Pan American mails takeover circular to Aquiline
Ticker Symbol: C:PAA C:AQI

Pan American mails takeover circular to Aquiline

Pan American Silver Corp (C:PAA)
Shares Issued 87,225,673
Last Close 10/29/2009 $23.27
Friday October 30 2009 - News Release

Also Aquiline Resources Inc (C:AQI) News Release

An anonymous director of Pan American reports

PAN AMERICAN SILVER CORP. AND AQUILINE RESOURCES INC. MAIL TAKE-OVER BID CIRCULAR AND DIRECTORS' CIRCULAR

Pan American Silver Corp. has mailed to securityholders of Aquiline Resources Inc. its takeover bid circular dated Oct. 30, 2009, and related documents in connection with its previously announced offers for all of the issued and outstanding common shares of Aquiline and each outstanding series of Aquiline warrants and the Aquiline convertible debenture. The total value implied by all of the offers is approximately $626-million, based on closing prices on the day prior to public announcement of the transaction.

Included in the mailing to Aquiline securityholders is Aquiline's directors' circular, also dated Oct. 30, 2009. The board of directors of Aquiline has unanimously determined that the share offer is fair to Aquiline shareholders and in the best interest of Aquiline and unanimously recommends that Aquiline shareholders accept the share offer and deposit their Aquiline common shares to the share offer. The board of directors of Aquiline is making no recommendation as to whether any holders of Aquiline warrants and the Aquiline convertible debenture should accept or reject any of the convertible security offers.

BMO Capital Markets, financial adviser to Aquiline, has delivered a fairness opinion to the board of directors of Aquiline in connection with the share offer. Cormark Securities Inc. also delivered a fairness opinion to the board of directors of Aquiline in connection with the share offer. Pan American's exclusive financial adviser for this transaction is Goldman, Sachs & Co. Based on the closing price of Pan American common shares on the Toronto Stock Exchange on Oct. 13, 2009, being the last trading day prior to announcement of the offers (and assuming a value of 81 cents for each 0.1 of a five-year Pan American warrant), the implied value of the share offer is $7.47 per Aquiline common share, which represents a premium of approximately 36.6 per cent over the closing price of Aquiline common shares on the TSX on the same date, and a 62.0-per-cent premium to Aquiline's 10-day volume weighted average price. Upon successful completion of the transaction, Aquiline shareholders will own approximately 19 per cent of the enlarged Pan American.

The share offer was made on the basis of 0.2495 of a Pan American common share, plus 0.1 of a five-year Pan American warrant for each Aquiline common share. Each whole five-year Pan American warrant will entitle the holder to acquire one Pan American common share at a price of $35.00 per Pan American common share for a period of five years after the date on which Pan American first pays for Aquiline common shares tendered to the share offer. The consideration offered pursuant to the convertible security offers will consist of replacement Pan American securities, exercisable to acquire Pan American common shares, with similar terms to the respective Aquiline securities, subject to an adjustment based on a 0.2495 exchange ratio.

Pan American has entered into lock-up agreements with each of the directors and senior officers of Aquiline, pursuant to which 6,447,096 common shares of Aquiline and 1,758,333 in-the-money Aquiline options (assumed to be converted into Aquiline shares prior to the expiry of the mandatory extension (as defined in the takeover bid circular)), together representing approximately 9.79 per cent of the issued and outstanding common shares of Aquiline (on a partially diluted basis, as defined in the takeover bid circular) and 38,000 Aquiline warrants have been locked up and committed to being tendered to the offers.

The details of the offers are contained in the takeover bid circular. The takeover bid circular and related documents have been filed on SEDAR and EDGAR, and the directors' circular has been filed on SEDAR. The offers will be open for acceptance until 9 p.m. (Eastern Time) on Dec. 7, 2009, unless the offers are extended or withdrawn by Pan American. The share offer is conditional upon, among other things, valid acceptance by Aquiline shareholders owning enough number of Aquiline common shares, which together with Aquiline common shares owned by Pan American and affiliates, would constitute not less than 66-2/3 per cent of the outstanding common shares of Aquiline on a partially diluted basis (as defined in the takeover bid circular).

Aquiline securityholders may obtain a copy of the takeover bid circular, letters of transmittal and notice of guaranteed delivery at the SEDAR website, at the EDGAR website, at the Pan American website and from the information agent, Kingsdale Shareholder Services Inc., which may be contacted toll-free at 1-888-518-6824. Copies of the directors' circular may be obtained at the SEDAR website and at Aquiline's website. The depositary for the offers is Kingsdale. Inquiries should be directed to the depositary toll-free at 1-888-518-6824 or contactus@kingsdaleshareholders.com.