Pan American set to acquire MAG Silver for $2.1 billion
Pan American Silver Corp. [PAAS-TSX, NASDAQ] has announced a definitive deal to acquire all of the issued and outstanding shares of MAG Silver Corp. [MAG-TSX, NYSE American] via a plan of arrangement.
The move aims to further solidify Pan American as a leading Americas-focused silver producer.
MAG Silver is a Canadian exploration and development company focused on becoming a top-tier primary silver mining company. MAG’s key asset is its 44%-owned Juanicipio property in Mexico, which the company holds in a joint venture partnership with 56% owner and project operator Fresnillo Plc.
MAG is also executing multi-phase exploration programs at the 100%-owned Deer Trail project in Utah and 100%-owned Larder Project, in Canada’s Abitibi region.
Under the terms of the deal, MAG shareholders will receive $2.1 billion, or $20.54 per MAG share, based on the closing price of Pan Amercian common shares on the New York Stock Exchange on May 9, 2025. The consideration will consists of a mix of cash totalling $500 million and 0.755 Pan American shares per MAG share, subject to proration as detailed in the company’s press release. The consideration represents premiums of approximately 21% and 27%, respectively, on a prorated basis to the closing price and the 20-day volume weighted average price of MAG’s common shares on the NYSE American ending May 9, 2025.
MAG Silver shares advanced on the news, rising 7.35% or $1.73 to $21.31. The shares were previously trading in a 52-week range of $25.36 and $15.64. Pan American eased 12.5% or $4.76 to $33.14.
The definitive agreement and the transaction have been unanimously approved by the board of directors of both companies, and in MAG’s case by the unanimous recommendation of a special committee of independent directors of MAG. MAG’s board of directors unanimously recommends that MAG shareholders vote in favour of the transaction.
“Our acquisition of MAG brings into Pan American’s portfolio one of the best silver mines in the world,’’ said Pan American President and CEO Michael Steinmann. “Juanicipio is a large scale, high-grade, low-cost silver mine that will meaningfully increase Pan American’s exposure to high margin silver ounces,’’ he said. “Furthermore, we see future growth opportunities through significant exploration potential at Juanicipio, as well as MAG’s Deer Trail, and Larder properties.’’
Pan American was recently in the news when it said it had received Government of Canada approval for the sale of its 100% interest in La Arena SA, which owns the La Arena gold mine as well as the La Arena 11 project in Peru to Jinteng (Singapore) Mining Pte. Ltd., a subsidiary of China’s Zijin Mining Group Co. Ltd.
Pan American agreed to sell the asset for US$245 million cash up front and a US$50 million contingent payment.
Pan American had been selling non-core assets in keeping with its stated aim of optimizing its portfolio following the recent acquisition of Yamana Gold Inc. in a US$4.8 billion deal.
The company recently completed the previously announced divestment of its 56.2% stake in the Mara project in Argentina and its 92.3% interest in the Morococha mine in Peru.