Off The Wire
SSR Mining agrees to acquire Alacer Gold in at-market transaction
“The combination of Alacer and SSR Mining will create a diversified portfolio of high-quality, long-life mines across four mining-friendly jurisdictions,” said Rodney Antal, president and chief executive officer of Alacer, who has been tapped to become president and CEO of the new company.
SSR Mining assets include the Marigold gold mine in Nevada, Seabee in Saskatchewan and Puna operations in Argentina. Alacer’s flagship asset is the Çöpler Gold Mine in Turkey.
The combined company would be expected to have average annual production of around 780 gold-equivalent ounces over a three-year period, based on consensus analyst estimates, the companies said. Also, based on these estimates, officials said that the combined entity is projected to generate average annual pro forma free cash flow of around $450 million from 2020 to 2022, which they said would be ahead of the peer group average of $275 million.
Under the deal, Alacer shareholders will receive 0.3246 SSR Mining shares for each Alacer share that they hold. The exchange ratio, together with closing prices for shares of both companies on the Toronto Stock Exchange on Friday, implies consideration of C$8.19 per Alacer common share and a combined market capitalization of approximately $4 billion, the companies said. At closing, SSR Mining and Alacer shareholders will collectively own 57% and 43% of SSR Mining, respectively. Based on Alacer’s 43% share of that capitalization, the deal effectively values Alacer at $1.72 billion.
“The zero-premium merger of SSR Mining and Alacer creates an exciting leading intermediate gold producer with exceptional financial 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,” said Paul Benson, president and CEO of SSR Mining.
The company would continue as SSR Mining Inc. and be headquartered in Denver, with a corporate office in Vancouver, the company said. SSR chairman Michael Anglin would become chairman of the merged company. After the transaction is completed, the new board of directors would have five directors from each of the current SSR Mining and Alacer boards for a total of 10 directors, including the CEO.
The boards of directors of both companies have voted unanimously in favor of the transaction, the companies said. The transaction would will require approval by shareholders of both companies. Special shareholder meetings for both companies are expected in July.