Americas Silver Corp. and Pershing Gold Corp. have entered into a definitive agreement to complete a business combination to create a low-cost, precious metal growth company for the Americas. The transaction pairs two polymetallic mines, the Galena Complex in Idaho and the San Rafael mine in Mexico, which are expected to produce approximately 7 million silver equivalent ounces (oz) with the Relief Canyon (precious metals) development project in Nevada, which could potentially add approximately 91,000 gold oz annually.
“This transaction aligns with our stated initiative of building a profitable and low-cost precious metal company in the Americas by operating and building low risk, low capital, high return projects,” said Darren Blasutti, president and CEO of Americas Silver. “With the on-schedule and on-budget construction and rapid commissioning of San Rafael now successfully completed, we are focused on the next leg of growth — today’s transaction delivers this growth platform, while also providing us with additional precious metal exposure and a near-term operating presence in Nevada.”
This transaction provides a clear path for the development of Relief Canyon, explained Steve Alfers, president and CEO of Pershing.
Under the terms of the agreement, holders of Pershing common shares will receive 0.715 common shares of Americas Silver for each common share of Pershing by way of a share exchange. Based on the closing price of Americas Silver on the New York Stock Exchange American on September 28, this implies a value of $1.69 per Pershing common share.
The combined company will be managed by the executive team of Americas Silver, led by Blasutti as president and CEO. Alex Davidson will be the chairman of the combined company, which will comprise nine members. Pershing’s board will designate one individual to join the combined board.
The transaction, which requires shareholder approval, is expected to close in the first quarter of 2019.