Latin America, Latin America Legal Chronicle May 24, 2018
Todd y Asociados, McCullough O’Connor Irwin, Stikeman Elliott, Galicia Abogados, Cassels Brock & Blackwell and Ritch Mueller Heather y Nicolau advised on the deal
First Majestic Silver Corp. (TSX:FR) (NYSE:AG) (Frankfurt:FMV) and Primero Mining Corp. (TSX:P) have entered into a definitive arrangement agreement whereby First Majestic will acquire all of the issued and outstanding common shares of Primero.
Under the terms of the Arrangement Agreement, all of Primero’s issued and outstanding common shares will be exchanged for First Majestic common shares on the basis of 0.03325 of a First Majestic common share for each Primero common share (the “Exchange Ratio”).
Concurrent with execution of the Arrangement Agreement, First Majestic has entered into agreements with Wheaton Precious Metals International Ltd., a wholly-owned subsidiary of Wheaton Precious Metals Corp. (“WPM”) whereby, following closing of the Arrangement, the current silver streaming interest at Primero’s San Dimas silver-gold mine (“San Dimas”) held by WPM will be terminated and First Majestic and WPM will enter into a new stream arrangement based on 25% of the gold equivalent production at San Dimas (the “New Stream”) with ongoing payments of $600 per gold equivalent ounce delivered under the agreement. As part of the transaction, WPM will receive 20,914,590 common shares of First Majestic having an aggregate value of $151 million.
The Exchange Ratio implies consideration of C$0.30 per Primero common share, based on the 20day volume weighted average price of the First Majestic common shares on the Toronto Stock Exchange (“TSX”) for the period ending January 10, 2018, representing a 200% premium to the weighted average price of Primero common shares on the TSX over the same period. The total transaction value is estimated at approximately $320 million, consisting of First Majestic equity to be issued to Primero shareholders and WPM described above and certain additional amounts payable in connection with the Arrangement, including repayment of all amounts owing under Primero’s existing revolving credit facility, net of Primero cash on hand and the expected repayment of Primero’s $75 million of outstanding convertible debentures and various transaction expenses.
Primero operates the 100%-owned San Dimas silver-gold mine in Durango, Mexico, a premier low-cost asset with more than 100 years of mine production history. Primero has identified more than 120 epithermal veins with exploration potential. Together with First Majestic’s existing six operating silver mines in Mexico, the combined company is expected to be a premier leading Mexican silver producer with pro forma annualized attributable silver equivalent production of 27-30 million silver equivalent ounces. With a strong balance sheet and liquidity profile and a diversified portfolio of seven producing silver mines in Mexico, the combined company is expected to continue generating strong free cash flow and industry leading exposure to silver prices.
The Bank of Nova Scotia has granted to
First Majestic a $75 Million Loan to partially finance the acquisition.
In Canada, McCullough O’Connor Irwin advised First Majestic Silver Corp. with James Beeby (Picture), Mia Bacic, Lisa Stewart, Katie Blundy and Tajinder Rathor.
In Mexico, Todd y Asociados advised First Majestic Silver Corp. with Fernando Todd Dip, Jorge García Díaz and Jose Carlos Pizaña Ramírez.
Stikeman Elliott advised Primero Mining with Liz Breen, Amanda Linett, Peter Howard, Ashley Taylor, John Lorito, Larry Cobb, Nancy Ramalho, Lorna Cuthbert, Natasha Vanden, Marshall Eidinger, Cory Lastman, Lee Nicholson, Lindsay Gwyer and Lanette Wilkinson.
Galicia Abogados advised Wheaton Precious Metals International Ltd. with Manuel Galicia, Osiel Padilla and Ricardo Pedroza.
Cassels Brock & Blackwell advised Wheaton Precious Metals International Ltd. with Mark T. Bennett, Alexandra Iliopoulos, Alexander Pizale, David Budd and Jennifer Wasylyk.
Ritch Mueller Heather y Nicolau advised The Bank of Nova Scotia with Jean Paul Farah Chajín (Picture), Gabriel Robles Beistegui, Fernanda Ibargüengoitia Lira, Enrique López Scherer and Jimena Caballero Gómez.
Involved fees earner: James Beeby – McCullough O’Connor Irwin; Mia Bacic – McCullough O’Connor Irwin; Lisa Stewart – McCullough O’Connor Irwin; Katie Blundy – McCullough O’Connor Irwin; Tajinder Rathor – McCullough O’Connor Irwin; Fernando Todd – Todd y Asociados; Jorge García Díaz – Todd y Asociados; Mark Bennett – Cassels Brock & Blackwell LLP; Alexandra Iliopoulos – Cassels Brock & Blackwell LLP; Alexander Pizale – Cassels Brock & Blackwell LLP; David Budd – Cassels Brock & Blackwell LLP; Jennifer Wasylyk – Cassels Brock & Blackwell LLP; Manuel Galicia – Galicia Abogados, S.C; Luis Osiel Padilla del Moral – Galicia Abogados, S.C; Jean Paul Farah Chajín – Ritch, Mueller, Heather y Nicolau, SC; Gabriel Robles Beistegui – Ritch, Mueller, Heather y Nicolau, SC; Enrique López Scherer – Ritch, Mueller, Heather y Nicolau, SC; Elizabeth Breen – Stikeman Elliott; Amanda Linett – Stikeman Elliott; Marshall Eidinger – Stikeman Elliott; Cory Lastman – Stikeman Elliott; Peter Howard – Stikeman Elliott; Ashley John Taylor – Stikeman Elliott; Lee Nicholson – Stikeman Elliott; John Lorito – Stikeman Elliott; Lindsay Gwyer – Stikeman Elliott; Larry Cobb – Stikeman Elliott; Nancy Ramalho – Stikeman Elliott; Lorna Cuthbert – Stikeman Elliott; Lanette Wilkinson – Stikeman Elliott;
Law Firms: McCullough O’Connor Irwin; Todd y Asociados; Cassels Brock & Blackwell LLP; Galicia Abogados, S.C; Ritch, Mueller, Heather y Nicolau, SC; Stikeman Elliott;
Clients: Scotiabank; Wheaton Precious Metals Corp.; First Majestic Silver Corp.; Primero Mining Corp.;
Original Article: https://www.globallegalchronicle.com/first-majestic-silver-corps-acquisition-of-100-stake-in-primero-mining/
