Tahoe Resources has a diverse portfolio of mines and projects in Canada, Guatemala and Peru.
The merger is expected to create to a major silver mining company, with a strong financial position and access to capital to advance key growth projects.
The combined entity is anticipated to possess a robust growth profile with the restart of the Escobal silver mine after the completion of the consultation process and community engagement.
During its last four quarters of undisturbed production, the Escobal silver mine produced 21Moz of Ag at US$8.63/oz Ag AISC. The mine is a well built, turn-key operation.
The merged company will also have an additional growth potential through expansion of the La Colorada mine following the recent exploration discovery of Navidad, which is one of the world’s largest undeveloped primary silver deposits.
The combined entity is also expected to lead to well positioning of gold assets for low-cost production.
Pan American Silver president and chief executive officer Michael Steinmann said: “The combination of Pan American and Tahoe will establish the world’s premier silver mining company with an industry-leading portfolio of assets, superior growth opportunities and attractive operating margins.
“This transaction doubles our silver reserves and further improves our cost profile. We will build on that strong foundation, optimizing these high-quality assets to deliver profitable growth and superior returns.”
Pan American said that it has enough cash resources to finance the cash portion of the acquisition cost.
The completion of the transaction will be subject to regulatory approvals. It is expected to be closed in the first quarter of 2019.
Following the completion of the transaction, existing shareholders of Pan American and Tahoe Resources will hold nearly 73% and 27% of Pan American, respectively.
Tahoe Resources executive chair Kevin McArthur said: “This transaction allows our shareholders to participate in the creation of the world’s premier silver company with the contribution of the world-class Escobal mine to Pan American’s existing asset base.”
