Coeur Mining to buy SilverCrest for $1.7 bln in bets on silver boom
Adds details throughout
Oct 4 (Reuters) -Coeur Mining CDE.N is buying smaller peer SilverCrest Metals SIL.TO for about $1.7 billion to bulk up as silver prices hit their highest in more than a decade, the companies said on Friday.
Silver prices XAG= have climbed nearly 35% this year and are hovering near a 12-year high hit late in September on the back of gold's stellar rally and strong demand, prompting miners to rush to secure reserves of the metal that is used in industries ranging from solar panels to electronics.
Last month, Canada's First Majestic AG.TO agreed to buy Mexico-focused Gatos Silver GATO.N for $970 million.
Coeur shares fell nearly 5% before the bell, while SilverCrest's U.S.-listed shares jumped 12.1%.
SilverCrest shareholders will receive 1.6022 Coeur common shares for each owned, with an implied value of $11.34 per share — a 22% premium to last close of the company's U.S. listing.
Coeur has wholly owned operations in Mexico, Nevada, Alaska and South Dakota, while SilverCrest's principal focus is its Las Chispas mine in Sonora, Mexico.
With demand for silver in renewable energy and a wide range of electrification end-uses rising, Coeur bets on the addition of SilverCrest's Las Chispas mine to its portfolio of Palmarejo underground silver and gold operation next door in Chihuahua.
Upon completion of the deal, expected late in the first quarter of 2025, the existing Coeur and SilverCrest shareholders will own about 63% and 37% of the combined company, respectively.
With the addition of Las Chispas mine to Coeur's portfolio, silver production is expected to rise to nearly 21 million ounces in 2025 from 10.7-13.3 million silver ounces it estimates for 2024.
The combined company is also expected to produce about 432,000 ounces of gold next year from the 310,000-355,000 ounces estimated this year.
If the transaction is not cleared, a fee of $60 million and $100 million are payable by SilverCrest and Coeur, respectively.
Reporting by Seher Dareen in Bengaluru; Editing by Mrigank Dhaniwala and Shilpi Majumdar
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