Mr. Tim Termuende of Taiga Gold reports
SSR MINING AND TAIGA GOLD ANNOUNCE FRIENDLY ACQUISITION OF TAIGA GOLD
SSR Mining Inc. and Taiga Gold Corp. have entered into a definitive arrangement agreement whereby SSR Mining will acquire all of the issued and outstanding common shares of Taiga Gold pursuant to a plan of arrangement at a price of 26.5 Canadian cents per Taiga Gold share. The transaction implies an equity value of approximately $27-million (Canadian) ($21-million (U.S.)) on a fully diluted in-the-money basis and has been unanimously approved by the board of directors of each of SSR Mining and Taiga Gold.
The offer price represents a premium of approximately 36 per cent to the closing price of the Taiga Gold common shares on the Canadian Securities Exchange (CSE) on Dec. 1, 2021, the day prior to the announcement of the transaction, and a premium of 39 per cent to the 20-day VWAP (volume-weighted average price) of the Taiga Gold common shares traded on the CSE prior to announcement of the transaction.
Strategic rationale for SSR Mining
- As the only gold producer in the highly prospective province of Saskatchewan, the transaction materially expands SSR Mining's presence in a core jurisdiction by adding five new properties (34,569 hectares), which provide new exploration targets stretching south from the Seabee mine to SSR Mining's 100-per-cent-owned Amisk property. The company will leverage its existing teams and infrastructure to advance the development of the newly acquired assets;
- Consolidates a 100-per-cent interest in the Fisher property contiguous to the Seabee mine, currently operated under joint venture comprising SSR Mining (80 per cent) and Taiga Gold (20 per cent);
- Unencumbers the Fisher property through the elimination of a 2.5-per-cent net smelter return (NSR) royalty covering the majority of the Fisher property;
- The Fisher property provides future potential ore sources to extend the operating life of the Seabee property, particularly given the excess capacity at the Seabee mill and the recently completed tailings facility expansion which provides capacity through 2031 at current production levels.
Rod Antal, president and chief executive officer, said: "With this transaction, we will successfully redeploy a portion of the proceeds from the recent non-core royalty portfolio sale into new growth opportunities in a core jurisdiction. The acquisition of Taiga Gold reiterates our commitment to the Seabee gold mine and ongoing investment for future resource discoveries as we aim to extend Seabee's mine life into the next decade. Additionally, the acquisition of new greenfields exploration properties across the province of Saskatchewan should allow SSR Mining to build upon our regional expertise in a region we consider exceptionally prospective geologically and underexplored."
Benefits to Taiga Gold shareholders
- All-cash consideration of 26.5 Canadian cents per Taiga Gold share represents an attractive premium of 36 per cent to Taiga Gold's closing price on the CSE on Dec. 1 and a 39-per-cent premium to Taiga Gold's 20-day VWAP (volume-weighted average price), solidifying value for Taiga Gold shareholders.
- All-cash offer that is not subject to any financing conditions.
- Strong shareholder support with voting support agreements from Eagle Plains Resources Ltd. and the management and directors of Taiga Gold, for the common shares, options and warrants held by such parties which collectively represent approximately 19.05 per cent of Taiga Gold's issued and outstanding common shares.
- The transaction provides certainty of value, removing potential future equity dilution as well as exploration, development and execution risk.
Tim Termuende, PGeo, president and CEO of Taiga Gold, said: "This transaction with SSR Mining fulfills the goal we set out to accomplish upon Taiga Gold's formation in 2018. The diligence and skill of our technical team has allowed Taiga Gold to maximize the value of our portfolio of exploration properties in Saskatchewan, and we are pleased to see those efforts recognized by SSR Mining in today's announcement. Management and the board of directors view this transaction as beneficial for all shareholders and a positive culmination of Taiga Gold's efforts to date."
