Paramount Gold And Silver Soars 35% On Coeur Mining Acquisition

Coeur Mining, Inc. CDE announced Wednesday it has entered into a merger agreement to acquire all of the outstanding shares of Paramount Gold and Silver Corp. PZG in an all-stock transaction valued at $146 million.  The announcement sent PZG shares soaring over 35 percent.

Immediately prior to completion of the merger, Paramount will spin-off to its existing stockholders a separate, publicly traded company, expected to be named Paramount Nevada Gold Corp. ("SpinCo"), a subsidiary that owns the Sleeper Gold Project and other assets in Nevada. As part of the transaction, Coeur will provide $10 million in cash to SpinCo and receive a 4.9 percent common share interest.

FactSet reported that M&A activity in the Energy Minerals sector has increased in 2014 though November with 34 deals compared to 30 in 2013.  The total transaction value has also increased by 40 percent in 2014 versus 2013.

With M&A activity heating up, traders may want to look for possible acquisition targets similar to Paramount.  

Allied Nevada Gold Corp. ANV is also in the gold and silver mining business and has a market capitalization similar to Paramount.  The stock is down over 70 percent Year-to-Date but surged 9.58 percent Wednesday to $0.929 amid the Paramount news.

Coeur Mining, Inc. recently traded at $4.32, down 5.47 percent.

Paramount Gold and Silver Corp. recently traded at $0.869, up 35.76 percent.