- \n
- SSR Mining to acquire an up to 40% interest and immediate operational control in the Hod Maden gold-copper development project (\u201cHod Maden\u201d or the \u201cProject\u201d) in northeastern T\u00fcrkiye from Lidya Mines <\/b><\/li>\n<\/ul>\n
- \n
- Aggregate acquisition consideration totals $270 million, which includes $120 million in upfront cash payment to acquire a 10% interest in Hod Maden, followed by $150 million in earn-in structured milestone payments to acquire an additional 30% interest, payable between the start of construction and the first anniversary of commercial production 4<\/sup><\/b><\/li>\n<\/ul>\n
- \n
- The acquisition of Hod Maden will add one of the highest margin and lowest capital intensity development projects globally to SSR Mining\u2019s robust portfolio of high-return growth projects and is expected to deliver an estimated all-in after-tax internal rate of return (\u201cIRR\u201d) in excess of 15% after acquisition costs <\/b><\/li>\n<\/ul>\n
- \n
- Transaction is accretive to SSR Mining across all meaningful per share valuation metrics, including Net Asset Value, Mineral Reserves, Mineral Resources, production, operating cash flow, and free cash flow \u00a01<\/sup><\/b><\/li>\n<\/ul>\n
- \n
- Based on the Feasibility Study \u2013 Technical Report NI 43-101 effective February 28, 2021 (\u201cthe 2021 Feasibility Study\u201d) published by Horizon Copper Corp. 2<\/sup>, Hod Maden features a 13-year mine life averaging (on a 100% basis) approximately 195,000 ounces of gold equivalent production annually at first quartile co-product AISC of $588\/oz, generating $164 million of annual free cash flow and a 36% after-tax internal rate of return (\u201cIRR\u201d) at base case commodity prices of $1,599\/oz gold and $3.19\/lb copper 3<\/sup><\/b><\/li>\n<\/ul>\n
- \n
- Transaction projected to provide SSR Mining with approximately an expected attributable 80,000 gold equivalent ounces and $66 million in free cash flow annually (at $1,599\/oz gold and $3.19\/lb copper) once in production, expected in 2027 3<\/sup><\/b><\/li>\n<\/ul>\n
- \n
- Hod Maden is a world-class, high grade and high-margin asset which will further enhance SSR Mining\u2019s free cash flow generation, which has been a key pillar of the Company\u2019s strategy and sector-leading capital returns program<\/b><\/li>\n<\/ul>\n
- \n
- The Transaction leverages SSR Mining\u2019s significant experience in T\u00fcrkiye and its proven project development team that successfully delivered the \u00c7\u00f6pler Sulfide Expansion Project on time and under budget, provides in-country synergies, and builds on a long-standing and strong joint venture partnership with Lidya Mines in T\u00fcrkiye <\/b><\/li>\n<\/ul>\n
\u00a0<\/b><\/p>\n
DENVER–(BUSINESS WIRE<\/a>)–
\nSSR Mining Inc. (NASDAQ\/TSX: SSRM, ASX: SSR) (\u201cSSR Mining\u201d or the \u201cCompany\u201d) is pleased to announce that it has reached an agreement to acquire from Lidya Mines an up to 40% interest in, and operational control of, the Hod Maden gold-copper development project, located in northeastern T\u00fcrkiye (the \u201cTransaction\u201d). Currently, Lidya Mines and Horizon Copper Corp. (\u201cHorizon\u201d) hold a 70% and 30% ownership interest, respectively, in Hod Maden.<\/p>\nThis press release features multimedia. View the full release here: https:\/\/www.businesswire.com\/news\/home\/20230508005529\/en\/<\/a><\/p>\n
![\"Figure](\"https:\/\/mms.businesswire.com\/media\/20230508005529\/en\/1786373\/4\/Project_Sand_Figure_1.jpg\")
<\/p>\nFigure 1. Location of the Hod Maden project relative to SSR Mining\u2019s assets in T\u00fcrkiye. (Photo: Business Wire)<\/p>\n<\/div>\n
\nAs consideration for the 40% ownership interest in Hod Maden, SSR Mining’s payments include:<\/p>\n
- \n
- \n$120 million upfront cash payment to acquire a 10% interest in the Project paid on closing of the Transaction on May 8, 2023; and<\/p>\n<\/li>\n<\/ul>\n
- \n
- \n$150 million in earn-in structured cash milestone payments to acquire an additional 30% interest in the Project, payable in accordance with an agreed upon schedule beginning at the start of construction and ending on the first anniversary of commercial production. 4<\/sup><\/li>\n<\/ul>\n
\nWith the upfront cash payment made on closing, SSR Mining now serves as sole project operator responsible for project development, construction and operations. Upon completion of the milestone payments, SSR Mining will own 40% of the Project. 4<\/sup><\/p>\n
