Silver Producer to Vote July 10 on Acquisition Deal With Pan American

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MAG Silver Corp. (MAG:TSX; MAG:NYSE American) scheduled a special meeting for July 10, 2025 at which shareholders will vote on Pan American Silver Corp.'s (PAAS:TSX; PAAS:NASDAQ) proposed acquisition of it, noted a news release. MAG has filed the related management information circular and associated materials on SEDAR+ and will mail them to shareholders on June 11.

MAG's board of directors unanimously recommends shareholders vote in favor of the resolution arrangement, as all directors and officers of the company intend to do, the release noted. It is anticipated that the acquisition will be completed in H2/25.

According to the arrangement, Pan American will acquire all of the issued and outstanding shares of MAG, and MAG shareholders will receive total consideration of about US$2.1 billion (US$2.1B). MAG shareholders will be able to elect to receive the consideration as either US$20.54 in cash per MAG share or 0.755 Pan American share per MAG share subject to proration, such that the aggregate consideration paid to all shareholders is US$500 million (US$500M) in cash and the rest in Pan American common shares.

MAG shareholders of record at the close of business on June 2, 2025, the record date, may vote at the special meeting, one vote per each MAG share held. Shareholders are encouraged to vote well in advance of the proxy voting deadline of July 8, 2025, at 9 a.m. (Vancouver time).

The board based its vote recommendation on numerous factors favorable to MAG. They include an immediate value uplift in the 20% range, optionality for shareholders, exposure to Pan American's diversified and large project portfolio and continued exposure to Juanicipio, both its outperforming mine and prospective property.

The acquisition significantly de-risks MAG shareholders' exposure by converting a concentrated interest in the Juanicipio mine into equity ownership of Pan American. Also, shareholders get equity participation in a large-cap, value-driven silver producer that has returned more than $1 billion to shareholders since 2010. Other benefits to MAG are improved trading liquidity in U.S. and Canadian markets and the potential for shareholders to receive a partial or full tax deferred rollover for Canadian income tax purposes.

Tier 1 Silver Producer

Headquartered in Vancouver, British Columbia, MAG Silver Corp. is a growth-focused mining and exploration company, advancing high-grade, district-scale precious metals projects in the Americas. MAG has emerged as a tier 1 silver producer through its (44%) joint venture interest in the 4,000 tons per day-producing Juanicipio project, operated by Fresnillo Plc (FNLPF:OTCMKTS; FRES:LSE) (56%). At Juanicipio, in Mexico's Fresnillo Silver Trend, an expanded exploration program is being carried out, targeting multiple highly prospective targets. Only 10% of the property has been explored thus far.

"From a qualitative point of view, Juanicipio is one of the highest-quality primary silver mines globally, wrote Bujon Capital in a May 24 Seeking Alpha article. "It has a long economic life, significant exploration potential and low production costs."

MAG has two other exploration-stage projects and is executing a multiphase drill program at each. One is Larder, spanning 3,370 hectares in Canada's Abitibi Greenstone Belt. Larder sits between the 70,000,000 ounce-plus (70 Moz-plus) Kirkland Lake/Macassa gold system and the 11 Moz-plus past-producing Kerr-Addison mine. MAG started drilling at Larder in 2020 and has proven that potential exists there both on and off the main Cadillac Larder Break. Last year, the miner completed 41,000 meters.

MAG's other project is silver-rich Deer Trail in Utah's Piute County, which has the potential to host large porphyry and carbonate replacement deposits on its 7,250 hectares. Geological synthesis has identified eight major targets for the 2025-2026 drill program. Phase four drilling there is underway.

As for the mining company's financial position, as of March 31, it had US$156 million (US$156M) in cash, consistency in cash return from Juanicipio, a CA$40M revolving credit facility and no debt.

Silver Price Moving Up

Recently, the silver price rose to 13-year highs; on June 9 it hit US$37.78 per ounce ($37.78/oz).

"With these moves, silver has now matched gold in year-to-date gains at nearly 26%, making it one of the best-performing assets that has flown under the radar," noted Mining.com on June 9.

A June 9 CBS News article purported that the uptrend in silver prices is likely to continue.

"Silver is up 25% from a year ago and has room to run higher, with many analysts predicting US$40/oz by end of year," Brett Elliott, director of content at precious metals marketplace APMEX, told the television broadcaster. "This is roughly a 20% gain from current levels, which would be an excellent return if price action follows the expected path."

