The highly anticipated merger between SilverCrest Metals Inc. and Coeur Mining Inc. has officially been approved by shareholders, paving the way for the formation of a major North American silver and gold producer. This deal brings together SilverCrest’s high-grade Las Chispas operation and Coeur’s diverse portfolio of mining projects, setting the stage for growth, increased production, and long-term shareholder value.
Overview of the Merger
On February 6, 2025, SilverCrest shareholders overwhelmingly approved the merger under a special resolution at the company’s special meeting. The transaction involves SilverCrest becoming a wholly-owned subsidiary of Coeur Mining through a statutory plan of arrangement. SilverCrest shareholders will receive 1.6022 shares of Coeur stock for each SilverCrest share they hold. Post-merger, former SilverCrest shareholders are expected to own 37% of the combined entity, while Coeur’s current shareholders will control 63%.
Key Voting Results and Approval Breakdown
The merger was backed by a resounding 99.32% of the votes cast by shareholders and 99.34% when combined with optionholders, showing widespread support among stakeholders. Here’s a closer look at the voting results:
Category | # Votes For | % Votes For | # Votes Against | % Votes Against |
Shareholders only | 82,144,220 | 99.32% | 558,450 | 0.68% |
Shareholders + optionholders | 84,490,372 | 99.34% | 558,450 | 0.66% |
These results highlight the collective confidence in the strategic rationale and financial benefits of the merger.
Why This Merger is a Big Deal for Both Companies
Asset Diversification and Reduced Risk
SilverCrest’s primary asset—the Las Chispas operation—has been a major driver of its success but also a potential vulnerability due to its reliance on a single asset. By merging with Coeur, SilverCrest gains access to Coeur’s four diversified mines across North America, including:
The Rochester Mine in Nevada
The Palmarejo Mine in Mexico
The Kensington Gold Mine in Alaska
This diversification mitigates the single-asset risk and provides exposure to additional growth opportunities.
Creation of a North American Mining Powerhouse
The merger positions the combined entity as a leading North American silver and gold producer with an expected 2025 production of:
21 million ounces of silver
432,000 ounces of gold
Approximately 56% of the combined company’s revenue will be generated from U.S.-based operations, with a focus on expanding silver production.
Strategic and Financial Benefits of the Merger
Strong Cash Flow and Improved Margins
The combined company is projected to generate $700 million in EBITDA and $350 million in free cash flow in 2025. With SilverCrest’s strong balance sheet and zero debt, the merger is expected to immediately reduce the company’s leverage ratio by 40%. This enhanced financial stability will allow for reinvestment into future exploration projects, operational improvements, and shareholder returns.
Significant Premium for SilverCrest Shareholders
SilverCrest shareholders benefit from a 22% premium to the company’s October 3, 2024, share price, which represents an all-time high in valuation. This premium reflects the market’s recognition of the strategic value that SilverCrest brings to the table.
Enhanced Access to Capital and Investor Interest
Larger market capitalization and combined production capacity are expected to boost investor interest, increase liquidity, and improve access to capital markets. This is particularly important for supporting future growth and exploration efforts within the company’s portfolio.
Strategic Review Process Leading to the Merger
The merger didn’t happen overnight. SilverCrest initiated a comprehensive strategic review following Las Chispas’ successful ramp-up to commercial production in late 2022. The company considered over 25 potential strategic opportunities ranging from asset sales to mergers of equals. After extensive due diligence and site visits, the Board concluded that a merger with Coeur offered the best opportunity for long-term value maximization.
Fairness Opinions and Due Diligence
The transaction received multiple fairness opinions from financial advisors including Scotiabank, Cormark Securities Inc., and Raymond James Ltd., all of which determined the merger to be fair from a financial perspective. This gave the Board confidence to unanimously recommend the merger to shareholders.
Leadership Changes and Continued Commitment to ESG
Following the merger, SilverCrest executives N. Eric Fier and Pierre Beaudoin will join the combined company’s board of directors, ensuring continuity and strategic alignment. The new entity will also continue its ESG commitments, focusing on responsible mining practices, community engagement, and reducing environmental impact.
Regulatory Approvals and Timeline
The merger has received the necessary shareholder and optionholder approvals, but it still requires various regulatory consents, including:
Approval from the Supreme Court of British Columbia
Conditional approval from the Toronto Stock Exchange
Approval of Coeur’s stock listing on the New York Stock Exchange
Once these approvals are secured, the merger is expected to be completed by late Q1 2025.
Potential Risks and Considerations
While the merger is expected to unlock significant value, investors should be aware of potential risks, including:
Commodity price fluctuations affecting silver and gold revenue
Operational challenges related to integrating two large mining operations
Regulatory or legal hurdles that could delay or modify the transaction
These risks are detailed in the management circular accompanying the merger announcement.
Final Thoughts: A Win-Win for Both Companies
The SilverCrest-Coeur merger marks a pivotal moment in the mining sector. By combining assets, expertise, and financial resources, the new entity is poised for growth, improved margins, and enhanced shareholder value. With increased silver and gold production, diversified assets, and a strong balance sheet, this merger creates a company well-equipped to thrive in the evolving precious metals market.
As SilverCrest CEO N. Eric Fier stated, “We look forward to delivering significant benefits to our shareholders through this strategic partnership with Coeur Mining.”
FAQs:
Why did SilverCrest merge with Coeur Mining?
The merger offers strategic benefits, including asset diversification, improved financial stability, and exposure to Coeur’s extensive North American portfolio.
What do SilverCrest shareholders gain from the merger?
Shareholders receive a significant premium, ownership in a larger company, and access to Coeur’s diversified mining operations.
When will the merger be finalized?
The merger is expected to close by late Q1 2025, pending final regulatory approvals.
Will the combined company focus on ESG initiatives?
Yes, the new entity will continue to prioritize sustainability, community engagement, and responsible mining.
Silvercrest SILV CDE Merger
Silvercrest SILV CDE Merger