Coeur Announces Flow-Through Shares Private Placement to Advance Silvertip Exploration

Rhea-AI Summary

Coeur Mining, Inc. (CDE) has announced a private placement of flow-through shares, raising approximately C$34 million to fund an accelerated exploration program on the Silvertip Property in British Columbia and Yukon. The offering will be subject to a four-month hold period.

Insights

Market Research Analyst

A private placement of flow-through common shares, such as the one conducted by Coeur Mining, Inc., is a strategic financing tool that is particularly relevant in the resource extraction industry. Flow-through shares are a tax-efficient way to raise capital for exploration activities, as investors can claim tax deductions for the exploration expenses incurred by the company. The 27% premium over the market price indicates strong investor confidence in the potential value of the exploration program and the underlying assets at the Silvertip Property.

From a market research perspective, the allocation of C$34 million towards an accelerated exploration program could signify a substantial increase in the company's resource base, should the exploration yield positive results. This could potentially enhance Coeur Mining's long-term production outlook and revenue projections, making it an attractive consideration for investors who are looking at growth potential in the mining sector.

Financial Analyst

The announcement of the private placement and its intended use for exploration expenditures at the Silvertip Property in British Columbia and Yukon can have several financial implications. The premium price of the flow-through shares suggests a favorable market perception, which might lead to a positive impact on the company's stock price in the short term. However, the four-month hold period could temporarily limit liquidity for investors.

Long-term financial implications hinge on the success of the exploration program. If the exploration confirms significant mineral deposits, it could lead to future mining operations that may increase Coeur Mining's revenues and profitability. Conversely, if the exploration results are disappointing, it could lead to a write-off of the exploration costs and potentially impact the company's financial position negatively.

Mining Sector Analyst

Understanding the technicalities of the mining industry, the term 'Canadian Exploration Expenditures' (CEE) refers to the types of expenses that are eligible for tax incentives under Canadian tax law, aimed at encouraging mining and resource exploration. The focus on silver, lead and zinc at the Silvertip Property aligns with the current market demand for these metals, which are critical in various industrial applications including batteries, galvanization and electronics.

The exploration program's success is not guaranteed, but the strategic investment in these commodities could position Coeur Mining, Inc. advantageously if global demand for silver, lead and zinc continues to rise. This exploration initiative could potentially increase the company's reserves and resources, which is a key metric for investors when evaluating mining companies.

C$34 million of expected proceeds to fund accelerated exploration program

CHICAGO--(BUSINESS WIRE)-- Coeur Mining, Inc. (“Coeur” or the “Company”) (NYSE: CDE) today announced that it has arranged a private placement (the “Offering”) of 7,704,725 flow-through common shares of the Company that will qualify as “flow-through shares” within the meaning of subsection 66(15) of the Income Tax Act (Canada) (the “flow-through shares”) for gross proceeds of approximately $25 million (C$34 million), resulting in a 27% premium. The offering will be subject to a four-month hold period.

The proceeds of the Offering will be used exclusively for qualifying Canadian Exploration Expenditures (“CEE”) (as such term is defined in the Income Tax Act (Canada), in conducting an exploration and mineral resource evaluation program on the Silvertip Property in British Columbia and Yukon to determine the existence, location, extent, and quality of the silver, lead, and zinc on the Silvertip Property.

The flow-through shares will be privately placed with investors in certain provinces in Canada pursuant to applicable exemptions from the prospectus requirements. The initial Offering is expected to close on or about March 8, 2024. The Offering will be subject to the satisfaction or waiver of customary closing conditions.

The flow-through shares will only be offered and sold outside the United States pursuant to Regulation S under the Securities Act of 1933, as amended (the “U.S. Securities Act”). The Offering has not been, and will not be, registered under the U.S. Securities Act or any U.S. state securities laws, and may not be offered or sold in the United States or to, or for the account or benefit of, United States persons absent registration or any applicable exemption from the registration requirements of the U.S. Securities Act and applicable U.S. state securities laws.

This news release is neither an offer to sell nor a solicitation of an offer to buy any of these securities and shall not constitute an offer, solicitation or sale in any jurisdiction in which such offer, solicitation or sale is unlawful.

