First Majestic Silver Corp. and Primero Mining Corp. announce that they have entered into a definitive arrangement agreement whereby First Majestic will acquire all of the issued and outstanding common shares of Primero. Under the terms of the Arrangement Agreement, all of Primero’s issued and outstanding common shares will be exchanged for First Majestic common shares on the basis of 0.03325 of a First Majestic common share for each Primero common share (the "Exchange Ratio").
Concurrent with execution of the Arrangement Agreement, First Majestic has entered into agreements with Wheaton Precious Metals International Ltd., a wholly-owned subsidiary of Wheaton Precious Metals Corp. ("WPM") whereby, following closing of the Arrangement, the current silver streaming interest at Primero’s San Dimas silver-gold mine (“San Dimas”) held by WPM will be terminated and First Majestic and WPM will enter into a new stream arrangement based on 25% of the gold equivalent production at San Dimas (the "New Stream") with ongoing payments of $600 per gold equivalent ounce delivered under the agreement.
As part of the transaction, WPM will receive 20,914,590 common shares of First Majestic having an aggregate value of $151 million.
The total transaction value is estimated at approximately $320 million.
Primero operates the 100%-owned San Dimas silver-gold mine in Durango, Mexico, a premier low-cost asset with more than 100 years of mine production history. Primero has identified more than 120 epithermal veins with exploration potential. Together with First Majestic's existing six operating silver mines in Mexico, the combined company is expected to be a premier leading Mexican silver producer with pro forma annualized attributable silver equivalent production of 27-30 million silver equivalent ounces.