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Highlights
- SSR Mining signs a deal to sell its Pitarrilla project in Durango, Mexico, to Endeavour Silver Corp. for total consideration of approximately US$127 million.
- On closing of the Transaction, SSR Mining will own approximately 5% of the outstanding shares of Endeavour Silver, conditional.
- The Transaction Closing is expected to occur in the first half of 2022.
ASX-listed Canadian mining Company SSR Mining Inc. (ASX:SSR) shared on 14 January 2022 that it has entered into a definitive agreement to sell its Pitarrilla project in Durango, Mexico, to Endeavour Silver Corp. (TSX: EDR; NYSE: EXK) for total consideration of approximately US$127 million.
According to the announcement, the 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 having an estimated value of roughly US$57 million (on the basis of "NI 43-101 Technical Report on the Pitarrilla Project, Durango State, Mexico", dated 14 December 2012).
Along with this, Endeavour Silver has committed to incur a minimum of US$10 million in exploration expenditures on the Pitarrilla project over five years following the closing of the Transaction.
The cash and equity components of the consideration totalling US$70 million will be paid upon closing of the Transaction. On closing, SSR Mining will hold approximately 5% of the outstanding shares of Endeavour Silver, conditional. The Transaction's closing remains subject to regulatory approvals and is expected to occur in the first half of 2022.
Today, the stock SSR was spotted trading 0.294% lower at AU$23.760 per share on ASX at 10:21 AM AEDT.
Bottom Line:
The Transaction is anticipated to be accretive to SSR Mining on a NAV per share basis. With this Transaction, SSR Mining continues to deliver on its goal of portfolio rationalisation, realising value for its shareholders by monetising non-core assets. Together with the sale of SSR's non-core royalty portfolio in the third quarter of 2021 and ongoing rationalisation of non-core equity positions, the Company has realised an excess of US$235 million in aggregate consideration over the past seven months.