\nRod Antal, President and CEO of SSR Mining, said, \u201cWe have been closely monitoring Hod Maden for well over seven years as it has progressed through critical development and permitting milestones, largely de-risking the Project as it approaches a construction decision in 2024. Our due diligence team was complimentary as to the detail and quality of work completed so far on the Project. Following our review and after discussions with our joint venture partners, we believe there are several positive operational value levers as well as exploration potential beyond the existing life of mine plan that was presented in the 2021 Feasibility Study. We will now spend the next twelve months updating the existing technical report for these value enhancing opportunities, as well as to account for changes in market conditions.<\/p>\n
\nWe would like to thank our joint venture partners in the Project for their support and cooperation during this process. We are excited for the outcome, which delivers our stakeholders exposure to what we believe is one of the most compelling undeveloped gold-copper projects in the world. It is clear that Hod Maden is one of the highest margin, lowest capital intensity projects in the sector, and once operational should be a meaningful free cash flow contributor to the SSR Mining business as our fifth producing asset. This is supported by the projected >15% IRR the Project will generate after acquisition costs.<\/p>\n
\nOur proven project development team will work to advance Hod Maden to a full construction decision in 2024 with a goal of delivering first production in 2027. The same principles and discipline that enabled our team to deliver the \u00c7\u00f6pler Sulfide Plant project in T\u00fcrkiye on time and under budget will be applied to Hod Maden to help us maximize the value of the Project. The Project\u2019s robust economics have the ability to support a project-level finance facility, and we will build upon the project finance work completed by the joint venture to date as a potential funding opportunity while limiting SSR Mining\u2019s cash outlay. Overall, this prudently structured transaction presents an opportunity to further our commitment to low capital intensity growth, strong free cash flow generation and continued robust capital returns.\u201d<\/p>\n
\nFollowing completion of the earn-in structured cash milestone payments, SSR Mining will own 40% of the Project, Lidya Mines will retain a 30% ownership interest and Horizon will own the remaining 30%. Horizon acquired its 30% ownership in the Project from Sandstorm Gold Ltd. on August 31, 2022 in exchange for a gold stream on production from a portion of Horizon\u2019s 30% interest and certain other non-cash consideration. SSR Mining\u2019s attributable production and free cash flow are not encumbered by the gold streaming agreement between Horizon and Sandstorm. As an upside sharing mechanism with Lidya Mines, if an additional 500,000 ounces of gold equivalent Mineral Reserves, beyond those currently identified as Mineral Reserves and Mineral Resources (\u201cMRMR\u201d) in the 2021 Feasibility Study, are delineated, SSR Mining will make an $84 million payment to Lidya Mines.<\/p>\n
\nKey regulatory approvals for the Transaction have been obtained and the transaction closed on May 8th<\/sup>, 2023.<\/p>\n
Strategic Rationale for the Hod Maden Investment<\/span><\/b><\/p>\n
- \n
- Adds a near-term, de-risked growth project to SSR Mining\u2019s robust development pipeline<\/b>\n
- \n
- \nOn a 100% basis, Hod Maden features total payable gold production of 2,027 thousand ounces gold and 255 million pounds copper over a 13-year mine life 3<\/sup><\/li>\n
- \nSignificant exploration potential across a 3,500-hectare property, including numerous untested soil geochemistry targets and a geological setting conducive to further exploration targeting through geophysical surveying<\/p>\n<\/li>\n
- \nProject de-risked with several key permits and EIA in place<\/p>\n<\/li>\n<\/ul>\n<\/li>\n
- Accretive transaction delivering a projected after-tax IRR, post due diligence and acquisition cost, of >15%<\/b>\n
- \n
- \nIncorporating $270 million acquisition cost and inflationary impacts since completion of 2021 Feasibility Study, the Transaction is expected to deliver an after-tax IRR of >15% to SSR Mining including due diligence outcomes<\/p>\n
- \n
- \nReturns analysis incorporates due diligence outcomes and inflationary impacts beyond the $309 million in pre-production capital originally outlined in 2021 Feasibility Study<\/p>\n<\/li>\n<\/ul>\n<\/li>\n
