Coeur Announces Acquisition of SilverCrest to Create Leading Global Silver Company
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
Under the terms of the Agreement, SilverCrest shareholders will receive 1.6022 Coeur common shares for each SilverCrest common share (the “Exchange Ratio”). The Exchange Ratio implies consideration of
Transaction Highlights
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Creates a
Leading Global Silver Company – Together with Coeur’s growing silver production from its recently expandedRochester mine inNevada and its Palmarejo underground mine in northernMexico , the addition of Las Chispas is expected to generate peer-leading 2025 silver production of approximately 21 million ounces from five North American operations, with approximately 56% of revenue generated fromU.S. -based mines and approximately 40% of revenue from silver. In addition to the peer-leading silver production, the combined company is expected to produce approximately 432,000 ounces of gold next year1. -
Adds World-Class Las Chispas Operation to Coeur’s Portfolio – SilverCrest’s Las Chispas underground mine in
Sonora, Mexico is one of the world’s highest-grade, lowest cost, and highest-margin silver and gold operations. Las Chispas commenced production in late 2022 and has delivered strong operational and financial results in 2023, selling approximately 10.25 million silver equivalent ounces at average cash costs of$7.73 per ounce. -
Significant and Immediate Addition to Coeur’s Rising Free Cash Flow – The combined company is expected to generate approximately
$700 million of EBITDA1 and$350 million of free cash flow1 in 2025 at lower overall costs and higher overall margins. -
Dramatically Accelerates Coeur’s Deleveraging Initiatives – The combination of SilverCrest’s strong balance sheet consisting of total treasury assets of
$122 million (cash and equivalents position of$98 million and$24 million of bullion) and no debt and its strong cash flow profile are expected to accelerate Coeur’s debt reduction initiative and result in an immediate 40% expected reduction in Coeur’s leverage ratio upon closing. -
Bolsters Coeur Board by Adding Two SilverCrest Directors – Upon closing, current SilverCrest Chief Executive Officer and Director,
N. Eric Fier and one other current SilverCrest Director will join Coeur’s board of directors, adding extensive and relevant experience to an already distinguished board of directors. - Continued Commitment to ESG Leadership – A shared commitment to ESG with a specific focus on water usage, emissions, community and workforce development, and leading governance practices.
"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
Benefits to Coeur Stockholders
- Pro forma Coeur is positioned to be a leading global silver company, with expected 2025 production of approximately 21 million ounces of silver, accounting for approximately 40% of pro forma Coeur’s expected total 2025 revenue. In addition, combined 2025 gold production is expected to reach approximately 432,000 ounces, equal to approximately 55 million silver equivalent ounces2 in total
- Exposure to a high-grade, low-cost, underground primary silver mine with strong operational track record and compelling exploration potential
- Las Chispas is expected to significantly improve Coeur’s cost and margin profile and materially increase its annual free cash flow given its high grades while maintaining 100% exposure to precious metals
- SilverCrest’s robust balance sheet combined with Las Chispas’ strong cash flow generation positions Coeur to significantly accelerate deleveraging
- Strong potential to add to Las Chispas’ current mine life based on near-mine exploration opportunities on over 20 kilometers of underexplored potential vein strike length. Current resources are estimated on only approximately 55% of the over 100 known silver-gold veins located at the project
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Leverages Coeur’s long track record of successfully operating the Palmarejo underground silver and gold mine in
Chihuahua, Mexico -
Significant revaluation opportunity given positioning of the combined company as a leading silver mining company based on its pro forma production and cash flow profile and the expected near-term impacts from the recently completed expansion of the
Rochester silver and gold operation inNevada
Benefits to SilverCrest Shareholders
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Immediate and significant premium of approximately 18% based on the 20-day volume-weighted average prices of both companies (22% premium to the
October 3, 2024 closing price) -
Substantial equity participation in Coeur’s balanced portfolio of producing mines located in
North America while retaining meaningful exposure to future upside at Las Chispas - Pro forma entity uniquely positioned to unlock the full potential of Las Chispas given Coeur’s extensive underground mining experience including the past 15 years of experience operating the Palmarejo underground silver and gold mine
- Combined entity’s robust financial strength and flexibility is expected to allow for continued future investments in Las Chispas
- Significantly improved trading liquidity and capital markets exposure
- Significant re-rate opportunity for the pro forma entity, providing additional potential value for SilverCrest shareholders
Transaction Summary
The proposed Transaction will be effected pursuant to a plan of arrangement under the Business Corporations Act (
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
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.
