SSR Mining Announces Closing of Sale of San Luis Project to Highlander Silver

Rhea-AI Summary

SSR Mining (Nasdaq/TSX: SSRM; ASX: SSR) has successfully closed the sale of its San Luis project in Central Peru to Highlander Silver Corp. (CSE: HSLV). SSR Mining received $5 million in cash and may receive up to $37.5 million in contingent payments based on project milestones. Additionally, SSR Mining secured a 4.0% net smelter return (NSR) royalty on the project. Highlander Silver can repurchase half of the NSR royalty for $15 million before the commencement of construction.

Positive

• SSR Mining received $5 million in cash from the sale.
• SSR Mining may receive up to $37.5 million in contingent payments based on project milestones.
• A 4.0% net smelter return (NSR) royalty was issued to SSR Mining.
• Highlander Silver can repurchase half of the NSR royalty for $15 million, potentially providing more cash to SSR Mining.

Negative

• The contingent payments are not guaranteed and depend on specific project milestones, which could introduce uncertainty.
• The NSR royalty repurchase by Highlander Silver is conditional and may not occur, leaving potential revenue unmaterialized.

Insights

Financial Analyst

SSR Mining's recent sale of the San Luis project is a noteworthy transaction for interested investors. The immediate cash influx of US$5 million boosts SSR Mining's liquidity, which could potentially be used for other ventures or to strengthen the company's balance sheet. The contingent payments of up to US$37.5 million provide a pathway for future revenue, albeit dependent on the project's progress under Highlander Silver.

For retail investors, the 4.0% net smelter return (NSR) royalty adds a unique twist, as it ensures a consistent revenue stream if the project becomes operational. The option for Highlander Silver to repurchase half of this royalty for US$15 million before construction begins offers additional financial flexibility for both parties.

Investors should weigh the immediate financial benefits against the potential risks and delay associated with contingent payments. This balance of immediate cash and future potential income might appeal to those seeking both short-term gains and long-term investment opportunities.

Market Research Analyst

The sale also highlights SSR Mining's strategic shift, possibly divesting from non-core assets like the San Luis project to focus on more lucrative ventures. For Highlander Silver, acquiring a project with a promising future can bolster their portfolio and elevate their standing in the market. This transaction could indicate a strategic pivot for both companies, reflecting their current growth trajectories.

For retail investors, it's important to consider how these strategic moves align with each company's broader objectives and market positioning. SSR Mining might be streamlining operations to enhance efficiency and profitability, while Highlander Silver could be in expansion mode, betting on the long-term potential of the San Luis project.

This strategic realignment offers investors a glimpse into the future plans of both companies, aiding in more informed decision-making.

DENVER--(BUSINESS WIRE)-- SSR Mining Inc. (Nasdaq/TSX: SSRM; ASX: SSR) (“SSR Mining” or the “Company”) is pleased to announce that it has closed the sale of the San Luis project (the “Project”) located in Central Peru to Highlander Silver Corp. (“Highlander Silver”) (CSE:HSLV) following the receipt of all required regulatory approvals and satisfaction of all closing conditions. As consideration for the sale, SSR Mining received US$5 million in cash. SSR Mining may also receive up to US$37.5 million in contingent payments payable in cash. The contingent payments are expected to be received in five installments beginning with the commencement of an initial drilling program at the Project and ending on the second anniversary of commercial production from the Project. A 4.0% net smelter return (“NSR”) royalty on the Project was also issued to SSR Mining concurrently with closing of the transaction. Under the terms of the agreement, at any time until commencement of construction, half of the NSR royalty can be repurchased by Highlander Silver for US$15 million cash.

About SSR Mining

SSR Mining is listed under the ticker symbol SSRM on the Nasdaq and the TSX, and SSR on the ASX.

To receive SSR Mining’s news releases by e-mail, please register using the SSR Mining website at www.ssrmining.com.

Cautionary Note Regarding Forward-Looking Information

Except for statements of historical fact relating to us, certain statements contained in this news release constitute forward-looking information, future oriented financial information, or financial outlooks (collectively “forward-looking information”) within the meaning of applicable securities laws. Forward-looking information may be contained in this document and our other public filings. Forward-looking information relates to statements concerning our outlook and anticipated events or results and, in some cases, can be identified by terminology such as “may”, “will”, “could”, “should”, “expect”, “plan”, “anticipate”, “believe”, “intend”, “estimate”, “projects”, “predict”, “potential”, “continue” or other similar expressions concerning matters that are not historical facts.

Forward-looking information and statements in this news release are based on certain key expectations and assumptions made by us. Although we believe that the expectations and assumptions on which such forward-looking information and statements are based are reasonable, undue reliance should not be placed on the forward-looking information and statements because we can give no assurance that they will prove to be correct. Forward-looking information and statements are subject to various risks and uncertainties which could cause actual results and experience to differ materially from the anticipated results or expectations expressed in this news release.

Forward-looking information and statements in this news release include any statements concerning, among other things: forecasts and outlook relating to the Transaction, timing and realized value of the development of the San Luis property, including timing of exploration, construction and production, the existence or realization of Mineral Resource estimates, value and timing of compensation relating to the contingent payment, value and timing of compensation relating to the NSR royalty; potential timing of repurchase of part of the NSR royalty; and any and all other timing, exploration, development, operational, financial, budgetary, economic, legal, social, environmental, regulatory, and political matters that may influence or be influenced by future events or conditions.

The above list is not exhaustive of the factors that may affect any of the Company’s forward-looking information. You should not place undue reliance on forward-looking information and statements. Forward-looking information and statements are only predictions based on our current expectations and our projections about future events. Actual results may vary from such forward looking information for a variety of reasons including, but not limited to, risks and uncertainties disclosed in our filings on our website at www.ssrmining.com, on SEDAR at www.sedarplus.ca, on EDGAR at www.sec.gov and on the ASX at www.asx.com.au and other unforeseen events or circumstances. Other than as required by law, we do not intend, and undertake no obligation to update any forward-looking information to reflect, among other things, new information or future events. The information contained on, or that may be accessed through, our website is not incorporated by reference into, and is not a part of, this document.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240522462331/en/

SSR Mining Inc.

E-Mail: invest@ssrmining.com

Phone: +1 (888) 338-0046

Source: SSR Mining Inc.

FAQ

What did SSR Mining receive from the sale of the San Luis project?

SSR Mining received $5 million in cash and may receive up to $37.5 million in contingent payments, along with a 4.0% NSR royalty.

Who purchased the San Luis project from SSR Mining?

Highlander Silver Corp. (CSE: HSLV) purchased the San Luis project from SSR Mining.

What is the stock symbol for SSR Mining?

SSR Mining is listed under the ticker symbol SSRM on Nasdaq and TSX, and SSR on ASX.

What are the terms of the NSR royalty on the San Luis project?

SSR Mining received a 4.0% NSR royalty, which Highlander Silver can repurchase half for $15 million before construction starts.

How can SSR Mining receive the contingent payments from the sale?

SSR Mining can receive up to $37.5 million in contingent payments in five installments, starting with initial drilling and ending on the second anniversary of commercial production.