Pan American Silver Completes Acquisition of Tahoe Resources
Pan American Silver Completes Acquisition of Tahoe
Resources
VANCOUVER
,
Feb. 22, 2019
/CNW/ -
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 shareholders
Pursuant 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 Board
Under 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 facility
Pan 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 shares
The 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 American
Pan 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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SOURCE
Pan American Silver Corp.
View original content:
http://www.newswire.ca/en/releases/archive/February2019/22/c6155.html
%SEDAR: 00002432E
For further information:
Siren Fisekci, VP, Investor Relations & Corporate Communications, Ph: 604-806-3191, Email:
CO: Pan American Silver Corp.
CNW 09:00e 22-FEB-19