First Majestic Silver Corp. (TSX: FR) (NYSE: AG) (Frankfurt: FMV), a Canadian silver-mining company, is purchasing the Jerritt Canton gold mine located in Nevada’s Elko County from Sprott Mining. First Majestic Silver is buying the mine for 5 million share purchase warrants and $470 million in shares. As part of the sale agreement, Eric Sprott, the president of Sprott Mining, will conclude a $30 million private place investment in First Majestic Silver.
First Majestic revealed that it had identified opportunities to help increase the mine’s production and cost profile.
Jerritt Canyon was found decades ago in 1972 and began production a few years later in 1981. Since then, the mine has produced more than 9 million ounces of gold. In 2020, the mine produced 112,749 ounces of gold at a cash cost of $1,289/ounce.
First Majestic Silver stated that this new acquisition, added to its trio of operational silver mines in Mexico, would help solidify the company’s position as a leading North American producer of precious metals. The company expects that annual production will be between 30–33 million silver equivalent ounces.
A survey by the Fraser Institute, which focuses on various resource and exploration companies and was released in February, named Nevada as the top mining destination in the world.
Coupled with the area’s known silver and gold potential, lithium deposits in Nevada have attracted a lot of attention in the recent years particularly because of their proximity to the Silver Peak mine owned by Albemarle, which is the only lithium mine in North America.
In related news, First Majestic Silver launched arbitration proceedings against the Mexican government at the start of this month. The government is seeking more than $500 million in alleged owed taxes from the mining company.
In 2020, the Vancouver-based mining company warned current Mexico president López Obrador’s administration of its intention to request that the International Center for Settlement of Investment Disputes be the mediator for the proceedings. This move prompted a three-month period for the government of Mexico to begin negotiations with the mining firm.
The company claims that Mexico had overlooked an advanced pricing agreement with Primero Empresa Minera, its subsidiary, which established a basis for taxing silver sales from the San Dimas mine in the 2010–2014 period.
On the other hand, the government, which has been focused on eliminating tax breaks for some time now, asserts that the Primero Empresa Minera subsidiary falsely kept its silver prices low over the last 10 years in order to pay lower taxes. However, First Majestic denies these claims, revealing that it has tried to begin talks with Mexican authorities with no success
Another company that is set to reap the benefits of owning a mining property in Mexico is Excellon Resources Inc. (TSX: EXN) (NYSE American: EXN) (FSE: E4X2). The company is intensifying its operations at the Platosa silver mine in Mexico, and its revenues are set to soar.
NOTE TO INVESTORS: The latest news and updates relating to Excellon Resources Inc. (TSX: EXN) (NYSE American: EXN) (FSE: E4X2) are available in the company’s newsroom at https://ibn.fm/EXN
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