SSR to acquire Colorado gold mine from Newmont
SSR Mining Inc. [SSRM-TSX, NASDAQ, SSR-ASX] has struck a definitive deal to acquire the Cripple Creek & Victor Gold (CC&V) Mine in Colorado from Newmont Corp. [NGT-TSX, NEM-NYSE, ASX, PNGX]. In an all-cash deal, Newmont will receive an upfront payment of $100 million and up to $175 million in additional milestone-based payments.
SSR is a free cash flow focused gold company with four producing operations locate in the United States, Turkey, Canada and Argentina. Over the last three years, the four operating assets combined have produced on average more than 700,000 gold equivalent ounces annually.
Its portfolio also includes a pipeline of development and exploration assets in the U.S., Turkey, Mexico, Peru and Canada.
CC&V is an epithermal gold deposit located approximately 160 kilometres southwest of Denver, Colorado. The operations span three developed open pit areas with a total land package of 5,000 hectares. All of the current mineral reserves are oxides.
CC&V is expected to add approximately 170,000 ounces in annual gold production to SSR Mining’s platform, and combined with Marigold (mine in Nevada), the company’s total U.S. gold production is expected to average between 300,000 and 400,000 ounces annually.
The transaction increases SSR Mining’s scale, free cash flow, and portfolio diversification, creating the third largest U.S. gold producer.
“This acquisition ensures that our portfolio of both producing and development assets is well balanced and provides our company with a diversified and long-lived free cash-flow focused platform, comprised of six key assets,’’ said SSR Executive Chairman Rod Antal.
Key components of the transaction include a $100 million cash payment to be paid on closing, and up to $175 million in milestone-based payments, of which $87.5 million will be payable upon final approval of the application to amend the CC&V permit. This permit amendment was filed by Newmont on April 25, 2024, with the scope to extend the life of the mine by adding 189 million short tons of leach pad capacity through construction of the Phase 4 of the Valley Leach Facility, and Phase 6 of the Valley Leach Facility, amongst other operational considerations, including pit laybacks and road adjustments.
Under the deal, up to $87.5 million will be payable upon obtaining regulatory relief relating to flow-related permitting requirements for the Carlton Tunnel, including steps taken to achieve the highest feasible alternative in relation to the Carlton Tunnel water flow.
The Carlton Tunnel is a historical dewatering tunnel that was constructed from 1939 to 1941, and is one of a series of dewatering tunnels used to dewater CC&V. The tunnel is approximately 10 kilometres long and sits at an elevation of 2,133 metres above sea level.
The transaction is expected to close in the first quarter of 2025. SSR Mining expects to provide 2024 guidance for CC&V in due course after the transaction has closed.
On Friday, SSR Mining shares edged up 0.23% or $0.02 to $8.56. The shares trade in a 52-week range of $15.78 and $5.10.