Pan American Silver Acquires Canadian Miner (PAAS, MFN)

Canada’s Pan American Silver Corp. (NASDAQ: PAAS) has agreed to acquire junior miner Minefinders Corp. Ltd. (AMEX: MFN) for total consideration of CDN$1.5 billion. The total works out to CDN$15.60/share, a 36% premium over Friday’s closing share price for Minefinders.

Minefinders shareholders may elect one of three payment plants: 1) an all-cash payment of CDN$15.60/share, subject to certain pro-rated limits; 2)0.55 shares of Pan American plus $1.84 in cash for each share of Minefinders; or 3) 0.6235 shares of Pan American for each share of Minefinders.

The combination produced about 26 million ounces of silver in 2011 and is expected to produce about 50 million ounces by 2015. Pan American’s CEO noted the company’s goal is to become the “largest, low-cost primary producer of silver in the world.”