By Adriano Marchese
Coeur Mining is set to acquire Canadian precious metals producer SilverCrest Metals in a deal worth $1.7 billion.
The two companies said on Friday that, through a subsidiary, Coeur will offer 1.6022 of its shares for each SilverCrest common share, implying a consideration of $11.34 apiece.
SilverCrest shares have surged in recent months, rising nearly 45% since the beginning of the year and closing on Thursday at 12.59 Canadian dollars, or $9.29. The stock has more than doubled in the past 52 weeks, rising 113%.
At a price of $11.34 a share, the offer represents a premium of 18% over the 20-day volume-weighted average prices of both companies as at Thursday's closing levels, and a 22% premium to SilverCrest's closing price on that day on the NYSE American.
In total, the offer implies a total equity value of about $1.7 billion, and once the transaction is complete, SilverCrest shareholders will own about 37% of the combined company, and Coeur shareholders will hold the other 63%.
The combination of the two companies is expected to create a larger silver producer, merging Coeur's silver production from its Rochester mine in Nevada and the Palmarejo underground mine in northern Mexico to SilverCrest's Las Chispas mine, also in Mexico.
Together, the companies expect to generate silver production of about 21 million ounces from five North American operations in 2025, and 432,000 ounces of gold.
The combined company is expected to generate about $700 million of earnings before interest, taxes, depreciation and amortization, and $350 million of free cash flow in 2025 at lower overall costs and higher margins, the companies said.
Write to Adriano Marchese at adriano.marchese@wsj.com
(END) Dow Jones Newswires
October 04, 2024 07:30 ET (11:30 GMT)
Copyright (c) 2024 Dow Jones & Company, Inc.
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