First Majestic announces acquisition of Jerritt Canyon Mine
Published by Will Owen,
Global Mining Review,
First Majestic Silver Corp. and Sprott Mining Inc. have entered into a definitive agreement whereby First Majestic will acquire all of the issued and outstanding common shares of Jerritt Canyon Canada Ltd. from Sprott Mining for US$470 million in shares of First Majestic plus 5 million First Majestic share purchase warrants. Concurrent with the acquisition, Eric Sprott, President of Sprott Mining, will complete a US$30 million private placement investment in First Majestic.
Jerritt Canyon owns and operates the Jerritt Canyon Gold Mine located in Elko County, Nevada. Jerritt Canyon was discovered in 1972 and has been in production since 1981 having produced over 9.5 million oz of gold over its 40-year production history. The mine currently operates as an underground mine and has one of three permitted gold processing plants in Nevada that uses roasting in its treatment of ore. This processing plant has a capacity of 4500 tpd and is currently operating at an average rate of approximately 2200 tpd due to limited ore production from two underground mines. The property consists of a large, underexplored land package consisting of 30 821 hectares (119 square miles). In 2020, Jerritt Canyon produced 112 749 oz of gold at a cash cost of US$1289/oz. 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.
Together with First Majestic’s existing three operating silver mines in Mexico, the combined company will be a premier North American silver and gold producer with expected pro forma annualized attributable production of 30 to 33 million silver equivalent ounces based on historical production rates. With a strong balance sheet and liquidity profile and a diversified portfolio of three producing silver mines in Mexico, and one gold mine in Nevada, the combined company is expected to continue generating strong free cash flow and industry leading exposure to silver and gold prices.
Keith Neumeyer, CEO of First Majestic, said, “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. We look forward to working with the operating team at Jerritt Canyon and are excited about the opportunities we have identified to enhance operations to unlock value. We also welcome the increased endorsement from Eric Sprott who will continue to be a significant shareholder in First Majestic going forward and thank him for his continued support of the company.”
Eric Sprott, President of Sprott Mining, stated, “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. I would like to take this opportunity to sincerely thank all the employees and management at Jerritt Canyon for their tireless efforts in the successful turnaround of the operation since Sprott Mining’s acquisition in 2015 and wish them well in their future with First Majestic.”
Read the article online at: https://www.globalminingreview.com/mining/18032021/first-majestic-announces-acquisition-of-jerritt-canyon-mine/
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