Vancouver's Silver Wheaton Corp. (TSX:SLW) plans to acquire Silverstone Resources Corp. (TSX-V:SST) in an all-share deal worth approximately $190 million.
The deal consolidates the silver streaming industry, which buys silver from producers at a fixed price and usually includes an upfront payment and strengthens Silver Wheaton's status as the world's largest silver streaming company.
Silver Wheaton will add three sources of silver to its portfolio: Capstone Mining's Minto mine in the Yukon, its Cozamin mine in Mexico and Lundin Mining's Neves-Corvo mine in Portugal. The deal will increase Silver Wheaton's annual silver production by 2.3 million ounces and increase its gold production by 31,000 ounces.
The deal will be completed through a plan of arrangement, under which Silver Wheaton will acquire all outstanding Silverstone shares in exchange for 0.185 Silver Wheaton common share. The deal values Silverstone at $1.47 per share, which represents a 40% premium based on the 20-day volume-weighted average of both companies.
Silverstone's share price range during the past week: between $1.10 and $1.25; 52-week high: $3.10; 52-week low: $0.345.
Silver Wheaton's share price range during the past week: between $7.67 and $8.57; 52-week high: $19.30; 52-week low: $3.07.
For the nine-month period ending September 30, Silver Wheaton reported a 10.2% increase in revenue to US$138 million from US$145.2 million. Net earnings rose 6.7% to $71.4 million from $67 million.
Capstone mining, which owns 24% of Silverstone, supports the deal, which is expected to close by the end of May.