First Majestic bids for Primero in friendly deal

First Majestic Silver’s (TSX: FR; NYSE: AG) proposed acquisition of Primero Mining (TSX: P) and its San Dimas silver-gold mine would bring the number of its operating silver mines in Mexico to seven. Keith Neumeyer, First Majestic’s president and CEO, said the friendly, all-share deal would take the company’s annual production to 30 million equivalent oz. of silver a year, up from the 16.2-million equivalent oz. of silver it produced in 2016. “It’s a pretty big chunky asset,” Neumeyer told analysts and investors on a conference call. “This is very much a world class asset and Durango is our backyard.” Under the agreement, First Majestic will issue 6.4 million shares to Primero shareholders in an all-stock deal that comes in at 30¢ a share, or a 200% premium to the weighted average price of Primero’s shares for the 20-day trading period ended Jan. 10. In addition, First Majestic will issue 21 million shares to Wheaton Precious Metals (NYSE: WPM), making the streaming company its largest shareholder. If the transaction is completed, Wheaton Precious Metals and current Primero shareholders would own 11% and 3% of First Majestic.