Mr. Rod Antal of SSR Mining reports
SSR MINING AND ALACER GOLD ANNOUNCE AT-MARKET MERGER OF EQUALS TO CREATE A FREE CASH FLOW FOCUSED, DIVERSIFIED GOLD PRODUCER
SSR Mining Inc. and Alacer Gold Corp. have entered into a definitive agreement to combine in an at-market merger of equals pursuant to a plan of arrangement under the Business Corporations Act (Yukon). All dollar figures are in U.S. dollars unless otherwise stated.
The combined entity will continue as SSR Mining and will be headquartered in Denver, Colo., with a corporate office in Vancouver, B.C., and will be led by Rod Antal as president and chief executive officer and Michael Anglin as chairman. Following the completion of the transaction, the new board of directors will comprise five directors from each of the current SSR Mining and Alacer boards of directors for a total of 10 directors, including the chief executive officer.
Pursuant to the transaction, Alacer shareholders will receive 0.3246 SSR Mining share for each Alacer share held. The exchange ratio, with closing prices for both SSR Mining and Alacer common shares on the Toronto Stock Exchange on May 8, 2020, implies consideration of $8.19 (Canadian) per Alacer common share and a combined market capitalization of approximately $4.0-billion. At closing, SSR Mining and Alacer shareholders will collectively own approximately 57 per cent and 43 per cent of SSR Mining, respectively, on an issued and outstanding share basis.
Diversified operating platform:
Creates a diversified portfolio of high-quality, long-life operating assets across four jurisdictions;
- Consensus forward-looking three-year average annual production profile of about 780,000 ounces gold equivalent at about $900 per ounce AISC (all-in sustaining cost);
- Experienced leadership team:
Combines management with shared records of creating value through exploration, construction and operations;
Brings together expertise in open-pit, underground, pressure oxidation, heap leach and flotation operations;
- Free cash flow leader:
- Based on consensus estimates, the combined entity is expected to generate peer leading average annual pro forma free cash flow of about $450-million (2020 to 2022), well ahead of a peer group annual average of $275-million;
- Financial strength:
- Strong balance sheet with consolidated cash and marketable securities of about $700-million to support growth pipeline and facilitate capital returns evaluation;
- Organic growth potential:
- Three significant district-scale land packages in United States, Canada and Turkey;
Attractive growth portfolio of low-capital-intensity greenfield and brownfield opportunities;
Record of resource conversion, successful greenfield and brownfield exploration, and project construction;
- Enhanced market presence:
- Attractive trading liquidity across multiple global exchanges to drive enhanced capital markets presence and investor relevance.
Paul Benson, president and chief executive officer of SSR Mining, said: "The zero-premium merger of SSR Mining and Alacer creates an exciting leading intermediate gold producer with exceptional financial strength, robust margins, strong cash flow generation and long mine lives that will be run by highly experienced management with a track record of value creation. Consistent with our long-standing strategy of growth through a combination of organic development and M&A, the new SSR Mining will be well positioned to build on the strong foundation of both companies to continue growing and delivering value for all shareholders."
Mr. Antal said: "The combination of Alacer and SSR Mining will create a diversified portfolio of high-quality, long-life mines across four mining-friendly jurisdictions. Our focus at Alacer over the past several years has been on generating peer-leading free cash flow -- this merger allows us to continue this strategy while diversifying our single operating asset exposure. In addition, the increased financial strength of the combined business will allow us to leverage the proven project execution capabilities of the combined management team to continue delivering on the extensive organic growth portfolio and compete for attractive assets as they arise. The complementary nature of the assets and the cultural alignment of the organizations will facilitate an effective integration and allow us to continue to deliver value to our shareholders."
Transaction conditions and timing
Under the terms of the agreement, the transaction will be carried out by way of a court-approved plan of arrangement under the Business Corporations Act (Yukon) and will require the approval of at least 66-2/3rds per cent of the votes cast by the shareholders of Alacer at a special meeting. The issuance of shares by SSR Mining under the agreement is also subject to the approval of the majority of votes cast by the SSR Mining shareholders at a special meeting.
