SSR Mining has acquired approximately 8,900 hectares contiguous to the Marigold mine in Nevada, U.S. comprised of a 100% interest in the Trenton Canyon and Buffalo Valley properties (the "Properties") from Newmont Goldcorp Corporation and Fairmile Gold Mining for an aggregate purchase price of $22 million in cash and the grant to Newmont of a 0.5% net smelter returns ("NSR") royalty on each of the Properties, and the assumption of the long-term environmental and reclamation obligations for the Properties.
Transaction and Property Highlights
- Acquisition of a large, wholly-owned prospective land package with 340,000 ounces of historical gold production, contiguous to the southern boundary of the Marigold mine.
- Historical Indicated Mineral Resources estimate of 418,000 ounces of gold at Buffalo Valley.
- Increases Marigold’s land position on trend with the Mackay pit to 19,800 hectares in Nevada’s Battle Mountain – Eureka gold belt, an 84% increase.
- Planned exploration activities aim to further define and potentially increase Mineral Resources at the Properties.
- With exploration success, potential exists to enhance the current Marigold mine plan to extend mine life, increase production or improve margins.
- Increases land position, which is favorable to host oxide and additional deep sulphide exploration targets.
- Also in 2018 and 2019, consolidated four additional parcels totaling 130 hectares of land located within the Marigold mine land package.
Paul Benson, President and CEO said, “Acquiring the Trenton Canyon and Buffalo Valley properties is expected to increase our gold resources and add multiple zones of mineralization proximate to our Marigold mine infrastructure. The acquisitions increase our land position by 84% since acquiring the Marigold mine and the Valmy property. Exploration plans aim to upgrade and expand known gold mineralization to potentially extend mine life, increase operating flexibility or access higher margin tonnes. We expect to commence exploration activities in the near-term and to begin incorporating the Properties into our longer-term mine planning as we evaluate opportunities to continue creating value at Marigold for our shareholders.”
Overview of the Properties
The Properties comprise an 8,900-hectare land package to the south and contiguous with the Marigold mine. The addition of the Properties increases our total land holding at the Marigold mine to 19,800 hectares.
The Trenton Canyon property consists of 7,350 hectares located immediately south and along the mineralized trend from the Marigold mine. The property was previously operated as an open-pit run-of-mine heap leach operation from 1996 to 2001. Based on data provided by Newmont, production during this period totaled approximately 290,000 ounces of gold from the North Peak, West and South pits within the Trenton Canyon property. The property also includes the North Peak heap leach pads and processing facilities. The Trenton Canyon property was previously 100% owned by Newmont.
The Buffalo Valley property consists of 1,550 hectares located southwest of the Marigold mine. The historic Indicated Mineral Resources estimate for Buffalo Valley is 418,000 ounces of gold (20 million tonnes at an average gold grade of 0.65 g/t), as of December 31, 20181. Such Mineral Resources estimate was prepared by Newmont and reported in its press release dated February 21, 2019, and is based on Newmont data (including collar, survey, lithology and assay data), using ordinary kriging with appropriate estimation parameters in accordance with industry standards. Such estimate needs to be verified by SSR Mining by conducting detailed verification checks, including QA/QC of location, geological, density and assay data. A qualified person for SSR Mining has not done sufficient work to classify the historical estimate at Buffalo Valley as current Mineral Resources and therefore SSR Mining is not treating the historical estimate as current Mineral Resources. Based on data provided by Newmont, historical production at Buffalo Valley from 1989 to 1991 totaled approximately 50,000 ounces of gold. Buffalo Valley was previously operated as a joint venture between Newmont (70% ownership and operator) and Fairmile (30% ownership).
Historical exploration activities on the Properties consist of over 2,700 drill holes totaling more than 340,000 meters of drilling completed between 1980 and 2012. The Properties host the same rock formations present at the Marigold mine, while displaying a higher intensity of rock alteration. Historic drilling indicates the prospective mineralized corridor at Trenton Canyon extends for at least 3,000 meters in a north-south direction, while surface geochemical anomalies potentially extend the mineralized footprint for over 5,000 meters. Our exploration activities are expected to commence in the near-term and will initially target Mineral Resources definition and confirmation.
Under the terms of the purchase agreements entered into with Newmont and Fairmile, we have acquired Newmont’s and Fairmile’s respective interest in the Properties for aggregate cash consideration of $22 million plus the grant to Newmont of a 0.5% NSR royalty on all mineral production from each of the Properties. The purchase price was funded from cash on hand. Under the terms of the purchase agreements, we have provided financial assurances to the environmental regulatory authorities with respect to the Properties’ long-term environmental and reclamation obligations totaling approximately $23.1 million.