The Prospector News

First Majestic Announces Friendly Acquisition of SilverCrest Mines

You have opened a direct link to the current edition PDF

Open PDF Close
Uncategorized

Share this news article

First Majestic Announces Friendly Acquisition of SilverCrest Mines

 

 

 

 

 

First Majestic Silver Corp. (TSX:FR) (NYSE:AG) (FRANKFURT:FMV) (BVM:AG) and SilverCrest Mines Inc. (TSX:SVL) (NYSE MKT:SVLC) (FRANKFURT:CW5) are pleased to announce that the companies have entered into a definitive agreement pursuant to which First Majestic has agreed to acquire all of the issued and outstanding common shares of SilverCrest for consideration of 0.2769 of a common share of First Majestic plus C$0.0001 in cash per SilverCrest common share. The offer implies a value of C$1.30 per SilverCrest share based on the closing price of First Majestic’s common shares on the Toronto Stock Exchange on July 24, 2015. The offer represents a premium of approximately 37% to SilverCrest’s 30-day volume-weighted average price on the TSX for the period ending July 24, 2015 and a 35% premium to SilverCrest’s previous closing price. The transaction will be implemented by way of a plan of arrangement under the Business Corporations Act (British Columbia). In addition, shareholders of SilverCrest will receive shares in a newly formed company which will hold certain exploration assets currently held by SilverCrest and First Majestic.
 

BENEFITS TO FIRST MAJESTIC SHAREHOLDERS

 

 
 
--  Enhances First Majestic's leading position in Mexico, one of the world's
    most prolific silver and gold regions 
--  Accretive to First Majestic's net asset value per share, reserves and
    total resources per share and production per share 
--  SilverCrest's Santa Elena Mine will be First Majestic's sixth producing
    silver mine adding further growth potential to First Majestic's
    portfolio of Mexican projects 
--  Strengthens First Majestic's balance sheet by adding approximately C$30
    million in cash and further enhances the working capital position 
--  Provides operational and production synergies with the potential for
    additional cost cutting 
--  Further diversifies production and cash flow across a robust portfolio
    of producing mines
 

 

 

BENEFITS TO SILVERCREST SHAREHOLDERS

 

 
 
--  Provides SilverCrest shareholders with a highly attractive premium to
    current market price 
--  Opportunity to participate in a leading silver producer through an all-
    share transaction 
--  Gain access to First Majestic's operational and underground mining
    expertise 
--  Diversifies SilverCrest's single asset risk profile and provides
    exposure to First Majestic's broad portfolio of Mexican assets 
--  Increased leverage to silver with First Majestic's primarily silver
    resource base 
--  Enhances capital markets presence with a pro forma market capitalization
    in excess of C$700 million based on current share prices including
    increased analyst coverage, trading liquidity and a broader
    institutional investor base 
--  Provides SilverCrest shareholders with ownership in New SilverCrest, a
    well-capitalized exploration company created to leverage SilverCrest
    management's exploration expertise
 

 

 

Keith Neumeyer, President & CEO of First Majestic, stated: “We believe this transaction provides an excellent opportunity for the shareholders of both First Majestic and SilverCrest. Shareholders stand to gain significant upside in the combined company with production of well over 20 million silver equivalent ounces per year while maintaining one of the lowest production costs and highest purity to silver in the industry.”
 

J. Scott Drever, CEO of SilverCrest, stated: “We believe the inclusion of SilverCrest’s Santa Elena mine into First Majestic’s portfolio of operating mines provides the combined company greater flexibility in the current difficult metals market and creates a strong platform from which First Majestic can continue its corporate growth to the benefit of both sets of shareholders. SilverCrest shareholders will benefit from First Majestic’s liquidity in the market place, the diversity provided by six mines and Management’s long history of successful operations in Mexico. First Majestic shareholders will benefit from SilverCrest’s strong balance sheet, free cash flow and low cost silver production.”
 

TRANSACTION SUMMARY
 

Under the terms of the Arrangement Agreement, on closing, each SilverCrest shareholder will receive 0.2769 common shares of First Majestic plus C$0.0001 in cash for each SilverCrest common share held. Pursuant to the transaction, First Majestic will issue approximately 32.8 million common shares (assuming no exercise of existing SilverCrest options), valuing SilverCrest’s equity at approximately C$154 million, based on current closing prices. Following the completion of the transaction, the current shareholders of SilverCrest will hold approximately 21% of the issued and outstanding shares of First Majestic. The transaction will be carried out by way of a court-approved plan of arrangement and will require the approval of at least 66 2/3% of the votes cast by the shareholders of SilverCrest, and approval by the “majority of the minority”, being a majority of the votes cast by SilverCrest shareholders other than J. Scott Drever, N. Eric Fier and Barney Magnusson, whose votes will not be included in determining minority approval pursuant to Multilateral Instrument 61-101 – Protection of Minority Security Holders in Special Transactions. The transaction will also require the approval of a simple majority of the shareholders of First Majestic in accordance with the rules of the TSX and the NYSE. The special meetings of shareholders of SilverCrest and First Majestic are expected to take place in late September 2015.
 

The Arrangement will also provide for the issuance by First Majestic of an aggregate of approximately 2.9 million replacement stock options (assuming no exercise of existing SilverCrest options) to SilverCrest option holders who do not exercise such options prior to the effective time of the Arrangement, at exercise prices adjusted by the Exchange Ratio. All other terms and conditions of the Replacement Options will be the same as the SilverCrest option for which they were exchanged, except that the terms and conditions of the First Majestic stock option plan relating to accelerated expiry of First Majestic options on account of early termination after ceasing to hold office or ceasing to be an employee or consultant will not apply to the Replacement Options.
 

