Coeur Mining, Inc. CDE announced that it signed a definitive agreement to acquire all issued and outstanding shares of SilverCrest Metals Inc. SILV. The transaction is expected to create a leading global silver company, with 2025 silver production of 21 million ounces.

Details of Coeur-SilverCrest Deal

According to the deal, SilverCrest stockholders would receive 1.6022 Coeur common shares per share valued at $11.34 based on Coeur's Oct. 3, 2024 closing price. The transaction values SilverCrest at $1.7 billion. 

After completion, Coeur investors and SilverCrest shareholders will own 63% and 37% of the combined firm, respectively. SilverCrest's CEO, N. Eric Fier, and one other director will join Coeur's board, bringing extensive experience and expertise.

CDE’s Benefits From the Transaction

The acquisition brings SilverCrest's high-grade, low-cost Las Chispas underground mine in Sonora, Mexico, into Coeur's portfolio, improving its cost and margin profile. The combined company will generate approximately $700 million of EBITDA and $350 million of free cash flow in 2025. 

The buyout positions Coeur as a significant global silver company, with around 56% of revenues coming from the United States-based operations and 40% from silver. In addition to its peer-leading silver output, the combined business is expected to generate 432,000 ounces of gold by 2025. 

SilverCrest's debt-free balance sheet, with $122 million in treasury assets, and strong cash flow are expected to accelerate Coeur's debt reduction, resulting in a 40% immediate decrease in Coeur's leverage ratio upon closing.

Coeur’s Q2 Top Line Rises Y/Y

The company came out with a second-quarter 2024 loss of 1 cent per share, narrower than the Zacks Consensus Estimate of a loss of 2 cents. CDE posted a loss per share of 6 cents in the second quarter of 2023.

Coeur reported revenues of $222 million for the quarter ended June 2024, missing the Zacks Consensus Estimate of $236 million. This compares to year-ago revenues of $177 million million.

CDE Share Price Outperforms Industry

The company’s shares have surged 182.3% in the past year compared with the industry’s 49.1% growth.

 

Image Source: Zacks Investment Research

 

Zacks Rank & Stocks to Consider

The company currently has a Zacks Rank #3 (Hold).

Some better-ranked stocks from the basic materials space are Carpenter Technology Corporation CRS and Eldorado Gold Corporation EGO. CRS and EGO sport a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for Carpenter Technology’s fiscal 2025 earnings is pegged at $6.09 per share. The consensus estimate for 2025 earnings has moved 7% north in the past 60 days. It has an average trailing four-quarter earnings surprise of 15.9%. CRS shares have gained 127.1% in a year.

The Zacks Consensus Estimate for Eldorado Gold’s 2024 earnings is pegged at $1.32 per share. The consensus estimate for 2024 earnings has moved 16% north in the past 60 days. It has an average trailing four-quarter earnings surprise of 430%. EGO shares have gained 82.9% in a year.