Minefinders Shares Skyrocketed: What You Need to Know

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of Minefinders (AMEX: MFN  ) soared 25% Monday after the silver and gold explorer agreed to be acquired by Pan American Silver (Nasdaq: PAAS  ) for $1.5 billion.

So what: The deal values Minefinders at $15.60 per share and represents a juicy premium of 36% to its Friday closing price. Pan American is making the move to gain access to Minefinders' Dolores gold and silver mine in northern Mexico, but given its stock's 9% drop this morning, it's clear that Pan American shareholders aren't exactly thrilled with the purchase price.

Now what: Minefinders shareholders now have the option of receiving 0.6235 of a Pan American share, $15.60 in cash, or a mix of $1.84 in cash and 0.55 of a Pan American share for each of their shares. "We believe that the addition of the Dolores deposit, along with a strong portfolio of exploration and development projects and a dedicated team of employees, provides a significant contribution to the future growth and success of Pan American," Minefinders CEO Mark Bailey said. Of course, unless you really need to maintain exposure to volatile silver prices, opting for the all-cash offer seems like the prudent play.

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