First Majestic which acquired Gatos Silver for $970 million

First Majestic Silver, a Canadian precious metals producer, is acquiring Gatos Silver, a Canadian explorer and developer, in an equity-based deal worth US$970 million ($1.31 billion).

Gatos owns a 70% interest in the Los Gatos joint venture and operates the Cerro Los Gatos underground silver mine in Chihuahua, Mexico. This acquisition will give First Majestic access to high quality silver deposits in the region.

Under the agreement, Gatos shareholders will receive 2,550 shares of First Majestic common stock for each Gatos share they own. This offering equates to an aggregate value of $13.49 per Gatos common share, based on the closing price of First Majestic common stock on the New York Stock Exchange on September 4, 2024.

Once the transaction is completed, current Gatos shareholders will own approximately 38% of First Majestic’s fully diluted shares.

Keith Neumeyer, president and CEO of First Majestic, said: “The acquisition of Gatos Silver…enhances First Majestic’s operating platform by adding 70% of Cerro Los Gatos – a high-quality, long-lasting free cash flow , no mistakes. active in the mining-friendly state of Chihuahua, Mexico.”

The deal brings together three top operational silver mining areas in Mexico: Cerro Los Gatos, San Dimas and Santa Elena. First Majestic says these areas form the basis of a diversified, mid-sized primary silver producer under a single entity.

The project would also increase First Majestic’s annual production to 30–32 million ounces (moz) of silver equivalent. This includes 15–16 moz of silver at sustaining costs ranging from $18 to $20 per silver equivalent ounce.

The agreement also adds concessions covering approximately 103,000 hectares of free land at Cerro Los Gatos with significant exploration potential supported by a large resource base and mineral reserves.

Gatos shares rose 7.5 percent to $12.49 in premarket trading, while First Majestic shares fell 5.1 percent to $5.02, as reported Reuters. The report noted that the price of silver has risen nearly 21 percent this year, in line with the trend in gold prices and driven by robust demand from sectors such as solar panels and electronics.

The price of gold OVER $2,500/oz for the first time on August 20.

“First Majestic to Acquire Gatos Silver for $970M” was originally created and published by Mining Technology, a brand owned by GlobalData.

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