Alacer Gold (TSX: ASR) and SSR Mining (TSX: SSRM) (NASDAQ: SSRM) this morning announced that they have entered into a definitive merger agreement, which they have referred to as an “at-market merger of equals.” The combined entity is being promoted as a free cash flow leader and a diversified operating platform.
Under the terms of the merger arrangement, Rod Antal, current CEO of Alacer Gold will become the President & CEO of the combined entity, while Michael Anglin, current Chairman of SSR Mining, will be named Chairman of the firm. Meanwhile the board of directors will be made up of five members from each side of the transaction, to form a board consisting of a total of ten directors,
The arrangement will see Alacer Gold shareholders receive 0.3246 SSR Mining shares for each share they currently hold, which values the transaction at $8.19 per common share. The combined entity is anticipated to consist of 57% SSR Mining ownership and 43% Alacer Gold ownership, with SSR Mining being the vehicle utilized for public listing. A $70 million termination fee has also been placed into the terms of the transaction.
The company is to continue as SSR Mining upon closing.
Highlights on the transaction include the potential for the firm to become a free cash flow leader, with the entity touting a pro forma free cash flow of $450 million based on analyst estimates for 2020 to 2022, versus a peer group average of $275 million, a proforma cash and marketable securities position of $700 million, and a diversified portfolio operating within four jurisdictions, with a forward-looking average annual production profile of 780 koz gold equivalent at an all in sustaining cost of $900/oz.
The proposed merger does not currently have an anticipated close date, given that both firms must conduct a shareholders meeting to receive approval from at least 66.7% of shareholders. Both meetings are to occur in July 2020.
Information for this briefing was found via Sedar, SSR Mining and Alacer Gold. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
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