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Canada’s First Majestic Silver Corp. (AG) entered into a merger agreement on September 5, 2024, to acquire Gatos Silver, Inc. (GATO) for $970 million in an all-stock deal.
Under the terms of the agreement, Gatos shareholders will receive 2.550 common shares of First Majestic for each common share of Gatos held.
The transaction is valued at approximately $13.49 per Gatos share, representing a 16.09% premium from the stock’s last close.
Gatos is a silver-focused exploration, development, and production company that operates the Cerro Los Gatos mine in southern Chihuahua, Mexico, and holds a 70% stake in the Los Gatos Joint Venture. It also explores other metals, including zinc, lead, and gold.
First Majestic is a mining company focused on silver and gold production in Mexico and the U.S., operating mines like San Dimas, Santa Elena, and La Encantada, along with the Jerritt Canyon Gold project in Nevada. Headquartered in Vancouver, Canada, it also owns a minting facility, offering silver directly to the public.
Electrum Group, which holds about 32% of Gatos’ common shares, has voted in favor of the deal, which is expected to close in early 2025.
Gatos Silver’s current EV/EBITDA (FWD) ratio is 6.67, below the sector median of 8.41.
Following the deal, the combined annual production from all the mines is expected to reach 30-32 million ounces of silver-equivalent ore, including 15-16 million ounces of silver.
Mining costs could rise to $18-$20 per silver-equivalent ounce, up from the approximately $15 reported by First Majestic in the second quarter.
For more in-depth information about this M&A transaction, please visit the Deal Metrics page here:
Deal Metrics for the acquisition of Gatos Silver, Inc. (GATO) by First Majestic Silver Corp. (AG)
The Deal Metrics page for each merger or acquisition includes:
– A spread history chart of the merger from announcement through eventual completion or failure.
– Every event as the merger progresses through the expiration of the HSR period, various regulatory approvals, shareholder votes, etc.
– News and SEC filings.
– A history of deal updates.
– And a whole lot more.
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Editor’s Note: Baranjot Kaur contributed to this article