First Majestic Announces New Stream Agreement at San Dimas Mine and New Credit Facility
May 10 2018 - 5:51PM
First Majestic Silver Corp. (“First Majestic”)
(NYSE:AG) (TSX:FR) (Frankfurt:FMV) is pleased to announce that
it has terminated the pre-existing silver purchase agreement with
Wheaton Precious Metals Corp. (“WPM”) and its subsidiary, Wheaton
Precious Metals International Ltd. (“WPMI”), relating to the newly
acquired San Dimas Mine and entered into a new precious metal
purchase agreement (the “New Stream Agreement”) with WPMI and FM
Metal Trading (Barbados) Inc., a wholly-owned subsidiary of First
Majestic.
Pursuant to the New Stream Agreement, WPMI will
be entitled to receive 25% of the gold production and 25% of the
silver production converted to gold equivalent at a fixed exchange
ratio of 70:1 at San Dimas in exchange for ongoing payments equal
to the lesser of US$600 (subject to a 1% annual inflation
adjustment) and the prevailing market price, for each gold ounce
delivered to an offtaker under the agreement. As part of the
termination of the previous silver purchase agreement, WPMI
received 20,914,590 common shares of First Majestic.
The New Stream Agreement provides for a number
of value creation opportunities with alignment between silver and
gold production and increased post-stream cash flow at San Dimas.
First Majestic and WPMI have agreed to fix the gold to silver ratio
that will be used to calculate the gold equivalent production at
70:1, with provisions to adjust the gold to silver ratio if the
average gold to silver ratio moves above or below 90:1 or 50:1,
respectively, for a period of six months.
For more information on the New Stream
Agreement, please refer to First Majestic’s news release of
January 12, 2018.
First Majestic has also entered into an amended
and restated credit agreement (the “Amended Credit Agreement”)
today with the Bank of Nova Scotia, Bank of Montreal and Investec
Bank PLC, as lenders. Pursuant to the Amended Credit Agreement, the
lenders have agreed, among other things, to provide First Majestic
with a US$75 million senior secured revolving term credit facility
(the “New Credit Facility”). First Majestic previously had an
existing credit agreement with Scotia Bank and Investec, as
lenders, which was entered into on February 8, 2016 in connection
with a senior secured credit facility, consisting of a US$25
million revolving credit line and a US$35 million term loan (the
“Existing Credit Facility”). The New Credit Facility will replace
the Existing Credit Facility and the prior Credit Facility of
Primero.
The New Credit Facility will mature on the third
anniversary date of the Amended Credit Agreement, but can be
prepaid in advance of such date. Interest will accrue at LIBOR plus
an applicable range which is dependent on certain financial
parameters of First Majestic.
ABOUT FIRST MAJESTIC
First Majestic is a mining company focused on
silver production in Mexico and is aggressively pursuing the
development of its existing mineral property assets. The Company
presently owns and operates seven producing silver mines; the San
Dimas Silver/Gold Mine, the Santa Elena Silver/Gold Mine, the La
Encantada Silver Mine, the La Parrilla Silver Mine, the San Martin
Silver Mine, the Del Toro Silver Mine and the La Guitarra Silver
Mine. Production from these seven mines is projected to be between
27 to 30 million silver equivalents ounces in 2018.
FOR FURTHER INFORMATION contact
info@firstmajestic.com, visit our website at www.firstmajestic.com
or call our toll free number 1.866.529.2807.
ON BEHALF OF THE BOARD OF
FIRST MAJESTIC SILVER CORP.
“signed”
Keith Neumeyer
President & CEO
SPECIAL NOTE REGARDING FORWARD LOOKING
STATEMENTS
This news release includes certain
“Forward‐Looking Statements” within the meaning of the United
States Private Securities Litigation Reform Act of 1995 and
“forward‐looking information” under applicable Canadian securities
laws. When used in this news release, the words “anticipate”,
“believe”, “estimate”, “expect”, “target”, “plan”, “forecast”,
“may”, “schedule” and similar words or expressions, identify
forward‐looking statements or information. These forward‐looking
statements or information relate to, among other things: the
commercial effects of the New Stream Agreement; the future plans
for and the development of the San Dimas Mine; future silver
production; and future growth potential for First Majestic.
These statements reflect the parties’ respective
current views with respect to future events and are necessarily
based upon a number of assumptions and estimates that, while
considered reasonable by the respective parties, are inherently
subject to significant business, economic, competitive, political
and social uncertainties and contingencies. Many factors, both
known and unknown, could cause actual results, performance or
achievements to be materially different from the results,
performance or achievements that are or may be expressed or implied
by such forward‐looking statements or information and the parties
have made assumptions and estimates based on or related to many of
these factors. Such factors include, without limitation:
fluctuations in general macro-economic conditions; fluctuations in
securities markets and the market price of First Majestic’s shares;
fluctuations in the spot and forward price of silver, gold, base
metals or certain other commodities (such as natural gas, fuel oil
and electricity); fluctuations in the currency markets (such as the
Canadian dollar and Mexican peso versus the U.S. dollar); changes
in national and local government, legislation, taxation, controls,
regulations and political or economic developments in Canada or
Mexico; operating or technical difficulties in connection with
mining or development activities; risks and hazards associated with
the business of mineral exploration, development and mining
(including environmental hazards, industrial accidents, unusual or
unexpected formations, pressures, cave-ins and flooding); and the
factors identified under the caption “Risk Factors” in First
Majestic’s Annual Information Form.
Readers are cautioned against attributing undue
certainty to forward‐looking statements or information. Although
the parties have attempted to identify important factors that could
cause actual results to differ materially, there may be other
factors that cause results not to be anticipated, estimated or
intended. The parties do not intend, and do not assume any
obligation, to update these forward‐looking statements or
information to reflect changes in assumptions or changes in
circumstances or any other events affecting such statements or
information, other than as required by applicable law.
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