DEFA14A: Coeur Mining to Acquire New Gold, Creating North American Metals Giant

Coeur Mining, Inc. announced a definitive agreement to acquire New Gold Inc. in a stock-for-stock transaction, forming a leading North American precious metals producer.

Summary

• Coeur Mining, Inc. will acquire New Gold Inc. through a court-approved plan of arrangement.
• New Gold shareholders will receive 0.4959 shares of Coeur common stock for each New Gold common share.
• The Exchange Ratio implies a consideration of $8.51 per New Gold common share, a 16% premium to New Gold's closing price on October 31, 2025.
• The transaction values New Gold at approximately $7 billion, resulting in a pro forma combined equity market capitalization of approximately $20 billion.
• Existing Coeur stockholders will own approximately 62% and New Gold shareholders approximately 38% of the combined company.
• The combined entity is projected to generate approximately $3.0 billion of EBITDA and $2.0 billion of free cash flow in 2026.
• The combined company will operate seven high-quality mines across North America, producing an estimated 1.25 million gold equivalent ounces in 2026, including 20 million ounces of silver and 900,000 ounces of gold, and 100 million pounds of copper.
• Over 80% of the combined company's revenue is expected to be generated from the U.S. and Canada.
• The transaction is subject to approval by New Gold shareholders (66% of votes cast, and a simple majority excluding certain votes), Coeur stockholders (for stock issuance and charter amendment), and various regulatory and court approvals.
• Two current New Gold directors, including President and CEO Patrick Godin, are expected to join Coeur's board of directors upon closing.

Sentiment

Score: 9

Explanation: The filing outlines a highly strategic and financially accretive merger, projecting substantial increases in key financial metrics (EBITDA, free cash flow) and creating a larger, more diversified, and geographically focused entity. The premium offered to New Gold shareholders and the anticipated benefits for both sets of shareholders, coupled with strong management endorsement, indicate a very positive outlook for the combined entity.

Positives

• Creates a leading, 100% North American-based senior precious metals producer with an approximately $20 billion market capitalization.
• Significant and immediate addition to Coeur's EBITDA and free cash flow, with combined expected 2026 figures of $3.0 billion and $2.0 billion, respectively, a material increase from Coeur's expected 2025 figures of $1 billion EBITDA and $550 million free cash flow.
• Enhanced financial position expected to lead to a net cash position at closing and a rapidly growing cash balance, potentially leading to an investment-grade credit rating and higher stockholder returns.
• Robust, fully-funded growth pipeline with accelerated investment in high-return organic growth opportunities like New Afton's K-Zone and brownfield exploration at Rainy River and Coeur's existing portfolio.
• Highly accretive to Coeur's key per share metrics, including net asset value, operating cash flow, and free cash flow, positioning for a potential share price re-rating.
• Enhanced sector and capital market profile, placing the combined company among the top 10 largest precious metals companies and top 5 largest silver producers globally, with potential for inclusion in major U.S. indexes and increased trading liquidity.
• Bolstered combined management team and Board, with several New Gold management members joining Coeur and two New Gold directors joining Coeur's board.
• Provides New Gold shareholders with an immediate and significant premium of approximately 16% to their shares' closing price on October 31, 2025.
• New Gold shareholders retain meaningful exposure to future upside at New Afton and Rainy River, owning approximately 38% of the combined company.
• Tangible benefits to Canada, British Columbia, and Ontario, including sustained employment, maintaining New Gold's corporate office in Toronto, and continued partnerships with Indigenous and local communities.

Negatives

• The transaction involves significant termination fees: Coeur would pay $413,705,000 and New Gold $254,725,000 under certain circumstances.
• Integration of operations carries inherent risks and may be more complex or costly than anticipated.
• Diversion of management time on transaction-related issues could impact ongoing operations.

