Canadian miner Pan American Silver to acquire Aquiline Resources for $608 million

Canadian miner, Pan American Silver Corp, which operates in Latin America's richest silver-producing countries, has enetred into a deal to acquire Aquiline Resources, a gold and silver exploration and development company,  for $608 million.

The friendly acquisition gives Pan American control of Aquiline's Navidad silver mining exploration operations in Argentina- one of the world's largest underdeveloped silver deposits, which holds an annual production estimate of 15 million ounces of silver.

Vancouve-based Pan American, which has eight operating mines in Mexico, Peru, Argentina and Bolivia, will also get control of Aquiline's gold / silver deposit at Calcatreu in Argentina and the Pico Machay project, a gold deposit in Peru.

Under the deal, shareholders in Toronto-based Aquiline would get 0.2495 Pan American shares and 0.1 of a share warrant, the right to a tenth of a Pan American share, for each one of their shares. The warrant could be converted into a Pan American share for C$35 within about five years.

Pan American said that the implied value of the offer is C$7.47 per Aquiline common share, which represents a premium of approximately 36.6 per cent over Tuesday's closing price of Aquiline on the Toronto Stock Exchange.

Pan American Silver, which had sales of C$111.4 million and net income of $13.5 million for the quarter ended 30 June 2009, said that the acquisition of Aquiline would increase Pan American's estimated measured and indicated silver resources to approximately 945 million ounces.