SSR unveils US$42.5 million project sale to Highlander Silver

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SSR Mining Inc. [TSX-SSRM, NASDAQ, ASX-SSR] said it has reached a definitive deal to sell its San Luis project in Peru to Highlander Silver Corp. [CSE-HSLV] for up to US$42.5 million.

That amount consists of US$5.0 million in upfront cash and up to US$37.5 million in contingent payments, also payable in cash. Under the agreement, SSR will retain a 4.0% net smelter return (NSR) royalty on the project.

SSR said the upfront cash component is payable on closing. The contingent payments will be delivered in five installments starting with the commencement of an initial drilling program at the project, and ending on the second anniversary of commercial production.

At any time until the start of construction, Highlander can repurchase half of the NSR royalty for US$15 million in cash.

The San Luis is a greenfield gold and silver development project located in the Ancash Department of Central Peru.

Highlander shares were unchanged at 38 cents on Thursday. The shares trade in a 52-week range of 40 cents and 10 cents.

Highlander Silver, backed by the Augusta Group and the Lundin Family, is focused on the discovery of silver-gold-polymetallic projects in the Central Andes, leveraging the team’s significant technical and operational experience in Peru and South America.

The company is currently developing the La Estrella and Alta Victoria projects in central Peru.

The Alta Victoria project is located 160 kilometres northeast of Lima and consists of 18 mining concessions over a total area of 71 square kilometers within the Central Cordillera polymetallic mineral belt, which hosts major scale silver and polymetallic mineral deposits.

The project is located in a district that has produced over 1.5 billion ounces of silver historically from carbonate replacement deposits, skarn, vein, manto and diatreme-related deposits.

Highlander recently completed a $3 million offering of 30 million units, each of which consists of one common share and one warrant exercisable for one additional share priced at 15 cents for three years from the issue date.

The company said net proceeds are earmarked for the La Estrella project, and the ongoing assessment of acquisition opportunities. Estrella is the company’s flagship asset. Highlander recently said 3D grade shell modelling and historic drilling has indicated a near surface exploration target containing some 50 to 100 million silver equivalent ounces.

Average grades of 50 to 60 g/t silver and 0.4 to 0.6 g/t gold were considered for the silver equivalent content of the exploration target. However, the grade and content of the exploration target is considered to be conceptual in nature.

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