History
Minefinders raised over C$150 million in late 2010 to expand its Dolores mine in Mexico, then agreed to a Pan American Silver takeover completed in March 2012.
2010-2011: Drilling, funding and a reserve update
In 2010 Minefinders, a Vancouver-based company, was working on two fronts in Mexico. In September it reported first results from drilling at La Virginia, in Sonora, and announced a gold and silver mineralized system. The best intercepts included 2.0 metres at 12.17 g/t gold and 27.0 metres at 1.01 g/t gold. Eleven widely spaced holes totalling about 2,770 metres had been drilled, and management said it would expand the program.
In October, deep drilling south of the Dolores open pit, its operating gold and silver mine in Chihuahua, returned high-grade results, including 2.0 metres at 73.24 g/t gold and 4,986.7 g/t silver. The company began assessing a possible underground mine and a mill at Dolores, though this mineralization was not yet in any reserve and needed more drilling.
Funding came next. In November Minefinders swapped US$32,941,000 of its 4.50% convertible notes due December 2011 for US$36,235,000 of new notes due December 2015, convertible at about US$11.97 per share. That left US$52,059,000 of the 2011 notes outstanding. In December it sold 13,650,000 new shares at C$11.10 in a bought deal, raising C$151,515,000 for Dolores expansion and mill construction, the La Bolsa property, debt repayments and general purposes. The sale diluted existing holders. An option for up to 2,047,500 more shares was still open at closing.
In May 2011 the company issued its first reserve update since 2008, current to the end of 2010. Open pit reserves stood at 2.024 million ounces of gold and 114.52 million ounces of silver, which it said supported 16 years of open pit production. Average gold grades were lower than before, which it put down to methodology changes, higher metal prices and lower-grade pit-expansion areas. It planned about $3.5 million for roughly 20,000 metres of drilling in 2011. The record then goes quiet until January 2012.
2012: Sale to Pan American Silver
On January 23, 2012, Minefinders agreed to be acquired by Pan American Silver through a plan of arrangement. Shareholders could choose 0.55 Pan American shares plus $1.84 cash, 0.6235 Pan American shares, or $15.60 cash, subject to pro-ration. The $15.60 figure was a 36% premium to the January 20 TSX close, and the deal was valued at about $1.5 billion. Minefinders holders were to own about 33% of Pan American, and the agreement carried $42 million reciprocal termination payments.
Approvals followed quickly. In mid-March proxy advisers ISS and Glass Lewis backed the deal, and Mexico's Federal Competition Commission authorized it. On March 26 Minefinders shareholders voted 99.79% in favour, and Pan American shareholders approved issuing up to 53,666,003 shares with 79.78% support. The Ontario Superior Court issued its final order on March 28.
Pan American completed the arrangement on March 30, 2012 and now owns all Minefinders shares, along with Dolores, La Bolsa and La Virginia. Full-proration holders received CDN$1.84 plus 0.55 Pan American share per share. Minefinders shares were to be delisted from the TSX and NYSE Amex. The filings do not state the fate of the remaining 2011 and 2015 notes.
Written from the 11 story beats below (2010 to 2 Apr 2012), which come from the company's own announcements and filings.