Pan American (NASDAQ:PAAS) has agreed to buy Minefinders (NYSE:MFN) in a deal valued at C$1.5 billion that solidifies its position as one of the world’s primary silver mining companies.
The C$15.60 a share deal, which represents a premium of 36% to Minefinders’ closing price on Friday on the Toronto Stock Exchange, is slated to create a leading company with expected silver production doubling to 50 million ounces of silver from just 26 million by 2015.
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“Given the location of Minefinders' assets, we believe this acquisition is logical and consistent with Pan American's vision to become the largest, low-cost primary producer of silver in the world,” Pan American CEO Geoff Burns said in a statement.
With silver production from Minefinders’ Dolores mine increasing almost 200% over the last year, the combined company is expected to have 350 million ounces of proven and probable silver mineral reserves.
The proposed acquisition, subject to certain customary conditions and regulatory approvals, has been unanimously approved by both companies’ boards of directors. Upper management and directors of Minefinders’ holding a total of 3.5% outstanding shares have agreed to vote in favor of the deal.
If all goes as planned, the transaction is slated to close by the end of March.