VANCOUVER - Pan American Silver Corp. (NYSE: PAAS) (TSX: PAAS) and MAG Silver Corp. (NYSEAM:MAG) (TSX:MAG) announced on Sunday a definitive agreement for Pan American to acquire all issued and outstanding shares of MAG. The transaction, valued at approximately $2.1 billion, will see MAG shareholders receive $20.54 per share based on Pan American’s May 9, 2025, closing price on the NYSE. MAG, currently trading at $16.92 with a market capitalization of $1.75 billion, has demonstrated strong momentum with a 26% year-to-date return, according to InvestingPro data.
MAG Silver, a primary silver mining company, holds a 44% joint venture interest in the Juanicipio mine, a large-scale, high-grade operation in Mexico, with Fresnillo plc operating and owning the remaining 56%. The deal represents a 21% to 27% premium to MAG’s recent share prices. InvestingPro analysis reveals MAG’s robust financial health with an excellent current ratio of 7.35, indicating strong liquidity. InvestingPro subscribers have access to 10+ additional key insights about MAG’s financial position.
Under the agreement, MAG shareholders will receive a mix of $500 million in cash and 0.755 Pan American shares for each MAG share, subject to proration. Post-transaction, MAG shareholders will own roughly 14% of Pan American’s fully diluted shares.
Michael Steinmann, CEO of Pan American, highlighted the strategic importance of the acquisition, citing Juanicipio’s potential for growth and its alignment with Pan American’s portfolio. George Paspalas, CEO of MAG, emphasized the immediate premium and ongoing exposure to Pan American’s assets as significant benefits for MAG shareholders.
The transaction is touted as beneficial for both sets of shareholders, offering MAG’s investors diversified exposure and growth, while bolstering Pan American’s position as a leading silver producer with an expected 14.7 to 16.7 million ounces of silver from Juanicipio in 2025. The mine is also projected to generate around $200 million in free cash flow this year.
The acquisition will be executed via a court-approved plan of arrangement, requiring a two-thirds majority vote by MAG shareholders at a special meeting planned for July 2025. The deal is expected to close in the second half of the year, pending customary closing conditions and regulatory approvals.
This strategic move is based on a press release statement and aims to strengthen Pan American’s silver portfolio significantly. The joint conference call discussing the transaction is scheduled for today at 10:00 am ET.
In other recent news, MAG Silver Corp reported a strong financial performance for the first quarter of 2025, surpassing earnings expectations. The company’s earnings per share (EPS) came in at $0.28, beating the forecast of $0.20, while revenue reached $175 million, marking a 42% year-over-year increase. Despite the revenue being below the forecast of $206 million, the company’s robust operational performance at the Juanicipio project played a significant role in achieving these results. MAG Silver’s net income for the quarter was $28.7 million, and the company declared a dividend of 20¢ per share. Analysts have noted the company’s strong production capabilities and cost management, contributing to a positive market response.
MAG Silver’s operational success was highlighted by the processing of 337,000 tonnes of ore, producing 4.5 million ounces of silver. The company maintained a high cash operating margin of 81%, up from 70% in the prior year. MAG Silver also received $61.5 million in cash from the Juanicipio project in April, further strengthening its financial position. The company has set ambitious production targets for the remainder of 2025, aiming for 14.7-16.7 million silver ounces, with sustaining costs projected between $6 and $8 per ounce. Additionally, MAG Silver plans to invest $70-$80 million in sustaining capital and an extra $22-$28 million for an underground conveyor system.
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