Each one in plain English, with the numbers worked through for a shareholder.
2 Mar 2021regulatory community update▼ BadMajor
First Majestic filed a NAFTA Chapter 11 arbitration request with the World Bank's ICSID against the Government of Mexico, for itself and its Mexican subsidiary PEM (owner of San Dimas). It says Mexico refused to negotiate and acted contrary to the Advance Pricing Agreement that set PEM's revenue and tax method for 2010-2014. This escalates the long-running SAT tax dispute over San Dimas silver; no amount or outcome is stated in this filing. The release also gives 2021 production guidance of 12.5-13.9M silver oz (20.6-22.9M silver-equivalent oz).
At the request of Canada's investment industry regulator (IIROC), First Majestic stated it is not aware of any undisclosed material information that would explain the recent rise in its share price and trading volume. The filing contains no new business, financial or deal information.
The board adopted its first dividend policy: the company intends to pay quarterly dividends of 1% of net revenues, starting after the first quarter of 2021. Payments remain at the board's discretion and the policy can be changed at any time, so no future dividend is guaranteed; non-Canadian holders face Canadian withholding tax. Separately, director Nicole Adshead-Bell resigned effective November 30, 2020.
First Majestic closed the bought deal announced a week earlier, issuing 5,000,000 common shares at CDN$15.60 for gross proceeds of CDN$78 million under an underwriting agreement dated September 14, 2020. Proceeds, with existing cash, are intended to develop mining projects and/or improve existing mines and add to working capital. This resolves the offering thread and increases the share count by 5 million.
What it means for a shareholder
5.0m new shares at C$15.60 to raise about C$78.0m. That's 2.4% dilution: every existing holder's slice gets 2.4% smaller. If you held C$1,000 of shares (64 at the issue price), your slice goes from 0.0000322% to 0.0000314% of the company. To keep it you'd need 2 more shares - about C$31 at the issue price.
First Majestic announced an underwriter agreed to buy 5,000,000 new common shares at CDN$15.60 each, for gross proceeds of CDN$78 million. The company says it will use the money, with existing cash, to develop and/or improve its existing mines and add to working capital; the offering is Canada-only, under its November 2018 Canadian shelf prospectus, and was scheduled to close by September 17, 2020. The headline names Eric Sprott as the investor, but the text itself only refers to 'an underwriter'. This adds new shares to the count, separate from the earlier US$50M BMO at-the-market program.
What it means for a shareholder
5.0m new shares at C$15.60 to raise about C$78.0m. That's 2.4% dilution: every existing holder's slice gets 2.4% smaller. If you held C$1,000 of shares (64 at the issue price), your slice goes from 0.0000322% to 0.0000314% of the company. To keep it you'd need 2 more shares - about C$31 at the issue price.
First Majestic published its first ESG and sustainability report, covering 2019. Highlights include US$3.8 million invested in local communities, an 18% improvement in the recordable incident rate versus 2018, and over 80% of water consumed recycled. It carries no financial or deal news; the release also says 2020 production from its three mines is projected at 21.4 to 22.9 million silver equivalent ounces.
First Majestic completed the Springpole silver stream deal announced June 11, 2020. The first payment of $2.5 million cash plus $7.5 million in shares (805,698 First Majestic shares) was paid to First Mining, and the 30 million First Mining warrants at CAD$0.40 were granted. Two further payments ($7.5M and $5M) remain tied to a pre-feasibility study and environmental approval, per the earlier release.
First Majestic agreed to buy a stream on 50% of the payable silver from First Mining's Springpole gold project in Ontario for $22.5 million in cash and shares over three payments ($10M at closing, $7.5M after a pre-feasibility study, $5M after environmental approval). It will also pay 33% of the silver spot price per ounce, capped at $7.50, and receives 30 million First Mining warrants at CAD$0.40 for five years. The company calls it its first investment outside Mexico; closing was expected in early July 2020.
First Majestic signed an at-the-market equity program with BMO Capital Markets, letting it sell common shares from time to time up to US$50 million. It sits under a US$300 million shelf prospectus dated November 5, 2018 and a Form F-10. For shareholders, any shares sold would add to the share count; the excerpt does not say how much will be sold or why the company is raising money.
First Majestic closed the Wheaton stream swap on San Dimas: the old silver stream was terminated and a new one gives Wheaton's subsidiary 25% of gold production plus 25% of silver converted to gold at 70:1, paid at the lesser of US$600 (1% annual inflation adjustment) and market price per gold ounce. Wheaton received 20,914,590 First Majestic shares as part of the termination. It also signed a new US$75 million senior secured revolving credit facility with Scotiabank, Bank of Montreal and Investec, maturing in three years, replacing its existing US$25M revolver/US$35M term loan (Feb 2016) and Primero's prior facility. This completes the stream terms agreed in January 2018 and sets the company's new debt arrangement.