In connection with the Arrangement, each SilverCrest shareholder will also receive 0.1667 common shares of New SilverCrest for each SilverCrest common share held. As part of the Arrangement, SilverCrest will transfer the Las Chispas, Cruz de Mayo, Angel de Plata, Huasabas and Estacion Llano exploration properties located in northern Mexico, as well as C$5.25 million in cash and certain other assets currently owned by SilverCrest to New SilverCrest. First Majestic will also transfer its Guadalupe exploration property located in Durango, Mexico to New SilverCrest, and First Majestic will own approximately 9.9% of the shares of New SilverCrest following completion of the transaction. SilverCrest’s La Joya project will be retained by First Majestic following closing of the transaction, however First Majestic does not have any immediate plans to advance the La Joya project. N. Eric Fier, SilverCrest’s Chief Operating Officer, will be the CEO and President of New SilverCrest along with other members of SilverCrest’s current board and management team. New SilverCrest intends to make application to list its shares on the TSX Venture Exchange.
 

In addition to shareholder, court and creditor approvals, the transaction is subject to applicable regulatory approvals and the satisfaction of certain other closing conditions customary in transactions of this nature.
 

The Arrangement Agreement includes customary provisions, including non-solicitation of alternative transactions, right to match superior proposals and fiduciary-out provisions. In addition, SilverCrest has agreed to pay a termination fee to First Majestic of C$8 million upon the occurrence of certain events. First Majestic and SilverCrest have each agreed to pay a C$1 million expense reimbursement fee to the other party upon termination of the Arrangement Agreement due to the occurrence of certain other events.
 

The Board of Directors of SilverCrest has unanimously approved the transaction and will provide a written recommendation that SilverCrest shareholders vote in favour of the transaction which will be included in the Information Circular to be mailed to shareholders in connection with the Arrangement. Each of the directors and senior officers of SilverCrest, who hold in the aggregate approximately 3.9% of the issued and outstanding SilverCrest shares (assuming no exercise of existing SilverCrest stock options) have entered into a voting agreement with First Majestic and have agreed to vote in favour of the transaction at the special meeting of SilverCrest shareholders to be held to consider the Arrangement.
 

Full details of the Arrangement will be included in a joint Management Information Circular to be filed with the regulatory authorities and mailed to SilverCrest and First Majestic shareholders in accordance with applicable securities laws. SilverCrest and First Majestic expect to mail the joint Management Information Circular in early September 2015.
 

ADVISORS AND COUNSEL
 

Cormark Securities Inc. acted as exclusive financial advisor and McCullough O’Connor Irwin LLP acted as legal counsel to First Majestic. Cormark has provided an opinion to the First Majestic Board of Directors that, based upon and subject to the assumptions, limitations and qualifications in the opinion, the consideration being offered by First Majestic to SilverCrest pursuant to the transaction is fair, from a financial point of view, to First Majestic.
 

National Bank Financial Inc. acted as exclusive financial advisor and Koffman Kalef LLP acted as legal advisor to SilverCrest. National Bank has provided an opinion to the Board of Directors of SilverCrest that, based upon and subject to the assumptions, limitations, and qualifications in the opinions, the consideration to be received is fair, from a financial point of view, to the shareholders of SilverCrest.

ABOUT FIRST MAJESTIC

 

First Majestic is a mining company focused on silver production in Mexico and is aggressively pursuing the development of its existing mineral property assets and the pursuit through acquisition of additional mineral assets which contribute to the Company achieving its corporate growth objectives.
 

ABOUT SILVERCREST

 

SilverCrest is a Canadian precious metals producer headquartered in Vancouver, BC. SilverCrest’s flagship property is the 100%-owned Santa Elena Mine, located in the State of Sonora, Mexico. The operation comprises a high-grade, epithermal silver and gold deposit, along with a 3,000 tpd conventional milling facility. Santa Elena is projected to produce in a range of 4.7 to 5.1 million silver equivalent ounces in 2015.

Posted July 27, 2015

Share this news article

MORE or "UNCATEGORIZED"


GoGold Announces Annual Net Income of $8.1M USD for September 30, 2019

GoGold Resources Inc. (TSX: GGD) (OTCQX: GLGDF) is pleased to ann... READ MORE

December 13, 2019

Lundin Gold Announces First Export of Gold Concentrate and Doré

Lundin Gold Inc. (TSX: LUG) (Nasdaq Stockholm: LUG) reports the fi... READ MORE

December 13, 2019

O3 Mining Intersects 9.3 g/t Au Over 6.0 m, Including 25.7 g/t Au Over 1.9 m at Epsilon

O3 Mining Inc. (TSX-V: OIII) is pleased to provide new results fr... READ MORE

December 13, 2019

GT Gold Closes C$8.3 Million Investment by Newmont Goldcorp Corporation

GT Gold Corp. (TSX-V: GTT) is pleased to report that it has close... READ MORE

December 13, 2019

Canada Cobalt Intersects Massive Silver as Castle East Discovery Builds Out

Canada Cobalt Works Inc. (TSX-V: CCW) (OTC: CCWOF) (Frankfurt: 4T... READ MORE

December 13, 2019

Copyright 2019 The Prospector News - Site design by Spyderbaby Productions