Paladin’s Fission Uranium takeover delayed by Canada security review
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Palmarejo mine complex in Mexico.
Coeur Mining (NYSE:CDE), the U.S. largest silver producer, confirmed Wednesday it is acquiring Paramount Gold and Silver Corp. (TSX:PZG) in an all-stock transaction valued at $146 million, as it seeks to expand its mining footprint in Mexico.
As part of the agreement, Paramount will spin off its non-Mexican assets, such as its Nevada-based Sleeper Gold Project, into a standalone publicly listed company to be named Paramount Nevada Gold Corp. Coeur will will provide $10 million in cash to the new company and will own a 4.9% stake on it.
The deal is the latest in a growing trend among mining companies to seek consolidation due to low metal prices. Mergers are expected to lower miner’s cost base, expand their deposits and make them more profitable.
Paramount’s San Miguel mining project neighbours Coeur’s Palmarejo silver-gold mine complex in Northern Mexico.
“By adding Paramount’s San Miguel Project and particularly the Don Ese deposit to the ongoing mining activities at our Guadalupe deposit, Palmarejo will be well-positioned to remain one of the world’s top producing silver and gold mines with significantly higher grades and lower costs., Coeur’s President and Chief Executive Officer, Mitchell J. Krebs said in the statement.
Besides Palmarejo, Chicago-based Coeur also owns the San Bartolome silver mine in Bolivia, the Rochester silver-gold mine in Nevada and the Kensington gold mine in Alaska. Winnemucca, Nevada-based Paramount also owns the Sleeper gold project in Nevada.
