(SSR Mining, 2.Dec.2021) — SSR Mining Inc. (NASDAQ: SSRM) (TSX: SSRM) (ASX: SSR) and Taiga Gold Corp. (CSE: TGC) 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 C$0.265 per Taiga Gold share. The Transaction implies an equity value of approximately C$27mn ($21mn) 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% to the closing price of the Taiga Gold common shares on the Canadian Securities Exchange (CSE) on 1 December 2021, the day prior to the announcement of the Transaction, and a premium of 39% to the 20-day VWAP 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%-owned Amisk property. The Company will leverage its existing teams and infrastructure to advance the development of the newly acquired assets
- Consolidates a 100% interest in the Fisher property contiguous to the Seabee mine, currently operated under joint venture comprised of SSR Mining (80%) and Taiga Gold (20%)
- Unencumbers the Fisher property through the elimination of a 2.5% 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 CEO 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 C$0.265 per Taiga Gold share represents an attractive premium of 36% to Taiga Gold’s closing price on the CSE on 1 December, and a 39% premium to Taiga Gold’s 20-day VWAP, 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% 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, P.Geo., President and CEO of Taiga Gold said “This transaction with SSR Mining fulfils 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%) and Taiga Gold (20%). The Transaction would eliminate a 2.5% 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 g/t Au over 1.46 meters at the Mac North target and 10.03 g/t Au over 2.5 meters 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% owned by Taiga Gold
- Potential satellite deposit to the Seabee property, located ~23 km south-southwest
- Hosts ~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 1 December 2021, Taiga Gold has terminated its option agreement with SKRR Exploration Inc. (“SKRR”) whereby SKRR had the right to earn up to a 75% interest in Leland
Chico (4,716 hectares)
- 100% owned by Taiga Gold
- Located ~6 km south of the Fisher Property and ~45 km southeast of the Seabee gold mine. Covers ~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 100m wide at Chico/Royex/Main structural zone
- Surface sample returned 113.5 g/t Au, and prior drilling included a 0.5 meter 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% interest in Chico
Orchid (11,179 hectares)
- 100% owned by Taiga Gold
- Located ~70 km southeast of the Seabee gold mine
- Numerous gold showings and encouraging historical drill results from multiple targets
- Historical surface sampling data includes 61.3 g/t Au at the Orchid zone, 52.4 g/t Au from Tim’s Showing
Mari Lake (5,909 hectares)
- 100% owned by Taiga Gold
- Located ~25 km northeast of Flin Flon and ~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 VMS mineralization on property
SAM (1,004 hectares)
- 100% owned by Taiga Gold
- Tactical Resources Corp. (a private BC corporation) holds option to earn a 60% interest in the property
- Located ~15 km west of Flin Flon, and within the Amisk property (100% owned by SSR Mining) claim block
- Historical trench sampling results include 24.61 g/t Au over 1.0 meter and 9.61 g/t Au over 1.55 meters
- Numerous gold showings with limited historical drilling
Transaction Conditions & Timing
Taiga Gold intends to call a meeting of shareholders to be held on or before 15 March 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 662/3% of the votes cast by Taiga Gold shareholders; and
- 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 C$1.5mn 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 C$425,000 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% 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 “Fairness Opinion”). 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 (each, a “Taiga Gold 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 C$0.265 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 20 May 2020 between SKRR and Taiga Gold. Under the terms of the termination agreement, Taiga Gold has agreed to pay SKRR C$900,000 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% interest in the Leland property.
Qualified Person
The scientific and technical disclosure in this news release has been reviewed and approved by C.C. Downie, P.Geo., a director and officer of Taiga Gold Corp., identified as the “Qualified Person” under National Instrument 43-101 – Standards of Disclosure for Mineral Projects.
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