Overview of properties
Fisher (33,171 hectares)
- Operated under joint venture by SSR Mining (80 per cent) and Taiga Gold (20 per cent). The transaction would eliminate a 2.5-per-cent NSR royalty on a large portion of the Fisher property;
- Contiguous to SSR Mining's Seabee property, with the potential to provide additional ore sources to extend the life of the currently operating Seabee mill;
- Recent (September, 2021) exploration results announced by SSR Mining at Fisher included 22.99 grams per tonne Au over 1.46 metres at the Mac North target and 10.03 g/t Au over 2.5 metres at the Yin target;
- Additional surface sampling results announced (November, 2021) by Taiga Gold including 55.62 g/t Au and 33.88 g/t Au at the George East target.
Leland (11,761 hectares)
- 100 per cent owned by Taiga Gold;
- Potential satellite deposit to the Seabee property, located about 23 kilometres south-southwest;
- Hosts approximately 25 km extension what is currently interpreted as a structural splay of the Tabbernor fault, the major deep-seated crustal shear system that is associated with the Seabee-Santoy mineralization;
- Numerous historical grab samples up to 60 g/t and limited prior drilling;
- As of Dec. 1, 2021, Taiga Gold has terminated its option agreement with SKRR Exploration Inc. whereby SKRR had the right to earn up to a 75-per-cent interest in Leland.
Chico (4,716 hectares)
- 100 per cent owned by Taiga Gold;
- Located about six km south of the Fisher property and about 45 km southeast of the Seabee gold mine. Covers about 15 km of north-south-trending Tabbernor fault strike with multiple gold showings;
- Potential satellite deposits to Seabee with open-pit potential;
- Quartz veining and gold mineralization up to 100 m wide at Chico/Royex/Main structural zone;
- Surface sample returned 113.5 g/t Au, and prior drilling included a 0.5-metre intercept at 36.3 g/t Au;
- In early November, 2021, Taiga Gold terminated its option agreement with Aben Resources Ltd. whereby Aben had the right to earn up to an 80-per-cent interest in Chico.
Orchid (11,179 hectares)
- 100 per cent owned by Taiga Gold;
- Located about 70 km southeast of the Seabee gold mine;
- Numerous gold showings and encouraging historical drill results from multiple targets;
- Historical surface sampling data include 61.3 g/t Au at the Orchid zone, 52.4 g/t Au from Tim's showing.
Mari Lake (5,909 hectares)
- 100 per cent owned by Taiga Gold;
- Located about 25 km northeast of Flin Flon and about 20 km from SSR Mining's Amisk property;
- Positive historical grab samples including 14.4 g/t Au and 12.69 g/t Au, limited prior drilling;
- Additional targets for potential volcanogenic massive sulphide mineralization on property.
SAM (1,004 hectares)
- One hundred per cent owned by Taiga Gold;
- Tactical Resources Corp. (a private B.C. corporation) holds option to earn a 60-per-cent interest in the property;
- Located about 15 km west of Flin Flon, and within the Amisk property (100 per cent owned by SSR Mining) claim block;
- Historical trench sampling results include 24.61 g/t Au over 1.0 metre and 9.61 g/t Au over 1.55 metres;
- Numerous gold showings with limited historical drilling.
Transaction conditions and timing
Taiga Gold intends to call a meeting of shareholders to be held on or before March 15, 2022, to seek shareholder approval for the transaction. The transaction will be effected by way of a court-approved plan of arrangement under Section 193 of the Business Corporations Act (Alberta) and will require:
- Approval of at least 66-2/3rds per cent of the votes cast by Taiga Gold shareholders;
- A simple majority of the votes cast by Taiga Gold shareholders, excluding votes from certain shareholders, as required under Multilateral Instrument 61-101 -- Protection of Minority Securityholders in Special Transactions.
The completion of the transaction is also subject to the receipt of court, stock exchange and any other required regulatory approvals, and is subject to certain customary closing conditions for transactions of this nature. The transaction does not require the approval of the shareholders of SSR Mining.
