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Pan American shareholders approve Tahoe acquisition

Deal overwhelmingly approved on Jan. 8
With its acquisition of Tahoe Resources, Pan American Silver now owns the Escobal underground silver mine in Guatemala, although operations are currently suspended pending the outcome of a legal decision on its mining licence. (Tahoe photo)

The $1.1-billion acquisition of Tahoe Resources by Pan American Silver has been approved by shareholders.

A special meeting to discuss the purchase was held Jan. 8 in Vancouver, with Pan American shareholders voting 98 per cent in favour of the merger. Tahoe shareholders, meanwhile, voted 95 per cent in favour of the move.

"We are very pleased to see strong shareholder support for our acquisition of Tahoe," said Michael Steinmann, president and CEO of Pan American, in a Jan. 8 news release.

“This is a logical combination that provides investors with exposure to a geographically diversified portfolio of some of the world's best silver mining assets."

The two companies originally announced the acquisition in November. It will give Vancouver-headquartered Pan American Silver ownership of Tahoe’s underground Escobal silver mine in Guatemala, which went into operation in 2013.

The mine has proven and probable reserves of 264 million ounces of silver, and another 375 million ounces of silver in the measured and indicated categories.

The facility’s mill, which went into production in 2014, has a processing capacity of 4,500 tonnes per day.

However, operations at Escobal have been temporarily suspended since June 2017, pending the outcome of a legal ruling on the operation’s mining licence.

In Canada, Tahoe Resources owns and operates the underground Timmins West and Bell Creek gold mines, along with the Bell Creek Mill, located in the Porcupine Mining Division, about 20 kilometres northeast of Timmins.

The Bell Creek Mill, which processes ore from both operations, has a capacity of 4,000 tonnes per day. Its estimated production for 2018 is 160,000 to 175,000 gold ounces.

Tahoe acquired the operation after purchasing Lake Shore Gold in 2016.

Pan American’s acquisition of Tahoe still requires approval by the Supreme Court of British Columbia and the Mexican Federal Economic Competition Commission.

The transaction is expected to be completed by Feb. 26.