VANCOUVER – Shares in Primero Mining Corp., which owns the San Dimas silver-gold mine in Mexico, more than doubled in trading Friday after First Majestic Silver announced a deal to buy the company.

Primero shares (TSX:P) were up 15 cents at 27 cents in trading on the Toronto Stock Exchange, while shares of First Majestic (TSX:FR) fell 30 cents to $8.44.

Under the deal, shareholders will receive 0.03325 of a First Majestic share for each Primero share.

First Majestic also signed an agreement with a subsidiary of Wheaton Precious Metals Corp. to end a silver streaming interest at San Dimas and replace it with a new deal based on 25 per cent of the gold equivalent production with ongoing payments of US$600 per gold equivalent ounce.

As part of the transaction, Wheaton Precious Metals will receive 20.9 million shares of First Majestic valued at roughly US$151 million.

First Majestic put the total value of the transaction at US$320 million including the shares issued to Primero shareholders and Wheaton Precious Metals as well as other payments under the deal including the repayment of Primero debt.