All dollar figures in US dollars unless
otherwise stated
VANCOUVER and TORONTO,
May 11, 2020 /PRNewswire/ - SSR
Mining Inc. (NASDAQ: SSRM and TSX: SSRM) ("SSR Mining") and Alacer
Gold Corp. (TSX: ASR and ASX: AQG) ("Alacer") are pleased to
announce that they have entered into a definitive agreement (the
"Agreement") to combine in an at-market merger of equals pursuant
to a plan of arrangement under the Business Corporations Act
(Yukon) (the "Transaction").
The combined entity will continue as SSR Mining Inc. and will be
headquartered in Denver, Colorado
with a corporate office in Vancouver,
B.C. and will be led by Rod
Antal as President & CEO and Michael Anglin as Chairman. Following the
completion of the Transaction, the new board of directors will be
comprised of five directors from each of the current SSR Mining and
Alacer boards of directors for a total of 10 directors, including
the CEO.
Pursuant to the Transaction, Alacer shareholders will receive
0.3246 SSR Mining shares for each Alacer share held (the "Exchange
Ratio"). The Exchange Ratio, together with closing prices for both
SSR Mining and Alacer common shares on the Toronto Stock Exchange
on May 8, 2020, implies consideration
of C$8.19 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% and 43% of SSR
Mining, respectively, on an issued and outstanding share basis.
Transaction Highlights
- Diversified Operating Platform:
-
- Creates a diversified portfolio of high quality, long life
operating assets across four jurisdictions
- Consensus1 forward-looking 3-year average annual
production profile of ~780 koz AuEq at ~$900/oz AISC2
- Experienced Leadership Team:
-
- Combines management with shared track 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 estimates3, the combined entity
is expected to generate peer leading average annual pro forma free
cash flow4 of ~$450
million (2020E-2022E), well ahead of a peer group annual
average of $275 million
- Financial Strength:
-
- Strong balance sheet with consolidated cash5 and
marketable securities of ~$700 million to support growth
pipeline and facilitate capital returns evaluation
- Organic Growth Potential:
-
- Three significant district scale land packages in USA,
Canada, and Turkey
- Attractive growth portfolio of low capital intensity greenfield
and brownfield opportunities
- Track 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 CEO 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."
Rodney P. Antal, President and
CEO of Alacer 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 66-2/3% 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.
Board of Directors' Recommendations
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% Senior Convertible Notes due
2033
SSR Mining announces that as of March 31,
2020, cash and equivalents totaled $398 million and the face value of outstanding
debt was $230 million. The updated
balances reflect the redemption of outstanding 2.875% Senior
Convertible Notes due 2033 (the "2013 Notes") as first announced on
February 13, 2020. As of March 31, 2020, no 2013 Notes remain
outstanding.
Advisors and Counsel
National Bank Financial Inc. acted as exclusive financial
advisor to SSR Mining and McCarthy Tétrault LLP and Lawson Lundell
LLP acted as legal counsel to SSR Mining. TD Securities Inc. acted
as financial advisor to the Special Committee of independent
directors of SSR Mining.
Scotiabank acted as exclusive financial advisor 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
5:30am PDT / 8:30am EDT / 10:30pm AEST to discuss the Transaction.
Participants may dial in using the numbers below (no access code is
needed).
Toll-free in U.S. and Canada: +1 (855) 327-6838
All other callers: +1 (604)
235-2082
Webcast:
http://services.choruscall.ca/links/ssrmining20200511.html
The conference call will be available for playback for two weeks
by dialing 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
SSR Mining Inc. is a Canadian-based precious metals producer
with three operations, including the Marigold gold mine in
Nevada, U.S., the Seabee Gold
Operation in Saskatchewan, Canada
and Puna Operations in Jujuy, Argentina. SSR Mining also has two feasibility
stage projects and a portfolio of exploration properties in North
and South America. SSR Mining is
committed to delivering safe production through relentless emphasis
on Operational Excellence. SSR Mining is also focused on growing
production and Mineral Reserves through the exploration and
acquisition of assets for accretive growth, while maintaining
financial strength.
