First Majestic & Silvermex Pleased With Takeover

By David Bond

Vancouver – Silvermex Resources (TSX:SLX.TO) shareholders woke up Tuesday nearly 30 percent richer than they were Monday night on news that SLX will be acquired by First Majestic Silver Corp. (NYSE:AG; TSX:FR) in a friendly takeover that values Silvermex at approximately C$0.60 per share, representing a premium of approximately 33 percent  to the closing price of Silvermex as of April 2, 2012 and approximately 43 percent to the 30-day, volume-weighted average price. Both companies mine silver in Mexico.

Silvermex CEO Duane Nelson, who served as last year's honorary chairman of the Cambridge House Silver Summit in Spokane, described the deal as a “great match.”

“It's not something we jumped into,” Nelson said. “It was just one of those situations where two plus two works out to six. First Majestic has the money, the experience and the resources to exploit the upside potential of our properties and the larger resource.”

First Majestic CEO Keith Neumeyer noted that Silvermex's La Guitarra silver mine in the Temascaltepec Mining District will bring to four the number of AG's producing assets. “First Majestic shareholders gain increased exposure to silver and can realize the significant upside in production and reserves that we believe exists at La Guitarra,” Neumeyer said.

According to the companies, each Silvermex shareholder will receive 0.0355 common shares of First Majestic and C$0.0001 in cash per Silvermex common share. Outstanding Silvermex options will be exchanged for First Majestic shares with a value equal to the in-the-money value of the options (based on the Exchange Ratio). Outstanding Silvermex warrants will be exchanged for First Majestic shares with a value equal to the in-the-money value of the warrants (based on the Exchange Ratio) or may be exchanged for equivalent warrants of First Majestic, at the election of the holder. Pursuant to the transaction, First Majestic will issue approximately 9.6 million First Majestic common shares valuing the company at approximately C$175.4 million.

Nelson will join First Majestic's staff in as-yet undetermined capacity, he said, adding, “I look forward to being a part of that company.” Silvermex shareholders are expected to vote on the proposal in June.