Coeur Mining recently announced it has entered into a definitive agreement with a subsidiary of Goldcorp to acquire 100% of the Wharf gold mine located near Lead, South Dakota, for $105 million in cash.
The Wharf mine is expected to produce 85,000 to 90,000 oz of gold in 2015 at an all-in sustaining cost of $800/oz-$875/oz. The acquisition would also leverage Coeur’s 25 years of open-pit, heap-leach experience and increase the company’s total gold reserves by 24%.
“The acquisition of Wharf improves our overall portfolio with strong cash flow generation in a low-risk jurisdiction. Wharf is a straight-forward open-pit operation that has been well-run for more than 30 years. Ongoing capital requirements are expected to be minimal, resulting in low expected all-in costs and significant expected free cash flow,” said Mitchell J. Krebs, president and CEO. “We believe this transaction will generate an attractive rate of return and is immediately accretive to cash flow and net asset value. We are excited to welcome our new team members at Wharf as we look to pursue identified opportunities to optimize the operation, add incremental value and extend the mine life.”
The transaction is subject to U.S. antitrust approval and other customary closing conditions. Coeur anticipates closing the transaction in the first quarter of 2015.