SSR Mining (TSX: SSRM) this morning continued its process of monetizing non-core assets. The firm revealed this morning that it has entered into an arrangement with Endeavour Silver Corp (TSX: EDR) for the sale of its Pitarrilla project in Mexico.
The Pitarrilla project is a large project, covering 4,950 hectares and five concessions, found in Durango, Mexico. Mineralization is said to consist of silver, lead, and zinc, with the current model for the property suggesting the property would be suitable for a large open pit mine. The property currently has a measured and indicated resource estimate of 525.27 million ounces of silver at 99.1 g/t.
Total consideration for the project is estimated at US$127 million, with consideration consisting of cash, shares, and a net smelter return royalty. The cash and share components, both of which are pegged at US$35 million, are to be paid upon closing of the arrangement.
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The net smelter return meanwhile amounts to 1.25%, which is estimated at being worth roughly US$57 million. Exploration commitments of $10 million over a five year period have also been made as part of the definitive agreement.
Following the close of the transaction, which is slated for the second half of 2022, SSR Mining is expecting to hold roughly a 5% stake in Endeavour Silver. The firm expects the position to be accretive based on current analyst estimates for Endeavour.
SSR Mining last traded at $21.59 on the TSX.
Information for this briefing was found via Sedar and the companies mentioned. 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.
