First Majestic Silver Corp. (TSX:FR)(OTCQX:FRMSF)(FRANKFURT:FMV)(WKN:A0LHKJ) has announced the closing today of the acquisition of all the real estate interests including the original mill and infrastructure and underlying royalties and bonuses which were associated with the Real de Catorce Silver Project in San Luis Potosi State, Mexico.
The total purchase price of US$3,000,000 consists of US$1,500,000 cash and the issuance of US$1,500,000 in common shares of First Majestic equalling 152,798 shares at a deemed price of $9.91 per share based on the volume weighted average of the past five days trading.The package includes title to all of the land underlying the Santa Ana Hacienda located within the Real de Catorce property, together with all associated buildings and certain historic geological and proprietary mining information relating to the project.
The Real de Catorce Silver Mine which was acquired in November 2009, had been subject to a 3% net smelter royalty ("3% NSR"), of which 1.75% could be acquired for a total price of US$1.75 million, if paid prior to March 15, 2014, otherwise the total purchase price would increase to US$2.1 million. In addition, the previous owner (Normabec) had agreed to acquire the surface rights, the buildings located thereon which cover the location of the previous mining operations, and all technical and geological information, in consideration for a single payment of US$1.2 million to be made by December 2010. The Company was also obligated upon commencement of commercial production, to pay an additional US$200,000 to the previous owner.
The acquisition by the Company today replaces the above mentioned total cash payments of between $3.15 and $3.4, with a total purchase price of US$3.0 million in cash and shares, and removes entirely any future NSR on the Real de Catorce project.
The Company is currently evaluating its alternatives for future production in the area,including the evaluation of past exploration worksin order to plan for future underground development, mining and processing plant alternatives. In the meantime, the Company is planning to rehabilitate the Santa Ana Hacienda for the purpose of opening a mining museum to help the community create new jobs and increase the economic opportunities in the area.
Source: First Majestic Silver Corp.