Acquisition Of A World-Class Deposit That Fits SSR Mining’s Strategy, Geographic Focus, And Leverages SSR Mining’s Core Strengths To Create Shareholder Value
Highlights
DENVER–(BUSINESS WIRE)–SSR Mining Inc. (NASDAQ/TSX: SSRM, ASX: SSR) (“SSR Mining” or the “Company”) is pleased to announce that it has reached an agreement to acquire from Lidya Mines an up to 40% interest in, and operational control of, the Hod Maden gold-copper development project, located in northeastern Türkiye (the “Transaction”). Currently, Lidya Mines and Horizon Copper Corp. (“Horizon”) hold a 70% and 30% ownership interest, respectively, in Hod Maden.
As consideration for the 40% ownership interest in Hod Maden, SSR Mining’s payments include:
With the upfront cash payment made on closing, SSR Mining now serves as sole project operator responsible for project development, construction and operations. Upon completion of the milestone payments, SSR Mining will own 40% of the Project. 4
Rod Antal, President and CEO of SSR Mining, said, “We have been closely monitoring Hod Maden for well over seven years as it has progressed through critical development and permitting milestones, largely de-risking the Project as it approaches a construction decision in 2024. Our due diligence team was complimentary as to the detail and quality of work completed so far on the Project. Following our review and after discussions with our joint venture partners, we believe there are several positive operational value levers as well as exploration potential beyond the existing life of mine plan that was presented in the 2021 Feasibility Study. We will now spend the next twelve months updating the existing technical report for these value enhancing opportunities, as well as to account for changes in market conditions.
We would like to thank our joint venture partners in the Project for their support and cooperation during this process. We are excited for the outcome, which delivers our stakeholders exposure to what we believe is one of the most compelling undeveloped gold-copper projects in the world. It is clear that Hod Maden is one of the highest margin, lowest capital intensity projects in the sector, and once operational should be a meaningful free cash flow contributor to the SSR Mining business as our fifth producing asset. This is supported by the projected >15% IRR the Project will generate after acquisition costs.
Our proven project development team will work to advance Hod Maden to a full construction decision in 2024 with a goal of delivering first production in 2027. The same principles and discipline that enabled our team to deliver the Çöpler Sulfide Plant project in Türkiye on time and under budget will be applied to Hod Maden to help us maximize the value of the Project. The Project’s robust economics have the ability to support a project-level finance facility, and we will build upon the project finance work completed by the joint venture to date as a potential funding opportunity while limiting SSR Mining’s cash outlay. Overall, this prudently structured transaction presents an opportunity to further our commitment to low capital intensity growth, strong free cash flow generation and continued robust capital returns.”
Following completion of the earn-in structured cash milestone payments, SSR Mining will own 40% of the Project, Lidya Mines will retain a 30% ownership interest and Horizon will own the remaining 30%. Horizon acquired its 30% ownership in the Project from Sandstorm Gold Ltd. on August 31, 2022 in exchange for a gold stream on production from a portion of Horizon’s 30% interest and certain other non-cash consideration. SSR Mining’s attributable production and free cash flow are not encumbered by the gold streaming agreement between Horizon and Sandstorm. As an upside sharing mechanism with Lidya Mines, if an additional 500,000 ounces of gold equivalent Mineral Reserves, beyond those currently identified as Mineral Reserves and Mineral Resources (“MRMR”) in the 2021 Feasibility Study, are delineated, SSR Mining will make an $84 million payment to Lidya Mines.
Key regulatory approvals for the Transaction have been obtained and the transaction closed on May 8th, 2023.
Strategic Rationale for the Hod Maden Investment
Overview of the Hod Maden Project
The Hod Maden project is located in northeastern Türkiye within the Eastern Pontides metallogenic belt and approximately 130 km from the Erzurum airport. The Project is located approximately 330 km from SSR Mining’s Çöpler gold mine and 260 km from the Copper Hill development prospect. The Hod Maden licenses cover approximately 3,500 hectares, consisting primarily of forestry and private lands. With the successful closing of the Transaction and the accompanying $120 million upfront cash payment made on May 8, 2023, the licenses are now managed under a tri-party ownership structure where SSR Mining will earn-in to own up to 40% of the project and serve as project operator, while Lidya Mines will own 30% and Horizon will own 30%.
