NYSE- and TSX-listed First Majestic on Thursday announced the actuation of Mexico-focused Gatos Silver for $970-million.

Gatos is a silver-dominant producer with a 70% interest in the Los Gatos joint venture, which owns the producing Cerro Los Gatos underground mine in Chihuahua.

Under the terms of the definitive agreement, Gatos shareholders would receive 2.550 common shares of First Majestic for each common share of Gatos held. The consideration implies a total offer value of $13.49 a share of Gatos based on the closing price of First Majestic’s common shares on the NYSE.

Following completion of the transaction, existing Gatos shareholders will own about 38% of First Majestic shares on a fully diluted basis.

The transaction will consolidate three world-class, producing silver mining districts in Mexico under one banner: Cerro Los Gatos, San Dimas and Santa Elena collectively provide the foundation of a diversified, intermediate primary silver producer.

The transaction enhances First Majestic's production profile with combined production of 30-million to 32-million ounces of silver equivalent, including 15-million to 16-million ounces of silver at all-in sustaining costs of $18/oz to $20/oz.

"The acquisition of Gatos Silver is a highly compelling and transformative transaction that meaningfully enhances First Majestic's operating platform through the addition of 70% of Cerro Los Gatos - a high-quality, long-life, unencumbered, free cash flow generating asset in the mining-friendly state of Chihuahua, Mexico," First Majestic president and CEO Keith Neumeyer said.

"Mexico is a country that First Majestic has operated in for over 20 years, and we are extremely excited to deploy our operating expertise within these mining districts to deliver operational synergies and exploration success for our shareholders," he added.

Gatos CEO Dale Andres said the transaction provided its shareholders an attractive immediate premium and the opportunity to retain exposure to the high-quality, long-life Cerro Los Gatos asset.

"This transaction also provides our shareholders with the benefits of First Majestic’s enhanced capital markets presence, liquidity and balance sheet, while combining its local Mexican expertise and history of operations with our history of successful performance. I want to thank the Cerro Los Gatos operating team for its dedication. I am confident that the combination of our strong operating teams will create an opportunity to generate significant value for all shareholders.”