Completion of the transaction is also subject to regulatory and court approvals and other customary closing conditions. The agreement includes customary provisions, including non-solicitation of alternative transactions, a right to match superior proposals and a $70-million reciprocal termination fee payable under certain circumstances.
Officers and directors of SSR Mining have entered into voting and support agreements with Alacer agreeing to vote their shares in favour of the transaction. Officers and directors of Alacer have also entered into voting and support agreements with SSR Mining agreeing to vote their shares in favour of the transaction.
Full details of the transaction will be included in a joint management information circular of both SSR Mining and Alacer to be delivered to their respective shareholders in the coming weeks. Subject to receiving requisite court approval, the special shareholder meetings of both companies are expected to be held in July, 2020.
The board of directors of SSR Mining and the board of directors of Alacer have unanimously approved the transaction and recommend that shareholders vote in favour of the transaction. National Bank Financial Inc. and TD Securities Inc. have provided fairness opinions dated May 9, 2020, to the board of directors and the special committee of independent directors of SSR Mining, respectively, stating that, as of the date of such opinions and based upon and subject to the assumptions, limitations and qualifications stated in such opinions, the consideration to be paid by SSR Mining to the shareholders of Alacer is fair, from a financial point of view, to SSR Mining. Scotiabank and CIBC World Markets Inc. have provided fairness opinions dated May 9, 2020, to the board of directors of Alacer stating that, as of the date of such opinions and based upon and subject to the assumptions, limitations and qualifications stated in such opinions, the consideration to be received by the shareholders of Alacer under the transaction is fair, from a financial point of view, to shareholders of Alacer.
SSR Mining update on 2.875 per cent senior convertible notes due 2033
SSR Mining announces that as of March 31, 2020, cash and equivalents totalled $398-million and the face value of outstanding debt was $230-million. The updated balances reflect the redemption of outstanding 2.875 per cent senior convertible notes due 2033 as first announced on Feb. 13, 2020. As of March 31, 2020, no 2013 notes remain outstanding.
Advisers and counsel
National Bank Financial Inc. acted as exclusive financial adviser to SSR Mining and McCarthy Tetrault LLP and Lawson Lundell LLP acted as legal counsel to SSR Mining. TD Securities Inc. acted as financial adviser to the special committee of independent directors of SSR Mining.
Scotiabank acted as exclusive financial adviser to Alacer and Stikeman Elliott LLP acted as legal counsel to Alacer. The board of directors of Alacer also retained CIBC World Markets Inc. to provide a fairness opinion.
Conference call and webcast
SSR Mining and Alacer will hold a joint conference call and webcast on May 11, 2020, at 5:30 a.m. Pacific Daylight Time/8:30 a.m. Eastern Daylight Time/10:30 p.m. Australian Eastern Standard Time to discuss the transaction. Participants may dial in using the numbers below (no access code is needed):
Toll-free in United States and Canada: 1-855-327-6838
All other callers: 1-604-235-2082
The conference call will be available for playback for two weeks by dialling toll-free in U.S. and Canada: 1-855-669-9658, replay code 4566. All other callers: 1-412-317-0088, replay code 4566.
About SSR Mining Inc.
SSR Mining is a Canada-based precious-metals producer with three operations, including the Marigold gold mine in Nevada, the Seabee gold operation in Saskatchewan, and Puna operations in Jujuy, Argentina. The company also has two feasibility-stage projects and a portfolio of exploration properties in North and South America. The company is committed to delivering safe production through relentless emphasis on operational excellence.
About Alacer Gold Corp.
Alacer is a leading low-cost intermediate gold producer whose primary focus is to leverage its cornerstone Copler gold mine and strong balance sheet as foundations to continue its organic multimine growth strategy, maximize free cash flow and therefore create maximum value for shareholders. The Copler gold mine is located in east-central Turkey in the Erzincan province, approximately 1,100 kilometres southeast from Istanbul and 550 km east from Ankara, Turkey's capital city.
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