SSR Mining acquires past producers

SSR Mining (TSX: SSRM; NASDAQ: SSRM) is acquiring from Newmont Goldcorp (TSX: NGT; NYSE: NEM) and Fairmile Gold Mining two past-producing gold operations to the south of its Marigold mine in Nevada for US$22 million, and a 0.5% net smelter return royalty to Newmont on each of the properties.

The 89 sq. km land package includes the Trenton Canyon property south and along trend from Marigold, which operated as an open-pit, heap-leach operation between 1996 and 2001, and Buffalo Valley, to the southwest, which operated between 1989 and 1991.

“With the mega-mergers that were completed earlier on in 2019, we had flagged Nevada as a region where SSR could potentially pick up some prospective land, and we view [the] transaction favourably from SSR’s perspective, as a lower-risk, and lower-cost way to grow its assets,” CIBC mining analyst Cosmos Chiu says in a research note to clients.

President and CEO Paul Benson expects the acquisition will increase the company’s gold resources and “add multiple zones of mineralization proximate to our Marigold mine infrastructure.”

SSR Mining will explore the new ground “in the near-term” and begin “incorporating the properties into our longer-term mine planning, as we evaluate opportunities to continue creating value at Marigold for our shareholders.”

Exploration plans aim to “upgrade and expand known gold mineralization to potentially extend mine life, increase operating flexibility or access higher-margin tonnes,” Benson says.

Previously wholly owned by Newmont, Trenton Canyon produced 290,000 oz. gold from its Peak West and South pits, and the property includes the North Peak heap-leach pads and processing facilities.

Buffalo Valley, which operated as a joint venture between Newmont (70%) and Fairmile, produced 50,000 oz. gold. Buffalo Valley has historic indicated resources of 20 million tonnes grading 0.65 gram gold per tonne for 418,000 contained oz. gold.

Trenton Canyon and Buffalo Valley host the same rock formations as the Marigold mine, and SSR Mining says they display a “higher intensity of rock alteration.”

Historic exploration on the two properties includes 2,700 drill holes totalling more than 340,000 metres between 1980 and 2012.

Production at the Marigold mine last year totalled 205,161 oz. gold, and the company expects it will produce between 200,000 and 220,000 oz. gold in 2019.

SSR Mining acquired Marigold, which is situated on the Battle Mountain-Eureka trend in Humboldt County, in April 2014.

In production since 1989, Marigold is a large, run-of-mine, heap-leach operation with several open pits, waste-rock stockpiles, leach pads, a carbon-absorption facility, and a carbon processing and gold-refining facility. The gold doré bars produced at the mine are shipped to a third-party refinery.

In addition to its Marigold mine, SSR Mining owns the Seabee gold operation in Saskatchewan, Canada, and a 75% stake in the joint-venture Puna operations in Argentina’s Jujuy province.

The Seabee operation, 125 km northeast of the town of La Ronge in northern Saskatchewan, makes gold doré bars that are shipped to a third-party refinery. SSR Mining picked up Seabee in May 2016 as part of its acquisition of Claude Resources.

The Puna joint venture includes the Pirquitas processing facilities, and SSR Mining is the operator. The silver-lead-zinc Chinchillas mine entered commercial production in December 2018, and has an eight-year mine life.

SSR Mining also has two feasibility-staged projects: San Luis in Peru, and Pitarrilla (its own discovery) in Mexico.

SSR Mining has traded in a 52-week range of $10.71 to $20 per share. The company has 121 million common shares outstanding for a $2.2-billion market capitalization.