Coeur Mining to Buy SilverCrest Metals for US$1.7 Billion

Coeur Mining (NYSE:CDE) announced it will acquire SilverCrest Metals (TSX:SIL,NYSEAMERICAN:SILV) in a US$1.7 billion deal, furthering its bid to position itself as a leading global silver producer.

The acquisition will see Coeur integrate SilverCrest's Las Chispas mine in Sonora, Mexico, a high-grade, low-cost silver and gold operation. The transaction is also expected to bolster Coeur’s silver production, projecting an output of 21 million ounces of silver annually across five North American mining operations by 2025.

The combined entity will also produce an estimated 432,000 ounces of gold per year.

Under the terms, the transaction will involve a share exchange under which SilverCrest shareholders will receive 1.6022 Coeur common shares for each SilverCrest share.

Based on the closing prices of both companies on October 3, 2024, this equates to a per-share valuation of US$11.34 for SilverCrest, a premium of 18 percent over recent trading averages.

Upon completion, Coeur shareholders will own approximately 63 percent of the combined company, while SilverCrest shareholders will hold around 37 percent.

This acquisition is part of Coeur's strategy to enhance its silver production and operational footprint in North America.

Coeur, which already operates the Rochester silver mine in Nevada and the Palmarejo underground mine in Mexico, will add Las Chispas to its portfolio, who in turn commenced commercial production in late 2022.

The combined company’s operations will focus predominantly on silver, which is projected to contribute 40 percent of revenues by 2025.

Coeur President and CEO Mitchell Krebs highlighted the importance of the acquisition for the company’s growth trajectory, stating that SilverCrest’s operational and financial strength would significantly enhance Coeur’s balance sheet and provide opportunities for investment in other projects.

“With over 15 years of experience operating our Palmarejo underground silver and gold operation next door in Chihuahua, we look forward to adding the high-quality Las Chispas mine to create a leading global silver company at a time when the demand for silver in renewable energy and a wide range of electrification end uses is rapidly rising,” Krebs added.

The acquisition is slated to close by late Q1 2025, pending approval from SilverCrest and Coeur shareholders, as well as regulatory clearances in Canada, Mexico and the US.

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Securities Disclosure: I, Giann Liguid, hold no direct investment interest in any company mentioned in this article.