SilverCrest Metals Inc. (NYSE: SILV) stock is experiencing a notable increase on the charts after announcing a definitive acquisition agreement with Coeur Mining, Inc. As of the last pre-market check, SILV shares were trading at $10.39, reflecting a remarkable rise of 11.84%. This upward trend indicates strong investor interest following the announcement.
SilverCrest Acquisition Agreement Outline
In accordance with the recently formed agreement, a court-approved plan of arrangement will be used by a wholly-owned subsidiary of Coeur Mining to purchase all issued and outstanding shares of SilverCrest. For every SilverCrest common share owned, each shareholder will get 1.6022 shares of Coeur common stock. SilverCrest will receive $11.34 per share.
Creation of a Leading Silver Entity
With respect to SilverCrest’s outstanding shares, the transaction is valued at about $1.7 billion in total equity. After the merger, approximately 63% of the combined company’s common stock will belong to Coeur owners, while approximately 37% will belong to SilverCrest shareholders.
In the event that the transaction falls through, Coeur would owe $100 million and SilverCrest would have to pay a $60 million break fee. Additionally, in the event that the deal falls through, the two businesses have promised to compensate one another for a portion of their costs.
By combining SilverCrest’s Las Chispas mine with Coeur’s current silver output from its Rochester mine in Nevada and its Palmarejo underground mine in Mexico, the combination seeks to become a preeminent worldwide silver firm. By 2025, it is anticipated that the combined operations would produce around 21 million ounces of silver, with sales of silver accounting for a significant 40% of revenue.
Positive Financial Prognosis Following SILV’s Merger
Predictions indicate that the combined business will have $350 million in free cash flow and $700 million in EBITDA by 2025, showing great financial performance. N. Eric Fier, the current CEO of SilverCrest, and another director of SilverCrest will also join Coeur’s board, offering significant experience and strengthening strategic leadership.