About Alacer
Alacer is a leading low-cost intermediate gold producer whose
primary focus is to leverage its cornerstone Çöpler Gold Mine and
strong balance sheet as foundations to continue its organic
multi-mine growth strategy, maximize free cash flow, and therefore
create maximum value for shareholders. The Çöpler Gold Mine is
located in east-central Turkey in
the Erzincan Province, approximately 1,100 kilometers ("km")
southeast from Istanbul and 550km
east from Ankara, Turkey's capital
city.
SSR Mining Contacts
Paul Benson, President, CEO &
Director
W. John DeCooman, Jr., Senior Vice
President, Business Development and Strategy
SSR Mining Inc.
Vancouver, BC
E-Mail: invest@ssrmining.com
Alacer Contacts
Rodney P. Antal, President, CEO
& Director
F. Edward Farid, SVP, Business
Development & Investor Relations
Lisa Maestas, Director, Investor
Relations
Alacer Gold Corp.
Denver, CO
E-Mail: info@alacergold.com
Cautionary Note Regarding Forward-Looking Information and
Statements:
Except for statements of historical fact relating to Alacer or
SSR Mining, certain statements contained in this press release
constitute forward-looking information, future oriented financial
information, or financial outlooks (collectively "forward-looking
information") within the meaning of Canadian securities laws.
Forward-looking information may be contained in this document and
other public filings of Alacer or SSR Mining. Forward-looking
information relates to statements concerning Alacer's or SSR
Mining's outlook, anticipated events or results, statements as to
Alacer and SSR Mining management expectations with respect to the
Transaction and the combined company and in some cases, can be
identified by terminology such as "may", "will", "could", "should",
"expect", "plan", "anticipate", "believe", "intend", "estimate",
"projects", "predict", "potential", "continue" or other similar
expressions concerning matters that are not historical facts.
This press release also contains forward-looking statements
regarding the anticipated completion of the Transaction and timing
thereof. Forward-looking statements in this press release are based
on certain key expectations and assumptions made by Alacer and SSR
Mining, including expectations and assumptions concerning the
receipt, in a timely manner, of regulatory and stock exchange
approvals in respect of the Transaction. Although Alacer and SSR
Mining believe that the expectations and assumptions on which such
forward-looking statements are based are reasonable, undue reliance
should not be placed on the forward-looking statements because
Alacer and SSR Mining can give no assurance that they will prove to
be correct. Forward-looking statements are subject to various risks
and uncertainties which could cause actual results and experience
to differ materially from the anticipated results or expectations
expressed in this press release. The key risks and uncertainties
include, but are not limited to governmental and regulatory
requirements and actions by governmental authorities, including
changes in government policy, government ownership requirements,
changes in environmental, tax and other laws or regulations and the
interpretation thereof; developments with respect to the COVID-19
pandemic, including the duration, severity and scope of the
pandemic and potential impacts on mining operations; and other risk
factors detailed from time to time in Alacer and SSR Mining reports
filed with the Canadian securities regulatory authorities. There
are also risks that are inherent in the nature of the Transaction,
including failure to obtain any required regulatory and other
approvals (or to do so in a timely manner). The anticipated
timeline for completion of the Transaction may change for a number
of reasons, including the inability to secure necessary regulatory,
stock exchange or other approvals in the time assumed, developments
with respect to the COVID-19 pandemic or the need for additional
time to satisfy the conditions to the completion of the
Transaction. As a result of the foregoing, readers should not place
undue reliance on the forward-looking statements contained in this
press release concerning the timing of the Transaction.
Such forward-looking information and statements are based on a
number of material factors and assumptions, including, but not
limited in any manner to, those disclosed in any other of Alacer's
or SSR Mining's filings, and include the inherent speculative
nature of exploration results; the ability to explore;
communications with local stakeholders; maintaining community and
governmental relations; status of negotiations of joint ventures;
weather conditions at Alacer's or SSR Mining's operations;
commodity prices; the ultimate determination of and realization of
mineral reserves; existence or realization of mineral resources;
the development approach; availability and receipt of required
approvals, titles, licenses and permits; sufficient working capital
to develop and operate the mines and implement development plans;
access to adequate services and supplies; foreign currency exchange
rates; interest rates; access to capital markets and associated
cost of funds; availability of a qualified work force; ability to
negotiate, finalize, and execute relevant agreements; lack of
social opposition to the mines or facilities; lack of legal
challenges with respect to the property of Alacer or SSR Mining;
the timing and amount of future production; the ability to meet
production, cost, and capital expenditure targets; timing and
ability to produce studies and analyses; capital and operating
expenditures; economic conditions; availability of sufficient
financing; the ultimate ability to mine, process, and sell mineral
products on economically favorable terms; and any and all other
timing, exploration, development, operational, financial,
budgetary, economic, legal, social, geopolitical, regulatory and
political factors that may influence future events or conditions.
