First Majestic Silver takes over gold mine in Nevada

First Majestic Silver (TSX: FR) (NYSE: AG) is acquiring the Jerritt Canyon gold mine in Elko County, Nevada from Sprott Mining for $ 470 million in shares and five million share purchase warrants. As part of the deal, Sprott Mining President Eric Sprott will conduct a $ 30 million private placement in First Majestic. The Canadian mining company said it has identified opportunities to improve the mine’s cost and production profile, as well as short-term brownfield potential between the SSX and Smith mines. Jerritt Canyon was discovered in 1972 and has been in production since 1981. The facility has since delivered more than 9.5 million ounces of gold. Last year it produced 112,749 ounces at a cash cost of $ 1,289 an ounce. First Majestic said that this new acquisition, along with the three operating silver mines in Mexico, will cement its position as one of the leading North American precious metals producers. The mining company's expected annual production was reported to be 30 to 33 million ounces of silver equivalent. Nevada was named the World's Leading Mining District in the Fraser Institute's latest survey of natural resources and exploration companies published in February. Along with the region's well-known gold and silver potential, Nevada's lithium deposits have been in the spotlight in recent years, particularly due to its proximity to North America's only lithium mine - Albermarle's Silver Peak (NYSE: ALB). First Majestic opened arbitration proceedings earlier this month against the Mexican government, which is demanding more than $ 500 million in alleged taxes from the company. The Vancouver-based mining company warned the López Obrador government last year of its intention to seek mediation from the International Center for the Settlement of Investment Disputes. Such a move triggered a 90-day period for the Mexican government to enter into negotiations with the company. The company said at the time that Mexico had ignored an Advanced Pricing Agreement (APA) with its subsidiary Primero Empresa Minera. The agreement created the basis for taxing silver sales from the San Dimas mine between 2010 and 2014, the company said. The government, which has made tackling tax breaks a priority, claims that First Majestic's subsidiary has artificially kept Silver Prices low for the past decade in an attempt to pay less tax. The mining company, which denies these claims, said it tried to hold talks with the Mexican authorities but they refused to enter into it.