The mining industry has been seeing a newfound surge in multi-billion mergers. While today’s announcement of the $18 billion offer from Barrick Gold to acquire Newmont Mining has caught most industry experts attentions, it overshadowed another important development worth mentioning.
Today Pan American Silver (TSE: PAAS) announced that they concluded the $1 Billion acquisition of Tahoe Resources (TSE: THO) to become one of the largest silver mining companies in the world.
Pan American Silver is currently the second-largest silver miner in the world. The acquisition of Tahoe into the organization would see it’s silver reserves double. This includes adding the controversial Escobal mine in Guatemala to its collection of assets. The mine, which is the third largest silver mine in the world, has had its license suspended by Guatemala’s highest court, as regulatory officials conduct consultations of local indigenous populations regarding the impact it has had on their lifestyles.
“The completion of the Arrangement establishes the world’s premier silver mining company with an industry-leading portfolio of assets, a robust growth profile and attractive operating margins. We are also now the largest publicly traded silver mining company by free float, offering silver mining investors enhanced scale and liquidity,” said Pan American Silver CEO Michael Steinmann. “We have a 25-year track record in Latin America of building successful partnerships with the communities around our operations, respecting the diversity of local populations and safeguarding the natural environment. We welcome the opportunity to work with local communities around the new operations for the benefit of all stakeholders.”
Tahoe shareholders had the option of either receiving cash for their shares ore 0.24 Pan American shares for each of their Tahoe shares they owned. It is revealed that less than ten percent of shareholders took the cash option, with the remaining 90 plus percent choosing to receive Pan American shares.
In response to the news, shares of Pan American Silver dropped around 1.2 percent while Tahoe Resources increased by the same amount.
Pan American Silver Company Profile
Pan American Silver Corp., incorporated on March 7, 1979, is a silver production company. The Company is principally engaged in the operation and development of, and exploration for, silver producing properties. The Company’s segments include Peru, Mexico, Argentina and Bolivia. The Company also produces and sells gold, zinc, lead and copper. The Company’s operating properties in Mexico include La Colorada Mine, Dolores and Alamo Dorado. The Company’s operating properties in Peru include Huaron Mine and Morococha Mine. The Company’s operating properties in Bolivia include San Vicente. The Company’s operating properties in Argentina include Manantial Espejo. The Company’s development properties include Navidad Property. – Reuters
Tahoe Resources Company Profile
Tahoe Resources Inc., together with its subsidiaries, acquires, explores for, develops, and operates mineral properties in the Americas. It explores for silver, gold, lead, zinc, and copper deposits, as well as precious metals assets. The company holds interest in the La Arena gold mine located in the Huamachuco district of northern Peru; Shahuindo mine located in the province of Cajabamba in northern Peru; and La Arena II, a copper-gold porphyry deposit located in Peru. – Bloomberg