Pan American Silver Corp. (“Pan American” or the “Company”)
(NASDAQ:PAAS) (TSX:PAAS) and Tahoe Resources Inc. (“Tahoe”)
(TSX:THO) (NYSE: TAHO) today completed the previously announced
transaction (the “Arrangement”) whereby Pan American acquired all
of the issued and outstanding shares of Tahoe.
Michael Steinmann, President and Chief Executive Officer of Pan
American Silver, said: "The completion of the Arrangement
establishes the world's premier silver mining company with an
industry-leading portfolio of assets, a robust growth profile and
attractive operating margins. We are also now the largest publicly
traded silver mining company by free float, offering silver mining
investors enhanced scale and liquidity."
Added Mr. Steinmann: "We have a 25-year track record in
Latin America of building successful partnerships with the
communities around our operations, respecting the diversity of
local populations and safeguarding the natural environment. We
welcome the opportunity to work with local communities around the
new operations for the benefit of all stakeholders."
Results of elections by Tahoe shareholdersPursuant to the
Arrangement, Tahoe shareholders had the right to elect to receive
either US$3.40 in cash (the “Cash Election”) or 0.2403 of a Pan
American share (the “Share Election”) for each Tahoe share, subject
in each case to pro-ration based on a maximum cash consideration of
US$275 million and a maximum number of Pan American shares issued
of 56.0 million. Tahoe shareholders who did not make an election by
the deadline of 4:30 pm EST on January 3, 2019 were deemed to have
made the Share Election.
The following elections were made:
- holders of 23,661,084 Tahoe shares made
the Cash Election; and
- holders of 290,226,406 Tahoe shares
made, or were deemed to have made, the Share Election.
Since the aggregate number of Tahoe shares in respect of which
Cash Elections were made is less than the Aggregate Cash
Consideration (as defined in the Arrangement agreement dated as of
November 14, 2018 among Pan American, Tahoe and 0799714 B.C. Ltd.),
holders of Tahoe shares who made or were deemed to have made the
Share Election are subject to pro-ration in the manner described in
Tahoe's management information circular dated December 4, 2018 and
will receive consideration per Tahoe share of approximately 19.7%
in cash (US$0.67) and approximately 80.3% in Pan American shares
(0.1929 of a Pan American share). Tahoe shares in respect of which
Cash Elections were made will receive all cash consideration.
In addition, Tahoe shareholders received contingent
consideration in the form of one contingent value right ("CVR") for
each Tahoe share. Each CVR will be exchanged for 0.0497 of a Pan
American share upon first commercial shipment of concentrate
following restart of operations at the Escobal mine. The CVRs are
transferable and have a term of 10 years.
In aggregate, Pan American will pay US$275 million in cash and
issue 55,990,512 Pan American shares and 313,887,490 CVRs to Tahoe
shareholders under the Arrangement. Upon closing of the
Arrangement, existing Pan American and former Tahoe shareholders
own approximately 73% and 27% of Pan American, respectively. Upon
satisfaction of the payment conditions under the terms of the CVRs,
Pan American and Tahoe shareholders will own approximately 68% and
32%, respectively, of the combined company (based upon the number
of Pan American shares outstanding as at today’s date).
C. Kevin McArthur and Charles A. Jeannes appointed to Pan
American BoardUnder the Arrangement, Tahoe was entitled to
nominate two of its directors to join Pan American’s Board of
Directors. Tahoe has nominated Messrs. C. Kevin McArthur and
Charles A. Jeannes. Effective today, Messrs. C. Kevin McArthur and
Charles A. Jeannes joined Pan American’s Board of Directors.
"Kevin and Chuck are seasoned mining executives with deep
knowledge of the precious metals industry. I warmly welcome them to
Pan American's Board of Directors," said Mr. Ross J. Beaty,
Chairman of Pan American.
Increase to, and drawdown under, Pan American’s revolving
credit facilityPan American is also pleased to announce that it
has amended and extended its revolving credit facility led by The
Bank of Nova Scotia and the Canadian Imperial Bank of Commerce as
Joint Lead Arrangers and Joint Bookrunners. The facility has been
increased by US$200 million to US$500 million, and matures on
February 1, 2023. At Pan American’s option, amounts can be drawn
under the revolving facility and will incur interest based on the
Company’s leverage ratio at either (i) LIBOR plus 1.875% to 2.750%
or; (ii) The Bank of Nova Scotia’s Base Rate on U.S. dollar
denominated commercial loans plus 0.875% to 1.750%. Undrawn amounts
under the revolving facility are subject to a stand-by fee of
0.4219% to 0.6188% per annum, dependent on the Company’s leverage
ratio.
