Amarillo Gold - Eric Sprott.
Eric Sprott.
Source: Mining Weekly.
  • Canadian billionaire Eric Sprott has acquired a C$78 million stake in First Majestic Silver (FM) on the back of “mispricing” in the precious metals market
  • Under the bought deal financing, the company issued five million common shares at a price of $15.60 each
  • This has resulted in Eric holding approximately 2.3 per cent of First Majestic’s issued and outstanding securities
  • The proceeds will be used to further develop mining projects and improve existing mines
  • First Majestic Silver (FM) is currently down 2.24 per cent to $13.96 per share at 11:00am EDT

Canadian billionaire Eric Sprott has injected C$78 million into First Majestic Silver (FM) on the back of “mispricing” in the silver market.

Under the terms of the bought deal financing, which was announced on September 10, the company issued to Eric a total of five million common shares at a price of $15.60 each.

Cormack Securities acted as underwriter for the offering, which has resulted in Eric holding approximately 2.3 per cent of First Majestic’s issued and outstanding securities.

Keith Neumeyer, President and CEO of First Majestic Silver, said he is pleased to welcome Eric as a significant shareholder.

“As a fellow silver bull, Eric has been recognised 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,” he added.

Eric also commented on the investment, noting a failure among Canadian precious metals investors to recognise the underlying value of First Majestic and the broader silver sector.

“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 recognises the mispricing of silver in the marketplace and has been a stalwart for silver,” he said.

In an interview with CME Group, Lloyd Blankfein, former Chairman and CEO of Goldman Sachs, acknowledged the precious metals sector’s strong run this year, but said the perceived impact of inflation has turned many investors away.

“It has been so long since these metals have played a role in financial markets as a store of value. But if there was ever a time where they would, it is now,” he concluded.

First Majestic Silver intends to use the proceeds raised from Eric’s investment, along with its existing cash reserves, to develop its projects and improve its existing mines.

First Majestic Silver (FM) is currently down 2.24 per cent to $13.96 per share at 11:00am EDT.

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