MAG Silver (MAG) M&A Announcement summary

Deal rationale and strategic fit

• Acquisition adds a 44% interest in Juanicipio, a high-grade, low-cost silver mine in Mexico, strengthening the acquirer's position as a leading silver producer with the largest reserves and resources among peers.

• The deal embeds the acquired company's core asset in a diversified Americas-focused portfolio, reducing single-asset and jurisdiction risk.

• Provides significant exploration upside at Juanicipio (only 10% explored), Deer Trail, and Larder projects.

• Shareholders of the acquired company gain exposure to a larger, more liquid entity and diversified growth opportunities.

• Deploys $500 million of cash strategically to enhance silver exposure and future growth.

Financial terms and conditions

• Total consideration is $2.1 billion, or $20.54 per share, with $500 million in cash and 0.755 shares per acquired share, subject to proration and aggregate limits.

• Shareholders can elect cash, shares, or a mix, subject to a $500 million cash cap and pro rata adjustments.

• Represents a 21% premium to the closing price and a 27% premium to the 20-day VWAP as of May 9, 2025.

• Upon closing, acquired company shareholders will own about 14% of the combined entity on a fully diluted basis.

• A $60 million break fee applies if the transaction is terminated under certain conditions.

Synergies and expected cost savings

• Silver production is expected to increase by 34% to up to 27.4 million ounces in 2025, positioning the combined company as the second-largest primary silver producer globally.

• Juanicipio's low-cost structure is forecast to reduce all-in sustaining costs for silver by over $3.00/oz, with 2025 AISC projected at $6.00–$8.00 per ounce.

• High-margin ounces from Juanicipio are expected to boost free cash flow, with an estimated $98 million incremental free cash flow in 2025.

• Transaction is significantly accretive to silver production and cost profile.

• De-risks acquired company shareholders by converting concentrated asset exposure into diversified equity ownership.