The deal has received unanimous approval from the board of directors of both companies.
The offer price represents a premium of approximately 36% to the closing price of Taiga common shares on the Canadian Securities Exchange (CSE) on December 1, 2021, the day before the announcement of the transaction, as well as a premium of 39% to the 20-day volume weighted average price of Taiga’s common shares on the CSE prior to the transaction announcement.
On December 1, 2021, Taiga Gold shares closed at 19.5 cents and trade in a 52-week range of 28 cents and 14 cents, leaving the company with a market cap of $18.6 million, based on 95.3 million shares outstanding.
Taiga Gold was created through a plan of arrangement with Eagle Plains Resources Ltd. in April, 2018, and owns six Saskatchewan gold projects located within the Trans Hudson Corridor in the area near SSR Mining’s Seabee Gold operation.
Taiga’s flagship Fisher property is currently being explored in the joint venture held 80% by SSR Mining and 20% by Taiga. The project is contiguous to the Seabee gold mine. The junior continues to advance its 100%-owned Chico, Orchid, Leland and Mari Lake projects, while its wholly-owned SAM property is currently under option to Tactical Resources (formerly DJI Capital).
SSR Mining is an intermediate gold miner with four producing assets located in the U.S., Turkey, Canada and Argentina. In 2020, those assets produced 711,000 gold equivalent (AuEq) ounces. The company recently said it is on track to produce between 720,000 and 800,000 ounces of AuEq this year at an all-in-sustaining cost of US$1,000 to US$1,040 per ounce.
Its portfolio also includes a pipeline of development and exploration assets in the U.S., Turkey, Mexico, Peru and Canada.
SSR is currently the only gold producer in Saskatchewan. It said the transaction materially expands its presence in a core jurisdiction by adding five new properties (34,569 hectares), which provide new exploration targets stretching south from the Seabee mine to SSR Mining’s 100%-owned Amisk property.
The transaction also unencumbers the Fisher property through the elimination of a 2.5% net smelter return royalty which covers the majority of the project, particularly given the excess capacity at the Seabee mill and the recently completed tailings facility expansion, which provides capacity through 2031 at current production levels.
“With this transaction, we will successfully redeploy a portion of the proceeds of the recent non-core royalty portfolio sale into new growth opportunities in a core jurisdication,” said SSR President and CEO Rod Antal.