- \nProject stand-alone IRR on a 100% basis of 36%, based on 2021 Feasibility Study 2<\/sup><\/li>\n
- \nTransaction accretive to SSR Mining\u2019s key per share metrics, including expected increases to Net Asset Value, attributable Mineral Reserves and Mineral Resources, production, and 2027\/2028 operating and free cash flow<\/p>\n<\/li>\n<\/ul>\n<\/li>\n
- Fits SSR Mining\u2019s proven strategy of low capital intensity growth in core jurisdictions<\/b>\n
- \n
- \nOne of the lowest capital intensity undeveloped mining projects in the industry<\/p>\n
- \n
- \nApproximately $30 million in site establishment costs (at a 100% basis) are expected to be incurred during 2023, including spend on site access and earthworks<\/p>\n<\/li>\n<\/ul>\n<\/li>\n
- \nOpportunities for project level financing, ensuring SSR Mining retains balance sheet flexibility to support continued investment in capital returns and organic growth opportunities<\/p>\n<\/li>\n<\/ul>\n<\/li>\n
- Low-cost, high-margin production expected to further bolster the Company\u2019s strong corporate-level free cash flow generation<\/b>\n
- \n
- \nCurrent life of mine average by-product cash costs of $84\/oz and AISC of $334\/oz. Life of mine co-product cash costs of $387\/oz and AISC of $588\/oz 3<\/sup><\/li>\n
- \nHod Maden is expected to generate approximately $164 million in annual free cash flow (on a 100% basis, at a $1,599\/oz gold price and $3.19\/lb copper price) once at full production, which is expected in 2027 3<\/sup><\/li>\n
- \nOpportunity to complement SSR Mining\u2019s delivery of strong free cash flow generation and continued robust capital returns<\/p>\n<\/li>\n
- \nTransaction expected to reduce SSR Mining\u2019s consolidated asset-level life-of-mine AISC 1<\/sup><\/li>\n<\/ul>\n<\/li>\n
- Adds high grade Mineral Reserves and Mineral Resources to SSR Mining platform<\/b>\n
- \n
- \nMineral Reserves of 8,696 thousand tonnes at 8.8 g\/t gold and 1.5% copper for 2,452 thousand ounces gold and 287 million pounds copper 3<\/sup> (100% basis)<\/p>\n<\/li>\n
- \nMeasured and Indicated Mineral Resources of 8,143 thousand tonnes at 10.6 g\/t Au and 1.8% Cu for 2,768 thousand ounces gold and 330 million pounds copper, inclusive of Mineral Reserves 3<\/sup> (100% basis)<\/p>\n<\/li>\n
- \nInferred Mineral Resources of 1,342 thousand tonnes at 5.4 g\/t gold and 0.7% copper for 232 thousand ounces gold and 21 million pounds copper 3<\/sup> (100% basis)<\/p>\n<\/li>\n<\/ul>\n<\/li>\n
- Transaction builds on our long-standing, value accretive and exclusive partnership with Lidya Mines and operational expertise in T\u00fcrkiye<\/b>\n
- \n
- \nImmediate operatorship will allow SSR Mining\u2019s proven project development team, which successfully delivered the \u00c7\u00f6pler Sulfide Plant project on time and under budget, to work to advance Hod Maden to a full construction decision in 2024<\/p>\n<\/li>\n
- \nPotential for meaningful synergies between the Hod Maden project and existing operations at SSR Mining\u2019s \u00c7\u00f6pler gold mine<\/p>\n<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n
Overview of the Hod Maden Project<\/b><\/p>\n
\nThe Hod Maden project is located in northeastern T\u00fcrkiye within the Eastern Pontides metallogenic belt and approximately 130 km from the Erzurum airport. The Project is located approximately 330 km from SSR Mining\u2019s \u00c7\u00f6pler gold mine and 260 km from the Copper Hill development prospect. The Hod Maden licenses cover approximately 3,500 hectares, consisting primarily of forestry and private lands. With the successful closing of the Transaction and the accompanying $120 million upfront cash payment made on May 8, 2023, the licenses are now managed under a tri-party ownership structure where SSR Mining will earn-in to own up to 40% of the project and serve as project operator, while Lidya Mines will own 30% and Horizon will own 30%.<\/p>\n
2021 Feasibility Study Metrics<\/span>2<\/sup><\/b><\/p>\n
\nThe 2021 Feasibility Study included the following life of mine metrics (all metrics shown on a 100% basis):<\/p>\n
- \n
- \nTotal production of 2,027,000 ounces gold and 255,000,000 pounds copper over a 13-year life of mine<\/p>\n
- \n
- \nAverage annual production of 156,000 ounces gold and 19,600,000 pounds copper<\/p>\n<\/li>\n
- \nLife of mine revenue split: 80% gold, 20% copper<\/p>\n<\/li>\n<\/ul>\n<\/li>\n
- \nMill design capacity of 800,000 tonnes per annum, with average gold and copper recoveries of 85% and 93%, respectively<\/p>\n<\/li>\n