Advisors and Counsel
Conference Call
Coeur will conduct a conference call to discuss the Transaction on
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(855) 560-2581 ( |
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(855) 669-9657 ( |
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(412) 542-4166 (International) |
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Hosting this call will be
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(877) 344-7529 ( |
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(855) 669-9658 ( |
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(412) 317-0088 (International) |
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521 50 06 |
About Coeur
About SilverCrest
SilverCrest is a Canadian precious metals producer headquartered in
Notes
All figures are in
1. Source: FactSet, street research, public disclosure.
2. Silver equivalent production based on Street consensus pricing of
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.
Important Additional Information
In connection with the Transaction, Coeur and SilverCrest intend to file materials with the
Stockholders of Coeur and shareholders of SilverCrest will be able to obtain free copies of the Proxy Statement and the Circular, as each may be amended from time to time, and other relevant documents filed by Coeur and/or SilverCrest with the
Participants in the Solicitation
Coeur, SilverCrest and their respective directors and certain of their executive officers and other members of management and employees may be deemed, under
Cautionary Note to U.S. Investors
Coeur’s public disclosures are governed by the
Forward-Looking Statements and Cautionary Statements
Certain statements in this document concerning the proposed Transaction, including any statements regarding the expected timetable for completing the Arrangement, the results, effects, benefits and synergies of the Transaction, future opportunities for the combined company, future financial performance and condition, guidance and any other statements regarding Coeur’s or SilverCrest’s future expectations, beliefs, plans, objectives, financial conditions, assumptions or future events or performance that are not historical facts are “forward-looking” statements based on assumptions currently believed to be valid. Forward-looking statements are all statements other than statements of historical facts. The words “anticipate,” “believe,” “ensure,” “expect,” “if,” “intend,” “estimate,” “probable,” “project,” “forecasts,” “predict,” “outlook,” “aim,” “will,” “could,” “should,” “would,” “potential,” “may,” “might,” “anticipate,” “likely” “plan,” “positioned,” “strategy,” and similar expressions or other words of similar meaning, and the negatives thereof, are intended to identify forward-looking statements. Specific forward-looking statements include, but are not limited to, statements regarding Coeur’s or SilverCrest’s plans and expectations with respect to the proposed Transaction and the anticipated impact of the proposed Transaction on the combined company’s results of operations, financial position, growth opportunities and competitive position, including maintaining current Coeur and SilverCrest management, strategies and plans and integration. The forward-looking statements are intended to be subject to the safe harbor provided by Section 27A of the Securities Act, Section 21E of the Securities Exchange Act of 1934 and the Private Securities Litigation Reform Act of 1995 and applicable Canadian securities laws.
These forward-looking statements involve significant risks and uncertainties that could cause actual results to differ materially from those anticipated, including, but not limited to, the possibility that shareholders of SilverCrest 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 anticipated timing of mailing proxy statements and circulars regarding the Transaction; the risk that the either Coeur or SilverCrest may terminate the Agreement and either Coeur or SilverCrest is required to pay a termination fee to the other party; potential adverse reactions or changes to business or employee relationships of Coeur or SilverCrest, 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 SilverCrest; the effects of the business combination of Coeur and SilverCrest, 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 SilverCrest may not receive the required stock exchange and regulatory approvals of the Transaction; the expected listing of shares on the NYSE; 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; and the fact that operating costs and business disruption may be greater than expected following the public announcement or consummation of the Transaction. Expectations regarding business outlook, including changes in revenue, pricing, capital expenditures, cash flow generation, strategies for the combined company’s operations, gold and silver market conditions, legal, economic and regulatory conditions, and environmental matters are only forecasts regarding these matters.
Additional factors that could cause results to differ materially from those described above can be found in Coeur’s Annual Report on Form 10-K for the year ended
All forward-looking statements speak only as of the date they are made and are based on information available at that time. Neither Coeur nor SilverCrest assumes any obligation to update forward-looking statements to reflect circumstances or events that occur after the date the forward-looking statements were made or to reflect the occurrence of unanticipated events except as required by applicable securities laws. As forward-looking statements involve significant risks and uncertainties, caution should be exercised against placing undue reliance on such statements.
Non-GAAP and Non-IFRS Financial Measures
This press release contains certain non-GAAP and non-IFRS financial measures, which management believes may enable investors to better evaluate the Coeur and SilverCrest performance, liquidity and ability to generate cash flow. These measures do not have any standardized definition under
Free Cash Flow
Free cash flow subtracts sustaining capital expenditures from net cash provided by operating activities, serving as an indicator of the capacity to generate cash from operations post-sustaining capital investments.
View source version on businesswire.com: https://www.businesswire.com/news/home/20241004279894/en/
Attention:
Phone: (312) 489-5800
www.coeur.com
Attention:
Phone: +1 (604) 694-1730
www.silvercrestmetals.com
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