Author: Staff Reporter

On Sunday May 11, Pan American Silver announced the  agreement to acquire MAG Silver Corp.

This acquisition adds the strategic interest in Tier-One Juanicipio Silver Mine and significantly strengthens the silver mining portfolio of Pan American Silver.

(All amounts expressed in U.S. dollars unless otherwise indicated.)

VANCOUVER, British Columbia–(BUSINESS WIRE)– Pan American Silver Corp. (NYSE: PAAS) (TSX: PAAS) (“Pan American“) and MAG Silver Corp. (NYSEAM:MAG) (TSX:MAG) (“MAG“) are pleased to announce that they have entered into a definitive agreement whereby Pan American will acquire all of the issued and outstanding common shares of MAG pursuant to a plan of arrangement (the “Transaction“). MAG is a tier-one primary silver mining company through its 44% joint venture interest in the large-scale, high-grade Juanicipio mine, operated by Fresnillo plc (“Fresnillo“), who holds the remaining 56% interest in the Juanicipio joint venture.

All details can be verified in the PAAS press release. 

Under the terms of the Transaction, MAG shareholders will receive total consideration of approximately $2.1 billion representing $20.54 per MAG share, based on the closing price of Pan American’s common shares on the New York Stock Exchange (“NYSE“) on May 9, 2025. Consideration will be comprised of a mix of cash totaling $500 million and 0.755 Pan American shares per MAG share, subject to proration as detailed below. The consideration represents premiums of approximately 21% and 27%, respectively, on a prorated basis to the closing price and the 20-day volume weighted average price (“VWAP“) of MAG’s common shares on the NYSE American (“NYSEAM“) ending May 9, 2025. Following completion of the Transaction, existing MAG shareholders will own approximately 14% of Pan American shares on a fully diluted basis, benefiting from participation in a larger, diversified, and growth-oriented silver and gold producer.

Michael Steinmann, President and CEO of Pan American, commented: “Our acquisition of MAG brings into Pan American’s portfolio one of the best silver mines in the world. 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. We would like to thank the Fresnillo and the Juanicipio management teams for the constructive interactions and impressive site visit. Together, we bring many decades of operator experience in Mexico and Latin America to the Joint Venture and we are looking forward to a collaborative future and value generation for all shareholders involved.”

George Paspalas, President and CEO of MAG, commented, “This transaction represents a compelling opportunity for our shareholders, providing an immediate premium and meaningful exposure to Pan American’s world-class assets and proven growth strategy. We are proud of what we’ve accomplished at MAG, particularly our partnership with Fresnillo which has created extraordinary value at the exceptional Juanicipio mine. Through the acquisition of our interest by Pan American – a respected leader in the global precious metals industry – our shareholders will participate in an exciting future defined by operational excellence, substantial exploration potential, and strong financial stewardship with significant portfolio exposure.”

BENEFITS TO MAG SHAREHOLDERS

The Transaction creates significant value and delivers multiple benefits to MAG’s shareholders:

• Attractive immediate premium:Immediate value uplift of approximately 21% and 27%, respectively, on a prorated basis to the closing price and the 20-day VWAP of MAG’s common shares on the NYSEAM ending May 9, 2025.
• Diversified exposure and growth opportunities: Exposure to Pan American’s diversified portfolio of ten silver and gold mines across seven countries and a proven track record of success in exploration, project-development and mining operations.
• Portfolio participation: Enlarged growth pipeline with exposure to Pan American’s La Colorada Skarn project in Mexico and the potential reopening of Pan American’s 100%-owned Escobal mine, one of the world’s best silver mines with past production of 20 Moz of silver per year.
• Continued Exposure to Juanicipio: The Transaction provides MAG shareholders with the opportunity to maintain exposure to the interest in Juanicipio, which continues to demonstrate strong operational performance and resource potential.
• Derisking: Significantly de-risks MAG shareholders’ exposure by converting a concentrated interest in Juanicipio into equity ownership of Pan American, a diversified, leading silver producer with meaningful, long-term upside.
• Financial strength and robust returns: Equity participation in a well-capitalized, value driven, large-cap silver producer known for returning capital to shareholders, with over $1.0 billion returned to shareholders via dividends and buybacks since 2010.
• Increased liquidity and market presence: Greater scale, lower risk and peer leading cash flows driving improved trading liquidity on U.S. and Canadian markets.
• Attractive consideration:An elective tax rollover for taxable MAG shareholders resident in Canada who receive Pan American shares.
• Low Execution Risk:The Transaction would not require review and approvals under theInvestment Canada Act. Pan American shareholder approval of the Transaction will not be required.

