Key merger in the Silver mining industry

First Majestic Silver and Gatos Silver have made a press release that they entered into a definitive merger agreement! Under this agreement, First Majestic will acquire all outstanding common shares of Gatos, marking a significant milestone for both companies.

Key Transaction Highlights:

• Strengthening Portfolio: This merger consolidates three world-class, silver-producing mining districts in Mexico—Cerro Los Gatos, San Dimas, and Santa Elena—under one banner. Together, these assets will form the foundation of a diversified, intermediate primary silver producer.
• Boosting Production & Margins: The combined entity will produce 30-32 million ounces of silver-equivalent annually, including 15-16 million ounces of silver, at an all-in sustaining cost of $18.00-$20.00 per ounce.
• Enhanced Cash Flow: Gatos Silver is expected to contribute approximately $70 million in annual free cash flow, immediately boosting the combined company’s financial performance.
• Leverage in Mexico: With over 20 years of experience operating in Mexico, our combined team will focus on socially responsible mining, community engagement, and value creation.
• Massive Land Package: This merger creates a 350,000-hectare land package with significant exploration potential, positioning us for future discoveries and growth.
• Stronger Market Presence: The new entity will have a market capitalization approaching $3 billion, with enhanced trading liquidity and an improved capital markets profile.
• Synergies & Efficiency: This merger is expect to realize meaningful synergies, including cost savings, supply chain efficiencies, and cross-expertise collaboration, all contributing to value creation for shareholders.

Leadership Comments:

Keith Neumeyer, President & CEO of First Majestic, said, “The acquisition of Gatos Silver is a highly compelling and transformative transaction that meaningfully enhances First Majestic’s operating platform through the addition of 70% of Cerro Los Gatos – a high quality, long-life, unencumbered, free cash flow generating asset in the mining-friendly state of Chihuahua, Mexico.”

Dale Andres, CEO of Gatos, added, “This transaction also provides our shareholders with the benefits of First Majestic’s enhanced capital markets presence, liquidity and balance sheet, while combining its local Mexican expertise and history of operations with our history of successful performance.”