What's Happening?
Coeur Mining has entered into a definitive agreement to acquire New Gold through a court-approved plan of arrangement. Under the terms of the agreement, New Gold shareholders will receive 0.4959 shares
of Coeur common stock for each New Gold share they hold, valuing New Gold shares at $8.51 each. The transaction, valued at approximately $7 billion, will result in Coeur stockholders owning about 62% of the combined company, while New Gold shareholders will own around 38%. The merger will create a 100% North American-based senior precious metals producer with a market capitalization of approximately $20 billion, operating across seven sites. The combined entity is projected to produce around 1.25 million gold equivalent ounces in 2026, with more than 80% of its revenue expected to come from the US and Canada.
Why It's Important?
This acquisition is significant as it positions the merged company as a major player in the precious metals industry, ranking among the world's top ten largest precious metals producers and top five silver producers. The merger is expected to generate around $3 billion in EBITDA and $2 billion in free cash flow in 2026, enhancing the financial strength and market profile of the combined entity. The deal is accretive to Coeur's key per share metrics, including net asset value, operating cash flow, and free cash flow, potentially leading to a share price re-rating. The merger also accelerates investment in high-return organic growth opportunities, such as New Afton's K-Zone and brownfield exploration at Rainy River.
What's Next?
Upon completion of the transaction, New Gold's President, CEO, and Director Patrick Godin, along with another New Gold director, will join Coeur's Board of Directors. The combined company will focus on unlocking operational synergies and diversifying its asset base by adding five high-quality precious metals operations. The merger is expected to rapidly unlock the potential of K-Zone at New Afton and the exploration potential of Rainy River, while also enhancing the company's sector and capital market profile.
