[ferro-alloys.com]First Majestic (NYSE: AG, TSX: FR) will raise C$78 million (about $59 million) through a bought deal financing investment from mining billionaire Eric Sprott, the Mexico-focused silver producer announced on Thursday evening.

Cormark Securities Inc., as underwriter, will purchase five million common shares of the company at a price of C$15.60 per share on behalf of a corporation beneficially controlled by Sprott.

This investment will result in Sprott holding approximately 2.3% of First Majestic’s issued and outstanding common shares following closing. The Canadian businessman did not own any shares in the company prior to the financing.

Earlier this month, both Sprott and the company made equity investments in newly listed miner Silver Dollar Resources (CSE: SLV), which has projects in Canada and Mexico.

“We are very pleased to welcome Mr. Sprott as a significant shareholder in First Majestic. As a fellow silver bull, Eric has been recognized as one of the most influential leaders within the silver investment community and this deal represents his largest treasury investment in a silver producer, let alone the entire silver space,” First Majestic president and CEO Keith Neumeyer said in a press release.

“We believe there has been a lack of appreciation for First Majestic’s equity in 2020 and we are happy to align ourselves with Keith, who recognizes the mispricing of silver in the marketplace and has been a stalwart for silver,” Sprott said.

The company plans to use the net proceeds, together with current cash resources, to develop its existing mines and for working capital.

First Majestic’s shares rose 2.4% by noon EDT following Sprott’s investment boost. The company has a market capitalization of approximately C$3.3 billion.

(Mining.com)

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