Risks

• The possibility that shareholders of New Gold may not approve the Transaction or stockholders of Coeur may not approve the Stock Issuance or the Charter Amendment.
• The risk that any other condition to closing of the Transaction may not be satisfied.
• The risk that the closing of the Transaction might be delayed or not occur at all.
• The risk that either Coeur or New Gold may terminate the Arrangement Agreement and be required to pay a termination fee to the other party.
• Potential adverse reactions or changes to business or employee relationships of Coeur or New Gold, including those resulting from the announcement or completion of the Transaction.
• The diversion of management time on transaction-related issues.
• The ultimate timing, outcome, and results of integrating the operations of Coeur and New Gold.
• The effects of the business combination of Coeur and New Gold, including the combined company's future financial condition, results of operations, strategy, and plans.
• The ability of the combined company to realize anticipated synergies in the timeframe expected or at all.
• Changes in capital markets and the ability of the combined company to finance operations in the manner expected.
• The risk that Coeur or New Gold may not receive the required stock exchange and regulatory approvals of the Transaction.
• The risk of any litigation relating to the proposed Transaction.
• The risk of changes in governmental regulations or enforcement practices.
• The effects of commodity prices, life of mine estimates.
• The timing and amount of estimated future production.
• The risks of mining activities.
• Operating costs and business disruption may be greater than expected following the public announcement or consummation of the Arrangement.

Future Outlook

The combined company anticipates a strong financial position leading to a net cash position at closing and a rapidly growing cash balance, potentially achieving an investment-grade credit rating and higher stockholder returns. It expects to accelerate investment in high-return organic growth opportunities, including New Afton's K-Zone and brownfield exploration at Rainy River and across Coeur's existing portfolio. The transaction is expected to be accretive on all of Coeur's key per share metrics and aims to enhance the combined entity's sector and capital market profile.

Management Comments

• Mitchell J. Krebs, Coeur's Chairman, President and Chief Executive Officer: "This transaction provides clear and compelling benefits for New Gold and Coeur shareholders by bringing together two companies with similar cultures to create a stronger, more resilient, and larger scale precious metals mining company."
• Mitchell J. Krebs: "We believe this is an extraordinary opportunity to create an unrivaled North American-only, mining powerhouse at just the right time."
• Mitchell J. Krebs: "With the addition of New Gold's two Canadian operations to our five current operating mines we expect to generate approximately $3 billion of EBITDA and approximately $2 billion of free cash flow in 2026 at significantly lower overall costs and higher margins."
• Patrick Godin, New Gold President, Chief Executive Officer and Director: "Today is a monumental day for New Gold and the culmination of diligent focus by the team on operational and development work that has transformed New Gold into the financially strong and significant free cash flow generating company it is today."
• Patrick Godin: "A combination with Coeur unlocks the next level of potential for our shareholders, uniting with a company of similar financial strength and cash flow generation while also gaining exposure to a larger scale, diversified portfolio with new long-life assets and immense exploration potential."
• Patrick Godin: "Together, we will be a cash flow powerhouse, leaping above larger peers, with significant exploration upside and the potential to significantly extend mine life and grow net asset value per share."
• Patrick Godin: "I strongly believe in the potential of the pro forma company, which is why I am keen to join the Board, as we embark on the next stage in the evolution of both companies as a new, all North American senior precious metals company, one that is unique in our industry."

Industry Context

This acquisition represents a significant consolidation within the precious metals mining sector, creating a larger, more diversified, and exclusively North American-focused producer. The emphasis on increased scale, lower costs, higher margins, and robust free cash flow generation aligns with broader industry trends towards operational efficiency and financial strength. The combined entity aims to position itself among the top global precious metals and silver producers, potentially attracting larger institutional investors and index inclusions, reflecting a move towards greater market liquidity and profile in a competitive global mining landscape.

Comparison to Industry Standards

• The combined company is expected to be among the top 10 largest precious metals companies globally, and among the top 5 largest silver producers globally.
• The combined entity's projected $3.0 billion EBITDA and $2.0 billion free cash flow in 2026 represent a significant leap compared to Coeur's standalone expected 2025 figures of $1 billion EBITDA and $550 million free cash flow, indicating a substantial increase in financial scale and efficiency relative to its prior state and potentially outperforming many peers.
• The combined company's focus on seven North American operations, with over 80% of revenue from the U.S. and Canada, positions it uniquely as an 'all North American' senior producer, differentiating it from many global peers with more geographically dispersed assets.
• The expected daily trading liquidity of over $380 million for the combined company is a key metric for attracting larger generalist investors and potentially qualifying for inclusion in major U.S. indexes, which would place it alongside more established, larger-cap mining companies.

