First Majestic Silver Corp. (NYSE: AG) has been crushed along with silver and gold players in recent weeks and months. In fact, its stock price has been cut in more than half. Apparently enough is enough, because BofA/Merrill Lynch has decided that it is time for investors to step up to the plate and to buy First Majestic Silver shares.

David Forster, the analyst of the Canadian Merrill Lynch team, has reinstated a Buy rating. His price target is in Canadian dollars, but that is C$16 per share, versus a closing price of C$11.70 yesterday. In turn that is upside projection of almost 37%. The 3.5% gain in Canada today to C$12.11 compares to a local New York trading price of $11.56 (U.S.) after a 4% gain on the day.

The firm’s report calls First Majestic a near-pure play on silver with five producing silver mines in Mexico. Forster expects that the ramp-up of its lower cost Del Toro mine will play a key role in doubling silver production by 2015. That is expected to generate significant revenue growth as well as margin expansion. The call also believes that First Majestic should trade at premium rather than one times its net asset value. Forster said, “We believe First Majestic should trade at a significant premium given its superior growth profile and above average exposure to precious vs. base metals.”

Another boost here comes from a strong balance sheet and higher cash balances. Positive free cash flow is expected to drive the company’s net cash to $825 million by 2017, and that should lead to a share buyback and/or a dividend.

First Majestic has a U.S. market cap of about $1.3 billion. Its 4% gain to $11.56 in New York trading compares to a 52-week range of $8.81 to $24.20.

It has been a tough ride finding anything positive to say in the silver and gold patch of late — at least until now. Now that everyone has seen the drop in silver and in gold, they got to see firsthand why silver is sometimes referred to as the Devil’s Metal.

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