DEFA14A: Coeur Mining to Acquire New Gold, Forms $20B Metals Leader

Coeur Mining announces a definitive agreement to acquire New Gold, creating a combined $20 billion market capitalization company with seven North American operations.

Summary

• Coeur Mining will acquire all outstanding common shares of New Gold via a Plan of Arrangement, valuing the transaction equity at approximately $7 billion.
• New Gold shareholders will receive 0.4959 of a Coeur share for each New Gold share held, implying a consideration of $8.51 per New Gold share, representing a 16% premium based on New Gold's closing price on October 31, 2025.
• The combined company is projected to have an approximate $20 billion market capitalization and seven high-quality North American operations.
• Expected combined production for 2026 includes approximately 20 million ounces of silver, 900,000 ounces of gold, and 100 million pounds of copper.
• The combined entity is anticipated to generate approximately $3.0 billion of EBITDA and $2.0 billion of free cash flow in 2026, with lower overall costs and higher overall margins.
• Coeur and New Gold shareholders are expected to own approximately 62% and 38% of the outstanding common shares of the combined company, respectively.
• The transaction requires approval by a British Columbia court, 66 2/3% of New Gold shareholders, and a majority of Coeur stockholders, with shareholder meetings expected in Q1 2026 and closing in H1 2026.

Sentiment

Score: 9

Explanation: The filing announces a highly strategic and financially accretive acquisition, projecting significant increases in key financial metrics, enhanced market position, and substantial benefits for both sets of shareholders, with clearly outlined growth pathways and a strong financial outlook.

Positives

• The transaction is expected to provide a significant and immediate addition to Coeur's EBITDA and Free Cash Flow.
• The combined company is projected to generate approximately $3.0 billion of EBITDA and $2.0 billion of free cash flow in 2026, operating at lower overall costs and higher overall margins.
• A strong free cash flow is expected to result in a net-cash position at closing and a rapidly growing cash balance, creating a clear path to an investment-grade credit rating and enhanced stockholder returns.
• The robust financial position will accelerate investment in high-return organic growth opportunities at New Afton, Rainy River, and across Coeur's existing portfolio.
• The acquisition is accretive to Coeur's Street per share net asset value, and significantly accretive to operating cash flow and free cash flow metrics, positioning the combined company for a potential share price re-rating.
• New Gold shareholders will receive an immediate and significant 16% premium to their closing share price on October 31, 2025.
• New Gold shareholders will gain substantial equity participation (approximately 38%) in Coeur's well-balanced portfolio, while retaining meaningful exposure to future upside at New Afton and Rainy River.
• The combination allows New Gold shareholders to gain exposure to a combined entity with greater scale and operating diversification, thereby significantly reducing risk.
• The combined company will offer enhanced trading liquidity and capital markets exposure with a U.S. listing and a new Toronto Stock Exchange (TSX) listing being sought by Coeur.
• There is potential for additional ETF ownership and eligibility for larger generalist investors due to increased scale and liquidity.
• The combined company is expected to be among the largest silver producers globally, generating more than 80% of 2026E revenue from Canada and the U.S., reducing jurisdictional risk.
• Additions of New Gold's low-cost, Canadian mines are expected to significantly enhance Coeur's cost profile and improve the combined company's resilience and optionality.
• A peer-leading combined free cash flow yield is expected to support strong re-rating potential for the combined entity.
• Coeur has a demonstrated track record of successfully extending mine lives through exploration investment and optimizing underground operations, which will be leveraged for New Afton and Rainy River.
• The combined portfolio offers substantial exploration potential to unlock significant and long-term value, including high-grade silver and critical mineral potential at Silvertip and growth at Palmarejo and K-Zone.
• Both companies share a disciplined approach to sustainability, reinforcing their ability to deliver responsibly sourced metals and long-term value.

Negatives

• Break fees of approximately $255 million are payable by New Gold and approximately $414 million are payable by Coeur in certain circumstances related to the transaction.

Risks

• Necessary approvals from Coeur's stockholders and New Gold's shareholders may not be obtained.
• Required regulatory approvals or any other condition to closing of the transaction may not be satisfied.
• The closing of the transaction may be delayed or may not occur at all.
• There are uncertainties regarding the ultimate timing, outcome, and results of integrating the operations of Coeur and New Gold.
• Changes in governmental regulations or enforcement practices could materially affect results.
• Anticipated production, cost, and expense levels may not be attained.
• The mining business inherently involves risks and hazards, including those related to developing and expanding large-scale mining projects, environmental hazards, industrial accidents, and weather or geologically-related conditions.
• Changes in the market prices of gold, silver, and copper, or a sustained lower price or higher treatment and refining charge environment, pose financial risks.
• Uncertainties are inherent in production, exploration, and development activities, including risks relating to permitting and regulatory delays, mining law changes, ground conditions, and grade and recovery variability.
• Future labor disputes or work stoppages (involving either Coeur or New Gold or third parties) could impact operations.
• There is a risk of adverse outcomes in litigation.
• Uncertainties are inherent in the estimation of mineral reserves and resources.
• Impacts from future acquisitions of new mining properties or businesses by either Coeur or New Gold could be adverse.
• The loss of access or insolvency of any third-party refiner or smelter to whom Coeur or New Gold markets their production is a risk.
• Materials and equipment availability, as well as inflationary pressures, could affect operations and costs.
• Continued access to financing sources is crucial for business operations.
• The effects of environmental and other governmental regulations and government shut-downs could be detrimental.
• Risks are inherent in the ownership or operation of or investment in mining properties or businesses in foreign countries.
• Coeur's and New Gold's respective ability to raise additional financing necessary to conduct business, make payments, or refinance debt is a key financial risk.

