Fresnillo sells down MAG Silver stake

(Sharecast News) - Fresnillo has sold the majority of its stake in MAG Silver, it said on Friday, following the announcement of a proposed acquisition of MAG by Pan American Silver. The precious metals miner said its initial investment in MAG Silver was made to support the development of the Juanicipio mine, where Fresnillo is operator and majority owner.

Under the terms of the proposed deal, Fresnillo's 9% holding in MAG would be diluted to less than 1% in Pan American.

The company emphasised its continued confidence in the performance and long-term value of Juanicipio, which it described as a key asset in its portfolio.

It added that the sale of shares reflected a disciplined investment approach, with proceeds to be used in line with Fresnillo's capital allocation priorities, including growth projects and maintaining balance sheet strength.

Fresnillo said it was looking forward to working with Pan American at Juanicipio should the acquisition complete, but confirmed that governance and legal terms of the mine's partnership remain unchanged.

At 0809 BST, shares in Fresnillo were down 0.3% at 1,013p.

Reporting by Josh White for Sharecast.com.