SSR Mining to sell its Pitarrilla silver project in Mexico to Endeavour Silver for up to $127M
Welcome to Kitco News' 2022 outlook series. The new year will be filled with uncertainty as the Federal Reserve looks to pivot and tighten its monetary policies. At the same time, the inflation threat continues to grow, which means real rates will remain in low to negative territory. Stay tuned to Kitco News to learn from the experts on how to navigate turbulent financial markets in 2022.
(Kitco News) - SSR Mining (NASDAQ: SSRM/TSX: SSRM) announced today that it has entered into a definitive agreement to sell its Pitarrilla silver project in Mexico to Endeavour Silver for total consideration of up to US$127 million.
Total consideration consists of US$35 million in cash, US$35 million in Endeavour Silver shares, and a 1.25% net smelter return royalty on the Pitarrilla property currently estimated by SSR Mining to be valued at up to US$57 million.
The company said that in addition, Endeavour Silver has committed to incur a minimum of US$10 million in exploration expenditures on the Pitarrilla project over a five-year period following closing of the transaction.
“With this transaction, SSR Mining continues to deliver on its goal of portfolio rationalization, realizing value for shareholders by monetizing non-core assets. Together with the sale of our non-core royalty portfolio in the third quarter of 2021 and ongoing rationalization of non-core equity positions, SSR Mining has realized
in excess of US$235 million in aggregate consideration over the past 7 months," the company said in a statement.
The Pitarrilla project is a 100% owned grassroots discovery made by SSR Mining in 2002, located approximately 160 kilometres north-northwest of the city of Durango within the State of Durango, Mexico.
|Burgeoning green economy may lead to a structural silver deficit - report|
The project has measured and indicated mineral resources of 496.5 million ounces of silver at an average grade of 97 g/t and 28.8 million ounces of silver at a grade of 165 g/t at Pitarrilla Underground, plus inferred mineral resources of 21.2 million ounces of silver at an average grade of 77.4 g/t and 5.5 million ounces of silver at a grade of 138.1 g/t at Pitarrilla Underground.
A feasibility study on the Pitarrilla project completed on December 14, 2012 delivered an after-tax NPV of $737 million at base case metal prices and $1.7 billion at spot metal prices. An after-tax IRR is 12.8% at base case metal prices ($27.50 per ounce of silver in the final pre-production year and the first two years of production, and $25 per ounce of silver thereafter).
SSR Mining is an intermediate gold company with four producing assets located in the USA, Turkey, Canada, and Argentina, combined with a global pipeline of development and exploration assets in the USA, Turkey, Mexico, Peru, and Canada. In 2020, the four operating assets produced approximately 711,000 gold-equivalent ounces.