NYSE-listed Coeur Mining announced on Friday its acquisition of smaller peer SilverCrest Metals in a deal valued at $1.7-billion, creating a 21-million-ounce-per-year silver powerhouse.

SilverCrest shareholders will receive 1.6022 Coeur common shares for each share held, representing a consideration of $11.34 per share.

The acquisition will integrate SilverCrest’s flagship Las Chispas mine in Mexico with Coeur’s existing operations, including the recently expanded Rochester mine, in Nevada, and the Palmarejo underground mine, in Mexico. The combination is expected to drive peer-leading silver production of 21-million ounces by 2025 across five North American operations.

In addition to its strong silver output, the combined company is projected to produce about 432 000 oz of gold next year.

SilverCrest’s Las Chispas underground mine in Sonorais one of the world’s highest-grade, lowest cost, and highest-margin silver and gold operations. Las Chispas started production in late 2022 and has delivered strong operational and financial results in 2023, selling about 10.25-million silver equivalent ounces at average cash costs of $7.73/oz.

"The acquisition of SilverCrest creates a leading global silver company by adding low-cost silver and gold production and significant free cash flow to our rapidly growing production and cash flow driven by the recent expansion of our Rochester silver and gold mine in Nevada,” said Coeur president and CEO Mitchell Krebs.

"This immediate deleveraging, along with the significant combined expected free cash flow, will allow for rapid debt repayment and investment in other organic growth opportunities while offering shareholders an unparalleled re-rating opportunity. With over 15 years of experience operating our Palmarejo underground silver and gold operation next door in Chihuahua, we look forward to adding the high-quality Las Chispas mine to create a leading global silver company at a time when the demand for silver in renewable energy and a wide range of electrification end uses is rapidly rising," he stated.

SilverCrest CEO Eric Fier, who will become a director of Coeur, said he was proud of what his team had accomplished over the past nine years, taking Las Chispas from discovery to production.

"Our operational consistency since declaring commercial production in late 2022 is a testament not only to the asset quality, but also our outstanding team and strong stakeholder relationships. I feel confident that the Coeur team will extend this track record of success at Las Chispas and believe this transaction is the best opportunity for shareholders to not only receive an immediate premium, but also have the opportunity to become meaningful owners of a growing, multi-asset, US-based, NYSE-listed silver and gold company with tremendous upside potential."

In addition to shareholder and court approvals, the transaction is subject to applicable regulatory approvals, including Mexican antitrust approval, approval of the listing of the Coeur common shares to be issued under the transaction on the NYSE, and the satisfaction of certain other closing conditions customary for a transaction of this nature. Subject to the satisfaction of conditions, the transaction is expected to close late in the first quarter of 2025.