2021 Feasibility Study Metrics 2
The 2021 Feasibility Study included the following life of mine metrics (all metrics shown on a 100% basis):
Table 1. Summary of Hod Maden’s Mineral Reserves and Mineral Resource as set forth in the 2021 Feasibility Study 2 (all metrics on 100% basis)
|
| Ore |
| Grade |
| Contained | ||||||||
Category |
| (Mt) |
| (g/t Au) |
| (% Cu) |
| (g/t AuEq) |
| (koz Au) |
| (Mlb Cu) |
| (koz AuEq) |
Proven & Probable |
| 8.7 |
| 8.8 |
| 1.5% |
| 11.1 |
| 2,452 |
| 287 |
| 3,114 |
M&I i |
| 8.1 |
| 10.6 |
| 1.8% |
| 13.5 |
| 2,768 |
| 330 |
| 3,530 |
Inferred |
| 1.3 |
| 5.4 |
| 0.7% |
| 6.5 |
| 232 |
| 21 |
| 280 |
i M&I inclusive of Mineral Reserves
Conference Call Information
SSR Mining will host a conference call to discuss the Transaction on May 8, 2023, at 5:00 pm EDT. Participants may dial in using the numbers below.
Toll-free in U.S. and Canada: +1 (800) 319-4610
All other callers: +1 (604) 638-5340
The conference call will be available for playback for two weeks by dialing toll-free in U.S. and Canada: +1 (855) 669-9658, replay code 0175. All other callers: +1 (412) 317-0088, replay code 0175.
About SSR Mining
SSR Mining Inc. is a leading, free cash flow focused gold company with four producing operations located in the USA, Türkiye, Canada, and Argentina, combined with a global pipeline of high-quality development and exploration assets. Over the last three years, the four operating assets combined have produced on average more than 700,000 gold-equivalent ounces annually. SSR Mining is listed under the ticker symbol SSRM on the NASDAQ and the TSX, and SSR on the ASX.
Cautionary Note Regarding Forward-Looking Information
Except for statements of historical fact relating to us, certain statements contained in this news release constitute forward-looking information, future oriented financial information, or financial outlooks (collectively “forward-looking information”) within the meaning of applicable securities laws. Forward-looking information may be contained in this document and our other public filings. Forward-looking information relates to statements concerning our outlook and anticipated events or results and, in some cases, can be identified by terminology such as “may”, “will”, “could”, “should”, “expect”, “plan”, “anticipate”, “believe”, “intend”, “estimate”, “projects”, “predict”, “potential”, “continue” or other similar expressions concerning matters that are not historical facts.
Forward-looking information and statements in this news release are based on certain key expectations and assumptions made by us. Although we believe that the expectations and assumptions on which such forward-looking information and statements are based are reasonable, undue reliance should not be placed on the forward-looking information and statements because we can give no assurance that they will prove to be correct. Forward-looking information and statements are subject to various risks and uncertainties which could cause actual results and experience to differ materially from the anticipated results or expectations expressed in this news release. The key risks and uncertainties include, but are not limited to: local and global political and economic conditions; governmental and regulatory requirements and actions by governmental authorities, including changes in government policy, government ownership requirements, changes in environmental, tax and other laws or regulations and the interpretation thereof; developments with respect to the COVID-19 pandemic, including the duration, severity and scope of the pandemic and potential impacts on mining operations; and other risk factors detailed from time to time in our reports filed with the Securities and Exchange Commission on EDGAR and the Canadian securities regulatory authorities on SEDAR.
Forward-looking information and statements in this news release include any statements concerning, among other things: our investment in the Hod Maden project, including our expectations for the completion of earn-in structured cash milestone payments, the availability of project financing for our investment, the ability to develop the Project and our ability to lead this effort, the expected timeframe for production, our expectations for production volumes from the Project, our expected return on investment and our statements related to additional opportunities available at the property; preliminary cost reporting in this document; production, operating, cost, and capital expenditure guidance; our operational and development targets and catalysts and the impact of any suspension on operations; forecasts and outlook, including related to production guidance; timing and expectations regarding the impact of any interruptions caused on our operations; the results of any metal reconciliations; the ability to discover additional ore; matters relating to proposed exploration; communications with local stakeholders; maintaining community and government relations; negotiations of joint ventures; negotiation and completion of transactions; commodity prices; Mineral Resources, Mineral Reserves, conversion of Mineral Resources, realization of Mineral Reserves, and the existence or realization of Mineral Resource estimates; the development approach; the timing and amount of future production; the timing of studies, announcements, and analysis; the timing of construction and development of proposed mines and process facilities; capital and operating expenditures; economic conditions; availability of sufficient financing; exploration plans; receipt of regulatory approvals; and any and all other timing, exploration, development, operational, financial, budgetary, economic, legal, social, environmental, regulatory, and political matters that may influence or be influenced by future events or conditions.
