VANCOUVER, BRITISH COLUMBIA, Oct. 14, 2009 (Marketwire) --

VANCOUVER, BRITISH COLUMBIA -- (Marketwire) -- 10/14/09 -- (Note: All currency figures are in CDN$, unless otherwise indicated)

Pan American Silver Corp. ("Pan American") (TSX: PAA)(NASDAQ: PAAS) and Aquiline Resources Inc. ("Aquiline") (TSX: AQI) are pleased to announce that they have signed a support agreement (the "Support Agreement") pursuant to which Pan American will make a formal take-over bid to acquire all of the issued and outstanding shares of Aquiline (the "Share Offer"). Contemporaneously with the Share Offer, Pan American also proposes to make formal take-over bids for each outstanding series of Aquiline warrants and the Aquiline convertible debenture (together, the "Convertible Security Offers"). The transaction value implied by all of the offers is approximately $626 million.

The Share Offer will be made on the basis of 0.2495 of a Pan American common share, plus 0.1 of a Pan American common share purchase warrant for each Aquiline common share. Each of these warrants 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 "Five Year Pan American Warrant"). 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.

Based on the closing price of Pan American common shares on the TSX on October 13th, 2009 (and assuming a value of $0.81 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% over the closing price of Aquiline common shares on the TSX on the same date, and a 62.0% premium to Aquiline's 10-day volume weighted average price. Aquiline shareholders will own approximately 19% of the enlarged Pan American.

The Board of Directors of Aquiline, after receiving the recommendation of a special committee of independent directors, has unanimously determined (i) that the Share Offer is fair to Aquiline's shareholders and is in the best interest of Aquiline, and (ii) to recommend that Aquiline shareholders tender their common shares to the Share Offer. BMO Capital Markets, financial advisor to Aquiline, has delivered a fairness opinion to the Board of Directors of Aquiline in connection with the Share Offer. Cormark Securities Inc. has also delivered a fairness opinion to the Board of Directors of Aquiline in connection with the Share Offer. The offers are conditional on the directors and senior officers of Aquiline entering into lock-up agreements with Pan American and agreeing to tender all of their Aquiline shares in support of the Share Offer. The Support Agreement and the transactions contemplated herein arose as a result of a review of strategic alternatives undertaken by Aquiline.

Highlights of the Transaction

The acquisition will add a world-class silver development project to Pan American's portfolio, while providing Aquiline shareholders with both a substantial premium on their shares and the opportunity to participate in Pan American's prospects for near- and long-term growth. The addition of Navidad and Aquiline's other projects would increase Pan American's estimated measured and indicated silver resources (inclusive of proven and probable reserves) to approximately 945 million ounces. Estimated inferred silver resources would increase to approximately 233 million ounces. In addition, the combined companies would boast approximately 1.9 million ounces of gold in estimated measured and indicated resources (inclusive of proven and probable reserves), while estimated inferred gold resources would increase to approximately 817 thousand ounces.

"We believe the acquisition of Aquiline provides a perfect match with Pan American's core strength as a developer and operator of primary silver mines. The Navidad project is one of the world's largest undeveloped silver deposits and we will bring all the skills, technology and experience we have gained commissioning or expanding five new mines in the last six years to its development and operation. This is a true value creation story for both Aquiline and Pan American shareholders. With both the Navidad and La Preciosa development projects in our portfolio, Pan American is well on its way to producing 40 million ounces of silver annually," said Geoffrey Burns, President and Chief Executive Officer of Pan American.

Mr. Burns continued, "We have an excellent track record of working with both the government and local communities in Argentina. Our successful development of Manantial Espejo resulted in us being recognized as the 2009 Mining Company of the Year in Argentina. That award was a testament to the dedication and professionalism of our Argentinean operating group. We are looking forward to working productively and proactively with the provincial government in Chubut and local communities that surround Navidad and are committed to developing Navidad into a flagship silver mine which both Pan American and the people of Argentina can be proud of. Pan American is confident that it can demonstrate to all interested parties in the provinces of Chubut and Rio Negro the benefits of responsible mining."

Marc Henderson, Director and Chief Executive Officer of Aquiline, said, "We are impressed with Pan American's track record of bringing projects into production, and in particular its strength in government and community relations in Argentina. Pan American already owns and operates eight mines in the Americas, and by adding Navidad, Pico Machay, and Calcatreu into its portfolio, Aquiline will diversify and mitigate its risk profile as well as gain immediate access to Pan American's financial strength and proven development team. This is a win-win transaction and the full Board of Aquiline and I believe that tendering into Pan American's offer is in the best interests of our shareholders, through both the attractive up-front premium and the opportunity to participate in the tremendous upside we see as the development of Navidad unfolds in an enlarged Pan American."

Under the terms of the Support Agreement, Aquiline is subject to certain customary non-solicitation covenants, including the obligation to pay Pan American a non-completion fee of $18 million under certain circumstances. In addition, Aquiline has provided Pan American with certain other customary rights including a five business day right to match a proposal deemed superior by the Aquiline Board of Directors. Under certain other circumstances, where the Support Agreement is terminated, Aquiline is obligated to reimburse Pan American's reasonable expenses up to a maximum of $3 million.

The Share Offer and each of the Convertible Securities Offers are conditional upon a minimum of 66 2/3% of the outstanding Aquiline shares on a diluted basis being tendered to the Share Offer. The Share Offer is not contingent on a successful take-up under any of the Convertible Securities Offers.

Pan American expects to launch the formal take-over bids as soon as practicable. Detailed terms and conditions of the Share Offer and the Convertible Securities Offers will be set out in the formal offer and bid circular to be mailed to Aquiline security holders. The transaction is subject to stock exchange approvals, the receipt of certain confirmations under Argentinean anti-trust laws, and other customary closing conditions.