First Majestic pays $175 million for Silvermex Resources

Mexican silver miner, First Majestic, announced a friendly acquisition of Silvermex Resources for Can$175 million.

“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”),” wrote First Majestic in its news release.

Silvermex’s core asset is the La Guitarra silver-gold underground mine located in the Temascaltepec Mining District of Mexico. The mine is processing 320 tpd and is expected to produce 800,000 oz of silver per year.  Silvermex also possesses five projects, primarily silver, throughout northwest and central Mexico.

“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,” says Duane Nelson, CEO of Silvermex.

“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.”

According to First Majestic’s website, the company owns three producing silver mines and two development projects through four separate wholly owned Mexican subsidiaries.The company’s  largest operation, the La Encantada Silver Mine, reached close to 3.8 million ounces of silver production in 2010. It is anticipated to reach approximately 4.5 million ounces of silver in the form of Dore bars in 2011.