Pan American Silver Corp. completed its acquisition of Tahoe Resources Inc.
Ongoing CVR that trades - The CVRs had a term of ten years.
Please read the SEC documents regarding this current security and understand that I do own of these shares. This isn’t an offer or solicitation to buy shares.
Let me preface this by saying this does not look promising. A search of the Escobal Mine in google news shows a very active local tribe that doesn’t want the mine to restart.
https://www.sec.gov/Archives/edgar/data/771992/000119312518343574/d666422dex992.htm
History:
Pan American Silver Corp. completed its acquisition of Tahoe Resources Inc. on February 22, 2019, in a deal valued at approximately $1.07 billion .The merger aimed to create the "world's premier silver mining company" by combining their asset portfolios and significantly increasing Pan American's silver reserves.
Here's a summary of the key aspects of the merger:
Strategic Rationale:
Doubled Silver Reserves: The acquisition significantly boosted Pan American's silver reserves, making the combined entity the largest publicly traded primary silver mining company by reserves.
Diversified Portfolio: The merger provided a more geographically diversified asset base across the Americas, including silver, gold, zinc, and other metals.5
Escobal Mine: A primary driver of the acquisition was Tahoe's Escobal silver mine in Guatemala, one of the world's largest silver mines. While Escobal was on care and maintenance due to social and legal issues with local indigenous people being hurt. Pan American aimed to leverage its 25-year track record in Latin America to work with local communities and potentially restart the mine.
It is not going well.
Transaction Terms for Tahoe Shareholders:
Tahoe shareholders had the option to elect to receive either US$3.40 in cash or 0.2403 Pan American shares for each Tahoe share, subject to pro-ration based on maximum cash and share considerations.
In addition to the initial consideration, Tahoe shareholders received Contingent Value Rights (CVRs). These CVRs would be exchanged for 0.0497 Pan American shares for each Tahoe share upon the first commercial shipment of concentrate following the restart of operations at the Escobal mine. The CVRs had a term of ten years.
At the closing of the arrangement, existing Pan American and former Tahoe shareholders owned approximately 73% and 27% of the combined company, respectively. Upon the satisfaction of the CVR payment conditions, these ownership percentages would adjust to approximately 68% and 32%, respectively.
The merger was approved by shareholders of both companies and received regulatory approvals.
Prior 2017, the mine had three consecutive years of production at 20 Moz Ag per year at AISC consistently below US $10 per ounce Ag. Operations are currently on care and maintenance pending completion of an ILO 169 consultation. No timeline has been set for a completion of the consultation process or a restart of operations at Escobal.
https://panamericansilver.com/operations-2/silver-segment/escobal/
https://earthworks.org/releases/xinka-people-say-no-to-the-escobal-mine/
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