First Majestic expands Mexico footprint with $320M Primero Mining acquisition

Canada’s First Majestic Silver (NYSE:AG) (TSX:FR) has agreed to buy fellow miner Primero Mining (NYSE:PPP)(TSX:P) in a cash and stock deal valued at $320 million, including debt.

With the acquisition, the Mexico-focused company gains access to Primero’s flagship asset, the San Dimas silver-gold mine, located in what First Majestic defines as it “backyard”, in the state of Durango.

As a result of the transaction, Wheaton Precious Metals (NYSE, TSX: WPM) — the world's largest pure silver and gold streaming company — has ended its existing San Dimas silver purchase agreement with Primero, replacing it with a fresh contract with the mine’s new owner.

"San Dimas has operated for over 130 years and is the mine Wheaton was founded on in 2004,” Randy Smallwood, President and CEO of Wheaton said in the statement. “With the new streaming arrangement being linked to a combination of gold and silver production, we believe San Dimas will continue to deliver significant value to Wheaton for many years to come while also providing economic and social opportunities to the community of Tayoltita," he noted.

First Majestic’s takeover of Primero implies consideration of C$0.30/share, based on the 20-day volume weighted average price of AG shares on the Toronto Stock Exchange through Jan. 10, representing a 200% premium to the weighted average price of Primero common shares on the TSX over the period, the company said in a statement.

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