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  Title	Coeur Mining (CDE) Announces Acquisition of SilverCrest (SILV)
  ID	2958201
  External ID	7184513294
  Author	Unknown
  Published Date	Oct. 4, 2024, 6:12 a.m.
  Summary	October 4, 2024 7:01 AM EDT Coeur Mining, Inc. (“Coeur”) (NYSE: CDE ) and SilverCrest Metals Inc. (“SilverCrest”) (TSX: SIL; NYSE American: SILV ) announce that they have entered into a definitive ag
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  URL	https://www.streetinsider.com/corporate+news/coeur+mining+%28cde%29+announces+acquisition+of+silvercrest+%28silv%29/23803098.html
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• Content Details

  Content ID	1437605
  Key	0648a7ed-5dd3-4eae-905d-bb6b9b3594e0
  Content	October 4, 2024 7:01 AM EDT Coeur Mining, Inc. (“Coeur”) (NYSE: CDE ) and SilverCrest Metals Inc. (“SilverCrest”) (TSX: SIL; NYSE American: SILV ) announce that they have entered into a definitive agreement (the “Agreement”) whereby, a wholly-owned subsidiary of Coeur will acquire all of the issued and outstanding shares of SilverCrest pursuant to a court-approved plan of arrangement (the “Transaction”). 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 $11.34 per SilverCrest common share, based on the closing price of Coeur common shares on the New York Stock Exchange (“NYSE”) on October 3, 2024. This represents an 18% premium based on 20-day volume-weighted average prices of Coeur and SilverCrest each as at October 3, 2024 on the NYSE and NYSE American, respectively, and a 22% premium to the October 3, 2024 closing price of SilverCrest on the NYSE American. This implies a total equity value of approximately $1.7 billion based on SilverCrest's common shares outstanding. Upon completion of the Transaction, existing Coeur stockholders and SilverCrest shareholders will own approximately 63% and 37% of the outstanding common stock of the combined company, respectively. Transaction Highlights Together with Coeur's growing silver production from its recently expanded Rochester mine in Nevada and its Palmarejo underground mine in northern Mexico, 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 from U.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. – 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. – 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. – 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. 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. – 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 Rochester silver and gold mine in Nevada,” said Mitchell J. Krebs, Chairman, President and Chief Executive Officer of Coeur. “Together with SilverCrest's large and growing cash balance and no debt, our balance sheet is expected to be materially strengthened on day one. This immediate deleveraging, along with the significant combined expected free cash flow, will allow for rapid debt repayment and investment in other organic growth opportunities while offering shareholders an unparalleled re-rating opportunity. With over 15 years of experience operating our Palmarejo underground silver and gold operation next door in Chihuahua, we look forward to adding the high-quality Las Chispas mine to create a leading global silver company at a time when the demand for silver in renewable energy and a wide range of electrification end uses is rapidly rising.” N. Eric Fier, Chief Executive Officer, and Director of SilverCrest said, “I'm exceptionally proud of what the SilverCrest team has accomplished over the past nine years taking Las Chispas from discovery to production and creating one of the world's premier silver operations. Our operational consistency since declaring commercial production in late 2022 is a testament not only to the asset quality, but also our outstanding team and strong stakeholder relationships. I feel confident that the Coeur team will extend this track record of success at Las Chispas and believe this transaction is the best opportunity for shareholders to not only receive an immediate premium, but also have the opportunity to become meaningful owners of a growing, multi-asset, U.S.-based, NYSE-listed silver and gold company with tremendous upside potential. I am excited to continue to be involved as an ongoing Director of Coeur.” 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 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 in Nevada Benefits to SilverCrest Shareholders 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 (British Columbia), which is required to be approved by a British Columbia court. The Transaction will require approval by 66 2/3 percent of the votes cast by the shareholders of SilverCrest and 66 2/3 percent of the votes cast by the shareholders and option holders of SilverCrest, voting together as a single class, at a special meeting of SilverCrest shareholders expected to be held around year-end. The Transaction will also require approval of a simple majority of votes cast by the shareholders of SilverCrest, excluding those votes attached to SilverCrest common shares held by persons required to be excluded pursuant to Multilateral Instrument 61-101 – Protection of Minority Security Holder in Special Transaction . The issuance of shares by Coeur pursuant to the Transaction and an amendment to the Coeur certificate of incorporation to increase the number of authorized shares of Coeur stock is also subject to approval by the Coeur stockholders at a special meeting also expected to be held around year-end. The directors and senior officers of SilverCrest and Coeur have entered into customary voting support agreements, pursuant to which they have committed to vote their common shares held in favor of the Transaction. Upon completion of the Transaction, existing Coeur stockholders and SilverCrest shareholders will own approximately 63% and 37% of the issued and outstanding shares of common stock of the combined company, respectively. Additionally, upon closing of the Transaction, N. Eric Fier and one other current SilverCrest director are expected to join Coeur's board of directors. 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 $60 million and $100 million are payable by SilverCrest and Coeur, respectively, and a reciprocal expense reimbursement fee is payable by one party to the other party in certain circumstances if the Transaction is not completed. 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. Cormark Securities Inc. and Raymond James Ltd. have each provided fairness opinions to the SilverCrest Board of Directors, and Scotiabank has provided a fairness opinion to the SilverCrest special committee, to the effect that, as of the date thereof, and based upon and subject to the assumptions, limitations and qualifications stated in each such opinion, the consideration received is fair, from a financial point of view, to the shareholders of SilverCrest. Advisors and Counsel BMO Capital Markets is acting as financial advisor to Coeur. Goldman Sachs & Co. LLC is also acting as a financial advisor to Coeur. Goodmans LLP and Gibson, Dunn & Crutcher LLP are acting as Coeur's legal advisors. Cormark Securities Inc. and Raymond James Ltd. are acting as financial advisors to SilverCrest and Scotiabank acted as financial advisor to the special committee. Cassels Brock & Blackwell LLP and Paul, Weiss, Rifkind, Wharton & Garrison LLP are acting as SilverCrest's legal advisors. Conference Call Coeur will conduct a conference call to discuss the Transaction on October 4, 2024 at 8:00 a.m. Eastern Time. An accompanying presentation will be made available on the Company's website at www.coeur.com Dial-In Numbers: (855) 560-2581 (U.S.) (855) 669-9657 (Canada) (412) 542-4166 (International) Conference ID: Coeur Mining Hosting this call will be Mitchell J. Krebs, Chairman, President and Chief Executive Officer of Coeur, who will be joined by N. Eric Fier, Chief Executive Officer and Director of SilverCrest. A replay of the call will be available through October 11, 2024. Replay numbers: (877) 344-7529 (U.S.) (855) 669-9658 (Canada) (412) 317-0088 (International) Conference ID:
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