The agreement provides for, among other things, non-solicitation covenants, with fiduciary out provisions that allow Taiga Gold to consider and accept a superior proposal, subject to a right to match period in favour of SSR Mining. The agreement also provides for: (i) a termination fee of $1.5-million (Canadian) to be paid by Taiga Gold to SSR Mining if the agreement is terminated in certain specified circumstances; and (ii) an expense reimbursement fee of $425,000 (Canadian) to be paid by SSR Mining to Taiga Gold if the transaction fails to close as a result of specified breaches of the agreement by SSR Mining.
The transaction is expected to close in the first half of 2022.
Voting support agreements, board approval and recommendation
Officers and directors of Taiga Gold, along with Eagle Plains Resources Ltd., which together hold approximately 19.05 per cent of the outstanding Taiga Gold common shares, have entered into voting support agreements pursuant to which they have agreed, among other things, to vote their Taiga Gold common shares in favour of the transaction.
The transaction has been unanimously approved by the board of directors of each of SSR Mining and Taiga Gold. The board of directors of Taiga Gold unanimously recommends that its shareholders vote in favour of the transaction.
Taiga Gold has received an opinion from McKnight Mineral Advisor Services that, based upon and subject to the limitations, assumptions and qualifications of and other matters considered in connection with the preparation of such opinion, the consideration to be received by Taiga Gold shareholders pursuant to the transaction is fair, from a financial point of view, to the Taiga Gold shareholders. The full text of the fairness opinion will be included in the management information circular of Taiga Gold which will be mailed to Taiga Gold shareholders prior to the meeting.
Warrants and options
Pursuant to the transaction, each Taiga Gold stock option and warrant outstanding immediately prior to the effective time of the transaction shall automatically vest and be immediately cancelled in exchange for a cash payment equal to the excess, if any, of the 26.5-Canadian-cent consideration over the applicable aggregate exercise price of such Taiga Gold options and warrants.
Leland option termination
Taiga Gold has entered into a termination agreement with SKRR whereby Taiga Gold and SKRR have mutually agreed to terminate the option agreement on the Leland property, dated May 20, 2020, between SKRR and Taiga Gold. Under the terms of the termination agreement, Taiga Gold has agreed to pay SKRR $900,000 (Canadian) in cash to terminate the option agreement, effective immediately. SKRR no longer has any rights to the Leland property nor the obligation to make cash payments, issue common shares or incur exploration expenditures. Moving forward, Taiga Gold will control a 100-per-cent interest in the Leland property.
The scientific and technical disclosure in this news release has been reviewed and approved by C.C. Downie, PGeo, a director and officer of Taiga Gold, identified as the qualified person under National Instrument 43-101 -- Standards of Disclosure for Mineral Projects.
About SSR Mining Inc.
SSR Mining is a leading, free-cash-flow-focused intermediate gold company with four producing assets located in the United States, Turkey, Canada and Argentina, combined with a global pipeline of high-quality development and exploration assets in the U.S., Turkey, Mexico, Peru and Canada. In 2020, the four operating assets produced approximately 711,000 gold-equivalent ounces.
About Taiga Gold Corp.
Taiga Gold was created through a plan of arrangement with Eagle Plains Resources in April, 2018, and is listed on the Canadian Securities Exchange under the symbol TGC. Taiga Gold has ownership in six projects targeting gold located within the Trans Hudson Corridor in the area near the Seabee gold operation, owned and operated by SSR Mining. Taiga's flagship Fisher property is currently being explored by the Fisher joint venture between SSR Mining and Taiga Gold (80 per cent/20 per cent, respectively). Taiga Gold continues to advance its 100-per-cent-owned Chico, Orchid, Leland and Mari Lake projects, while its 100-per-cent-owned SAM property is currently under option to Tactical Resources (formerly DJ1 Capital).
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