Global supply and demand dynamics are the root cause of silver's price performance, wrote Christian Norman in a June 10 MarketPulse article. Industrial demand for the metal, for solar panels, electric vehicles and electronics, is expected to reach new highs this year after record demand last year. For the fifth year in a row, demand is expected to surpass new supply. Other factors pushing up the silver price are global monetary policy, including monetary easing by the Union and the United Kingdom, ongoing safe haven demand and a weaker dollar.

"If [the] price can stabilize and stage a move higher, bulls will first look to break US$37, with some resistance expected around US$37.10," Norman wrote.

Brien Lundin of Gold Newsletter posited in a June 9 alert that the next target for silver is US$40/oz. Analysts and other experts expect US$50/oz silver sometime in 2026. Lundin, however, thinks we could see US$50 silver sooner, by the end of this year, he wrote.

Given the rising price, he suggests buying physical silver or investing in silver stocks as the latter "can provide extraordinary leverage to physical silver," he noted. Silver equities finally are moving and outperforming the metal itself.

"I strongly recommend that you get positioned in top-quality junior silver stocks now," Lundin added. "If this move is like what we saw in 2016, the potential short-term gains could be extraordinary."

Further out, the silver price will rise incrementally through at least 2036, according to Coin Price Forecast on June 10. Predications call for silver to reach $70 in 2028, $75 in 2029, $90 in 2030, $100 in 2031, $110 in 2032, $125 in 2033, $140 in 2035 and $150 in 2036.

The Catalyst: Acquisition Closing

According to MAG's Corporate Presentation, throughout this year and next, production and optimization will continue at Juanicipio. The company will keep doing exploration work and drilling at Larder and Deer Trail, potentially resulting in discoveries.

If MAG approves its agreement resolution with Pan American, the acquisition will close in H2/25. 

Experts See Deal as Positive

CIBC Analyst Cosmos Chiu highlighted in his May 21 research report that Pan American's acquisition of MAG offers significant value and affords multiple benefits to MAG shareholders. They get exposure to Pan American's diversified portfolio of 10 silver and gold mines, including potential growth opportunities from the La Colorado skarn project. They retain exposure to Juanicipio and gain equity in Pam American. They will continue getting dividends, management said, paid until the acquisition closes.

"We expect about US$0.194 per share and about US$0.197 per share in dividends to be declared over the next two periods, respectively," Chiu wrote.

After the acquisition arrangement was made public, Chiu changed his rating on MAG to Tender. He raised his target price to US$28 per share from US$26, implying a 32% return from MAG's current share price. Chiu changed his rating to Tender.

Bujon Capital indicated in his Seeking Alpha article he considered MAG a Buy.

"With my 'Buy' rating, I want to underscore Juanicipio's tier-1 quality, along with its significant expiration potential, long mine life and some of the lowest production costs in the industry," he wrote.

Peter Krauth of Silver Stock Investor wrote on May 14 he was in favor of the Pan American-MAG deal and noted it would give MAG shareholders 14% of Pan American shares.

"MAG shareholders get an immediate bump up on share value, instant asset diversification and lower risk through Pan American assets, ongoing exposure to the Juanicipio mine, growth potential through upside on Pan American's assets including the standout potential reopening of the Escobal mine, liquidity and market access," added Krauth.

On the news that MAG agreed to be acquired by Pan American, Joe Reagor, managing director and senior research analyst at ROTH Capital Partners, increased his target price on MAG to US$18 per share from US$16, he noted in a May 12 research report. The target represents 18% upside from where MAG is trading now. Reagor maintained his Neutral rating on the silver miner.

Chen Lin of What Is Chen Buying? What Is Chen Selling? commented on May 15, "I really like MAG here. The company is an inexpensive way to buy Pan American Silver shares."

Ownership and Share Structure

According to Refinitiv, 14 strategic entities own 3.11% of MAG. The Top strategic shareholder is Industrias Penoles SAB de CV with 2.3%.

Numerous institutional investors hold 54.86%. The Top 3 are Van Eck Associates Corp. with 8.09%, First Eagle Investment Management LLC with 7.53% and Sprott Asset Management LP with 2.59%. The rest is in retail.

MAG Silver has 103.46 million (103.46M) outstanding shares and 100.23M free float traded shares. Its market cap is CA$2.2B. Its 52-week range is CA$15.64–29.83 per share.