Pan American Silver Corp (Pan American) and Tahoe Resources Inc (Tahoe) announced that they have entered into a definitive agreement for Pan American to acquire all of the outstanding shares of Tahoe pursuant to a plan of arrangement, creating the world's premier silver mining company. Shareholders of Tahoe will be entitled to elect to receive common shares of Pan American and/or cash in exchange for their shares of Tahoe. Additional consideration will be in the form of the right to a contingent payment in common shares of Pan American tied to the restart of the Escobal mine in Guatemala. The deal would end up into a world-class primary silver asset portfolio, diversified across the Americas. It will also create world's largest silver reserve base and silver measured and indicated resource base. It will be the largest publicly-traded silver mining company by free float. The entity would offer a robust growth profile with the restart of the Escobal silver mine following completion of the consultation process and community engagement. Escobal is a well built, turn-key operation with minimal capital outlay and development risk. The mine produced 21Moz of Ag at US$8.63/oz Ag AISC during its last four quarters of undisturbed production. Additional upside is also seen through expansion of the La Colorada mine following the recent exploration discovery and potential development of Navidad, one of the world's largest undeveloped primary silver deposits. Commenting on the transaction, Michael Steinmann, President and Chief Executive Officer of Pan American Silver, stated that the combination of Pan American and Tahoe will establish the world's premier silver mining company with an industry-leading portfolio of assets, superior growth opportunities and attractive operating margins.
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