Coeur Mining (NYSE: CDE) has reached an agreement to acquire Canadian precious metals producer Silvercrest (TSX: SIL) (NYSE: SILV) in an all-share deal valued at $1.7 billion.
The addition of Silvercrest’s Las Chispas mine Mexico, one of the world’s lowest-cost, highest-grade silver operations, is expected to make Coeur a leading global silver miner with 21 million ounces of the metal and and 432,000 ounces of gold a year.
The merged company will own five mines in North America, with three of them considered top silver producers —Rochester, in Nevada; Palmarejo in Mexico’s Chihuahua; and Las Chispas in Sonora, also Mexico.
Las Chispas mine, which began production in late 2022, has shown strong operational performance, Coeur’s President and CEO, Mitchell J. Krebs told investor on a conference call on Thursday morning. The excutive said that in 2023, the mine’s first full-year of operations, it produced over 10.25 million silver equivalent ounces at a cash cost of $7.73 per ounce.
SilverCrest shares have risen nearly 45% since the start of the year, closing at C$12.59, or $9.29, on Thursday. The stock has more than doubled its value in the past 52 weeks, rising 113%. Coeur’s have soared rocketed 117.2% year-to-date through Thursday, as gold prices have rallied to record highs.
Combined company will have 56% of its revenue coming from US mines and about 40% of revenue from silver. (Taken from Coeur’s presentation.)
Coeur’s proposed acquisition price of $11.34 per share represents an 18% premium over the 20-day volume-weighted average prices of both companies as of October 3 closing price. It also implies a 22% premium to SilverCrest’s closing price on the NYSE American that same day.
Upon completion, Coeur shareholders will own 63% of the merged company, while SilverCrest shareholders will control 37%.
Both companies’ boards have unanimously endorsed the deal, urging their shareholders to vote in favor. The agreement includes break fees of up to $100 million if the transaction does not proceed.
The transaction still requires approval from SilverCrest and Coeur shareholders, as well as regulatory authorities, including Mexican antitrust approval. A special meeting is expected by the end of 2024, with the deal anticipated to close in Q1 2025.
More to come…
Source: MINING.COM – Read More
