SSR Mining agreed to a nearly $500 million deal to buy Roxmore Resources, landing one of the largest undeveloped gold deposits in Nevada not currently owned by a major mining company.
The companies said Tuesday they had entered a definitive agreement for the acquisition of Roxmore and for the spinoff of its exploration assets.
The price tag includes about 663 million Canadian dollars (US$464.2 million) in cash, plus shares in a newly created exploration company valued at roughly C$49 million, for a total consideration of C$712 million, or US$498.5 million.
Under the deal, Roxmore's shareholders would receive C$6.75 a share in cash and 0.33 of a share in the new Roxmore SpinCo estimated at C$0.50 apiece. Excluding the value of SpinCo, the cash component represents a 27% premium to last Friday's closing price for Roxmore's shares.
SpinCo would house interests in Roxmore's Rattlesnake Hills, Shabu River and Newton Property projects. The new company is slated to be funded with US$10 million in cash and would be about 85% owned by former Roxmore shareholders and almost 15% by SSR, and be led by key members of Roxmore's current management team including Chief Executive and Chairman John Dorward.
Roxmore's flagship operation is the Converse gold project in Nevada, a multimillion-ounce gold resource next door to SSR's Marigold mine. SSR said Converse has the potential to add 150,000 to 170,000 ounces of average annual gold production to its U.S. operations.
Roxmore's 2026 mineral-resource estimate included 103 million metric tons of indicated resources at 0.65 grams a ton containing 2.2 million ounces of gold and 218 million tons of inferred resources at 0.43 grams a ton containing 3 million ounces of gold. Initial capital for construction is estimated at $800 million to $900 million.
SSR said combining Converse with Marigold and its Cripple Creek & Victor gold mine in Colorado would give it the potential to produce between 350,000 and 400,000 ounces of the precious metal a year in the U.S. through the 2030s.
Roxmore's board unanimously approved the transaction and recommended shareholders vote in favor of the deal. The buy also has the support of Roxmore's largest shareholder and all directors and officers, representing almost 27% of the company's shares.