The mining sector was jolted by unexpected news as Coeur Mining announced a transformative $7 billion all-stock transaction to acquire competitor New Gold. This strategic move, while creating a potential industry heavyweight, has triggered a massive selloff among concerned investors. Market participants watched in astonishment as Coeur’s equity value plummeted 30% within a single month following the announcement.
Creating a Global Mining Powerhouse
Through this landmark agreement, Coeur Mining will absorb New Gold entirely through stock issuance, positioning the combined entity among the world’s ten largest precious metals producers. The transaction terms specify that New Gold shareholders will receive 0.4959 Coeur shares for each of their existing holdings.
Upon completion, scheduled for the first half of 2026, current Coeur investors will maintain approximately 62% ownership in the merged corporation, while former New Gold stakeholders will control the remaining 38%. The consolidation promises to establish the new company as the planet’s fifth-largest silver producer, representing both significant opportunity and substantial integration challenges.
Should investors sell immediately? Or is it worth buying Coeur Mining?
Ambitious Financial Projections Meet Market Skepticism
Corporate leadership has projected impressive financial metrics for the combined operation, anticipating roughly $3 billion in EBITDA and approximately $2 billion in free cash flow for 2026. These forecasts substantially exceed Coeur’s standalone expectations for 2025, which included over $1 billion in EBITDA and more than $550 million in free cash flow. The company’s third-quarter 2025 results had already demonstrated positive momentum with metal sales increasing 15% and liquidity positions strengthening.
Despite these optimistic projections, market reception has been decidedly negative. The dramatic 30% share price collapse within weeks reflects deep-seated investor concerns about potential integration complications, shareholder dilution from the stock-based transaction structure, and unpredictable operational risks. The spectacular 141% annual gains previously achieved have rapidly evaporated, highlighting the inherent volatility surrounding major corporate combinations in the resources sector.
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