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First Majestic lands new San Dimas stream deal, amended US$75M facility

First Majestic Silver Corp. said May 10 that it terminated the previous silver purchase agreement with Wheaton Precious Metals Corp. and Wheaton Precious Metals International Ltd. over the San Dimas gold mine in Mexico and signed a new precious metal purchase agreement with WPMI and FM Metal Trading (Barbados) Inc., a First Majestic subsidiary.

The previous stream deal was inherited through First Majestic's acquisition of Primero Mining Corp. earlier this year. Under the new stream agreement, WPMI will be entitled to 25% of the gold production and 25% of the silver production at San Dimas converted to gold equivalent at a fixed rate, with provisions for adjustments.

In exchange for the metals, First Majestic will receive ongoing payments equal to the lesser of either US$600, subject to a 1% annual inflation adjustment, or the prevailing market price for each gold ounce delivered to an off-taker under the agreement. As part of the termination of the previous silver purchase agreement, WPMI also received 20,914,590 First Majestic common shares.

Furthermore, First Majestic signed an amended and restated credit agreement with Bank of Nova Scotia, Bank of Montreal and Investec Bank PLC, giving the miner access to a US$75 million senior secured revolving term credit facility. This new facility will replace an existing credit agreement with Scotia Bank and Investec, dating back to 2016 and comprising a US$25 million revolving credit line and a US$35 million term loan. The new loan replaces the prior credit facility of Primero Mining.

The new credit facility will mature on the third anniversary of the amended credit agreement but can be repaid in advance. The interest rate is set at the London Interbank Offered Rate plus an applicable range based on certain financial parameters of First Majestic.