Vancouver, British Columbia--(Newsfile Corp. - October 9, 2015) - Following the recent friendly acquisition of SilverCrest Mines by First Majestic Silver (TSX: FR) (NYSE: AG), analyst Greg Doyle resumed coverage, giving First Majestic a sector perform rating and a $6.50 target price. This is a premium of 37% to the $4.72 price on October 4th, the day the report was issued.
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The acquisition was valued at $140 million, with the main asset consisting of the producing Santa Elena Silver Mine. National Bank believes the Santa Elena Silver Mine will increase Silver Majestic's production by approximately 25%, and provide for a US$0.90 per ounce margin improvement in the company's all-in sustaining costs.
First Majestic, in its 10th consecutive year of production growth, plans to release updated operating and cost guidance in the coming weeks.
Keith Neumeyer, President and CEO of First Majestic stated: "With this closing, First Majestic is integrating a well-built, low-cost, profitable silver mine into its large portfolio of operating mines. The Santa Elena Silver Mine, becoming our sixth mine in Mexico, is projected to increase the Company's total production by approximately 5 million silver equivalent ounces per year."
Analyst Greg Doyle stated: "SilverCrest brings with it approximately US$30 million in cash, which we believe alleviates market concerns surrounding the company's potential need for additional liquidity at current metal prices."
The terms of the acquisition resulted in the formation of SilverCrest Metals, which began trading on the TSX Venture today under the symbol "SIL". It will be run by the previous directors and officers of SilverCrest Mines and will own the remaining portfolio of silver properties located in northern Mexico, as well as $5.25 million in cash.
Majestic Silver trades at $4.84, below the $6.50 target price, and with 155 million shares outstanding, the company is capitalized at $750 million.
For more information, please visit the company's website www.firstmajestic.com or contact Todd Anthony, Investor Relations, at 1-866-529-2807 or email info@firstmajestic.com.
For more information about National Bank Financial or to obtain a copy of their research report, contact your nearest National Bank Financial office. Their branches are listed on their website at www.nbf.ca.
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