First Majestic Silver Corp. (NYSE: AG) revealed on Friday that it has signed a Share Purchase Agreement. As per the deal, First Majestic will buy all of the issued and outstanding common shares of Jerritt Canyon Canada Ltd for $470 million in shares of First Majestic along with 5 million First Majestic share buying permits.
In parallel with the purchase, Eric Sprott, President of Sprott Mining, will finalize a $30 million private placement investment in First Majestic. Jerritt Canyon Gold Mine which is situated in Nevada was found in 1972 has been in manufacturing since 1981 has manufactured over 9.5 million ounces of gold over its 40-year manufacturing history.
The mine also has one of the three authorized gold processing plants in Nevada that utilize the roasting in its processing of ore. The processing plant has a capability of 4,500 tons per day and is currently in operation at an average rate of roughly 2,200 tpd due to restricted ore production from two underground mines.
Furthermore, shares of First Majestic Silver plunged 3.40% at $15.91 at the time of writing on Friday. The firm has recorded a trading volume of 511.56K as compared to the average volume of 10.62 million. First Majestic market capitalization has stayed high, hitting $3.64 billion at the time of writing on Friday.
If we combine the current three silver mines of the firm in Mexico, the merged firm will be a leading North American silver and gold maker with anticipated pro forma on an annual basis attributable manufacturing of 30 to 33 million silver equal ounces based on the historical production rates.