#United States #Chicago #precious metals #Coeur Mining #New Gold

Coeur Mining and New Gold Join Forces

In a significant move for the North American mining sector, Coeur Mining, Inc. (NYSE: CDE) has announced its acquisition of New Gold Inc. (TSX: NGD) (NYSE American: NGD). This strategic agreement aims to create a leading entity focused on precious metals, combining both companies’ strengths for enhanced production and cash flow generation.

Details of the Acquisition

Under the terms of the agreement, a wholly-owned subsidiary of Coeur will acquire all issued and outstanding shares of New Gold at an exchange ratio of 0.4959 Coeur shares for each New Gold share. This translates to a value of $8.51 per New Gold share, representing a noteworthy 16% premium based on New Gold’s closing price as of October 31, 2025. Once finalized, the merger will result in an aggregate equity value of approximately $7 billion.

The new entity is set to significantly increase its market capitalization to around $20 billion, boasting seven high-quality operations across North America and a projected production of about 20 million ounces of silver, 900,000 ounces of gold, and 100 million pounds of copper by 2026. This merger positions Coeur to be a dominant player in the precious metals arena.

Enhancing Financial Performance

One of the key highlights of this transaction is the anticipated increase in EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) to approximately $3 billion in 2026, along with free cash flow projected at $2 billion. This represents a substantial increase compared to Coeur’s expected performance in 2025, which previously estimated an EBITDA around $1 billion and a free cash flow of $550 million. The merger promises lower operational costs and improved margins, setting the stage for increased shareholder value.

Strategic Benefits and Growth Potential

The combination of resources and expertise from both companies is poised to accelerate investment in high-return projects. New Gold's current projects, such as the K-Zone at New Afton and exploration activities at Rainy River, will leverage Coeur’s existing portfolio strengths to maximize output and efficiency. This robust financial position is anticipated to enhance the overall quality of Coeur's asset portfolio and expand exploration opportunities in various regions, including the U.S., Mexico, and Canada.

Mitchell J. Krebs, Coeur's Chairman and CEO, remarked on the benefits of the merger, stating, "This acquisition allows us to unite two companies with aligned cultures and goals, creating a formidable North American precious metals leader."

Patrick Godin, New Gold's CEO, echoed this sentiment, highlighting how the merger unlocks potential for greater shareholder value by diversifying their asset bases and enhancing liquidity. This transformative step aims to not only solidify their operational capabilities but also to improve risk diversification for shareholders.

Community and Economic Impact

The union is also set to drive investment in Canadian communities where both companies operate. With plans to sustain and enhance employment and maintain local corporate offices, the new company emphasizes its commitment to the environment and community relationships. Coeur aims to boost exploration and investment in resources, contributing positively to the Canadian economy.

Looking Ahead

The transaction requires approval from shareholders and regulatory bodies, and the completion is projected in the first half of 2026. With substantial backing from both companies’ boards, this merger signals a vibrant future for not only Coeur and New Gold but for the North American precious metals market as a whole.

Investors should anticipate the issuance of shares and the overall market dynamics surrounding this merger, making it a crucial development in the mining industry landscape as Coeur Mining and New Gold come together to harness their combined strengths.