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(Wallace Refiners) – Major producers continue to put their money to work with senior silver producer First Majestic Silver announcing a new acquisition.
Friday, the silver miner announced that it entered into an agreement to acquire Jerritt Canyon Canada Ltd. from Sprott Mining for $470 million in shares of First Majestic plus 5 million First Majestic share purchase warrants.
At the same time, the company also said that Eric Sprott, President of Sprott Mining, will complete a $30 million private placement investment in First Majestic.
Jerritt Canyon owns and operates the Jerritt Canyon Gold Mine located in Elko County, Nevada. The deposit was discovered in 1972; it has been in production since 1981 and has produced over 9.5 million ounces of gold over its 40-year production history. In 2020, Jerritt Canyon produced 112,749 ounces of gold at a cash cost of US$1,289 per ounce.
“First Majestic has identified several opportunities to enhance both the cost and production profile of Jerritt Canyon as well as near-term brownfield potential between the SSX and Smith mines and long-term property-wide exploration potential,” the company said.
First Majestic said that this new acquisition, along with its three operating silver mines in Mexico, will solidify the miner’s position as a premier North American precious metals producer with expected annualized production between 30 to 33 million silver equivalent ounces.
“The acquisition of Jerritt Canyon is a highly compelling transaction that further enhances First Majestic’s operating platform, adding a producing asset in a world-class jurisdiction. Nevada is ranked as one of the most attractive jurisdictions, if not the most attractive, for mining operations and we are delighted to add another cornerstone asset to our portfolio. While we remain focused on maintaining our peer-leading exposure to silver, Jerritt Canyon is a unique opportunity to create value for First Majestic’s shareholders and provides a new geographic operating platform while preserving our pristine balance sheet,” said Keith Neumeyer, CEO of First Majestic, in a statement.
“This deal is a win-win for both parties and we look forward to having continued exposure to Jerritt Canyon’s bright future through our increased ownership in First Majestic. We have a long-standing respect and high regard for Keith Neumeyer and his leadership in the silver industry, an industry with which we have had an increasing involvement over the past two years. We also see this as a big step forward for Jerritt Canyon where it can flourish under the larger umbrella of First Majestic,” said Sprott in a statement.
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