PAAS Secures All Approvals for MAG Deal: Is Industry Leadership Next?

Pan American Silver Corp. PAAS has cleared the final regulatory hurdle for its acquisition of MAG Silver Corp. MAG, receiving approval from Mexico’s Federal Economic Competition Commission (COFECE). The transaction is set to close on or about Sept. 4, 2025, concluding a process that began in May. It solidifies Pan American’s standing with the largest silver reserves and resources among peers. 

This deal builds on PAAS’ history of successful acquisitions, including Yamana Gold in 2023 and Tahoe Resources in 2019, which expanded its scale and improved profitability. With the MAG Silver acquisition, Pan American Silver gains 44% stake in the Juanicipio project, which is recognized as the world’s largest-scale, highest-grade and lowest-cost primary silver mine.

Juanicipio is expected to produce 14.7-16.7 million ounces of silver in 2025.  Adding PAAS’ share to its guided 2025 production of 20–21 million ounces, its total output will go up to 26.5-28.3 million ounces. This puts Pan American Silver way ahead of peers like Coeur Mining CDE and First Majestic Silver AG.

Juanicipio is also expected to drive a meaningful reduction in Pan American Silver’s all-in sustaining costs (AISC) for the silver segment. The company reported a silver segment AISC of $19.69 per ounce in the second quarter of 2025 and guided $16.25-$18.25 for 2025. The low-cost production profile at Juanicipio could push costs even lower, strengthening margins.

Juanicipio is expected to add 58 million ounces to PAAS’ proven and probable silver reserves, which stood at 468 million ounces as of June 30, 2024. It is expected to contribute a free cash flow of $98 million to Pan American Silver this year, with growth of roughly 23% projected over the next three years.

The broader mining industry has been experiencing a wave of consolidation as companies seek to offset reserve depletion and avoid the lengthy timelines and high costs associated with exploring and developing a mine.  

In January, First Majestic acquired Gatos Silver, Inc. With this move, First Majestic gained 70% interest in the high-quality and long-life Cerro Los Gatos Silver underground mine.

In February, Coeur Mining completed the acquisition of Silvercrest. The acquisition added SilverCrest's high-grade, low-cost Las Chispas underground mine in Sonora, Mexico, to Coeur Mining's portfolio, improving its cost and margin profile.

PAAS’ Price Performance, Valuation & Estimates

Year to date, PAAS shares have gained 63.8%, outpacing the industry's 56.7% growth. In comparison, the Basic Materials sector has risen 17.7%, while the S&P 500 has moved up 9.8%.

PAAS is currently trading at a forward 12-month price-to-earnings multiple of 14.79X compared with the industry average of 17.84X.

The consensus mark for 2025 earnings is pegged at $1.98 per share, indicating a year-over-year surge of 150.6%. The estimate for 2026 of $2.38 indicates an increase of 20.2%.

The Zacks Consensus Estimate for Pan American Silver’s earnings for 2025 has moved up 17.9% over the past 60 days. The same for 2026 has moved up 23.3%.

PAAS stock currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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