SSR Mining Inc. and Alacer Gold Corp. are planning an all-stock merger that will keep the SSR Mining name, and the Marigold Mine in Nevada and Marigold’s exploration potential will be a key part of the new, larger company.
Rodney Antal, president and chief executive officer of Alacer and the soon-to-be CEO of SSR Mining after the merger, said Marigold has potential with continued mining of oxide ores and “sulfide potential at Trenton Canyon.”
Marigold’s land package doubled last year with the acquisition of the Trenton Canyon and Buffalo Valley properties adjacent to Marigold that were owned by Newmont Corp. The land deal was completed before Newmont and Barrick Gold Corp. formed the Nevada Gold Mines joint venture for their operations in Nevada.
The Marigold Mine is north of the Nevada Gold Mines Phoenix Mine, and is west of Battle Mountain. It has been in continuous operation since 1989.
Marigold General Manager Greg Gibson said in an email that “we currently have 430 employees and do not anticipate any changes to our workforce.”
SSR Mining operates Marigold, the Seabee gold mine in Saskatchewan, Canada, and the Puna Mine in Argentina, and Alacer brings to the table the Copler Mine in Turkey. There also is exploration potential in Turkey and SSR has two potential projects—Pitarrilla, a large silver deposit in Mexico and San Luis, a gold and silver deposit in Peru.
After the deal closes, the company will have its headquarters in Denver and its corporate office in Vancouver, and SSR Mining shareholders will own roughly 57% of the new SSR. Alacer shareholders will own 43%, according to the merger announcement. Shareholder voting is in July, and the at-market merger is subject to regulatory and court approvals.
SSR’s current CEO, Paul Benson, said in a teleconference that a synergy of the merger will be the savings on his CEO pay and possibly other executive-level changes, but both Benson and Antal said the benefits of the merger will come in the combination of skilled people rather than major financial savings.
Michael Anglin, now chairman of the SSR Mining board, will chair the new board that will include five directors each from the two companies.
“The zero-premium merger of SSR Mining and Alacer creates an exciting leading intermediate gold producer with exceptional financing strength, robust margins, strong cash flow generation and long mine lives that will be run by highly experienced management with a track record of value creation,” Benson said in the merger announcement.
He said the new SSR Mining will be “well-positioned to build on the strong foundations of both companies.”
Antal said the combination will “create a diversified portfolio of high quality, long-life mines across four mining-friendly jurisdictions. Our focus at Alacer over the past several years has been on generating peer-leading free cash flow – this merger allows us to continue this strategy while diversifying our single asset exposure.”
He said the merger should bring in roughly $450 million in annual free cash flow over the next three years, and there is the potential for dividends down the road.
Antal said that the due diligence done before the COVID-19 pandemic affected travel showed that the two companies had a “close cultural alignment,” and the deal has the approval of the boards of both companies.
Benson said the pandemic added some complications, but the companies have been working remotely and that has worked out better than expected, “so it hasn’t actually impacted the deal.”
He also said in the teleconference he was impressed with the advancements in Turkey and the “amazing infrastructure,” and he said the mine is in a remote region that is favorable to mining.
Alacer owns 80% of the Copler Mine, and the remaining 20% is held by Lidya Mining. Alacer has been operating the mine for a decade.
Antal said with the merger, the companies expect to produce 790,000 ounces of gold per year for the next three years.
In Vancouver-based SSR Mining’s production report issued in mid-April, the company stated Marigold produced 58,448 ounces in the first quarter of this year, Seabee produced 29,521 ounces of gold and Puna produced 1.8 million ounces of silver.
At that time, Benson said that in “this challenging global environment, our focus, above all else, has been the health and safety of our employees and stakeholders.” He said operations were suspended at Puna and Seabee late in the first quarter due to coronavirus restrictions.
SSR also wrote it was withdrawing the production forecast for the time being because of the pandemic. And SSR reported it was committing up to $350,000 for its operating mines to each donate $100,000 to support local communities, and the corporate office would donate up to $25,000 in a response to the coronavirus.
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