Management Changes

Corporate Governance

Legal Proceedings

• The Company and Parent will use commercially reasonable efforts to defend all lawsuits or other legal, regulatory, or other proceedings against them challenging or affecting the Arrangement or its consummation.
• The Company will give Parent a reasonable opportunity to participate in the defense or settlement of any substantive shareholder litigation against the Company or its directors or officers relating to the Arrangement, with material settlements requiring Parent's prior written consent.

Related Party Transactions

• Directors and senior officers of New Gold and Coeur have entered into customary voting support agreements, committing to vote their shares in favor of the transaction. This is a related party transaction as these individuals are insiders.

Stakeholder Impact

• Shareholders (New Gold): Receive a 16% premium and substantial equity participation (38%) in a larger, more diversified company with enhanced liquidity and growth potential.
• Shareholders (Coeur): Gain ownership in a larger, more liquid, and diversified precious metals producer with enhanced financial metrics and organic growth opportunities.
• Employees (New Gold): Several management team members are expected to join Coeur. Existing employment, consulting, indemnification, incentive, and bonus arrangements will be honored. Continuing employees will receive new Parent Incentive Awards and retention awards.
• Employees (Combined): The combined company would have over 1,700 employees across Canada, with approximately 450 more employed as contractors, sustaining significant employment levels.
• Communities (Canada): The combined company plans to accelerate investment in exploration and expansion at New Gold's existing operations and Coeur's Silvertip project, maintain New Gold's corporate office in Toronto, and continue strong partnerships with Indigenous and local communities.
• Creditors: The strong free cash flow profile is expected to lead to a net cash position and rapidly growing cash balance, creating a clear path to a potential investment-grade credit rating, which could benefit creditors.

Next Steps

• Company to apply to the Court for an Interim Order to schedule the shareholder meeting.
• Company to prepare and file the Company Circular for New Gold shareholders.
• Parent to prepare and file the Parent Proxy Statement for Coeur stockholders.
• New Gold to hold a special meeting of shareholders to approve the Arrangement Resolution (expected Q1 2026).
• Coeur to hold a special meeting of stockholders to approve the Stock Issuance and Charter Amendment (expected Q1 2026).
• Company to diligently pursue an application for the Final Order from the Supreme Court of British Columbia.
• Parent and Company to submit notifications and applications for regulatory approvals (CNA, Competition Act, ICA) within 20 business days of the agreement.
• Parent to apply for listing of Coeur shares on the TSX.
• New Gold to take actions to delist its shares from the TSX and NYSE American after the Effective Time.
• Coeur to file the Parent Charter Amendment with the Secretary of State of Delaware prior to the Effective Time.
• Coeur to grant Parent Incentive Awards and retention awards to Continuing Employees within 30 days of the Effective Time.

Key Dates

Recommendation

The acquisition of New Gold by Coeur Mining is a highly strategic and financially compelling transaction. The combined entity is projected to achieve significantly higher EBITDA ($3.0 billion) and free cash flow ($2.0 billion) in 2026 compared to Coeur's standalone projections, indicating substantial accretion. The creation of a leading North American precious metals producer with a $20 billion market capitalization, diversified assets, and a strong balance sheet positions the company for enhanced market profile, liquidity, and potential re-rating. The 16% premium for New Gold shareholders and the accretive nature for Coeur stockholders suggest strong value creation. The clear path to a net cash position and potential investment-grade rating further de-risks the investment. While integration risks exist, the overall strategic rationale and financial benefits are overwhelmingly positive, making it a strong buy for long-term investors.

Keywords

Coeur Mining, New Gold, Merger, Acquisition, Precious Metals, Gold Mining, Silver Mining, Copper Mining, North America, Mining Operations, SEC Filing, Stock-for-Stock, EBITDA, Free Cash Flow, Shareholder Approval, Regulatory Approval, NYSE, TSX, Rainy River, New Afton, Mineral Resources, Mineral Reserves