Pan American grabs 14.7% stake in Galleon Gold

[Ben Graham]

Pan American Silver (TSX, NYSE: PAAS) has taken a 14.7% stake in Galleon Gold Corp. (TSX-V: GGO) after buying 18.75 million units in the explorer and developer via private placement.

The Canadian precious metals miner paid C$0.60 per unit as part of Galleon’s wider 50-million-unit financing. Each unit includes one common share and half a warrant, with full warrants exercisable at C$0.75 until December 4, 2027.

The investment gives Pan American 18.75 million common shares, 9.38 million warrants and its previously issued unsecured convertible debenture, amounting to 14.7% ownership on a non-diluted basis and about 29.7% on a partially diluted basis.

This marks Pan American’s first direct equity stake in Galleon, although it already held rights to acquire shares through the debenture. The company agreed not to convert the debenture or exercise warrants above a 19.9% ownership threshold unless Galleon shareholders approve it as a control person.

Pan American said it bought the securities for investment purposes and may adjust its holdings depending on market conditions and strategic needs.

Shares in Pan American Silver were 1.74% higher on Friday in pre-market trading at $44.96 on the New York Stock Exchange. Galleon Gold closed 2.04% higher on Thursday at $0.5 on the OTC.