In a move that reshapes the precious metals landscape, US-based miner Coeur Mining has announced a definitive agreement to acquire competitor New Gold in an all-stock transaction valued at approximately $7 billion. This consolidation creates one of the most significant players in the sector, though initial market reaction signaled investor apprehension about the deal’s valuation.
Creating a $20 Billion Precious Metals Powerhouse
The merger unites two established producers into a single entity boasting a pro-forma market capitalization nearing $20 billion. The combined company will command an impressive portfolio of seven operational mines across politically stable jurisdictions in the United States, Canada, and Mexico. This geographical diversity is expected to mitigate operational risks while providing enhanced production stability.
Under the transaction terms, New Gold shareholders will receive 0.4959 Coeur Mining shares for each share they currently hold. Upon completion, existing Coeur investors will own approximately 62% of the merged enterprise, with New Gold stakeholders controlling the remaining 38%. The arrangement remains subject to approval from both companies’ shareholders and customary regulatory clearances, with closure anticipated during the first half of 2026.
Projected Financial Transformation: EBITDA Target of $3 Billion
The financial projections underpinning this combination reveal ambitious growth targets. Coeur Mining forecasts that the merged entity will achieve roughly $3 billion in combined EBITDA for 2026, alongside approximately $2 billion in free cash flow. These figures represent a substantial leap from Coeur’s standalone projections for 2025, which estimate $1 billion in EBITDA and $550 million in free cash flow.
This anticipated tripling of earnings power is predicated on fully-funded expansion projects currently being commissioned. Successful integration and the realization of projected synergies will be critical to achieving these financial targets.
Should investors sell immediately? Or is it worth buying Coeur Mining?
Strategic Timing Amid Gold Market Strength
This consolidation occurs during a period of exceptional momentum for precious metals. Gold recently surpassed the $4,000 per ounce threshold for the first time, while silver has demonstrated similarly robust performance. Rising demand for safe-haven assets coupled with ongoing monetary policy uncertainty has created a favorable environment for precious metals producers.
Despite these tailwinds, markets responded cautiously to the announcement. Coeur’s stock declined noticeably in pre-market trading, suggesting investors are weighing the acquisition’s premium against potential integration challenges. The ultimate success of this mega-merger will become clearer when the first combined production figures are released.
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