There’s another major merger set to occur in the silver mining market. Coeur Mining (NYSE: CDE) this morning announced it has entered into an agreement to acquire SilverCrest Metals (TSX: SIL) in an all-stock transaction.
The transaction will see SilverCrest shareholders receive 1.6022 Coeur common shares for each share of SilverCrest held, implying consideration of $11.34 per share based on yesterday’s closing price. The figure implies an 18% premium for SilverCrest shareholders based on a 20 day moving average, while valuing the company as a whole at $1.7 billion.
The strategic rationale for the merger is the creation of a leading global silver company, with Coeur’s production from the Rochester and Palmarejo mines to be brought together with SilverCrest’s Las Chispas project. On a combined basis, Coeur is expected to produce 21 million silver ounces in 2025. Gold production meanwhile is estimated at 432,000 ounces, with silver set to account for 40% of total revenue.
Sponsored · Altamira Gold Corp.
READ: First Majestic Silver To Acquire Gatos Silver In $970 Million Transaction
From a financial perspective, SilverCrest’s lack of debt and current balance sheet is expected to reduce Coeur’s leverage ratio by 40% upon closing, while free cash flow in 2025 is expected to hit $350 million.
“Together with SilverCrest’s large and growing cash balance and no debt, our balance sheet is expected to be materially strengthened on day one. This immediate deleveraging, along with the significant combined expected free cash flow, will allow for rapid debt repayment and investment in other organic growth opportunities while offering shareholders an unparalleled re-rating opportunity,” commented Mitchel Krebs, Chairman and CEO of Coeur.
The transaction remains subject to shareholder and regulatory approval, with a break fee of $60 million for SilverCrest and $100 million for Coeur also in play. The transaction is estimated to close in late Q1 2025.
Coeur Mining last traded at $7.08 on the NYSE.
Information for this briefing was found via Sedar and the sources mentioned. The author has no securities or affiliations related to these organizations. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
