NYSE-listed Coeur Mining on Thursday announced that it would buy Northern Empire, which owns high-grade heap-leachable deposits in Nevada, in a recommended transaction that values the TSX-V-listed junior at about $90-million, or C$117-million.
Northern Empire’s principal asset is the fully permitted, past producing Sterling gold mine, which has an inferred gold resource of about 709 000 oz averaging at 2.23 g/t. The company’s remaining deposits are collectively known as the Crown Block.
Coeur CEO Mitchell Krebs said that the acquisition of the Sterling project and large, prospective land package came at an opportune time for Northern Empire, bolstering its pipeline with high-quality projects.
The company would aim for a quick restart of the Sterling mine.
“The transaction - which provides a unique opportunity for Coeur to leverage its operational expertise in Nevada, a leading mining jurisdiction, and add expected near-term, high margin production and cash flow with minimal upfront capital, together with significant exploration potential - satisfies all of our acquisition criteria and is accretive on all key financial and operational metrics,” Krebs said.
Investors in Northern Empire appeared to welcome the transaction, with the company’s stock shooting up 11% to C$1.51 a share on the TSX-V, while Coeur’s stock slid 5.3% to $6.46 a share on the NYSE.
Northern Empire president and CEO Michael Allen said that acquiring the Sterling project and advancing it to an accretive transaction, such as the Coeur acquisition, was an “exceptional outcome”.
Coeur owns five mines in North America, including the Palmarejo silver/gold complex in Mexico, the Silvertrip silver/zinc/lead mine in British Columbia, the Rochester silver/gold mine in Nevada, the Kensington gold mine in Alaska, and the Wharf gold mine in South Dakota.