About Coeur

Coeur Mining, Inc. is a U.S.-based, well-diversified, growing precious metals producer with four wholly-owned operations: the Palmarejo gold-silver complex in Mexico, the Rochester silver-gold mine in Nevada, the Kensington gold mine in Alaska and the Wharf gold mine in South Dakota. In addition, the Company wholly-owns the Silvertip silver-zinc-lead exploration project in British Columbia.

Cautionary Statements

This news release contains forward-looking statements within the meaning of securities legislation in the United States and Canada, including statements regarding the Company’s Silvertip exploration project, the proposed issuance of flow-through shares and the tax treatment of the flow-through shares. Such forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause Coeur’s actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. Such factors include, among others, the satisfaction of conditions and completion of the private placement; the tax treatment of the flow-through shares; the risk that exploration efforts will not occur on a timely basis or requires more capital than currently anticipated; the risk that anticipated production, cost, expenditure and expense levels at our Palmarejo, Rochester, Wharf and Kensington mines are not attained; the risk that our Rochester mine expansion commissioning and ramp up is not completed; the risks and hazards inherent in the mining business (including risks inherent in developing and expanding large-scale mining projects, environmental hazards, industrial accidents, weather or geologically-related conditions); changes in the market prices of gold and silver and a sustained lower price or higher treatment and refining charge environment; the impact of geopolitical conditions, pandemics or epidemics, climate change, extreme weather events and other macro conditions, including disruptions to operations, the need for heightened health and safety protocols, inflation, and disruptions to our vendors, suppliers and the communities where we operate; the uncertainties inherent in our production, exploration and development activities, including risks relating to permitting and regulatory delays (including the impact of government shutdowns), ground conditions, grade and recovery variability; any future labor disputes or work stoppages (involving us or our subsidiaries or third parties); the risk of adverse outcomes in litigation; the uncertainties inherent in the estimation of gold, silver, zinc and lead mineral reserves and resources; impacts from our future acquisition of new mining properties or businesses; the loss of access or insolvency of any third-party refiner or smelter to whom we market our production; the continued effects of the COVID-19 pandemic, including impacts to workforce, materials and equipment availability; inflationary pressures; continued access to financing sources; government orders that may require temporary suspension of operations at one or more of our sites and effects on our suppliers or the refiners and smelters to whom we market our production and on the communities where we operate; the effects of environmental and other governmental regulations and government shut-downs; the risks inherent in the ownership or operation of or investment in mining properties or businesses in foreign countries; and our ability to raise additional financing necessary to conduct our business, make payments or refinance our debt, as well as other uncertainties and risk factors set out in filings made from time to time with the United States Securities and Exchange Commission, and the Canadian securities regulators, including, without limitation, Coeur’s most recent report on Form 10-K. Actual results, developments and timetables could vary significantly from the estimates presented. Readers are cautioned not to put undue reliance on forward-looking statements. Coeur disclaims any intent or obligation to update publicly such forward-looking statements, whether as a result of new information, future events or otherwise. Additionally, Coeur undertakes no obligation to comment on analyses, expectations or statements made by third parties in respect of Coeur, its financial or operating results or its securities.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240226585753/en/

For Additional Information

Coeur Mining, Inc.

200 S. Wacker Drive, Suite 2100

Chicago, Illinois 60606

Attention: Jeff Wilhoit, Director, Investor Relations

Phone: (312) 489-5800

www.coeur.com

Source: Coeur Mining

FAQ

What is the purpose of Coeur Mining's private placement offering?

The purpose of the private placement offering by Coeur Mining is to raise funds for an accelerated exploration program on the Silvertip Property in British Columbia and Yukon.

How much is Coeur Mining expecting to raise through the private placement offering?

Coeur Mining is expecting to raise approximately C$34 million through the private placement offering of flow-through shares.

Where will the proceeds from the private placement offering be used?

The proceeds from the private placement offering will be used exclusively for qualifying Canadian Exploration Expenditures (CEE) in conducting an exploration and mineral resource evaluation program on the Silvertip Property.

What is the hold period for the offering?

The offering will be subject to a four-month hold period.

Who will the flow-through shares be privately placed with?

The flow-through shares will be privately placed with investors in certain provinces in Canada pursuant to applicable exemptions from the prospectus requirements.