AU
Coeur Mining buys New Gold in $7B all-stock merger
Coeur Mining (NYSE: CDE) is acquiring Canada’s New Gold (TSX: NGD) in an all-stock deal valued at about $7 billion, creating a new North American mining heavyweight amid record gold prices and renewed investor enthusiasm for precious metals.
Chicago-based Coeur, which operates mines in the US and Mexico, will combine with New Gold’s two Canadian gold-producing sites to form a company valued at roughly $20 billion. The merged miner will produce an estimated 900,000 ounces of gold and 20 million ounces of silver next year.
The deal strengthens Coeur’s balance sheet and cash flow, giving it greater strategic flexibility, the company said. New Gold’s assets are expected to lower Coeur’s production costs and boost margins.
“With the addition of New Gold’s two Canadian operations to our five current operating mines we expect to generate approximately $3 billion of EBITDA and approximately $2 billion of free cash flow in 2026 at significantly lower overall costs and higher margins,” Coeur CEO Mitchell J. Krebs said in a news release.
“Just two years ago, Coeur’s full-year EBITDA was $142 million and free cash flow was negative $297 million (…) This transaction accelerates our transformation into a larger, more resilient, lower-cost company.”
Operational synergies, growth
New Gold President and CEO Patrick Godin said the merger will deliver value to shareholders through operational synergies and growth potential.
“It rapidly unlocks the K-Zone at New Afton and enhances exploration at Rainy River, while diversifying our asset base with five high-quality precious metal operations,” Godin said.
Investors will receive 0.4959 Coeur share for each New Gold share, a roughly 16% premium based on Friday’s closing prices. Coeur will maintain New Gold’s Toronto office and seek a Canadian listing.
The merger comes amid a record-setting rally in gold, which climbed above $4,000 an ounce this year and which the sector expects to surpass the $5,000 mark in the next 12 months. Shares of both Coeur and New Gold have tripled in 2025.
China cuts gold tax exemption as state bank stops gold product enrolments
A Chinese state bank closed retail gold accounts to new investors on Monday, two days after Beijing tweaked a long-standing tax exemption for the metal that is likely to hit retail demand in the world’s biggest consumer market.
State-owned China Construction Bank said on Monday it would no longer accept applications for one of its gold purchasing accounts without giving a reason. Fellow major ICBC also restricted new applicants but reversed the move hours later.
The decisions follow Beijing’s announcement two days earlier that it would cut the full 13% value-added tax exemption to 6% for certain gold purchases through the Shanghai Gold Exchange and the Shanghai Futures Exchange from November 1.
The change will affect industrial and jewellery users because gold purchased for investment, for example gold bars or ingots, is exempt, as are paper trades on the exchange. The new regime applies to non-members of the SGE regardless of the gold’s ultimate use.
“We expect the net effect is higher costs on gold consumption in jewellery and industrial uses,” UBS analyst Joni Teves said in a note on Monday, adding it could spur more companies to join the exchanges, improving liquidity and transparency.
The new tax regime comes amid a worldwide rush to buy gold, especially in China where consumers have lined up to purchase jewellery from retailers.
The buying helped drive gold’s rally to a record $4,381 an ounce on October 20.
Spot gold prices on Monday briefly slipped below $4,000 an ounce and were last trading near that level and have dropped about 9% since hitting the record.
Shares of gold jewellery retailers Laopu Gold and Chow Tai Fook dropped as much as 9% and 12%, respectively, on Monday, while gold miners Zijin Mining and Zhongjin Gold each fell around 1.5%.
Last month, the value-added tax exemption for platinum was also removed for China Platinum Company, also beginning on November 1.
(By Dylan Duan, Li Gu and Lewis Jackson; Editing by Christian Schmollinger and Sharon Singleton)
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