SSR Mining moves to reinvest in existing portfolio
Pirquitas project - San Miguel open pit - Night view
SSR Mining Inc. [SSRM-TSX, NASDAQ] moved Tuesday July 23 to reinvest in its existing portfolio of projects by announcing deals with Golden Arrow Resources Corp. [GRG-TSXV; OTCQB-GARWF; G6A-FSE] and SilverCrest Metals Inc. [SIL-TSXV; SILV-NYSE American].
The first of the two deals involves an agreement to purchase an additional 25% stake in the Puna Operations joint venture in Argentina from partner Golden Arrow Resources.
Puna Operations was formed through a joint venture, which combined SSR Mining’s Pirquitas Mine and processing plant and Golden Arrow’s nearby Chinchillas silver-lead-zinc project. After an accelerated period of development, commercial production at Puna Operations was declared in December 2018.
Puna Operations was previously held 75% by SSR and 25% by Golden Arrow.
“The sale of our equity position in Puna Operations is a landmark achievement for the company,” said Golden Arrow Executive Chairman, President and CEO Joseph Grosso. “The transaction provides Golden Arrow with a strengthened financial position to focus on delivering shareholder returns through the exploration and development of our exciting exploration portfolio in South America,” Grosso said.
Golden Arrow shares fell 11% or $0.03 to 24.5 cents on volume of 2.28 million. The shares trade in a 52-week range of 19 cents and 55 cents.
Under the agreement, SSR will pay $2.3 million in cash upon closing. It will also cancel Golden Arrow’s $10 million term loan including interest, transfer approximately 4.3 million Golden Arrow shares back to the company (worth $800,000) and SSR will issue $20 million worth of its shares to Golden Arrow based on the 20-day volume weighted average price prior to the close of the transaction.
SSR Mining shares advanced on the news, rising 1.25% or 26 cents to $21.02. The shares are trading in a 52-week range of $10.71 and $21.05.
Also, on Tuesday, SSR Mining said it has elected to exercise its right to maintain its interest in SilverCrest Metals by purchasing 718,000 shares of SilverCrest on the same terms as the bought deal public offering announced by SilverCrest on July 23, 2019. The additional shares will be acquired at a price of $5.85 per share, for a total consideration of $4.2 million.
Upon closing of the private placement, SSR Mining will own 8.94 million common shares of SilverCrest, representing a 9.9% interest in the company. SilverCrest recently announced an updated mineral resource estimate for its Las Chispas property in Sonora, Mexico. The inferred resource estimate includes 511,800 ounces of gold and 48.3 million ounces of silver, or 86.7 million ounces of silver equivalent, using a 150 g/t silver equivalent cut-off grade and minimum true vein width of approximately 1.5 metres.
The Las Chispas property is located approximately 180 km northeast of Hermosillo. It consists of 28 concessions totalling 1,400 hectares. Between 1880 and 1930, several mines on the property are thought to have yielded approximately 100 million ounces of silver and 200,000 ounces of gold.
“Our participation to maintain a 9.9% ownership interest in SilverCrest provides SSR Mining shareholders with exposure to a high-grade developable deposit as management de-risks the Las Chispas Project,” said SSR Mining President and CEO Paul Benson.