First Majestic Silver is acquiring SilverCrest Mines in a friendly shares-and-cash transaction that values SilverCrest at about C$154 million. Both companies are headquartered in Vancouver, British Columbia, Canada, and both have their operating focus on silver mines in Mexico.

SilverCrest owns and operates the Santa Elena mine in Sonora. In 2014, the mine produced 1.16 million oz of silver and 27,609 oz of gold.

First Majestic has five active mines: La Encantada in Coahuila, La Parrilla in Durango, San Martin in Jalisco, La Guitarra in Mexico state, and Del Toro in Zacatecas. In 2014, the company produced 11.7 million oz of silver and, with byproducts that include gold, lead, and zinc, 15.3 million silver equivalent oz.

Following the completion of the transaction, current shareholders of SilverCrest will own approximately 21% of the issued and outstanding shares of First Majestic. The combined company will have a market capitalization of about C$700 million.

As part of the transaction, a new silver exploration company, to be named New SilverCrest, will be created as a home for some on the companies’ exploration properties. SilverCrest will transfer its Las Chispas, Cruz de Mayo, Angel de Plata, Huasabas, and Estacion Llano properties in northern Mexico to New SilverCrest, as well as C$5.25 million in cash and certain other assets. First Majestic will transfer its Guadalupe exploration property in Durango, Mexico, to New SilverCrest.

First Majestic will own approximately 9.9% of the shares of New SilverCrest following completion of the transaction.

SilverCrest COO N. Eric Fier, will be the chief executive officer and president of New SilverCrest, and other members of SilverCrest’s current board and management team will join the new company. New SilverCrest intends to make application to list its shares on the TSX Venture Exchange.