First Majestic Silver Corp. said on Tuesday that it will take over Silvermex Resources Inc. in a friendly deal that values the smaller company at $175.4-million.

The deal comes as First Majestic, which is focused on becoming a senior silver producer, looks to add a fourth producing mine to its portfolio of silver assets in Mexico.

Silvermex shareholders will get 0.0355 of a First Majestic share plus $0.0001 in cash per common share in the deal, which values Silvermex at 60¢ a share, First Majestic said.

Shares of Silvermex, which were halted at $0.45 ahead of the news, rose 26.67 per cent to $0.57 on the Toronto Stock Exchange on Tuesday. Vancouver-based First Majestic fell 2.07 per cent to $16.56 amid a broad drop in the silver mining stocks.

The prize for First Majestic will be Silvermex’s La Guitarra mine, located some 30 kilometres southwest of Mexico City. Silvermex expects the mine to produce about 500,000 ounces of silver and 5,000 ounces of gold in 2012.

First Majestic, which produced 7.2 million ounces of silver in 2011, owns three producing mines in Mexico and is set to start output at its Del Toro mine in Zacatecas later this year.

The deal is backed by both boards, with Silvermex board members and senior officers holding some 21 per cent of outstanding shares in the company. The deal requires 66.66 per cent shareholder approval.

BMO Capital Markets is advising First Majestic on the deal, while GMP Securities is financial adviser for Silvermex.