Pan American Silver Corp. ( PAAS ) and MAG Silver Corp. ( MAG ) disclosed a definitive deal for Pan American to acquire MAG Silver’s shares through a plan of arrangement.

As per the deal, MAG shareholders will receive approximately $2.1 billion ($20.54 per MAG share based on PAAS’s May 9, 2025 NYSE closing price) in a mix of $500 million cash and 0.755 PAAS shares per MAG share (subject to proration).

This represents ~21% and ~27% premiums to MAG’s May 9, 2025 NYSEAM closing price and 20-day VWAP, respectively.

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Post-transaction, MAG shareholders will own ~14% of the enlarged, diversified Pan American, gaining exposure to a larger silver and gold producer.

The acquisition significantly enhances Pan American’s value by adding a 44% stake in Juanicipio, a premier, low-cost, high-grade silver mine in Mexico with substantial exploration potential, operated by Fresnillo.

This is expected to add forecasted production of 6.5-7.3 Moz of silver to Pan American Silver ( PAAS ) in 2025 and 58 Moz proven and probable reserves, 19 Moz measured and indicated resources, and 35 Moz inferred resources.

Notably, Juanicipio’s high-margin ounces, with projected 2025 cash costs of ($1.00)-$1.00/oz and all-in sustaining costs of $6.00-$8.00/oz, are a logical fit within Pan American’s Americas-focused silver portfolio.

The MAG acquisition should significantly boost Pan American’s 2025 free cash flow (+$98 million pro forma) and offer significant exploration upside (Juanicipio, Deer Trail, Larder), strategically deploying $500 million of PAAS’s cash for increased silver exposure and growth.

Michael Steinmann, President and CEO of Pan American, said, “Juanicipio is a large-scale, high-grade, low-cost silver mine that will meaningfully increase Pan American’s exposure to high-margin silver ounces. Furthermore, we see future growth opportunities through the significant exploration potential at Juanicipio as well as MAG’s Deer Trail and Larder properties. This strategic acquisition further solidifies Pan American as a leading Americas-focused silver producer.”

As of March 31, PAAS’ cash and short-term investments stood at $923.0 million.

Price Action: PAAS shares are down 7.24% to $25.24, while MAG shares are up 13% to $19.12 premarket at the last check on Monday.

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