Future Outlook

The combined company expects to achieve approximately $3.0 billion in EBITDA and $2.0 billion in free cash flow by 2026, with lower overall costs and higher margins. It anticipates a net-cash position at closing and a rapidly growing cash balance, paving the way for an investment-grade credit rating and increased stockholder returns. The strong financial position will accelerate investment in high-return organic growth opportunities across the combined portfolio, including New Afton and Rainy River, and support a sustained level of exploration investment to unlock significant long-term value.

Management Comments

• Mitchell J. Krebs (Coeur Chairman, President & Chief Executive Officer): "Creating a New, All North American Senior Precious Metals Producer."
• Patrick Godin (New Gold President & Chief Executive Officer): "An Unrivaled All North American Mining Powerhouse Creates U.S. Precious Metals Leader."

Industry Context

This acquisition represents a significant consolidation in the North American precious metals sector, creating a larger, more diversified, and financially stronger entity. The focus on North American assets reduces jurisdictional risk, aligning with a trend towards more stable operating environments. The combined company's enhanced scale and liquidity position it as a leader, potentially attracting broader institutional investment and ETF inclusion, which is a common driver for M&A in mature industries. The emphasis on lower costs and higher margins reflects ongoing industry pressures to optimize operations and improve profitability amidst fluctuating commodity prices.

Comparison to Industry Standards

• The combined company's approximately $20 billion market capitalization positions it as a senior precious metals producer, comparable to major players in the sector.
• Expected 2026E EBITDA of $3.0 billion and free cash flow of $2.0 billion, along with a 66% EBITDA margin (vs. Coeur standalone 61%), indicate a strong financial profile relative to industry averages.
• The combined entity is expected to be among the largest silver producers globally, generating over 80% of 2026E revenue from Canada and the U.S., which is a strong jurisdictional profile compared to peers with more diverse or higher-risk global footprints.
• The peer-leading combined FCF yield is expected to support strong re-rating potential, suggesting the combined company's valuation metrics could improve relative to its peers post-merger.
• The combined company will be among the most liquid names in the sector, with an average daily traded value of more than $380 million, enhancing its attractiveness to large institutional investors.

Management Changes

Corporate Governance

Legal Proceedings

• The forward-looking statements section mentions 'the risk of adverse outcomes in litigation' as a general factor that could cause actual results to differ materially.

Related Party Transactions

• The filing notes that the impact of the Franco-Nevada gold stream agreement at Palmarejo is excluded in the calculation of Mineral Reserves and Mineral Resources, indicating an existing related party agreement.

Stakeholder Impact

• **Shareholders (Coeur)**: Expected to benefit from accretion to net asset value, operating cash flow, and free cash flow metrics, a stronger balance sheet, increased capacity for capital returns, and potential share price re-rating due to enhanced scale and liquidity.
• **Shareholders (New Gold)**: Will receive a 16% premium for their shares and gain substantial equity participation (approximately 38%) in a larger, more diversified, and financially stronger combined company, which is expected to reduce risk and offer enhanced trading liquidity and future upside.
• **Employees**: The combined management team and Board will be bolstered with additions from New Gold, and there is a shared commitment to safety and caring for the workforce.
• **Customers/Suppliers**: The combined entity's increased scale and financial strength may lead to more stable and larger-scale operations, potentially impacting supply chain dynamics.
• **Creditors**: The strong free cash flow expected from the combined company is anticipated to result in a net-cash position and a rapidly growing cash balance, creating a clear path to an investment-grade credit rating, which is beneficial for creditors.
• **Local Communities**: Both companies share a disciplined approach to sustainability, including Indigenous and community engagement, reinforcing their commitment to responsible mining and long-term value creation in the areas they operate.

Next Steps

• Shareholder meetings for both Coeur and New Gold are expected to be held in the first quarter of 2026.
• The transaction is expected to close in the first half of 2026, subject to approvals.
• Coeur will seek a new Toronto Stock Exchange (TSX) listing in connection with this transaction.
• The combined company plans to accelerate investment in high-return organic growth opportunities at New Afton, Rainy River, and across Coeur's portfolio.
• Coeur intends to leverage its extensive underground mining expertise to unlock the full potential of New Afton and Rainy River.
• A sustained level of investment in exploration is planned across the combined, highly prospective portfolio to unlock significant and long-term value.

Key Dates

Recommendation

The acquisition of New Gold by Coeur Mining is a highly strategic and financially compelling move that creates a dominant North American precious metals producer. The transaction is significantly accretive to Coeur's key per-share metrics, including net asset value, operating cash flow, and free cash flow, and offers a substantial premium to New Gold shareholders. The combined entity is projected to achieve robust financial performance with $3.0 billion in EBITDA and $2.0 billion in free cash flow by 2026, coupled with lower costs and higher margins. The enhanced scale, diversification across seven high-quality North American operations, and a strong balance sheet with a clear path to an investment-grade credit rating significantly de-risk the investment profile. Furthermore, the increased trading liquidity and potential for U.S. index inclusion and broader institutional ownership are strong catalysts for a re-rating of the combined company's shares. The robust, fully-funded growth pipeline and Coeur's proven track record in optimizing underground operations and extending mine lives provide substantial long-term upside. The only notable negative is the break fees, which are customary for transactions of this size and do not outweigh the significant strategic and financial benefits.

Keywords

Gold mining, Silver mining, Copper mining, Precious metals, North America, Acquisition, Merger, Coeur Mining, New Gold, SEC filing, Financial reporting, Corporate governance, Risk management, Strategic analysis, Mineral reserves, Mineral resources, EBITDA, Free cash flow, Exploration, Canada, United States