DEFA14A: Coeur Mining to Acquire SilverCrest Metals in $1.7 Billion Deal, Creating Global Silver Leader

Coeur Mining will acquire SilverCrest Metals in a stock-for-stock transaction valued at approximately $1.7 billion, creating a leading global silver company with significant production and cash flow.

Summary

• Coeur Mining, Inc. and SilverCrest Metals Inc. have entered into a definitive agreement for Coeur to acquire SilverCrest in a stock-for-stock transaction.
• 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 (NYSE) on October 3, 2024.
• The transaction values SilverCrest at approximately $1.7 billion.
• Upon completion, existing Coeur stockholders will own approximately 63% and SilverCrest shareholders will own approximately 37% of the combined company.
• The combined company is expected to produce approximately 21 million ounces of silver and 432,000 ounces of gold in 2025.
• The combined company is expected to generate approximately $700 million of EBITDA and $350 million of free cash flow in 2025.
• The transaction is expected to close in late Q1 2025, subject to shareholder and regulatory approvals.
• Two members of the SilverCrest Board of Directors will join the Coeur Board upon closing.

Sentiment

Score: 9

Explanation: The document presents a highly positive outlook for the combined company, highlighting significant production, cash flow, and deleveraging benefits. The management commentary is also optimistic, contributing to a strong positive sentiment.

Positives

• The acquisition creates a leading global silver company with significant production and cash flow.
• SilverCrest's Las Chispas mine is a high-grade, low-cost operation that will improve Coeur's cost and margin profile.
• The transaction is expected to accelerate Coeur's debt reduction initiatives.
• SilverCrest's strong balance sheet will strengthen Coeur's financial position.
• The combined company will have a diversified portfolio of producing mines in North America.
• The addition of SilverCrest directors will bring valuable experience to Coeur's board.

Risks

• The transaction is subject to shareholder and regulatory approvals, and may not be completed.
• The integration of Coeur and SilverCrest may be challenging.
• The combined company may not be able to achieve the expected synergies and cost savings.
• Changes in commodity prices, operating costs, or other factors could affect the combined company's financial performance.

Future Outlook

The combined company is expected to be a leading global silver producer with significant free cash flow, enabling debt reduction and investment in organic growth opportunities.

Management Comments

• Mitchell J. Krebs, Chairman, President and Chief Executive Officer of Coeur, stated that the acquisition creates a leading global silver company and strengthens the balance sheet.
• N. Eric Fier, Chief Executive Officer, and Director of SilverCrest expressed confidence in Coeur's ability to extend SilverCrest's track record of success at Las Chispas and believes this transaction is the best opportunity for shareholders.

Industry Context

The acquisition reflects a trend towards consolidation in the precious metals mining industry, with companies seeking to increase production, diversify assets, and improve financial strength.

Comparison to Industry Standards

• Coeur's acquisition of SilverCrest positions it to compete with other major silver producers such as Fresnillo, Pan American Silver, and Hecla Mining.
• The combined company's expected silver production of 21 million ounces would place it among the top silver producers globally.
• Las Chispas is considered a world-class asset due to its high grades and low costs, making the acquisition strategically valuable for Coeur.

Management Changes

Stakeholder Impact

• Coeur stockholders will benefit from increased production, cash flow, and diversification.
• SilverCrest shareholders will receive a premium for their shares and participate in the upside of the combined company.
• Employees of both companies may experience changes as a result of the integration.
• Customers and suppliers of both companies may benefit from the increased scale and financial strength of the combined entity.

Next Steps

• Coeur and SilverCrest will file materials with the SEC and on SEDAR+.
• Coeur will mail a definitive proxy statement to its stockholders.
• SilverCrest will file a notice of the shareholder meeting and management information circular.
• Shareholder meetings will be held to approve the transaction.
• Regulatory approvals will be sought.
• The transaction is expected to close in late Q1 2025.

Key Dates

Keywords

SilverCrest Metals, Coeur Mining, Acquisition, Silver, Gold, Merger, Mining, Las Chispas