First Majestic To Buy Gatos Silver For Around $970 Mln, AG Down In Pre-Market

(RTTNews) - First Majestic Silver Corp. (AG, FR.TO), and Gatos Silver, Inc. (GATO), on Thursday announced that they have signed a merger deal through which First Majestic will acquire Gatos.

Under the terms, Gatos shareholders will receive 2.550 shares of First Majestic for each share of Gatos.

Thus, the proposed transaction, to be closed in early 2025, implies a total equity value for Gatos of around $970 million.

The consideration implies a total offer value of $13.49 per share of Gatos based on the closing price of First Majestic's shares on the NYSE on September 4.

In addition, it represents a 16 percent premium based on each company's closing prices and 20-day volume weighted average prices on the NYSE ending September 4.

Post transaction, existing Gatos shareholders will own around 38 percent of First Majestic.

Gatos is a silver producer with a 70 percent interest in the Los Gatos Joint Venture, which owns the producing Cerro Los Gatos underground silver mine in Chihuahua, Mexico.

Keith Neumeyer, CEO of First Majestic, said the acquisition will enhance it's operating platform through the addition of 70% of Cerro Los Gatos assets in the mining-friendly state of Chihuahua, Mexico.

The merger will result in a combined annual production of 30 to 32 million ounces of silver-equivalent, including 15 to 16 million ounces of silver at all-in sustaining costs of $18 to $20 per silver-equivalent ounce.

AG was trading down by 5.48 percent at $5 per share in the pre-market on the New York Stock Exchange.