First Majestic Silver Corp. and Silvermex Resources Inc.
VANCOUVER, BRITISH COLUMBIA--(04/03/12)- First Majestic Silver Corp. ("First Majestic") (TSX: FR.TO)(NYSE: AG)(Frankfurt: FMV.F) and Silvermex Resources Inc. (TSX: SLX.TO)(OTC.BB: GGCRF.PK)(Frankfurt: GSBN.F) ("Silvermex") are pleased to announce that they have entered into a definitive agreement (the "Arrangement Agreement") pursuant to which First Majestic has agreed to acquire all of the issued and outstanding common shares of Silvermex for a consideration of 0.0355 common shares of First Majestic (the "Exchange Ratio") and C$0.0001 in cash per common share of Silvermex. The offer values Silvemex at approximately C$0.60 per share, representing a premium of approximately 33% to the closing price of Silvermex as at April 2, 2012 and approximately 43% to the 30 day volume weighted average price ("VWAP"). The transaction will be implemented by way of a plan of arrangement (the "Arrangement") under the Business Corporations Act (British Columbia).
most prolific silver and gold regions.
potential to First Majestic's portfolio of Mexican assets.
of producing mines and development projects.
increases leverage to current strong silver price environment.
to First Majestic's portfolio of Mexican assets.
Keith Neumeyer, President & CEO of First Majestic, stated: "We believe this transaction provides an excellent opportunity for the shareholders of both First Majestic and Silvermex. First Majestic shareholders gain increased exposure to silver and can realize the significant upside in production and reserves that we believe exists at La Guitarra, while Silvermex shareholders realize an immediate premium and can capitalize on the value creation that First Majestic brings going forward."
Duane Nelson, CEO of Silvermex added: "First Majestic brings the necessary capital and operational expertise required to accelerate exploration activities and production growth at our La Guitarra Mine as well as our other advanced projects. We believe that First Majestic's proven track record of operational achievements and experience in Mexico will ensure a successful future for the combined company."
Under the terms of the Arrangement, on closing, each Silvermex shareholder will receive 0.0355 common shares of First Majestic and C$0.0001 in cash per Silvermex common share. Outstanding Silvermex options will be exchanged for First Majestic shares with a value equal to the in-the-money value of the options (based on the Exchange Ratio). Outstanding Silvermex warrants will be exchanged for First Majestic shares with a value equal to the in-the-money value of the warrants (based on the Exchange Ratio) or may be exchanged for equivalent warrants of First Majestic, at the election of the holder. Pursuant to the transaction, First Majestic will issue approximately 9.6 million First Majestic common shares valuing the company at approximately C$175.4 million based on First Majestic's 30 day VWAP on April 2, 2012. Following completion of the transaction, the current First Majestic shareholders will hold approximately 91.7% of the combined company, while current shareholders of Silvermex will hold approximately 8.3%. 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, warrant holders and option holders of Silvermex voting together as a single class at a special meeting expected to take place in June 2012. In addition to shareholder and court 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 no solicitation of alternative transactions, right to match superior proposals and fiduciary-out provisions. Silvermex has agreed to pay a termination fee to First Majestic of C$6.14 million upon the occurrence of certain termination events.
The Board of Directors of Silvermex has unanimously approved the transaction and is expected to provide a written recommendation that Silvermex shareholders vote in favour of the transaction in the information circular to be mailed to shareholders in connection with the Arrangement. Each of the directors and senior officers of Silvermex and certain shareholders of Silvermex representing approximately 21% of the issued and outstanding Silvermex securities have entered into voting agreements with First Majestic and have agreed to vote in favour of the transaction at the special meeting of Silvermex securityholders to be held to consider the Arrangement.
Full details of the Arrangement will be included in a Management Information Circular to be filed with the regulatory authorities and mailed to Silvermex securityholders in accordance with applicable securities laws. Silvermex expects to mail the Management Information Circular in May 2012.
BMO Capital Markets acted as exclusive financial advisor to First Majestic and has provided an opinion to the First Majestic Board of Directors that the consideration to be paid by First Majestic under the transaction is fair, from a financial point of view, to First Majestic. GMP Securities L.P., acting as financial advisor to Silvermex, has provided an opinion to the Board of Directors of Silvermex that, based upon and subject to the assumptions, limitations, and qualifications in the opinion, the consideration to be received is fair, from a financial point of view, to the shareholders of Silvermex. First Majestic's Canadian, Mexican and US legal counsel are McCullough O'Connor Irwin LLP, Todd y Asociados S.C. and Clark Wilson LLP respectively. Silvermex's Canadian and Mexican legal counsel are McMillan LLP and Urias Romero Y Asociados, S.C. respectively.
Click on WEBCAST on the First Majestic homepage as a simultaneous audio webcast of the conference call at www.firstmajestic.com.
An archived webcast of the conference call will also be available at www.firstmajestic.com.
First Majestic is a producing silver company focused on silver production in Mexico and is aggressively pursuing its business plan of becoming a senior silver producer through the development of its existing mineral property assets and the pursuit through acquisition of additional mineral assets which contribute to First Majestic achieving its aggressive corporate growth objectives.
Silvermex is a mining company focused in Mexico with a portfolio of projects ranging from early stage exploration to production. Silvermex's core asset is the producing La Guitarra silver-gold mine located in the Temascaltepec Mining District of Mexico.
ON BEHALF OF THE BOARD OF FIRST MAJESTIC SILVER CORP.
ON BEHALF OF THE BOARD OF SILVERMEX RESOURCES INC.