Under the agreement, every Primero shareholder will receive 0.03325 First Majestic common shares in exchange for one Primero common unit.
Primero owns the San Dimas silver-gold mine in the Mexican state of Durango.
Primero has identified more than 120 epithermal veins with exploration potentiality throughout its production history.
In parallel with the deal, First Majestic has entered separate agreements with Wheaton Precious Metals International (WPM) to terminate the existing silver streaming interest at the San Dimas mine.
The two parties will enter a fresh stream arrangement based on 25% of the gold equivalent production at the mine.
Under this transaction, WPM will receive First Majestic 20,914,590 common shares with an aggregate value of $151m.
First Majestic Silver CEO Keith Neumeyer said: “The acquisition of Primero is a highly compelling transformative transaction that further enhances First Majestic’s operating platform, adding a very high-quality, long-lived asset in San Dimas, all in First Majestic’s backyard in Durango, Mexico.
“Most importantly, the new stream and related amendments with WPM repositions the asset by maximising silver exposure for our shareholders, while significantly increasing the free cash-flow from San Dimas.”
After the completion of the acquisition, which is subject to customary closing and regulatory conditions, First Majestic is estimated to have a pro-forma annualised attributable silver equivalent production of 27 million to 30 million equivalent ounces.
Currently, the company operates six silver mines in Mexico.