Shareholders greenlight Coeur Mining’s $1.7bn takeover of SilverCrest Metals

Coeur Mining, Inc. has secured overwhelming shareholder approval for its $1.7 billion acquisition of SilverCrest Metals Inc., setting the stage for a transformative shift in the global silver and precious metals sector. The deal, initially announced in October 2024, received resounding support from SilverCrest Metals’ securityholders, with over 99% voting in favour at a special meeting held on February 6, 2025. This decisive vote marks a critical milestone in Coeur Mining’s strategy to consolidate its position as a leading North American silver producer.

Under the arrangement, Coeur Mining will acquire all outstanding shares of SilverCrest Metals. Shareholders of SilverCrest will receive 1.6022 Coeur Mining common shares for each SilverCrest share they hold. This exchange represents an 18% premium based on the 20-day volume-weighted average prices as of October 3, 2024. The transaction, valued at approximately $1.7 billion, is now pending final regulatory and court approvals, including consent from the Supreme Court of British Columbia and Mexican antitrust authorities. The acquisition is expected to close around mid-February 2025.

This silver mining acquisition is not just a business transaction—it signifies a major strategic move that will reshape Coeur Mining’s operational landscape, expand its resource base, and enhance its silver production capacity.

How will the acquisition boost Coeur Mining’s silver production growth?

The acquisition of SilverCrest Metals is poised to significantly enhance Coeur Mining’s production capabilities. By integrating SilverCrest’s high-grade Las Chispas mine in Mexico with its existing portfolio, which includes the expanded Rochester mine in Nevada, Coeur Mining aims to create a diversified, robust operation capable of meeting the growing global demand for silver.

The combined entity is projected to produce approximately 21 million ounces of silver annually, alongside 432,000 ounces of gold. This surge in output aligns with Coeur Mining’s broader strategy to capitalise on the rising demand for silver, driven by its critical applications in renewable energy technologies, industrial manufacturing, and electrification processes.

Mitchell J. Krebs, Chairman and CEO of Coeur Mining, highlighted the acquisition’s strategic significance: “This transaction is transformative for Coeur Mining. It strengthens our production profile, enhances our balance sheet, and positions us as a resilient, diversified leader in the precious metals sector.”

By leveraging the operational efficiencies of both companies, Coeur Mining expects to see substantial improvements in cash flow, reduced production costs, and an optimised resource allocation strategy. The integration of SilverCrest’s Las Chispas mine is anticipated to be a key driver of silver production growth, enhancing Coeur’s competitive edge in the global market.

What financial and strategic benefits does the deal offer?

SilverCrest Metals brings more than just valuable mining assets to Coeur Mining—it contributes financial strength and operational resilience. With a robust cash balance of $98 million and no outstanding debt, SilverCrest’s financial position will help Coeur Mining reduce its overall debt load and improve its leverage ratio by approximately 40% following the completion of the transaction.

The Las Chispas mine, a cornerstone of this acquisition, is recognised as one of the world’s highest-grade silver and gold operations. Since commencing production in late 2022, Las Chispas has demonstrated strong operational performance, contributing significantly to SilverCrest’s growth. The incorporation of this asset into Coeur’s portfolio is expected to drive substantial cost efficiencies and revenue growth, ultimately enhancing profitability.

Krebs emphasised the transformative potential of the deal, stating that the acquisition will unlock new growth opportunities, including expanded exploration initiatives and increased shareholder value. The deal structure, governed by British Columbia law, also includes customary regulatory safeguards, such as shareholder and judicial approvals, ensuring a smooth and compliant transaction process.

How will the acquisition impact Coeur Mining’s exploration and expansion opportunities?

One of the most compelling aspects of the precious metals merger is the expanded exploration potential it brings to Coeur Mining. The Las Chispas mine offers over 20 kilometres of largely underexplored vein strike length, presenting substantial opportunities for resource expansion and extended mine life.

Coeur Mining plans to apply its extensive underground mining experience, particularly from operating the Palmarejo underground mine in Chihuahua, Mexico, to maximise the potential of Las Chispas. This strategic focus on exploration will not only increase resource estimates but also enhance the long-term value derived from the acquisition.

N. Eric Fier, CEO of SilverCrest Metals, expressed confidence in Coeur Mining’s ability to sustain and build upon the operational success of Las Chispas. He highlighted the immediate premium available to SilverCrest shareholders and the long-term growth potential as part of a larger, diversified company. Following the transaction, both Fier and another SilverCrest director will join Coeur Mining’s board, bringing valuable expertise to guide future exploration and expansion efforts.

What role will ESG practices play in the merged company’s operations?

Both Coeur Mining and SilverCrest Metals have demonstrated strong commitments to environmental, social, and governance (ESG) principles, and this focus will remain central to the operations of the combined entity. The merger provides an opportunity to align ESG initiatives across both organisations, reinforcing responsible mining practices, sustainable resource management, and positive community engagement.

Coeur Mining plans to prioritise key sustainability objectives, including responsible water usage, emissions reduction, and community development initiatives in regions where it operates, particularly in Mexico and the United States. The integration of SilverCrest’s operations will enhance Coeur’s ability to meet stringent ESG standards, ensuring long-term operational resilience and maintaining stakeholder trust.

This shared commitment to ESG principles is expected to strengthen relationships with local communities, create job opportunities, and support sustainable economic development. It also aligns with the increasing importance of sustainability in the mining sector, where investors and regulators are placing greater emphasis on responsible resource management and corporate governance.

What do industry experts say about the market impact of the acquisition?

Industry analysts view the acquisition as a game-changer for Coeur Mining, positioning the company as a premier North American silver producer with diversified assets and enhanced operational capabilities. The merger is expected to drive significant shareholder value through increased production volumes, improved cost structures, and expanded exploration potential.

Experts suggest that the timing of this silver mining acquisition is particularly advantageous, given the rising demand for silver in renewable energy applications, such as photovoltaic cells in solar panels, and broader industrial uses. This demand surge, coupled with Coeur Mining’s expanded production capacity, positions the company to capitalise on evolving market dynamics.

BMO Capital Markets and Goldman Sachs acted as financial advisors to Coeur Mining, while Cormark Securities and Raymond James provided advisory support to SilverCrest Metals. Additionally, Scotiabank issued a fairness opinion to SilverCrest’s special committee, affirming the transaction’s financial soundness.

What’s next for Coeur Mining and SilverCrest Metals?

As the acquisition moves towards completion, Coeur Mining’s focus will shift to the seamless integration of SilverCrest Metals’ operations. The company aims to maximise synergies, streamline processes, and ensure that the transition delivers tangible benefits for shareholders, employees, and stakeholders.

This merger is expected to redefine the silver mining landscape in North America, positioning Coeur Mining as a global leader in silver and gold production. The strategic combination of assets, operational expertise, and financial strength will drive long-term growth, enhance exploration potential, and solidify Coeur Mining’s reputation as a top-tier precious metals producer.

The future of Coeur Mining looks promising, with the acquisition set to unlock new opportunities, fuel silver production growth, and create lasting value for all stakeholders involved.