Stillwater Mining Co. (SWC), a platinum producer in Montana, fell 22 percent after agreeing to pay $487 million in cash and shares to buy Peregrine Metals Ltd. (PGM), owner of a copper and gold project in Argentina.
Stillwater will acquire all outstanding shares of Vancouver-based Peregrine by exchanging 0.08136 of a share of Stillwater common stock and $1.35 in cash for each share of Peregrine stock, the companies said in a joint statement.
The deal is expected to close in 90 days. Peregrine must pay Stillwater $13.4 million if the deal collapses, said the statement.
“This transaction will transform Stillwater into a leading American mid-cap diversified mining company with a unique precious metal and copper production profile,” Francis McAllister, chief executive officer of Stillwater, said on a conference call.
Peregrine’s Altar project, a mine in western Argentina, has the potential to produce an average of about 280 million pounds (127 million kilograms) of copper a year and may contain 1.5 million ounces (43 million grams) of gold, McAllister said. Stillwater plans to invest $75 million in Altar over three years.
Stillwater, based in Billings, Montana, dropped $5.26, or 22 percent, to $18.46 at 4:15 p.m. on the New York Stock Exchange composite trading, while Peregrine more than tripled in Toronto trading to C$2.60.
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