While we consider these factors and assumptions to be reasonable
based on information currently available to us, they may prove to
be incorrect.
You should not place undue reliance on forward-looking
information and statements. Forward-looking information and
statements are only predictions based on our current expectations
and our projections about future events. Actual results may vary
from such forward-looking information for a variety of reasons
including, but not limited to, risks and uncertainties disclosed in
Alacer's filings on its website at www.alacergold.com, on SEDAR at
www.sedar.com and on the ASX at www.asx.com.au and SSR Mining's
filings on its website at www.ssrmining.com,on SEDAR at
www.sedar.com and on EDGAR at www.sec.gov, and other unforeseen
events or circumstances. Other than as required by law, Alacer and
SSR Mining do not intend, and undertake no obligation to update any
forward-looking information to reflect, among other things, new
information or future events.
Non-GAAP Measures
This news release includes certain terms or performance measures
commonly used in the mining industry that are not defined under
International Financial Reporting Standards ("IFRS"), including
free cash flow. Non-IFRS financial measures do not have any
standardized meaning prescribed under IFRS and, therefore, they may
not be comparable to similar measures reported by other companies.
Each of SSR Mining and Alacer believe that, in addition to
conventional measures prepared in accordance with IFRS, certain
investors use this information to evaluate business performance.
The data presented is intended to provide additional information
and should not be considered in isolation or as a substitute for
measures of performance prepared in accordance with IFRS. These
non-IFRS measures should be read in conjunction with each company's
consolidated financial statements. For additional information,
readers should refer to non-GAAP financial measures disclosure in
each company's recent filings with the Canadian securities
regulatory authorities on SEDAR at http://www.sedar.com as well as
the joint management information circular that will be delivered to
shareholders of both companies.
Analyst consensus forecasts
This press release contains information summarizing consolidated
analyst consensus forecasts, sourced from Capital IQ
(wwww.capitaliq.com) as at May 8,
2020. The Capital IQ data is based on analyst estimates from
Bank of America Securities, BMO Capital Markets, Canaccord Genuity,
CIBC Capital Markets, Cormark Securities Inc., Credit Suisse,
Macquarie, National Bank Financial, PI Financial Corp., RBC Capital
Markets, Scotiabank, Stifel Canada, and UBS AG.
This information is intended to provide an "order of magnitude"
indication for comparison purposes only, and is not intended to be,
and should not be treated as, a forecast, estimate or guidance
being made, adopted, confirmed or endorsed by the combined entity
or either of Alacer or SSR Mining.
__________
|
1 Derived
from consolidated analyst consensus estimates for SSR Mining and
Alacer sourced from Capital IQ. Refer to section entitled "Analyst
consensus forecasts" at the end of this press release for
additional information.
|
2 All-in
Sustaining Costs (AISC) is a Non-GAAP Measure with no standardized
definition under IFRS. For further information and a detailed
reconciliation to IFRS, please see the "Non-GAAP Measures" section
of Alacer's most recent MD&A.
|
3 Derived
from analyst consensus estimates for SSR Mining and Alacer
sourced from Capital IQ. Refer to section entitled "Analyst
consensus forecasts" at the end of this press release for
additional information.
|
4 Free
Cash Flow is a Non-GAAP Measure. For further information, please
see the "Non-GAAP Measures" section of Alacer's most recent
MD&A.
|
5
Consolidated cash is a Non-GAAP Measure and includes cash and cash
equivalents, cash that is restricted and shown as a long-term asset
in Alacer's financial statements and attributable cash held by
joint venture partners accounted for using the equity method. For
further information, please see the "Non-GAAP Measures" section of
Alacer's most recent MD&A.
|
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SOURCE SSR Mining Inc.