Mitchell Krebs on capital allocation
From Coeur Mining Makes “Massive Leap Forward” With New Gold | Mitch Krebs · · Kitco Mining
“We don't want to be in a position where we give investors a reason to not own our stock, right? So we don't want to be an outlier. We want to approach [dividends/shareholder returns] in a thoughtful way, but in a way that rewards shareholders... we don't want to put a dividend in place and then have to scale it back in two years from now.”
On , Mitchell Krebs, President, Chief Executive Officer & Chairman at COEUR MINING INC, spoke about capital allocation during Coeur Mining Makes “Massive Leap Forward” With New Gold | Mitch Krebs on Kitco Mining.
About Mitchell Krebs
Coeur Mining President and CEO Mitch Krebs has described the company’s acquisition of New Gold as a “massive leap forward,” stating that the all-stock deal, valued at approximately $7 billion, will move Coeur into a new peer group with a projected pro forma market capitalization of roughly $25 billion, over $3 billion in EBITDA, and more than $2 billion in free cash flow. Krebs said the transaction builds on the prior year’s SilverCrest acquisition and is intended to create a more resilient North American silver, gold, and copper producer. He acknowledged that the use of shares at a premium typically puts pressure on the acquirer’s stock price in the near term, but argued that such dilution fears are short-lived, citing the example of SilverCrest shareholders who he said are up triple on their investment if they held onto Coeur shares. Krebs has also commented on the broader precious metals market, stating that the global silver shortage is not ending soon, noting five consecutive years of supply deficits driven by industrial demand, particularly from solar panels and electronics. He described the current cycle as being in the “early innings” and said that gold and silver stocks remain undervalued when current spot prices are applied to company models. Regarding Mexico, Krebs said the mining environment is improving under new leadership, with permits that had been stalled for six years under the previous administration being issued in the first six to eight months of the new government. He added that Coeur is focused on disciplined capital allocation, prioritizing high-return investments and organic growth, including the Rochester mine expansion in Nevada and the Silver Tip project in British Columbia.