Stillwater Mining Co. is buying Peregrine Metals Ltd. in a cash-and-stock deal valued at $487.1 million.
Stillwater said Monday that the buyout provides it with copper and gold deposits in Argentina, as it will look to further develop and run Peregrine's Altar porphyry copper-gold deposit in the San Juan province. It plans to invest $75 million over the next three years on the property.
"The Peregrine transaction provides us with broader diversification into copper - a metal with favorable long-term fundamentals driven by growing market demand - as well as meaningful exposure to gold," Stillwater Chairman and CEO Frank McAllister said in a statement.
Stillwater's stock fell $1.27, or 5.4 percent, to $22.45 in morning trading as the broader markets tumbled.
Stillwater will exchange 0.08136 shares of its common stock and pay $1.35 in cash for each Peregrine share. The company said that each Peregrine share is valued at $3.28 apiece based on Stillwater's Friday closing price of $23.72.
The buyout assumes the exercise of Peregrine's outstanding options and warrants resulting in a $35.7 million treasury contribution. Peregrine is based in Vancouver, British Columbia.
Stillwater will own about 89.5 percent of the combined company, with Peregrine owning 10.5 percent.
Both companies' boards have unanimously approved the deal, which is expected to close by Sept. 30.