SSR Mining and Alacer Gold to merge

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SSR Mining Inc. [SSRM-TSX, NASDAQ] and Alacer Gold Corp. [ASR-TSX; AQG-ASX] have entered into a definitive agreement to combine in an at-market merger of equals pursuant to a plan of arrangement. The combined entity will continue as SSR Mining Inc. and will be headquartered in Denver, Colorado with a corporate office in Vancouver, B.C. and will be led by Rod Antal as President and CEO and Michael Anglin as Chairman.

Following the completion of the transaction, the new board of directors will be comprised of five directors from each of the current SSR Mining and Alacer boards of directors for a total of 10 directors, including the CEO.

Alacer shareholders will receive 0.3246 SSR Mining shares for each Alacer share held. The Exchange Ratio, together with closing prices for both SSR Mining and Alacer common shares on the TSX on May 8, 2020, implies consideration of C$8.19 per Alacer common share and a combined market capitalization of approximately $4.0 billion. At closing, SSR Mining and Alacer shareholders will collectively own approximately 57% and 43% of SSR Mining, respectively, on an issued and outstanding share basis. Below are the merger highlights:

*All dollar figures are in U.S. dollars unless otherwise stated.

Diversified Operating Platform:

  • Creates a diversified portfolio of high quality, long life operating assets across four jurisdictions
  • Consensus1forward-looking 3-year average annual production profile of ~780 koz AuEq at ~$900/oz AISC2

Experienced Leadership Team:

  • Combines management with shared track records of creating value through exploration, construction, and operations
  • Brings together expertise in open pit, underground, pressure oxidation, heap leach, and flotation operations

Free Cash Flow Leader:

  • Based on consensus estimates3, the combined entity is expected to generate peer leading average annual pro forma free cash flow4of ~$450 million (2020E-2022E), well ahead of a peer group annual average of $275 million

Financial Strength:

  • Strong balance sheet with consolidated cash5and marketable securities of ~$700 million to support growth pipeline and facilitate capital returns evaluation

Organic Growth Potential:

  • Three significant district scale land packages in USA, Canada, and Turkey
  • Attractive growth portfolio of low capital intensity greenfield and brownfield opportunities
  • Track record of resource conversion, successful greenfield and brownfield exploration, and project construction

Enhanced Market Presence:

  • Attractive trading liquidity across multiple global exchanges to drive enhanced capital markets presence and investor relevance

Paul Benson, President and CEO of SSR Mining said, “The zero-premium merger of SSR Mining and Alacer creates an exciting leading intermediate gold producer with exceptional financial strength, robust margins, strong cash flow generation, and long mine lives that will be run by highly experienced management with a track record of value creation.”

Rodney P. Antal, President and CEO of Alacer said, “The combination of Alacer and SSR Mining will create a diversified portfolio of high quality, long-life mines across four mining-friendly jurisdictions. Our focus at Alacer over the past several years has been on generating peer-leading free cash flow – this merger allows us to continue this strategy while diversifying our single operating asset exposure.”

The Transaction will require the approval of at least 66-2/3% of the votes cast by the shareholders of Alacer at a special meeting. The issuance of shares by SSR Mining under the Agreement is also subject to the approval of the majority of votes cast by the SSR Mining shareholders at a special meeting.

Completion of the Transaction is also subject to regulatory and court approvals. Officers and directors of SSR Mining have entered into voting and support agreements with Alacer agreeing to vote their shares in favour of the Transaction. Officers and directors of Alacer have also entered into voting and support agreements with SSR Mining agreeing to vote their shares in favour of the Transaction.

The Board of Directors of SSR Mining and the Board of Directors of Alacer have unanimously approved the transaction and recommend that shareholders vote in favour of the merger. National Bank Financial Inc. and TD Securities Inc. have provided fairness opinions stating that the consideration to be received by the shareholders of Alacer is fair.

SSR Mining announces that as of March 31, 2020, cash and equivalents totaled $398 million and the face value of outstanding debt was $230 million. The updated balances reflect the redemption of outstanding 2.875% Senior Convertible Notes due 2033 as first announced on February 13, 2020. As of March 31, 2020, no 2013 Notes remain outstanding.

SSR Mining is a Canadian-based precious metals producer with three operations, including the Marigold gold mine in Nevada, U.S., the Seabee Gold Operation in Saskatchewan, Canada and Puna Operations in Jujuy, Argentina. SSR Mining also has two feasibility stage projects and a portfolio of exploration properties in North and South America.

Alacer Gold is a leading low-cost intermediate gold producer whose primary focus is to leverage its cornerstone Çöpler Gold Mine and strong balance sheet as foundations to continue its organic multi-mine growth strategy, maximize free cash flow, and therefore create maximum value for shareholders. The Çöpler Gold Mine is located in east-central Turkey.

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