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Highlights

  • Pan American to acquire MAG Silver for approximately $2.1 billion, offering a 21%–27% premium to MAG shareholders.

  • Deal adds 44% stake in high-grade Juanicipio silver mine, significantly boosting Pan American’s reserves and cash flow.

  • MAG shareholders gain diversified exposure, liquidity, and continued interest in Juanicipio through equity in Pan American.

In a transformative move set to reshape the landscape of silver mining, Pan American Silver Corp. (NYSE:PAAS, TSX:PAAS) and MAG Silver Corp. (NYSEAM:MAG, TSX:MAG) have jointly announced a definitive agreement under which Pan American will acquire all issued and outstanding shares of MAG in a transaction valued at approximately $2.1 billion.

The deal, structured as a plan of arrangement, will provide MAG shareholders with $20.54 per share—comprising $500 million in cash and 0.755 Pan American shares per MAG share, subject to proration. The consideration represents a 21% premium to MAG’s closing price and a 27% premium to its 20-day volume-weighted average price (VWAP) on the NYSE American as of May 9, 2025.

Upon completion, MAG shareholders will own approximately 14% of Pan American on a fully diluted basis, granting them access to a larger, diversified precious metals producer with a track record of operational excellence and capital returns.

Strategic Rationale

The acquisition brings Pan American a 44% interest in the Juanicipio mine, one of the world’s top-performing, high-grade silver assets, located in Zacatecas, Mexico. The mine is operated by Fresnillo plc, which holds the remaining 56% interest. Juanicipio is projected to produce 14.7 to 16.7 million ounces of silver in 2025, translating to 6.5 to 7.3 million ounces net to Pan American under the new ownership structure.

The addition of Juanicipio significantly bolsters Pan American’s silver reserves, with 58 million ounces added to its proven and probable reserves, along with substantial increases in measured, indicated, and inferred resources. The mine is also forecasted to deliver robust free cash flow of $200 million in 2025, with low all-in sustaining costs (AISC) of $6.00–$8.00 per ounce, and cash costs potentially below $1.00 per ounce.

Benefits to MAG Shareholders

For MAG shareholders, the transaction presents a compelling value proposition:

  • Immediate value uplift through the premium-priced offer.

  • Diversified exposure to Pan American’s extensive portfolio of ten silver and gold mines across seven countries.

  • Continued participation in the Juanicipio project’s upside via ownership in Pan American shares.

  • Risk mitigation through the conversion of a concentrated asset interest into equity in a larger entity.

  • Enhanced liquidity and potential tax rollover options for Canadian investors.

MAG shareholders will also gain indirect exposure to Pan American’s La Colorada Skarn project and the potential reopening of the Escobal mine, one of the world’s most prolific silver assets with historic production of 20 million ounces per year.