Pan American Silver to Acquire Minefinders, $1.49 Billion
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Pan American Silver Corp. has entered into a definitive agreement to acquire Minefinders for about C$1.5 billion ($1.49 billion) in cash and stock to expand production and add reserves in Mexico.
“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. Silver production from Minefinders’ Dolores mine has increased almost 200% over the last year and we expect to see further increases into the future. As a producing, long-life, low-cost mine, Dolores will not only add to Pan American’s production, but will help balance our entire portfolio of producing and development assets.” Mr. Burns continued, “Minefinders also has significant expansion potential and exceptional exploration opportunities at Dolores and a number of other promising early stage properties. The combined company will be in an excellent position to see those assets reach their ultimate potential. Once the transaction is complete, we will focus our combined team on the exciting longer-term expansion opportunities at Dolores. We also look forward to continuing to build on the positive relationship that Minefinders has established with the local communities, ejidos and its own workers, at and around the Dolores mine,” said Geoff Burns, president and CEO of Pan American.
“Since drilling the discovery hole on the Dolores deposit in 1996, we have successfully advanced the project through exploration, permitting, and construction into a low-cost gold and silver producer. The proposed combination with Pan American represents an exciting next step for our shareholders as they gain exposure to a diverse portfolio of world class producing and development assets along with the substantial resources and expertise that a larger company possesses. Moreover, we believe that the addition of the Dolores deposit along with a strong portfolio of exploration and development projects and a dedicated team of employees provides a significant contribution to the future growth and success of Pan American,” said Mark Bailey, president and CEO of Minefinders.
Transaction Highlights:
— Creates the leading growth-oriented, geographically-diversified silver producer with combined market capitalization of approximately $4 billion:
The combined company will be one of the largest diversified silver mining companies by market capitalization, providing enhanced capital markets scale and profile and increased strategic flexibility.
— Exceptional growth profile with expected silver production to double by 2015:
The combined company will have a leading and well sequenced growth profile combining immediate access to near-term cash flow with significant future growth opportunities. Combined production for the year ended 2011 of approximately 26 million ounces of silver (based on Pan American 2011 guidance and Minefinders disclosed 2011 results), expected to reach over 50 million ounces by the year 2015. Minefinders’ Dolores property provides a number of attractive near-term opportunities to drive production growth prior to the expected commencement of production at Pan American’s Navidad project.
— Enhanced portfolio diversification and project pipeline:
The combined company will consist of 8 operating mines and an extensive portfolio of development and exploration projects in jurisdictions throughout the Americas where Pan American currently operates. Based on expected silver production in 2011, approximately 52 percent of combined production will be from mines in Mexico, 21 percent from Peru, 15 percent from Argentina and 12 percent from Bolivia.
— Significant silver Mineral Reserves and Mineral Resources:
The combined company will have a significant Mineral Reserve base consisting of 350 million ounces of Proven and Probable silver Mineral Reserves and 3.0 million ounces of Proven and Probable gold Mineral Reserves - with additional Measured and Indicated Mineral Resources of 742 million ounces of silver and 2.0 million ounces of gold and Inferred Mineral Resources of 265 million ounces of silver and 1.4 million ounces of gold, as of the end of December 2010.
About Pan American
Pan American’s mission is to be the world’s largest low-cost primary silver mining company by increasing its low-cost silver production and silver reserves. It has seven operating mines in Mexico, Peru, Argentina and Bolivia. Pan American also owns the Navidad project in Chubut, Argentina, and is the operator of the La Preciosa project in Durango, Mexico.
To stop by Pan American’s website, CLICK HERE
About Minefinders
Minefinders is a precious metals mining and exploration company and operates the multi-million ounce Dolores gold and silver mine in Mexico.
To stop by Minefinders’ website, CLICK HERE
