Pan American Silver acquires 18.75 M Galleon units

Executive Summary

• Pan American Silver Corp. acquired 18.75 million units of Galleon Gold Corp. for $11.25 million (60 cents per unit) via a non-brokered private placement.
• This acquisition brings Pan American's total stake in Galleon to approximately 14.7% on a non-diluted basis and 29.7% on a partially diluted basis, triggering an early warning report under National Instrument 62-103.
• The transaction is part of a broader brokered private placement by Galleon totaling 50 million units, and Pan American has agreed to hold off on converting existing debentures or exercising warrants until disinterested shareholders approve Pan American as a control person.

Key Details

• Transaction Structure: Pan American acquired 18.75 million units at $0.60 per unit, resulting in aggregate consideration of $11.25 million.
• Unit Composition: Each unit consists of one common share of Galleon and one-half of one common share purchase warrant.
• Warrant Terms: Each warrant entitles the holder to acquire one additional common share at an exercise price of $0.75 per share, exercisable until December 4, 2027.
• Post-Transaction Ownership:
  • Direct/Indirect Ownership: 18.75 million common shares and 9,375,000 warrants.
  • Percentage Ownership: Approximately 14.7% of issued and outstanding common shares on a non-diluted basis; approximately 29.7% on a partially diluted basis.
• Existing Debt Instrument: Prior to this acquisition, Pan American held an unsecured convertible debenture issued by Galleon on August 13, 2025, for $8 million.
  • Debenture Terms: 36-month term, 10.0% interest per annum (payable in cash or shares at Pan American's option), convertible at $0.45 per common share.
  • Potential Conversion: Conversion of the debenture would result in up to 17,777,777 common shares.
• Full Dilution Scenario: If Pan American converted the $8 million debenture and exercised all warrants, it would own 45,902,777 common shares, representing approximately 19.6% on a fully diluted basis and 29.7% on a partially diluted basis.
• Control Restrictions: Pan American agreed not to convert the debenture or exercise warrants if such actions would cause its ownership (including joint actors) to exceed 19.9% of issued and outstanding common shares until disinterested shareholders of Galleon approve Pan American as a control person.
• Strategic Intent: The acquisition was made for investment purposes with a long-term view; Pan American may acquire additional securities or sell existing ones based on market conditions and other factors.

Notable Quotes

• None provided in the text.