With the addition of the Las Chispas mine – one of the world’s lowest-cost and highest-grade silver/gold operations – the combined company is expected to produce 21 million ounces of silver annually1 with peer leading EBITDA and free cash flow
Coeur Mining, Inc. (NYSE: CDE) and SilverCrest Metals Inc. (TSX: SIL) (NYSE American: SILV) announce that they have entered into a definitive agreement whereby, a wholly-owned subsidiary of Coeur will acquire all of the issued and outstanding shares of SilverCrest pursuant to a court-approved plan of arrangement.
Under the terms of the Agreement, SilverCrest shareholders will receive 1.6022 Coeur common shares for each SilverCrest common share. The Exchange Ratio implies consideration of $11.34 per SilverCrest common share, based on the closing price of Coeur common shares on the New York Stock Exchange on October 3, 2024. This represents an 18% premium based on 20-day volume-weighted average prices of Coeur and SilverCrest each as at October 3, 2024 on the NYSE and NYSE American, respectively, and a 22% premium to the October 3, 2024 closing price of SilverCrest on the NYSE American. This implies a total equity value of approximately $1.7 billion based on SilverCrest’s common shares outstanding. Upon completion of the Transaction, existing Coeur stockholders and SilverCrest shareholders will own approximately 63% and 37% of the outstanding common stock of the combined company, respectively.
Transaction Highlights
“The acquisition of SilverCrest creates a leading global silver company by adding low-cost silver and gold production and significant free cash flow to our rapidly growing production and cash flow driven by the recent expansion of our Rochester silver and gold mine in Nevada,” said Mitchell J. Krebs, Chairman, President and Chief Executive Officer of Coeur. “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. 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.”
Benefits to Coeur Stockholders
Benefits to SilverCrest Shareholders
Transaction Summary
The proposed Transaction will be effected pursuant to a plan of arrangement under the Business Corporations Act (British Columbia), which is required to be approved by a British Columbia court. The Transaction will require approval by 66 2/3 percent of the votes cast by the shareholders of SilverCrest and 66 2/3 percent of the votes cast by the shareholders and option holders of SilverCrest, voting together as a single class, at a special meeting of SilverCrest shareholders expected to be held around year-end. The Transaction will also require approval of a simple majority of votes cast by the shareholders of SilverCrest, excluding those votes attached to SilverCrest common shares held by persons required to be excluded pursuant to Multilateral Instrument 61-101 – Protection of Minority Security Holder in Special Transaction. The issuance of shares by Coeur pursuant to the Transaction and an amendment to the Coeur certificate of incorporation to increase the number of authorized shares of Coeur stock is also subject to approval by the Coeur stockholders at a special meeting also expected to be held around year-end. The directors and senior officers of SilverCrest and Coeur have entered into customary voting support agreements, pursuant to which they have committed to vote their common shares held in favor of the Transaction. Upon completion of the Transaction, existing Coeur stockholders and SilverCrest shareholders will own approximately 63% and 37% of the issued and outstanding shares of common stock of the combined company, respectively. Additionally, upon closing of the Transaction, N. Eric Fier and one other current SilverCrest director are expected to join Coeur’s board of directors.
In addition to shareholder and court approvals, the Transaction is subject to applicable regulatory approvals, including Mexican antitrust approval, approval of the listing of the Coeur common shares to be issued under the Transaction on the NYSE, and the satisfaction of certain other closing conditions customary for a transaction of this nature. Subject to the satisfaction of such conditions, the Transaction is expected to close in late Q1 2025. The Agreement includes customary deal protections, including reciprocal fiduciary-out provisions, non-solicitation covenants, and the right to match any superior proposals. Additionally, break fees in the amount of $60 million and $100 million are payable by SilverCrest and Coeur, respectively, and a reciprocal expense reimbursement fee is payable by one party to the other party in certain circumstances if the Transaction is not completed.
Full details of the Transaction will be included in the Coeur proxy statement and SilverCrest information circular.
Board of Directors’ Recommendations
After consultation with its outside financial and legal advisors, the Board of Directors of Coeur have unanimously approved the Transaction. The Board of Directors of Coeur recommends that Coeur shareholders vote in favor of the Transaction.
SilverCrest appointed a special committee of independent directors to consider and make a recommendation with respect to the Transaction. Based on the unanimous recommendation of the SilverCrest special committee of independent directors, and after consultation with its outside financial and legal advisors, the Board of Directors of SilverCrest has unanimously approved the Transaction. The Board of Directors of SilverCrest recommends that SilverCrest shareholders vote in favor of the Transaction.
Cormark Securities Inc. and Raymond James Ltd. have each provided fairness opinions to the SilverCrest Board of Directors, and Scotiabank has provided a fairness opinion to the SilverCrest special committee, to the effect that, as of the date thereof, and based upon and subject to the assumptions, limitations and qualifications stated in each such opinion, the consideration received is fair, from a financial point of view, to the shareholders of SilverCrest.
Advisors and Counsel
BMO Capital Markets is acting as financial advisor to Coeur. Goldman Sachs & Co. LLC is also acting as a financial advisor to Coeur. Goodmans LLP and Gibson, Dunn & Crutcher LLP are acting as Coeur’s legal advisors.
Cormark Securities Inc. and Raymond James Ltd. are acting as financial advisors to SilverCrest and Scotiabank acted as financial advisor to the special committee. Cassels Brock & Blackwell LLP and Paul, Weiss, Rifkind, Wharton & Garrison LLP are acting as SilverCrest’s legal advisors.
About Coeur
Coeur Mining, Inc. is a U.S.-based, well-diversified, growing precious metals producer with four wholly-owned operations: the Palmarejo gold-silver complex in Mexico, the Rochester silver-gold mine in Nevada, the Kensington gold mine in Alaska and the Wharf gold mine in South Dakota. In addition, Coeur wholly-owns the Silvertip polymetallic critical minerals exploration project in British Columbia.
About SilverCrest
SilverCrest is a Canadian precious metals producer headquartered in Vancouver, British Columbia. SilverCrest’s principal focus is its Las Chispas Operation in Sonora, Mexico. SilverCrest has an ongoing initiative to increase its asset base by expanding current resources and reserves, acquiring, discovering, and developing high value precious metals projects and ultimately operating multiple silver-gold mines in the Americas. SilverCrest is led by a proven management team in all aspects of the precious metal mining sector, including taking projects through discovery, finance, on time and on budget construction, and production.
Notes
All figures are in U.S. dollars unless denoted otherwise.
1. Source: FactSet, street research, public disclosure.
2. Silver equivalent production based on Street consensus pricing of US$2,340/oz Au and US$29.66/oz Ag.
No Offer or Solicitation
Communications in the news release do not constitute an offer to sell or the solicitation of an offer to subscribe for or buy any securities or a solicitation of any vote or approval with respect to the proposed Transaction or otherwise, nor shall there be any sale, issuance or transfer of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction.
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