STRATEGIC RATIONALE AND BENEFITS TO PAN AMERICAN SHAREHOLDERS

The Transaction creates significant value and delivers multiple benefits to Pan American’s shareholders:

• Adds 44% ownership interest in Juanicipio, one of the best silver mines globally: Juanicipio is a large-scale, high-grade, low-cost silver mine located in Zacatecas, Mexico, with significant exploration upside and operated by Fresnillo, a world class precious metals producer.
• Strengthens Pan American’s position as one of the world’s premier silver producers: Juanicipio is forecasted to produce between 14.7 Moz and 16.7 Moz of silver in 2025 (6.5 Moz to 7.3 Moz on a 44% basis). (1)
• Further solidifies Pan American’s position as holding the largest silver reserves and resources amongst silver mining companies: Adds 58 Moz of silver to Pan American’s proven and probable mineral reserves, 19 Moz of silver to Pan American’s measured and indicated mineral resources, and 35 Moz of silver to Pan American’s inferred mineral resources. (2) 
• Contributes high-margin ounces: Juanicipio’s cash costs and all-in sustaining costs are forecasted to range between ($1.00) to $1.00 and $6.00 to $8.00 per silver ounce sold, respectively, for 2025. (1)
• Highly logical fit with Pan American’s silver dominant Americas-based portfolio: Leverages Pan American’s experience operating in the Americas for over 30 years.
• Significantly bolsters Pan American’s free cash flow generation: Juanicipio is expected to generate free cash flow of approximately $200 million in 2025 ($98 million on a pro forma basis). (3,4)
• Provides significant exploration upside potential: Exposure to growth opportunities through exploration at Juanicipio (only 10% explored) and the acquisition of 100% of the rights to the Deer Trail and Larder exploration projects as part of the Transaction.
• Investing in growth: Deploys $500M of Pan American’s record $923M cash and investments balance (5) in a measured and strategic manner to enhance silver exposure and provide future growth.

Notes:

1 As per the news release issued by MAG on March 24, 2025.

2 As per Fresnillo’s Mineral Resources and Ore Reserve Statements as at June 30, 2024. Figures are calculated from Fresnillo’s Mineral resources as of June 30, 2024 to display mineral resources exclusive of mineral reserves. Figures reflect MAG’s attributable 44% ownership.

3 Free cash flow is a non-GAAP measure. For further information regarding such measure please refer to each companies’ respective separate public disclosure. MAG defines free cash flow as cash flow from operating activities less cash used in investing activities and sustaining lease payments. Pan American defines free cash flow as cash flow from operating activities less sustaining capital expenditures.

4 Figures are based on street consensus estimate for 2025; mid-point of 2025 expansionary capex guidance added back to Juanicipio free cash flow to align with Pan American definition of free cash flow.

5 As per Pan American’s Management’s Discussion and Analysis dated May 7, 2025.

TRANSACTION SUMMARY

Under the terms of the Transaction, MAG shareholders will be able to elect to receive the consideration as either (i) $20.54 in cash per MAG share or (ii) 0.755 common shares of Pan American per MAG share, or a combination of cash and shares, subject to proration such that the aggregate consideration paid to all MAG shareholders consists of $500 million in cash and the remaining consideration paid in Pan American Shares.

At closing, Pan American expects to issue an aggregate of approximately 60 million common shares to MAG shareholders, and following completion of the Transaction, existing MAG shareholders will own approximately 14% of the issued and outstanding common shares of Pan American on a fully diluted basis.

The Transaction will be carried out by way of a court-approved Plan of Arrangement under the Business Corporations Act (British Columbia) and will require approval by 66 2/3% of the votes cast by MAG shareholders at a special meeting expected to be held in July 2025.

All directors and executive officers of MAG have entered into voting support agreements with Pan American pursuant to which they have agreed, subject to the terms of such agreements, to vote their MAG shares in favour of the Transaction.

The Transaction is expected to close in the second half of 2025, subject to the satisfaction of customary closing conditions, including clearance under Mexican anti-trust laws, and approval of the listing of the Pan American common shares to be issued under the Transaction on both the Toronto Stock Exchange and the NYSE.

Full details of the Transaction will be included in the management information circular of MAG, expected to be mailed to its shareholders in June 2025.

None of the securities to be issued pursuant to the Transaction have been or will be registered under the United States Securities Act of 1933, as amended (the “U.S. Securities Act”), or any state securities laws, and any securities issuable in the Transaction are anticipated to be issued in reliance upon available exemptions from such registration requirements pursuant to Section 3(a)(10) of the U.S. Securities Act and applicable exemptions under state securities laws. This press release does not constitute an offer to sell or the solicitation of an offer to buy any securities.