- \nAverage head grade over the life of mine of 8.8 g\/t gold and 1.5% copper<\/p>\n<\/li>\n
- \nLife of mine average by-product all-in-sustaining cost of $334\/oz and co-product all-in-sustaining cost of $588\/oz<\/p>\n<\/li>\n
- \nAt base case metal pricing of $1,599\/oz gold and $3.19\/lb copper, a $1.05 billion NPV5%<\/sub>with an after-tax IRR of 36% and a two-year payback period from the start of production<\/p>\n<\/li>\n<\/ul>\n
Table 1. Summary of Hod Maden\u2019s Mineral Reserves and Mineral Resource as set forth in the 2021 Feasibility Study 2<\/sup> (all metrics on 100% basis)<\/i><\/b><\/p>\n
- \nTotal production of 2,027,000 ounces gold and 255,000,000 pounds copper over a 13-year life of mine<\/p>\n
- \nMeasured and Indicated Mineral Resources of 8,143 thousand tonnes at 10.6 g\/t Au and 1.8% Cu for 2,768 thousand ounces gold and 330 million pounds copper, inclusive of Mineral Reserves 3<\/sup> (100% basis)<\/p>\n<\/li>\n
- \nHod Maden is expected to generate approximately $164 million in annual free cash flow (on a 100% basis, at a $1,599\/oz gold price and $3.19\/lb copper price) once at full production, which is expected in 2027 3<\/sup><\/li>\n
- \nCurrent life of mine average by-product cash costs of $84\/oz and AISC of $334\/oz. Life of mine co-product cash costs of $387\/oz and AISC of $588\/oz 3<\/sup><\/li>\n
- \nOn a 100% basis, Hod Maden features total payable gold production of 2,027 thousand ounces gold and 255 million pounds copper over a 13-year mine life 3<\/sup><\/li>\n
- Adds a near-term, de-risked growth project to SSR Mining\u2019s robust development pipeline<\/b>\n
- \n$150 million in earn-in structured cash milestone payments to acquire an additional 30% interest in the Project, payable in accordance with an agreed upon schedule beginning at the start of construction and ending on the first anniversary of commercial production. 4<\/sup><\/li>\n<\/ul>\n
- \n$120 million upfront cash payment to acquire a 10% interest in the Project paid on closing of the Transaction on May 8, 2023; and<\/p>\n<\/li>\n<\/ul>\n
- The Transaction leverages SSR Mining\u2019s significant experience in T\u00fcrkiye and its proven project development team that successfully delivered the \u00c7\u00f6pler Sulfide Expansion Project on time and under budget, provides in-country synergies, and builds on a long-standing and strong joint venture partnership with Lidya Mines in T\u00fcrkiye <\/b><\/li>\n<\/ul>\n
- Hod Maden is a world-class, high grade and high-margin asset which will further enhance SSR Mining\u2019s free cash flow generation, which has been a key pillar of the Company\u2019s strategy and sector-leading capital returns program<\/b><\/li>\n<\/ul>\n
- Transaction projected to provide SSR Mining with approximately an expected attributable 80,000 gold equivalent ounces and $66 million in free cash flow annually (at $1,599\/oz gold and $3.19\/lb copper) once in production, expected in 2027 3<\/sup><\/b><\/li>\n<\/ul>\n
- Based on the Feasibility Study \u2013 Technical Report NI 43-101 effective February 28, 2021 (\u201cthe 2021 Feasibility Study\u201d) published by Horizon Copper Corp. 2<\/sup>, Hod Maden features a 13-year mine life averaging (on a 100% basis) approximately 195,000 ounces of gold equivalent production annually at first quartile co-product AISC of $588\/oz, generating $164 million of annual free cash flow and a 36% after-tax internal rate of return (\u201cIRR\u201d) at base case commodity prices of $1,599\/oz gold and $3.19\/lb copper 3<\/sup><\/b><\/li>\n<\/ul>\n
- Transaction is accretive to SSR Mining across all meaningful per share valuation metrics, including Net Asset Value, Mineral Reserves, Mineral Resources, production, operating cash flow, and free cash flow \u00a01<\/sup><\/b><\/li>\n<\/ul>\n
- The acquisition of Hod Maden will add one of the highest margin and lowest capital intensity development projects globally to SSR Mining\u2019s robust portfolio of high-return growth projects and is expected to deliver an estimated all-in after-tax internal rate of return (\u201cIRR\u201d) in excess of 15% after acquisition costs <\/b><\/li>\n<\/ul>\n
- Aggregate acquisition consideration totals $270 million, which includes $120 million in upfront cash payment to acquire a 10% interest in Hod Maden, followed by $150 million in earn-in structured milestone payments to acquire an additional 30% interest, payable between the start of construction and the first anniversary of commercial production 4<\/sup><\/b><\/li>\n<\/ul>\n