First Majestic Silver (AG) M&A Announcement summary

Deal rationale and strategic fit

• Consolidates three major silver mining districts in Mexico, creating a leading intermediate silver producer with a 350,000 ha land package, diversified assets, and significant exploration upside.

• Enhances production profile to 30-32 million silver equivalent ounces annually, with over 50% of pro forma revenue from silver, exceeding peer averages.

• Adds Cerro Los Gatos, a high-quality, long-life, low-cost, free cash flow generating asset with exploration potential.

• Leverages combined teams with 20+ years of experience in Mexico, emphasizing responsible mining, operational excellence, and community engagement.

• Strengthens balance sheet, trading liquidity, and capital markets profile, positioning the company for increased shareholder value.

Financial terms and conditions

• Gatos shareholders receive 2.550 First Majestic shares per Gatos share, representing a 16% premium and an implied offer value of $13.49 per share, with a total equity value of $970 million.

• Pro forma ownership: 62% for current First Majestic shareholders, 38% for Gatos shareholders; Electrum Group to own ~12%.

• Combined financial liquidity will exceed $500 million USD.

• Termination fees: $46 million payable by First Majestic, $28 million by Gatos under certain circumstances.

Synergies and expected cost savings

• Anticipated corporate cost savings, supply chain and procurement efficiencies, and cross-pollination of expertise.

• Maintenance synergies via central facilities, equipment rebuild programs, and operational efficiency improvements.

• Enhanced free cash flow generation and improved gross margins anticipated from the combined portfolio, with Gatos expected to contribute about $70 million in annual free cash flow.

• Optimization of internal projects and exploration programs expected to deliver meaningful value creation.