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Update 16 May.

In an interview with Rick Rule, Mining Stock Monkey goes into detail straight off the bat on the deal between Pan American Silver and MAG silver.

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Both MAG Silver and Pan American Silver have since long been in our miners database. This is the third silver miner being acquired in the lapse of one year: preceded by the Gatos acquisition by First Majestic Silver and the SilverCrest acquisition by Coeur Mining, both of which have been reported on before.

Advancing notable gold mining projects across Nigeria, Senegal and, more recently, Côte d’Ivoire, Thor Explorations is positioned for continued organic growth across West Africa. Segun Lawson, CEO, tells us more.

THE GOLD STANDARD IN MINING

As a relatively underexplored and prospective geological region with huge potential for mineral exploitation, West Africa continues to attract attention from mining companies across the globe.  

Despite ongoing geopolitical issues causing some concern – particularly in Mali and Burkina Faso, for example, where investors have become more selective of the jurisdictions they enter – the region continues to see sustained success, particularly in gold mining. 

As such, international investors are increasingly deploying capital to carry out exploration, purchase mines, and build infrastructure.  

Toronto Stock Exchange (TSX)-listed gold producer, Thor Explorations (Thor), has particularly benefitted from West Africa’s burgeoning reputation as a mining hub.  

“Our exploration portfolio in Nigeria covers approximately 1,300 square kilometres (sqkm) of prospective gold-bearing ground,” introduces Segun Lawson, CEO.  

A major part of the company’s extensive portfolio is its wholly-owned flagship Segilola Gold Mine Project (Segilola) in Southwest Nigeria.  

Operated by Thor’s subsidiary, Segilola Resources Operating Limited (SROL), it completed construction in Q2 2021 and achieved commercial production in Q1 the following year.  

Approximately 85,000 ounces (oz) of gold per year has been produced by Segilola, which is built on a total probable reserve of 517,800 oz of gold grading at 4.02 grams per tonne (g/t).  

This makes the site Nigeria’s first and only large-scale commercial gold mine, employing over 1,700 staff. 

In addition, Thor holds a 70 percent economic interest in the Douta Gold Project (Douta), an advanced gold exploration site in Southeast Senegal.  

With a global resource of 1,780,000 oz of gold, the project has an indicated resource of 874,900 oz at 1.3g/t and an inferred resource of 909,400 oz at 1.2g/t.  

“Douta is currently being advanced by the company to be a preliminary feasibility study (PFS), and we aim to build this project as Thor’s second mine,” Lawson informs.  

ONGOING EXPANSION

Having recently expanded into Côte d’Ivoire, where it acquired three exploration licences, Thor is ideally positioned for continued success and expansion in West Africa.  

Work has already begun on all three licences, which are located on the prospective Birimian greenstone belt, with the results of the initial explorations promising.  

“We have set ourselves a target of achieving a maiden resource in at least one of these licences by the end of the year,” Lawson asserts.  

Elsewhere in Côte d’Ivoire, the Guitry Project, which was fully acquired from Endeavor Mining, presents further opportunity for exploration.  

Thor has also recently entered into joint venture (JV) partnerships with Goldridge Resources and the Mining Research and Exploitation Company (CAREM) on the Boundiali and Marahui licences, respectively.  

“We have an opportunity to earn up to an 80 percent stake in both of the aforementioned licences,” he details. 

Over in Southwest Nigeria, the company has also acquired a 600 sqkm land package of lithium tenure through its wholly owned subsidiary, Newstar Minerals Ltd (Newstar).  

With Segilola projected to produce between 85,000 and 95,000 oz per year with an all-in sustaining cost of between USD$800 and USD$1,000 per oz, Thor’s mining potential only continues to grow.  

Further to this, having paid off all senior debt on the project, the company now boasts a de-leveraged balance sheet and is in position to reinvest its surplus capital into further exploration, with an ongoing priority to extend the life of the mine.  

As such, strong cash flow has been a key factor in enabling Thor to scale up its exploration and has, in turn, contributed to the company’s reputation as the largest low-cost gold producer in Nigeria.  

“In terms of sustaining this cash flow to maximise shareholder value, something we’re doing today is purchasing our own drilling rigs, which will enable us to drill with more flexibility and at a cheaper cost,” Lawson tells us.  

As such, Thor is able to return money to its shareholders without forgoing the growth of the company – a key part of its business strategy.   

LEVERAGING LITHIUM

Boasting favourable geological formations comprising granitic terrains known to host significant pegmatite deposits, Nigeria’s lithium potential is notable. 

