Pan American Silver and Agnico Eagle have issued a definitive binding offer of approximately $4.8 billion in cash and stock to Canadian gold producer Yamana Gold.

In May 2022, Yamana Gold signed a definitive agreement with Gold Fields Limited to be acquired by the latter in an all-stock deal worth $6.7 billion. This deal is scheduled to close by the end of this year, subject to satisfying the preceding conditions.

However, Yamana Gold said that its board has determined the latest offer, from Pan American Silver and Agnico Eagle as superior.

According to Pan American Silver and Agnico Eagle, their offer is a premium of 15% to the offer from Gold Fields Limited. This is based on the spot price of Gold Fields Limited’s shares as of the market close on 3 November 2022.

Pan American Silver is planning to acquire Yamana Gold following which the latter will divest some subsidiaries and partnerships which hold its interests in its Canadian assets to Agnico Eagle. These include the Canadian Malartic mine, which is claimed to be among the largest gold mines in the world.

Yamana Gold said that it has notified Gold Fields Limited of its plan to accept the offer from Pan American Silver and Agnico Eagle. This will be subject only to Gold Fields Limited’s “right to match” under their agreement in May 2022.

The consideration offered by Pan American Silver and Agnico Eagle is made up of 153.5 million of Pan American Silver’s shares and $1bn in cash contributed by Agnico Eagle along with 36 million of its shares.

The offer from Pan American Silver and Agnico Eagle values each share of Yamana Gold at $5.02.

Yamana Gold stated: “At this time, there can be no assurance that the New Offer will lead to a termination of the Gold Fields Arrangement Agreement and the execution of a definitive arrangement agreement with the New Offerors in respect of the New Offer, or that the proposed transaction contemplated by the New Offer will be consummated.

“The Board has not changed its recommendation regarding the pending transaction with Gold Fields pursuant to the Gold Fields Arrangement Agreement (the “Gold Fields Arrangement”) and the special meeting of Yamana shareholders (the “Yamana Meeting”) to consider the Gold Fields Arrangement is scheduled to be held at 10:00 am (Toronto time) on Monday, November 21, 2022.”

Pan American Silver and Agnico Eagle, in a joint press release, stated that the potential deal with Yamana Gold will create a top precious metals producer in Latin America. It gives Yamana Gold exposure to Pan American Silver’s know-how and experience in operating mines in Latin America for more than 28 years.

Michael Steinmann — Pan American Silver President and CEO said: “The combination of our existing portfolio with Yamana’s high-quality assets in Latin America would create a powerful precious metals mining company in the Americas with leading exposure to silver, and represents an exciting opportunity for growth for both Yamana and Pan American shareholders.”

The proposed deal will also allow Yamana Gold to benefit from exposure to Agnico Eagle’s portfolio of producing mines in Canada, Finland, Australia, and Mexico. Furthermore, Agnico Eagle is the operator of the Canadian Malartic open-pit gold mine.

Ammar Al-Joundi — Agnico Eagle President and CEO said: “The full integration of the Canadian Malartic team and landholdings into our operational base in the region would enhance our Abitibi operating platform, placing Agnico in the unique position to further optimize the asset and unlock potential value through exploration and the leveraging of existing infrastructure, people and regional relationships.”

  Agnico Eagle, Ammar Al-Joundi, Canada, Gold Fields, Michael Steinmann, Pan American Silver, Yamana Gold