able to find those in the future, but that’s really the future of this operation and I would just suggest, give us some time to give further guidance on that, but I think over the next 12 to 18 months you’ll be seeing some changes in La Encantada, which will be quite interesting.

That’s great. Thanks a lot Keith.

Our next question is from Howard Flinker with Flinker and Company. Please go ahead.

Hello everybody.

Hello.

Hi Howard.

I don’t think you understood somebody’s question before when he asked about leverage. He didn’t mean how much debt would you add. He wanted to know what effect your bottom line would be on an increase in the price of silver of $1 or $2 or $3. I think he meant operational leverage and not financial leverage.

No, reconsidering that immediately upon saying it, I think I agree with you.

And yes, on the comment. I don’t know; it’s more of the job of the analyst on the Street to do that work and maybe Todd has a better answer, because he is closer to that side, but I would say that there’s quite a lot of leverage.

Yes, sure. No, I’m not asking. I can make my own faulty guesses too. I just wanted to clarify that.

And it comes to purity as well. We are one of the I think, if not the purest one of the purest silver companies in the world. So our silver has been under performing the other metals and I think that’s hurt us to some degree compared to our company. That’s cost 50% of the production in gold or whatever the case may be.

If the report is true that there’s an impending shortage of silver in China, that underperformance will disappear, but we’ll have to see in the next intermediate period to see if that report is accurate. We’ll find out soon enough.

In the meantime we just have to keep grinding our thoughts down and…

Just keep plowing away what you can control. You can’t control the price, that’s right.

That’s right.

All right. Thanks guys.

Thanks Howard. Anyone else? I see there is no other people in line here. If there’s any other questions – this is got to be the easiest conference call we’ve ever had.

(Operator Instructions). We do not seem to have any more questions.

Everyone’s bored to death. Okay, well thanks everyone for joining us today and hope to see you all on my travels over the coming months.

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