First Majestic completed the Primero acquisition announced in January 2018, buying all Primero shares at 0.03325 First Majestic share each. San Dimas becomes its seventh Mexican mine, and the CEO expects an estimated doubling of profitable ounces produced. Primero's $75 million 2020 convertible debentures are to be repaid in full on May 11, 2018, and Primero's TSX delisting is expected in about 2-3 business days. This resolves the main pending-acquisition thread; the Wheaton stream replacement was still to be announced later that day.
On January 12, 2018, First Majestic agreed to buy Primero Mining, which owns the San Dimas silver-gold mine in Durango, at 0.03325 First Majestic share per Primero share (about C$0.30 per share; total value about $320 million). At the same time, the existing Wheaton Precious Metals silver stream on San Dimas would be replaced by a new stream on 25% of gold-equivalent production at $600 per ounce, with Wheaton receiving 20,914,590 First Majestic shares (about $151 million). Wheaton and Primero holders would own about 11% and 3% of First Majestic; the deal needs Primero shareholder, court and Mexican antitrust approvals, and Primero owes a $10 million termination fee in certain events. A Mexican tax dispute (SAT) over San Dimas silver for 2010-2014 is unresolved.
First Majestic filed an updated technical report on its La Encantada silver mine (Ocampo, Coahuila), effective December 31, 2015, with the company stating it indirectly owns 100% of the mine. The excerpt provided shows the authors and consents but not the reserve or resource figures, so the results are not given here. The report is the company's own team's work plus an independent geologist from Amec Foster Wheeler.
First Majestic completed the SilverCrest acquisition on October 1, 2015. SilverCrest holders receive 0.2769 First Majestic share plus C$0.0001, and also 0.1667 share of the new spin-out company per SilverCrest share. Santa Elena becomes First Majestic's sixth mine in Mexico, and the CEO projects about 5 million more silver-equivalent ounces a year. This resolves the pending acquisition thread; SilverCrest shares are expected to be delisted.
Shareholders of both companies approved the SilverCrest deal on September 25, 2015. About 98.6% of votes cast by First Majestic holders approved the share issuance, and about 93.2% of SilverCrest votes (92.4% of disinterested votes) approved the arrangement. This clears the shareholder vote threads; closing is still expected October 1, 2015, subject to regulatory approvals and other conditions.
Two proxy advisory firms, ISS and Glass Lewis, recommended that First Majestic and SilverCrest shareholders vote FOR the SilverCrest acquisition ahead of the September 25, 2015 meetings. Proxy deadlines are 2:00 pm (First Majestic) and 10:00 am (SilverCrest) on September 23, and closing is now expected October 1, 2015. This continues the acquisition process and moves it toward the shareholder votes.
28 Aug 2015regulatory community update● NeutralMajor
First Majestic sent shareholders the notice and joint circular for a special meeting on September 25, 2015 in Vancouver. They will vote on issuing shares to SilverCrest holders under the acquisition; the board unanimously recommends voting for it, and approval is a condition for the deal to close. The circular says closing is anticipated in early October 2015 if all approvals are received, and that former SilverCrest holders would own about 21.2% of First Majestic and about 90.1% of New SilverCrest. This moves the July acquisition toward its shareholder vote.
First Majestic filed the full signed Arrangement Agreement (dated July 26, 2015) with SilverCrest Mines and the spin-out company 1040669 B.C. Ltd. This is the legal document behind the acquisition announced on July 27. The excerpt shows the consideration as 0.2769 of a First Majestic share plus C$0.0001 in cash per SilverCrest share, and lists conditions including Mexican antitrust clearance (COFECE) and a consent under SilverCrest's credit agreement with the Bank of Nova Scotia. It adds no new deal terms in the portion provided.
First Majestic announced a definitive agreement to acquire SilverCrest Mines in an all-share deal: 0.2769 of a First Majestic share plus C$0.0001 in cash per SilverCrest share, implying C$1.30 per share based on the July 24, 2015 closing price. It would issue about 32.8 million shares, leaving former SilverCrest holders with about 21% of First Majestic, and add SilverCrest's Santa Elena mine in Sonora as a sixth producing mine. SilverCrest's exploration properties go to a new spin-out company, New SilverCrest, together with First Majestic's Guadalupe property; First Majestic would own about 9.9% of it. The deal still needs approval from both companies' shareholders (meetings expected late September 2015), the court and regulators. SilverCrest owes First Majestic a C$8 million termination fee in certain events.
First Majestic published a new technical report on its La Guitarra silver mine in the State of Mexico, which it bought in 2012. It reports proven and probable reserves of 11.8 million silver-equivalent ounces (9.4 million of pure silver) and a 7-year mine life at about 190,000 tonnes a year, based on an effective date of December 31, 2014. Measured and indicated resources are 15.2 million silver-equivalent ounces and inferred resources 6.3 million. This is the first reserve and resource estimate for the mine under the company's own team, per the CEO.
