Coeur Mining, Inc. (NYSE:CDE) announced on Monday that it will acquire New Gold Inc. (AMEX:NGD) in an all-stock transaction valued at approximately $7 billion.
The transaction creates a new North American senior precious metals producer with a market cap of around $20 billion. The boards have unanimously approved the agreement.
"This transaction provides clear and compelling benefits for New Gold and Coeur shareholders by bringing together two companies with similar cultures to create a stronger, more resilient, and larger-scale precious metals mining company," said Mitchell J. Krebs, Coeur's Chairman, President, and Chief Executive Officer.
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He called the merger "an extraordinary opportunity to create an unrivaled North American-only mining powerhouse at just the right time," praising the cash flow potential.
Under the terms of the agreement, New Gold shareholders will receive 0.4959 shares of Coeur common stock for each New Gold share held. The exchange ratio values New Gold at $8.51 per share, representing a 16% premium to its closing price as of October 31.
Upon completion, Coeur shareholders will own approximately 62% of the combined company, while New Gold shareholders will hold about 38%.
The merger creates a seven-mine portfolio across the U.S., Canada, and Mexico. Production potential is set at 900,000 ounces of gold, 20 million ounces of silver, and 100 million pounds of copper annually.
The company anticipates generating $3 billion in EBITDA and $2 billion in free cash flow by 2026. Over 80% of the new entity's revenue would come from North America, placing it among the top ten global precious metals producers and one of the five largest silver producers.
Synergies and Growth Pipeline
The deal also delivers meaningful operational and financial synergies, with a strengthened balance sheet, lower costs, and expanded organic growth potential.
The combined pipeline includes Coeur's Silvertip project in British Columbia and New Gold's K-Zone expansion at New Afton, as well as the Rainy River exploration program. All of these should benefit from the merged company's scale and liquidity.
New Management and Board Composition
Upon closing, several members of New Gold's management team will join Coeur. Patrick Godin, New Gold's President and CEO, will join Coeur's Board of Directors, alongside one other New Gold director.
"Today is a monumental day for New Gold," Godin said. "Together, we will be a cash flow powerhouse, leaping above larger peers, with significant exploration upside and the potential to significantly extend mine life and grow net asset value per share."
Advisors and Closing Timeline
BMO Capital Markets and RBC Capital Markets are acting as financial advisors to Coeur, while National Bank Capital Markets and CIBC Capital Markets are advising New Gold.
The transaction will be implemented through a court-approved plan of arrangement and is expected to close in the first half of 2026, pending shareholder, court, and regulatory approvals.
The companies are hosting a joint investor call at 8:00 a.m. ET today.
Price Action: CDE stock was trading lower by 1.63% to $16.90 premarket at last check Monday. NGD was up 9.81%.
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