First Majestic Silver Corp. (AG)

[dws]

First Majestic buys Nevada gold mine for shares plus warrants

Mar. 12, 2021 7:22 AM ETFirst Majestic Silver Corp. (AG)By: Carl Surran, SA News Editor4 Comments
First Majestic Silver (NYSE:AG) agrees to acquire the Jerritt Canyon gold mine in Elko County, Nevada, from Sprott Mining for $470M in shares plus 5M share purchase warrants.
Also, Sprott Mining president Eric Sprott will complete a $30M private placement investment in First Majestic.
Jerritt Canyon has been in production since 1981 and has produced more than 9.5M oz. of gold over its 40-year production history; in 2020, the mine produced 112.7K oz. of gold at a cash cost of $1,289/oz.
First Majestic says it has identified opportunities to enhance the mine's cost and production profile as well as near-term brownfield potential between the SSX and Smith mines and long-term property wide exploration potential.
While First Majestic will have significant growth in free cash flow for FY 2021, the stock recently traded at more than 35x 2021 free cash flow estimates, Taylor Dart writes in a neutral analysis published on Seeking Alpha.