Pan American has drawn down US$301 million under the facility
under LIBOR-based interest rates to fund, in part, the cash
purchase price under the Arrangement and to repay, in full, and
cancel Tahoe’s second amended and restated revolving facility,
under which US$125 million had been drawn.
Delisting of Tahoe sharesThe shares of Tahoe are expected
to be delisted from the Toronto Stock Exchange as of the closing of
the market on February 26, 2019 and on the New York Stock Exchange
effective as of the closing of the market on March 4, 2019, subject
to the approval of each exchange. Pan American has applied for
Tahoe to cease to be a reporting issuer under applicable Canadian
securities laws and will file to suspend Tahoe’s reporting
obligations under U.S. securities laws.
About Pan AmericanPan American is the world’s second
largest primary silver producer, providing enhanced exposure to
silver through a diversified portfolio of assets, large reserves
and growing production. We own and operate mines in Mexico, Peru,
Canada, Argentina and Bolivia. In addition, we own the Escobal mine
in Guatemala that is currently not operating. Pan American
maintains a strong balance sheet, has an established management
team with proven operating expertise, and is committed to
responsible development. Founded in 1994, Pan American is
headquartered in Vancouver, B.C. and our shares trade on NASDAQ and
the Toronto Stock Exchange under the symbol "PAAS".
For more information, visit: www.panamericansilver.com.
Cautionary Note Regarding Forward-Looking Statements and
Information
Certain of the statements and information in this news release
constitute “forward-looking statements” within the meaning of the
United States Private Securities Litigation Reform Act of 1995 and
“forward-looking information” within the meaning of applicable
Canadian provincial securities laws. All statements, other than
statements of historical fact, are forward-looking statements or
information. Forward-looking statements or information in this news
release relate to, among other things, our growth profile and
opportunities as a result of the Arrangement, the restart of the
Escobal mine and production from such mine, first commercial
shipment of concentrate from Escobal following restart of
operations and the conversion and exchange of the CVRs following
such an event, the ownership proportions of the shareholders
following exchange of the CVR for Pan American shares, delisting of
the Tahoe shares from the Toronto Stock Exchange and the New York
Stock Exchange, Tahoe ceasing to be a reporting issuer under
applicable Canadian securities laws, Tahoe ceasing to be a
registrant under U.S. securities laws and Pan American’s production
growth.
These forward-looking statements and information reflect the
Company’s current views with respect to future events and are
necessarily based upon a number of assumptions that, while
considered reasonable by the Company, are inherently subject to
significant operational, business, economic and regulatory
uncertainties and contingencies.
The Company cautions the reader that forward-looking statements
and information involve known and unknown risks, uncertainties and
other factors that may cause actual results and developments to
differ materially from those expressed or implied by such
forward-looking statements or information contained in this news
release and the Company has made assumptions and estimates based on
or related to many of these factors. Among the key factors that
could cause actual results to differ materially from those
projected in the forward-looking information are the following: the
outcome of the ILO 169 consultation process and the Company’s
community engagement in Guatemala; the ability of Pan American to
successfully integrate Tahoe’s operations and employees and realize
synergies and cost savings at the times, and to the extent,
anticipated; the potential impact of the Arrangement on
relationships, including with regulatory bodies, employees,
suppliers, customers and competitors; changes in general economic,
business and political conditions, including changes in the
financial markets; changes in applicable laws; compliance with
extensive government regulation; and the diversion of management
time on the integration of Tahoe’s operations. Such factors include
those factors identified under the caption “Risks Related to Pan
American’s Business” in the Company’s most recent form 40-F and
Annual Information Form, as well as those factors identified in the
section entitled "Risk Factors" in the Company's management
information circular dated December 4, 2018 with respect to the
Arrangement, each filed with the United States Securities and
Exchange Commission and Canadian provincial securities regulatory
authorities, respectively. Although the Company has attempted to
identify important factors that could cause actual results to
differ materially, there may be other factors that cause results
not to be as anticipated, estimated, described or intended.
Investors are cautioned against undue reliance on forward-looking
statements or information. Forward-looking statements and
information are designed to help readers understand management’s
current views of our near and longer term prospects and may not be
appropriate for other purposes. The Company does not intend, nor
does it assume any obligation to update or revise forward-looking
statements or information, whether as a result of new information,
changes in assumptions, future events or otherwise, except to the
extent required by applicable law.
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version on businesswire.com: https://www.businesswire.com/news/home/20190222005093/en/
Siren FisekciVP, Investor Relations & Corporate
CommunicationsPh: 604-806-3191Email: ir@panamericansilver.com
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