A primary source of spodumene and lepidolite, both of which are crucial lithium-bearing minerals, these vast deposits demonstrate the nation’s significant underexplored lithium opportunities.  

Thor’s Nigerian subsidiary, Newstar, has a large land holding in the southwestern region of the country, which covers a prospective northeastern trading zone, both known lithium-bearing pegmatite deposits, and a large unexplored prospective pegmatite-rich belt.  

To capitalise on this resource-rich asset, Newstar has secured over 600 sqkm of granted tenure in Nigeria from the Oyo State, Kwara State, and Ekiti State Lithium Project areas, which it plans to exploit through small-scale lithium mining.   

“The Oyo State Project area is where we are currently focused. Whilst we have slowed down lithium exploration as we await the arrival of exploration drilling rigs, we look forward to picking this back up once the rigs arrive,” Lawson shares.  

Thor’s ongoing exploration work at Douta in Senegal, meanwhile, has allowed it to add significant scale to its operations.  

Whilst the pre-feasibility workstreams are being finalised, the company is continuing to drill additional targets across all its prospects, including Makosa Tail, Sambara, and Mansa.  

Thor is pleased to have drilled two discovery holes in Q1 2025 in the Douta-West licence on a new prospect, Baraka 3.  

“We are excited to be drilling this prospect through to Q2 this year,” he confirms.  

A LOCALISED SUPPLY CHAIN

As a company that proudly procures 80 percent of its products from West Africa, it is important for Thor to utilise local and regional suppliers and partners.  

“Last year, this meant we brought USD$24 million worth of procurement into the Nigerian economy,” Lawson elaborates.  

Since its inception, the company has been on a mission to bring sustainable development and prosperity to the communities in which it operates.  

This is backed by its core values, centring around accountability, integrity, trust, dignity, and respect.  

Thor’s relationship with its suppliers has evolved over time and since expanded to include a variety of services.  

For example, the company has provided mechanical engineering support, engaged a local waste contractor and regional logistics businesses to regularly deliver supplies, and partnered with local construction companies for camp accommodation expansion.   

“In this sense, we have helped to capacity-build businesses and enhance the skills required in the mining industry – a new emerging sector in Nigeria,” he reflects. 

Furthermore, the onset of the COVID-19 pandemic reinforced Thor’s need to leverage domestic supply chains as international shipping and logistics were significantly disrupted.  

“For this reason, local supply chains became vital in ensuring our key supplies, equipment, and spare parts were in easier reach.” 

SOCIALLY RESPONSIBLE

Equally important to Thor are its corporate social responsibility (CSR) and community development activities. 

As such, SROL has engaged with the three host communities around its Segilola mine site from the outset and signed community development agreements (CDAs) with each of them.  

“The CDA process took 18 months of built-up knowledge, trust, and a good working relationship with the community leaders in each village,” Lawson outlines.  

In this way, Nigeria is ahead of the curve in West Africa in terms of requiring CDAs from mining companies to improve transparency between businesses and communities.  

The final CDAs have established benefits based on community suggestions, including 26 scholarships granted annually to keep vulnerable children in school, 45 local women to receive equipment and training yearly to improve their livelihoods, and a minimum of 20 percent of employment being provided by the three host communities. 

Furthermore, 30 youth short-training programmes were completed in 2024, including carpentry, phone repair, fashion design, and truck driving courses.  

In addition, the maintenance of nine boreholes (three in each host community) is being implemented using local contractors, whilst provision of a 33-kilovolt transformer and 30 pylons will be installed to improve the local community’s energy supply.  

“The CDA process was invaluable to our project as it enabled us to achieve the social license to operate,” he prides.

THE FUTURE IS GOLDEN

Looking to 2025, exploration will continue for Thor across its entire portfolio, including its drilling programmes in Nigeria, Senegal, and Côte d’Ivoire. 

Having taken a long-term view of the former, the company’s priority here is to further extend the life of mine at Segilola through exploration.  

“With our first mover advantage and extensive human resource capability in the country, we are also in a position to assess additional opportunities outside Segilola,” Lawson asserts.  

In Senegal and Côte d’Ivoire,meanwhile, Thor looks forwards to achieving the milestones it has in place, such as the PFS in the former and maiden resource exploration in the latter.  

In short, the company seeks to continue its organic growth through exploration and mine life extension.  

Thor’s ongoing expansion is ultimately underpinned and supported by strong cash flow from the Segilola mine, particularly given the current high prices of gold in the industry.  

“We will continue to focus on being disciplined with our costs and look forward to building Douta, which will position us as a multi-mine, mid-tier gold producer,” Lawson confidently concludes. 

THOR EXPLORATIONS PARTNER