TORONTO (miningweekly.com) – Precious metals producer First Majestic Silver on Monday announced that it had entered into an agreement with BMO Capital Markets, under which BMO had agreed to buy 4.62-million shares of the company, at C$6.50 apiece for gross proceeds of C$30.03-million.

First Majestic explained that it intended to use the net proceeds of the offering for general working capital and ramp development at the La Guitarra silver mine, in Mexico. The company intended to link the Coloso mine to the Nazareno area, with the aim of bringing Nazareno online by year-end.

It also planned to use the cash to advance the permitting and planning process to develop the Mina de Agua and El Rincon areas at La Guitarra. Further, the company intended to start the planning process at the Plomosas silver project, in Sinaloa, to prepare for a future preliminary economic assessment.

The offering was expected to close on or about April 22 and was subject to certain conditions, including the company receiving all necessary regulatory approvals, including the approval of the TSX and the NYSE.

ACQUISITION
First Majestic on Monday morning before market open announced that it had acquired 14.5-million, or 19.7%, of the outstanding common shares of First Mining Finance through its ownership in KCP Minerals, formerly Sundance Minerals.

The company had entered into a plan of arrangement under which all of the outstanding securities of KCP were exchanged for the securities of First Mining. First Mining currently owned 18 mineral assets in Mexico and the US that were mainly gold-focused.

Analysts at Desjardins Capital Markets said in a note to clients that despite the transaction being relatively small and likely to have had minimal impact on First Majestic’s share price on Monday, they viewed the announcement as an option to create value through a number of assets that the market would likely have assigned little to no value to within First Majestic’s portfolio.