Pan American Silver completes acquisition of Yamana Gold

Michael Steinmann, President and Chief Executive Officer of Pan American, said: “This acquisition is transformative for Pan American, significantly increasing the scale of our operations in Latin America where we have been operating for nearly three decades. We expect a material increase in our production of silver and gold, while we continue to provide a preferred way to invest in silver through large silver mineral reserves and growth opportunities, further enhanced by the increase in our market capitalisation and trading liquidity. The acquisition is firmly aligned with our strategy of creating value by pursuing attractive growth opportunities, improving operating margins and extending mine life.”

The Arrangement adds four producing mines to Pan American’s portfolio: the Jacobina mining complex in Brazil, the El Peñón and Minera Florida mines in Chile, and the Cerro Moro mine in Argentina. It also adds the MARA development project in Argentina.

Pan American plans to provide a 2023 operating outlook inclusive of the Latin American assets acquired through the Arrangement, as well as a consolidated forecast for annual general and administrative, exploration and project development costs, in the mid-second quarter of 2023.

Transaction consideration

Pursuant to the Arrangement, Yamana shareholders received, in respect of each Yamana Share held, US$1.0406 in cash paid by Agnico Eagle, 0.0376 of a common share of Agnico Eagle (each whole share, an “Agnico Eagle Share“) and 0.1598 of a common share of Pan American (each whole share, a “Pan American Share“). In aggregate, Yamana shareholders received US$1 001,302 560 in cash, 36 177 931 Agnico Eagle Shares and 153 758 280 Pan American Shares pursuant to the Arrangement. Upon closing of the Arrangement, existing Pan American shareholders own approximately 58% of the Pan American Shares and former Yamana Shareholders own approximately 42% of the Pan American Shares.

Delisting of Yamana Shares

The Yamana Shares are expected to be delisted from the Toronto Stock Exchange as of the closing of the market on April 3, 2023, and from the New York Stock Exchange as of the opening of the market on April 3, 2023. The depositary interests of Yamana were suspended from trading on the London Stock Exchange as of the opening of the market on March 27, 2023, and are expected to be formally delisted from the London Stock Exchange and cancelled from the UK Financial Conduct Authority’s Official List as of the opening of the market on April 3, 2023. Pan American is in the process of applying for Yamana to cease to be a reporting issuer under applicable Canadian securities laws and to otherwise terminate Yamana’s public reporting requirements.

Pan American’s revolving credit facility and establishment of term credit facility Pan American has further amended and restated its existing US$500 million sustainability-linked credit agreement, which has been increased to US$750 million. In addition, a delayed-draw term loan facility in the amount of US$500 million has been established, which will be permanently cancelled and reduced to zero if it is not drawn within 60 days of today’s date. Pan American’s new amended and restated sustainability-linked credit facility is led by BMO Capital Markets, The Bank of Nova Scotia and Canadian Imperial Bank of Commerce as Joint Lead Arrangers and Joint Bookrunners, and Bank of Montreal, as administrative agent.

As at March, 31 2023, Pan American had drawn US$325 million under the Amended Revolving Credit Facility, which was used to repay the US$103 million drawn on the Existing Credit Facility, fund closing costs associated with the Arrangement and to repay, in full, and cancel Yamana’s revolving credit facility, under which US$205 million had been drawn.

Board of Director Changes In connection with the Arrangement, Pan American has identified three members of the former board of directors of Yamana who will be nominated for election to the board of directors of Pan American, being John Begeman, Alexander Davidson, and Kimberly Keating. In addition, Michael Carroll will not be standing for re-election at the Meeting, and Chantal Gosselin will be nominated for election at the Meeting. The Meeting is expected to occur on May 10, 2023.

Read the article online at: https://www.globalminingreview.com/finance-business/04042023/pan-american-silver-completes-acquisition-of-yamana-gold/