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Can Pan American Silver Close Its MAG Silver Deal This Quarter?
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Key Takeaways
Pan American Silver is close to completing its $2.1B acquisition of MAG Silver.
The deal centers on MAGs 44% stake in the Juanicipio project, a top-tier silver mine.
Juanicipio is expected to add 6.57.3M ounces to PAAS 2025 output and cut AISC.
Pan American Silver Corp. (PAAS - Free Report) is nearing the completion of its $2.1 billion acquisition of MAG Silver Corp. (MAG - Free Report) . The deal has so far received all major approvals, including those from MAG Silver shareholders, the final order of the Supreme Court of British Columbia, Canadian competition clearance and from the Toronto Stock Exchange and the New York Stock Exchange. Only the approval from Mexico’s Federal Economic Competition Commission (COFECE) remains to be cleared, which is expected in the ongoing quarter.
MAG Silver has set Aug. 27, 2025, as the deadline for its shareholders to opt for their choice of consideration.
This deal will add to PAAS’ solid track record of acquisitions, including Yamana Gold in 2023 and Tahoe Resources in 2019, which significantly added to its scale and improved profitability.
The focal point of the MAG Silver acquisition is its 44% stake in the Juanicipio project. It is known as the world’s largest-scale, highest-grade and lowest-cost primary silver mine.
Juanicipio is forecasted to produce 14.7-16.7 million ounces of silver in 2025. Pan American's 44% share will translate to approximately 6.5–7.3 million ounces. This will add to PAAS’ guided 2025 production of 20–21 million ounces (excluding Juanicipio).
Juanicipio is also expected to drive a meaningful reduction in Pan American Silver’s all-in sustaining costs (AISC) for the silver segment. The company reported a silver segment AISC of $19.69 per ounce in the second quarter of 2025 and guided $16.25-$18.25 for 2025, levels that the low-cost Juanicipio mine could help ease.
Juanicipio is expected to add 58 million ounces to PAAS’ proven and probable silver reserves, which stood at 468 million ounces as of June 30, 2024. It is expected to contribute a free cash flow of $98 million to Pan American Silver this year. The figure is expected to grow 23% over the next three years.
Recent Consolidation Activity Among Silver Miners
In January, First Majestic Silver (AG - Free Report) acquired Gatos Silver, Inc. With this move, First Majestic gained 70% interest in the high-quality and long-life Cerro Los Gatos Silver underground mine.
In February, Coeur Mining (CDE - Free Report) completed the acquisition of Silvercrest. The acquisition added SilverCrest's high-grade, low-cost Las Chispas underground mine in Sonora, Mexico, to Coeur Mining's portfolio, improving its cost and margin profile.
PAAS’ Price Performance, Valuation & Estimates
Year to date, PAAS shares have gained 58.5%, outpacing the industry's 48.6% growth. In comparison, the Basic Materials sector has risen 14.3%, while the S&P 500 has moved up 8.6%.
Image Source: Zacks Investment Research
PAAS is currently trading at a forward 12-month price-to-earnings multiple of 14.35X compared with the industry average of 16.95X.
Image Source: Zacks Investment Research
The consensus mark for 2025 earnings is pegged at $1.98 per share, indicating a year-over-year surge of 150.6%. The estimate for 2026 of $2.38 indicates an increase of 20.2%.
The Zacks Consensus Estimate for Pan American Silver’s earnings for 2025 has moved up 19.3% over the past 60 days. The same for 2026 has moved up 22.1%.
Image: Shutterstock
Can Pan American Silver Close Its MAG Silver Deal This Quarter?
Key Takeaways
Pan American Silver Corp. (PAAS - Free Report) is nearing the completion of its $2.1 billion acquisition of MAG Silver Corp. (MAG - Free Report) . The deal has so far received all major approvals, including those from MAG Silver shareholders, the final order of the Supreme Court of British Columbia, Canadian competition clearance and from the Toronto Stock Exchange and the New York Stock Exchange. Only the approval from Mexico’s Federal Economic Competition Commission (COFECE) remains to be cleared, which is expected in the ongoing quarter.
MAG Silver has set Aug. 27, 2025, as the deadline for its shareholders to opt for their choice of consideration.
This deal will add to PAAS’ solid track record of acquisitions, including Yamana Gold in 2023 and Tahoe Resources in 2019, which significantly added to its scale and improved profitability.
The focal point of the MAG Silver acquisition is its 44% stake in the Juanicipio project. It is known as the world’s largest-scale, highest-grade and lowest-cost primary silver mine.
Juanicipio is forecasted to produce 14.7-16.7 million ounces of silver in 2025. Pan American's 44% share will translate to approximately 6.5–7.3 million ounces. This will add to PAAS’ guided 2025 production of 20–21 million ounces (excluding Juanicipio).
Juanicipio is also expected to drive a meaningful reduction in Pan American Silver’s all-in sustaining costs (AISC) for the silver segment. The company reported a silver segment AISC of $19.69 per ounce in the second quarter of 2025 and guided $16.25-$18.25 for 2025, levels that the low-cost Juanicipio mine could help ease.
Juanicipio is expected to add 58 million ounces to PAAS’ proven and probable silver reserves, which stood at 468 million ounces as of June 30, 2024. It is expected to contribute a free cash flow of $98 million to Pan American Silver this year. The figure is expected to grow 23% over the next three years.
Recent Consolidation Activity Among Silver Miners
In January, First Majestic Silver (AG - Free Report) acquired Gatos Silver, Inc. With this move, First Majestic gained 70% interest in the high-quality and long-life Cerro Los Gatos Silver underground mine.
In February, Coeur Mining (CDE - Free Report) completed the acquisition of Silvercrest. The acquisition added SilverCrest's high-grade, low-cost Las Chispas underground mine in Sonora, Mexico, to Coeur Mining's portfolio, improving its cost and margin profile.
PAAS’ Price Performance, Valuation & Estimates
Year to date, PAAS shares have gained 58.5%, outpacing the industry's 48.6% growth. In comparison, the Basic Materials sector has risen 14.3%, while the S&P 500 has moved up 8.6%.
PAAS is currently trading at a forward 12-month price-to-earnings multiple of 14.35X compared with the industry average of 16.95X.
Image Source: Zacks Investment Research
The consensus mark for 2025 earnings is pegged at $1.98 per share, indicating a year-over-year surge of 150.6%. The estimate for 2026 of $2.38 indicates an increase of 20.2%.
The Zacks Consensus Estimate for Pan American Silver’s earnings for 2025 has moved up 19.3% over the past 60 days. The same for 2026 has moved up 22.1%.
Image Source: Zacks Investment Research
PAAS stock currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.