LEXPERT MAGAZINE
|
MARCH/APRIL 2018 9
LEXPERT: Why did Coeur decided to
launch operations in Canada for the first
time? What is it about the Silvertip mine
that was appealing?
Kari MacKay, Goodmans LLP (for Coeur Min-
ing): Most senior producers prefer to oper-
ate in stable jurisdictions or where other
production risks have been minimized.
However, equally important to senior
producers is their pipeline of continuing
growth. e Silvertip mine is one of those
unique opportunities that check all the
boxes for a producing company. … Silvertip
is a new mine with one of the highest grade
opportunities in the sector, it has anticipat-
ed near-term high margin cash flows with
low costs, is in a stable jurisdiction and has
a lot of exploration potential.
LEXPERT: Can you give me a sense of how
this deal came about? Had the Silvertip
mine been on Coeur's radar for a while?
MacKay: Like many senior producers,
Coeur is always looking for growth pipe-
line opportunities. ey regularly look at
a variety of opportunities and sometimes
spend many years looking at an asset. In
this instance, although there were the
inevitable starts and stops in early discus-
sions, the process moved along at a rela-
tively quick pace once negotiations began
in earnest. Coeur has been involved in a
number of Canadian transactions over the
years and is very happy to have a physical
presence, as well as its significant investor
presence at this time.
LEXPERT: ere were several elements to
this deal, including the cash-and-share
considerations, assumption of debt and
additional contingent payments of up to
US$50 million. Why was the deal struc-
tured in this way?
MacKay:
e diverse forms of consider-
ation offer the best opportunity to both the
purchaser to get good value for its money,
and for the sellers to leverage potential of
the asset and maintain exposure to future
expansions. e milestone payments are
objective opportunities to recognize future
potential with limited risks to Coeur. Tak-
ing a portion of the consideration in stock,
diversifies the holdings of JDS' sharehold-
ers while maintaining their exposure to
this great asset.
LEXPERT: How large a role did the en-
vironmental aspect play in the due dili-
gence process?
MacKay: Environmental protection is of
critical importance to Coeur not only in its
diligence process, but throughout its tenure
'Simplicity' in Silver
with any project. Coeur spent a lot of time
considering the environmental risks of the
intended operations and assured itself as
to the historical activities of prior opera-
tors. As in any mining operation, there are
a number of specific environmental mat-
ters that continue to be monitored at the
Silvertip mine so that Coeur may continue
sound environmental stewardship.
LEXPERT: As a corollary to that, how much
further discussion was required with First
Nations stakeholders? Do you expect fur-
consultations going forward?
Keith Bergner (Lawson Lundell LLP, for
Coeur in British Columbia): ere is an ex-
isting agreement in place with the Kaska
Nation, and the parties recognize they have
a mutual interest in building a strong rela-
tionship and co-operating with each other.
As with much of British Columbia, there
are some overlapping claims in the area,
including a claim by the Tahltan. e com-
pany is committed to fostering strong rela-
tionships with all potentially affected First
Nations communities and believes that the
Silvertip project holds opportunities for all
communities in the region.
MacKay: As part of our diligence, we con-
firmed the historically positive relationship
with the First Nations communities in
the area of the Silvertip mine. Coeur an-
ticipates ongoing consultation with these
communities both in the context of opti-
mization and exploration, and as a matter
of regular operations. Like its environmen-
tal stewardship policies, Coeur is dedicated
to preserving good community relations
and unique ecosystems throughout opera-
tions through to post-reclamation.
LEXPERT: Given that there is a new NDP
government in British Columbia, was there
any uncertainty around how things would
play out?
Coeur Mining's physical entry into Canada was negotiated quickly with limited approvals required
INTERVIEW BY GENA SMITH
Kari
MacKay
Good-
mans LLP
(for Coeur
Mining)
Karen
MacMillan
Lawson
Lundell LLP
(for Coeur
in BC)
ON THE DEAL
Things could not have gone more smoothly in Coeur Mining Inc.'s acquisition of the Sil-
vertip Mine — a high-grade silver-zinc-lead operation in Northern BC — and private com-
pany JDS Silver Holdings Ltd. The deal that marked the Chicago-based precious metals
producer's physical entry into Canada was marked by its 'simplicity' in execution. And
in these complicated times, that could bode well for foreign inbound mining.
Keith
Bergner
Lawson
Lundell
LLP (for
Coeur
in BC)
