Silver Producer Acquires Junior Miner, Junior Miner Shares Rally

By: AllPennyStocks.com News

September 15, 2009
Sometimes it’s a left-handed compliment for a smaller company -- particularly, a junior miner in this economic climate -- to be considered a prize by a much-larger suitor. In the middle of September, two such partners tied the knot when Vancouver-based First Majestic Silver Corp. (TSX:FR) agreed to purchase Normabec Mining Resources Ltd. (TSX-Venture:NMB) in an all-share transaction aimed at broadening its business.

A press release, issued Sept. 14, noted that once the deal is consummated, Normabec shareholders will be issued 0.060425 First Majestic shares for each share they currently own, plus shares in a newly formed public company NEWCO, which will hold Normabec's interest in Quebec’s Pitt Gold Property.

The deal values each Normabec share at 18.06 cents -- comprising of 14.06 cents in First Majestic shares and four cents in NEWCO shares -- representing a premium of 39% to Normabec's Friday's close on the Toronto Venture Exchange.

Standing on its own, Normabec has boasted a proven track record and an experienced management team. Its business model is focused on developing resources that are on properties in or near recognized mining camps with proven history and track record; with existing data that is both reliable and available. The company also shows a preference for deposits with high-grade vein systems, and that are at least mid-staged, ideally advanced-stage.

NMB’s crown jewels, as it were, among these properties, has been Pitt in Quebec and the Real de Catorce area of Mexico, a mine not yet subjected to modern exploration concepts and technology. Over two centuries, the Property had produced more than 230 million ounces of silver between 1773 and 1990. At the cessation of mining operations a mineral resource estimated at 533,000 tons, grading 275 grams silver per tonne (g/t), was left in place.

Last fall, on Pitt, NMB completed nine holes for a total of 5,180 metres of core. Most holes targeted extensions of known mineralized zones and more specifically, two zones located in the eastern portion of the property.

First Majestic is a producing silver company focused in Mexico and is aggressively pursuing its business plan to become a senior silver producer through the development of its existing assets and the pursuit through acquisitions (of the likes of NMB) of additional assets that contribute to achieving its corporate growth objectives. In 2009, First Majestic expects to produce approximately five million ounces of silver equivalent from its Mexican silver mines.

On the markets, NMB hit a 52-week peak of 24 cents last September, after bottoming out in December at 2.5 cents. FR also had a peak in September at $3.23 a share, before hitting a gully of 87 cents in October.

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