PERTH (miningweekly.com) – Triple listed SSR Mining has announced plans to sell its Pitarrilla silver/lead/zinc project in Durango, Mexico, to TSX- and NYSE-listed Endeavour Silver for up to $127-million.
The consideration would consist of a $35-million cash payment, $35-million in Endeavour Silver shares, with the number of shares to be issued based on the ten-day volume weighted average trading price preceding the date of the share purchase agreement, and a 1.25% net smelter return royalty on the Pitarrilla property currently estimated by SSR Mining to be valued at up to $57-million.
In addition, Endeavour Silver has committed to incur a minimum of $10-million in exploration expenditures on the Pitarrilla project over a five-year period following closing of the transaction.
The $70-million cash and equity component will be paid upon closing of the transaction, with SSR Mining to hold about 5% of the outstanding shares of Endeavour Silver, which will be subject to a hold period of four months and one day following the date of closing.
“The acquisition of Pitarrilla, one of the world’s largest undeveloped silver projects, accelerates our vision to become a premier senior silver producer,” said Endeavour CEO Dan Dickson.
“We now have a tremendous growth pipeline, which in addition to Pitarrilla includes the Terronera and Parral projects, in a country where we have extensive experience and expertise. While Terronera is the next project to be developed, we anticipate that Pitarrilla will be a significant asset in our portfolio and may take priority over the advancement of Parral. We will be in a position to make such a decision once we complete further drilling and analyse the economics of various scales and options for production.”
Pitarrilla has an underground measured and indicated resource of 496.5-million tonnes, containing 28.8-million ounces of silver. A 2012 feasibility study estimated that the project would have a mine life of 32 years, producing an average 15-million ounces of silver a year during the first 18 years of production.
Closing of the transaction remains subject to TSX and NYSE regulatory approvals and the approval of the Mexican Federal Economic Competition Commission, as well as customary closing conditions for a transaction of this kind and is expected to occur in the first half of 2022.
The ASX-, TSX- and NASDAQ-listed SRR Mining said on Friday that with the transaction, the company continues to deliver on its goal of portfolio rationalisation, realising value for shareholders by monetising noncore assets.
Along with the sale of its noncore royalty portfolio in the third quarter of 2021 and ongoing rationalisation of noncore equity positions, SSR Mining has realised in excess of $235-million in aggregate consideration over the past seven months.