(RTTNews) - Canadian silver mining company Pan American Silver Corp. (PAAS: News ,PAA.TO: News ) Wednesday agreed to acquire Aquiline Resources Inc. (AQI.TO: News ) by making a formal bid, in a deal valued at about C$626 million. Pan American would also make an offer for each outstanding series of Aquiline warrants and the Aquiline convertible debenture.

The Board of Directors of Aquiline has unanimously determined that the Pan American share offer is fair to Aquiline's shareholders and the transaction is in the best interest of Aquiline, and will unanimously recommend that Aquiline shareholders tender their common shares to the share offer. Aquiline shareholders will own about 19% of the enlarged Pan American, once the deal closes. Pan American shareholders will not be required to vote on the transaction.

In a statement, president and chief executive officer of Pan American, Geoffrey Burns said, "We believe the acquisition of Aquiline provides a perfect match with Pan American's core strength as a developer and operator of primary silver mines. The Navidad project is one of the world's largest undeveloped silver deposits and we will bring all the skills, technology and experience we have gained commissioning or expanding five new mines in the last six years to its development and operation."

Aquiline Resources is an exploration and development company advancing one of the world's largest undeveloped silver deposits in Navidad, as well as a gold/silver deposit in Calcatreu, both in Argentina, and a gold deposit in Pico Machay, Peru. The Company's core strategy is to acquire high-grade precious metals deposits within the Americas.

Under the agreement, Vancouver-based Pan American will make a friendly offer to acquire Aquiline Resources by offering 0.2495 of a its common share plus 0.1 of its common share purchase warrant for each Aquiline common share. Further, Pan American will make separate offers to purchase Aquiline warrants and convertible debenture, and offer replacement securities with similar terms, adjusted by the 0.2495 exchange ratio.
The total consideration is valued at C$7.47 per Aquiline common share, representing a 36.6% premium to Aquiline closing price of C$5.47 on Tuesday on the Toronto Stock Exchange, and a 62% premium to 10-day volume-weighted average price. Each full warrant entitles the holder to purchase one Pan American common share at C$35.00 over the 5-year period from the date of first take-up of Aquiline shares.

However, the offers are conditional on the directors and senior officers of Aquiline entering into lock-up agreements with Pan American and agreeing to tender all of their Aquiline shares in support of the share offer. The share offer and each of the convertible securities offers are conditional upon a minimum of 66 2/3% of the outstanding Aquiline shares on a diluted basis being tendered to the share offer.

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