First Majestic Silver completes silver stream agreement with First Mining Gold
(Kitco News) - First Majestic Silver (NYSE: AG, TSX: FR)appears to be capitalizing on rising silver prices as it complete the acquisition of a Silver Stream agreement with First Mining Gold (TSX: FF), the company announced Thursday.
According to the finalized agreement, First Majestic will pay First Mining total consideration of $22.5 million in cash and shares, over three payments, for the silver stream, which covers the life of the Project.
First Mining said that the money raised from the agreement will be used to develop its Springpole project located in Northern Ontario.
"Springpole is one of the largest undeveloped open pit gold assets in Canada," the company said.
According to First Mining's 2019 Preliminary Economic Assessment shows the potential for Springpole to produce more than 400,000 ounces of gold annually.
Springpole currently hosts 4.67 million ounces gold in the Indicated category and 0.23 million ounces gold in the Inferred category.
First Majestic will also make ongoing cash payments of 33% of the silver spot price per ounce, to a maximum of $7.50 per ounce, for all payable silver delivered by Springpole.
"This new silver stream gives First Majestic significant upside potential to higher silver prices while minimizing risks and costs," said Keith Neumeyer, President and CEO of First Majestic Silver in a press release issued last month. "With approximately 22 million ounces of silver expected to be produced over the life of the project, and additional exploration upside, Springpole has both the scale and location to make this an ideal investment for our long-term portfolio."