By Cory댊 Questions For Northern Empire?
I will be chatting with the guys over at Northern Empire tomorrow for the weekend show. If you have any questions you would like addressed please email me at Fleck@kereport.com.
For those who have missed it Northern Empire is being acquired by Coeur Mining for $117M worth of Coeur stock. Here is the news…
Coeur Mining, Inc. (“Coeur”) (NYSE: CDE) and Northern Empire Resources Corp. (“Northern Empire”) (TSXV: NM) are pleased to announce that they have entered into a definitive agreement (the “Arrangement Agreement”) pursuant to which Coeur has agreed to acquire, by way of a plan of arrangement (the “Arrangement”), all of the issued and outstanding securities of Northern Empire not currently owned by Coeur.
Northern Empire’s principal asset is the Sterling Gold Project located in Nevada, which consists of four high-grade heap-leachable deposits with a total inferred gold resource of approximately 709,000 ounces averaging 2.23 g/t located on a dominant 143 km2 land package approximately 185 km from Las Vegas within the historic Walker Lane trend. The high-grade Sterling gold deposit is a fully-permitted, past-producing mine with near-term, low-cost, low-capital production potential. The remaining deposits are collectively known as the Crown Block, which contain significant exploration potential, and the land package also includes 17 new targets that remain untested.
Transaction Highlights
- Transaction values Northern Empire at approximately US$90 million (C$117 million), inclusive of the approximately 7.4 million Northern Empire shares currently owned by Coeur, representing a premium of 40% to Northern Empire’s 20-day trailing volume-weighted average share price (“VWAP”) based on the 20-day VWAPs for both companies as at August 1, 2018
- Acquisition adds multiple high-quality, high-grade oxide gold deposits to Coeur’s evolving development pipeline that have the potential to become future long-life, low-cost operating assets
- Expands Coeur’s historical focus on Nevada, considered one of the world’s top mining jurisdictions
- Coeur will be focused on a quick restart of the Sterling Mine while aggressively exploring the highly prospective Crown Block and other targets
- Development of the Sterling Gold Project benefits from Coeur’s financial flexibility through its strong balance sheet and diversified cash flow generation
Under the Arrangement, each common share of Northern Empire will be exchanged for 0.1850 (the “Exchange Ratio”) common shares of Coeur. Based on the closing price of Coeur’s common shares on the New York Stock Exchange (“NYSE”) on August 1, 2018, the transaction values each Northern Empire share at C$1.64. The consideration received by Northern Empire shareholders represents a 40% premium based on the 20-day VWAP of Coeur from all trading on the NYSE and Northern Empire from all trading on the TSX Venture Exchange (“TSXV”) for the period ended August 1, 2018 and a premium of 20% over Northern Empire’s closing share price on the TSXV on August 1, 2018. Under the Arrangement, Coeur will also acquire all of the outstanding options and warrants exercisable for Northern Empire common shares at the in-the-money value of such securities, satisfied by delivery of Coeur common shares based on the Exchange Ratio.
Expected Benefits to Coeur Shareholders
- Unique opportunity to generate near-term value from expected high-margin production and cash flow at the Sterling Mine while aggressively exploring the highly prospective Crown Block deposits and other targets at the property with the goal of developing a long-life, low-cost gold operation
- Enhances Coeur’s existing U.S.-centric footprint in a top jurisdiction where it has operated open pit, heap leach operations for over thirty years
- Crown Block ground is the core of an emerging and highly prospective gold district – potential to unlock value through aggressive success-based exploration and drilling program
- Adds projects with the potential of being first and second quartile cost operations
- Potential opportunity to leverage Coeur’s U.S. net operating loss tax synergies
- Property and district scale exploration opportunities
Expected Benefits to Northern Empire Shareholders
- Immediate premium of 40% to the 20-day volume weighted average price of Northern Empire shares based on the 20-day VWAPs for both companies as at August 1, 2018
- Total return of 119% to investors who participated in the C$0.75 acquisition financing and 82% to those who participated in the most recent C$0.90 financing
- All investors who bought shares of Northern Empire have an opportunity for positive gains as the consideration exceeds the all-time high
- Continued exposure to the Sterling Gold Project as well as the opportunity to benefit from the ownership of Coeur shares, a Company poised for significant growth
- Reduced investment risk by transitioning from an “single asset development” company to a balanced portfolio of high quality producing mines and near-term development projects
“The acquisition of Northern Empire, with its high-grade Sterling Gold Project and large, prospective land package, comes at an opportune time for us to bolster our pipeline with high-quality projects. 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,” said Mitchell Krebs, President & CEO of Coeur.
Michael G. Allen, President, CEO and Director of Northern Empire stated, “Our focus has been steadfast in creating value for shareholders. Acquiring the Sterling Gold Project and rapidly advancing it towards an accretive transaction such as this is an exceptional outcome. We believe Coeur’s focus and expertise in the Western US will result in Sterling reaching its full potential. Northern Empire is pleased to enter into this agreement, and its Board unanimously recommends the transaction to shareholders. We wish to thank our employees and stakeholders for all their hard work advancing the Sterling Gold Project.”
Transaction Summary
The proposed business combination will be effected by way of a Plan of Arrangement completed under the Business Corporations Act (British Columbia). The Arrangement will be subject to the approval of at least 66-⅔% of the votes cast by Northern Empire security holders present in person or represented by proxy at a special meeting of Northern Empire security holders expected to take place in September 2018 and the approval of the majority of the minority of Northern Empire security holders after excluding votes …read more
From:: The Korelin Economic Report