In a C$154 million transaction, First Majestic Silver Corp. has agreed to acquire all of the issued and outstanding common shares of SilverCrest Mines. The agreement will also create New SilverCrest, which will hold exploration assets currently held by SilverCrest and First Majestic.
The deal enhances First Majestic’s position in Mexico. SilverCrest’s Santa Elena mine will be First Majestic’s sixth producing silver mine adding further growth potential to its portfolio of Mexican projects. The transaction also provides operational and production synergies with the potential for additional cost cutting.
“We believe this transaction provides an excellent opportunity for the shareholders of both First Majestic and SilverCrest,” said Keith Neumeyer, president and CEO of First Majestic. “The combined company will produce well more than 20 million silver equivalent oz per year while maintaining one of the lowest production costs and highest purity to silver in the industry.”
As part of the arrangement, SilverCrest will transfer the Las Chispas, Cruz de Mayo, Angel de Plata, Huasabas and Estacion Llano exploration properties located in northern Mexico, as well as C$5.25 million in cash and certain other assets currently owned by SilverCrest to New SilverCrest. First Majestic will also transfer its Guadalupe exploration property located in Durango, Mexico, to New SilverCrest, and First Majestic will own approximately 9.9% of the shares of New SilverCrest following completion of the transaction.
SilverCrest’s La Joya project will be retained by First Majestic following closing of the transaction, however, First Majestic does not have any immediate plans to advance the La Joya project. Eric Fier, SilverCrest’s COO, will be the president and CEO of New SilverCrest.
The SilverCrest Board of Directors has unanimously approved the transaction and will provide a written recommendation that shareholders vote in favor of the transaction in early September.