REPORT: Coeur Mining to Acquire Paramount Gold

The largest US producer of silver, Coeur Mining Inc., is rumored to be in the final stages of purchasing Paramount Gold and Silver Inc. The deal would give Coeur a significant advantage in its expansion efforts into Mexico, which currently contains the highest reserve of silver in the world.

Under the terms currently being negotiated, Paramount shareholders would be paid in shares of Coeur Mining. In addition, Paramount would spin off its non-Mexican assets into a standalone publicly listed company with Coeur having a 4.9 percent stake in that new company.

The biggest benefit of the deal would be acquiring Paramount’s San Miguel mining project, which neighbors Coeur’s Palmarejo silver-gold mine in Northern Mexico. The San Miguel project encompasses 40 concessions and spans more than 350,000 acres around the Palmarejo mine complex. The acquisition would also enable Palmarejo to continue for at least another seven years as one of the largest and highest grade silver and gold mines in the world.

Talks of Coeur acquiring Paramount Gold reflect the decline in metal prices. The down turn is driving mining companies into consolidation as they continue to lower their cost base, expand their deposits and operations in a bid to become more profitable.

Chicago-based Coeur Mining Inc. is a precious metals mining company and the largest primary silver producer in the United States. The company has built and commenced production at three mines including the San Bartolome silver in Bolivia, the Palmarejo silver-gold mine in Mexico and the Kensington gold mine in Alaska.