Highlander Silver has agreed to acquire US-based SSR Mining’s San Luis project, located in the department of Ancash in central Peru, for a total consideration of up to $42.5m.

The total consideration of $42.5m includes a $5m upfront cash payment upon closing, and up to $37.5m in contingent cash payments in five installments.

Highlander Silver will pay the contingent payments in five instalments, upon completion of certain milestones related to the San Luis project.

SSR Mining will retain a 4% net smelter returns (NSR) royalty on the Luis project, before the closing of the transaction, and half of the NSR royalty can be repurchased for $15m in cash.

The transaction is expected to be completed in the first quarter of 2024, subject to certain customary closing conditions including receipt of any required regulatory approvals.

Highlander Silver president and CEO David Fincham: “We are delighted to be bringing the high-grade San Luis gold-silver project into our portfolio and are very impressed by the size and grade of the historical resource contained within the Ayelen and Ines vein structures.

“We believe this deposit may be one of the highest-grade gold-silver deposits of its size that is yet to be mined in the world. Additionally, there may be exceptional growth and discovery potential on this large, but only partially prospected and explored property.

The San Luis project is located in the department of Ancash in central Peru, around 500km northwest of Lima, covering 23,144ha across 31 concessions.

Discovered in 2005, San Luis is a greenfield gold and silver development project.

It has historically measured and indicated mineral resources of 348,000oz of gold grading 22.4g/t Au, and 9,003,300oz of silver grading 578.1g/t Ag.

Highlander Silver intends to implement a comprehensive geological mapping and sampling program to develop a technical assessment of the discovery potential before more focused exploration.

Fincham added: “There are numerous compelling exploration targets based on previous field mapping and rock chip sampling, and we believe that the district has potential to yield much more.

“This acquisition has the potential to be transformative for Highlander Silver and aligned with our vision of building a portfolio focused on world-class silver gold projects to the benefit of all our stakeholders.”