Coeur Mining to acquire Canadian firms for $250m


Coeur Mining has signed an agreement to acquire Canadian firm JDS Silver Holdings and its wholly owned subsidiary for up to $250m. 

The acquisition comprises the silver-zinc-lead Silvertip mine in northern British Columbia that will add a sixth producing mine to Coeur’s portfolio. 

Under the agreement, Coeur will make an initial payment of $200m, which includes $146.5m of cash and around 4.3 million new shares totalling $38.5m. 

Through the acquisition, the company will inherit an existing debt of $15m.

Coeur Mining president and CEO Mitchell Krebs said: "The acquisition of the Silvertip mine represents a unique opportunity to significantly enhance our portfolio of operations and it satisfies all our acquisition criteria, it provides expected near-term, low-cost, high margin cash-flow from an attractive jurisdiction and it is accretive on all key operational and financial metrics."

"The acquisition of the Silvertip mine represents a unique opportunity to significantly enhance our portfolio of operations and it satisfies all our acquisition criteria."

Additional payments of up to $50m are linked to obtaining certain future permitting and exploration milestones at Silvertip.

The mine is located below the Yukon border and within a highly prospective 93,000-acre land package, with a silver-equivalent inferred resource grade of 1,155g per tonne (g/t), with 343g/t silver, 9.8% zinc, and 6.2% lead.

Having started production during the fourth quarter of last year, the mine has an indicated resource grade of 1,166g/t, including 352g/t silver, 9.4% zinc, and 6.7% lead. 

Once the transaction is complete later this month, the company is planning to invest $25m-$35m towards surface infrastructure, underground development and drilling, in addition to mill optimisation over a period of six months.

Commercial production at the site is expected to resume by the end of the first quarter of next year.

Coeur intends to obtain amended permits to enhance capacity from 500t to 1,000t a day throughout the year.

Upon achieving the 1,000t per day mark, the mine is estimated to produce an average of around ten million silver-equivalent ounces per annum over an estimated 7.5-year initial mine life.