MAG Silver To Be Acquired For $2.1 Billion By Pan American Silver

MAG Silver (TSX: MAG) is the latest producer to be acquired within the mining sector. Pan American Silver (TSX: PAAS) announced Sunday evening that they will be acquiring the Mexico-focused miner, who owns a 44% interest in the Juanicipio joint venture operated by Fresnillo plc.

The transaction will see Pan American Silver pay US$2.1 billion for MAG Silver via a combination of cash and shares. Total consideration will equate to US$20.54 per MAG share, a premium of 21% to Fridays close. Consideration will consist of 0.755 Pan American shares for each share of MAG Silver held, or US$20.54 in cash. Pan American has agreed to pay out up to US$500 million in cash in connection with the transaction, which is subject to proration. Approximately 60 million shares are expected to be issued in connection with the transaction.

On a post-transaction basis, MAG shareholders are expected to hold approximately 14% of the resulting issuer.

The transaction will see Pan American add a 44% interest in the Juanicipio mine to its asset base. The mine, forecasted to produce between 14.7 million and 16.7 million silver ounces this year, is expected to add attributable production of between 6.5 million and 7.3 million silver ounces to Pan American’s portfolio in 2025.

Juanicipio, a low cost producer, is expected to produce those ounces at cash costs between ($1.00) and $1.00 an ounce, while AISC is guided to be between $6.00 to $8.00 an ounce. Free cash flow for 2025 is estimated at $200 million, of which $98 million is attributable to MAG.

The purchase also adds 58 million ounces of silver to proven and probable mineral reserves, 19 million ounces to measured and indicated resources, and 35 million ounces of inferred resources.

The purchase is currently expected to close in the second half of 2025, subject to shareholder and regulatory approvals.

MAG Silver last traded at $23.58 on the TSX.

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