Fresnillo plc (LON:FRES) has announced that following the recently published agreement to acquire MAG Silver Corp by Pan American Silver Corp, Fresnillo has carefully considered its position in MAG Silver.
Fresnillo originally acquired its stake in MAG Silver as a strategic investment in a single-asset company to support the strong partnership at Juanicipio, one of the world’s premier silver mines where Fresnillo is the operator and majority owner. Under the terms of the Agreement, subject to approval of the transaction, Fresnillo’s shareholding of over 9% of MAG Silver would convert into a shareholding of less than 1% of Pan American, a diversified, multi-asset precious metals mining company. This conversion of shares does not align with Fresnillo’s strategic investment objectives nor with the interests of its shareholders and therefore Fresnillo has sold the majority of its MAG Silver shares.
Fresnillo is very confident in the value and performance of the Juanicipio mine, which continues to deliver excellent operational and financial results and remains one of the key assets in the Fresnillo portfolio. The sale of its MAG Silver shares reflects a disciplined approach to the Company’s investment strategy, focusing on its core objectives.
In the event the proposed transaction completes, Fresnillo welcomes the opportunity to build a collaborative relationship with Pan American, an experienced precious metals miner with a strong track record, complementing Fresnillo’s role as operator and majority owner of Juanicipio. The terms of the Juanicipio partnership, including all governance and legal matters, remain unchanged.
The proceeds from the sale of shares will be allocated in a disciplined manner in line with Fresnillo’s capital allocation priorities, including investment in its growth pipeline and maintaining a strong balance sheet.