Such forward-looking information and statements are based on a number of material factors and assumptions, including, but not limited in any manner to, those disclosed in any other of our filings on EDGAR and SEDAR, and include: the inherent speculative nature of exploration results; the reliance on the 2021 Feasibility Study reported as public filing by Horizon Copper Corp. (see endnote 1), the ability to explore; communications with local stakeholders; maintaining community and governmental relations; status of negotiations of joint ventures; weather conditions at our operations; commodity prices; the ultimate determination of and realization of Mineral Reserves; existence or realization of Mineral Resources; the development approach; availability and receipt of required approvals, titles, licenses and permits; sufficient working capital to develop and operate the mines and implement development plans; access to adequate services and supplies; foreign currency exchange rates; interest rates; access to capital markets and associated cost of funds; availability of a qualified work force; ability to negotiate, finalize, and execute relevant agreements; lack of social opposition to our mines or facilities; lack of legal challenges with respect to our properties; the timing and amount of future production; the ability to meet production, cost, and capital expenditure targets; timing and ability to produce studies and analyses; capital and operating expenditures; economic conditions; availability of sufficient financing; the ultimate ability to mine, process, and sell mineral products on economically favorable terms; and any and all other timing, exploration, development, operational, financial, budgetary, economic, legal, social, geopolitical, regulatory and political factors that may influence future events or conditions. While we consider these factors and assumptions to be reasonable based on information currently available to us, they may prove to be incorrect.
The above list is not exhaustive of the factors that may affect any of the Company’s forward-looking information. You should not place undue reliance on forward-looking information and statements. Forward-looking information and statements are only predictions based on our current expectations and our projections about future events. Actual results may vary from such forward-looking information for a variety of reasons including, but not limited to, risks and uncertainties disclosed in our filings on our website at www.ssrmining.com, on SEDAR at www.sedar.com, on EDGAR at www.sec.gov and on the ASX at www.asx.com.au and other unforeseen events or circumstances. Other than as required by law, we do not intend, and undertake no obligation to update any forward-looking information to reflect, among other things, new information or future events. The information contained on, or that may be accessed through, our website is not incorporated by reference into, and is not a part of, this document.
Qualified Person
Imola Gotz, a qualified person under NI 43-101, has reviewed the technical and scientific information contained in this press release and verifies that such information conforms to the information disclosed in the Hod Maden Feasibility Study – Technical Report NI 43-101 effective February 28, 2021 (the “2021 Feasibility Study”). For additional information, readers should refer to the 2021 Feasibility Study which is available under Horizon Copper Corp.’s profile at www.sedar.com., filed on July 20, 2022.
Cautionary Note Regarding Mineral Reserves and Mineral Resources Estimates
This press release includes terms that comply with reporting standards in Canada under NI 43-101, including the terms “Mineral Reserves” and “Mineral Resources”, in addition to terms that comply with reporting standards in the United States under S-K 1300. NI 43-101 is a rule developed by the Canadian Securities Administrators that establishes standards for all public disclosure an issuer makes of scientific and technical information concerning mineral projects. The standards of NI 43-101 differ significantly from the requirements of the SEC. Accordingly, information concerning mineral deposits set forth herein may not be comparable with information made in accordance with U.S. standards. See endnote 1 for additional discussion on the difference in reporting standards and how it pertains to assumptions made in this presentation.
Cautionary Note Regarding Non-GAAP Measures
We have included certain non-GAAP performance measures throughout this document. These performance measures are employed by us to measure the Hod Maden project operating and economic performance internally and to assist in decision-making, as well as to provide key performance information to senior management. We believe that, in addition to conventional measures prepared in accordance with GAAP, certain investors and other stakeholders also use this information to evaluate the Hod Maden project operating and financial performance; however, these non-GAAP performance measures do not have any standardized meaning. Accordingly, these performance measures are intended to provide additional information and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with GAAP. Our definitions of the Hod Maden project non-GAAP financial measures may not be comparable to similarly titled measures reported by other companies. These non-GAAP measures should be read in conjunction with the Hod Maden 2021 Feasibility Study.
Cash costs, AISC per ounce sold, free cash flow (FCF) before tax, free cash flow after tax, average free cash flow, and attributable average annual free cash flow are Non-GAAP Measures with no standardized definition under U.
Contacts
SSR Mining Contacts:
F. Edward Farid, Executive Vice President, Chief Corporate Development Officer
Alex Hunchak, Director, Corporate Development and Investor Relations
SSR Mining Inc.
E-Mail: invest@ssrmining.com
Phone: +1 (888) 338-0046
To receive SSR Mining’s news releases by e-mail, please register using the SSR Mining website at www.ssrmining.com.
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