The Pitarrilla Project in Durango, Mexico. Source: SSR Mining
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  • SSR Mining (SSR) signs a deal to sell its Pitarrilla Project in Mexico to TSX-listed Endeavour Silver for up to US$127 million (A$174.52 million)
  • Endeavour will pay US$35 million (A$48.1 million) in cash and issue US$35 million worth of shares to SSR
  • SSR will also receive a 1.25 per cent net smelter return royalty from Pitarrilla, estimated to be worth up to US$57 million (A$78.33 million)
  • The sale is part of SSR’s “portfolio rationalisation” efforts and is expected to be completed in the first half of 2022
  • Shares in SSR Mining were down 1.2 per cent at $23.54 at 12:40pm AEDT

SSR Mining (SSR) has signed a deal to sell its Pitarrilla Project in Mexico to TSX-listed Endeavour Silver for up to US$127 million (A$174.52 million).

Located roughly 160 kilometres north-northwest of the city of Durango, the project — wholly owned by SSR — is prospective for silver, lead and zinc. According to a mineral resource estimate released in December 2020, Pitarrilla hosts a measured and indicated reserve of 496.5 million ounces of silver at an average grade of 97 grams per tonne (g/t), plus 28.8 million ounces of silver at 165 g/t.

Under the terms of the agreement, Endeavour will pay US$35 million (A$48.1 million) in cash and issue US$35 million worth of shares to SSR, the exact number of which will be based on Endeavour’s 10-day volume weighted average price.

In addition, SSR will receive a 1.25 per cent net smelter return royalty from Pitarrilla — estimated to be worth up to US$57 million (A$78.33 million) — while Endeavour has committed to fund US$10 million (A$13.74 million) worth of exploration at the project over a five-year period.

The cash and equity components of the deal are payable upon closing of the transaction, at which point SSR will hold a roughly five per cent stake in Endeavour.

Completion of the sale remains subject to regulatory approvals from the TSX and the NYSE, as well as the Mexican Federal Economic Competition Commission, and is expected to occur in the first half of 2022.

In a statement released this morning, SSR said the sale of Pitarrilla is expected to be accretive on a net asset value (NAV) per share basis, “based on street consensus estimates.”

“In addition, the cash and equity components of the consideration received exceed the net book value of the Pitarrilla Project,” the company said.

“With this transaction, SSR Mining continues to deliver on its goal of portfolio rationalisation, realising value for shareholders by monetising non-core assets.”

The sale of Pitarilla follows the divestment of SSR’s non-core royalty portfolio to TSX Venture Exchange-listed EMX Royalty Corporation in October last year, which paid a total of US$99.5 million (A$136.73 million) for a package of 16 royalties.

That, combined with the “ongoing rationalisation” of non-core equity positions, means SSR has collected more than US$235 million (A$323 million) from the sale of assets over the last seven months.

Shares in SSR Mining are down 1.2 per cent at $23.54 at 12:40pm AEDT.

SSR by the numbers
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