In a friendly, all-share deal, Vancouver-based silver producer Pan American Silver (PAA-T) is offering to acquire all the outstanding shares of Toronto-based silver junior Corner Bay Silver (BAY-T).
Under the arrangement, each Corner Bay common share will be swapped for 0.54 common Pan American share, plus 0.25 share of a newly formed, US$3-million exploration company temporarily named “ExploreCo,” in which Pan American would own a 9.99% stake.
Corner Bay currently has 20.7 million fully diluted shares outstanding. Pan American currently has 41.5 million shares outstanding (45 million fully diluted) and will issue about 11 million shares to Corner Bay shareholders.
The merger ratio represents a 53 percent premium over Corner Bay’s May 17th closing share price.
The deal will combine Pan American’s silver production and operational experience at three silver mines with Corner Bay’s exploration assets and expertise.
In particularly, Pan American has had its eye on Corner Bay’s 1997 discovery, the Alamo Dorado silver-gold deposit in Mexico’s Sonora state.
Peter Mordaunt, Corner Bay’s chairman and president, will join Pan American’s board if the deal is approved by shareholders and regulators.
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