SSR Mining Inc. announced an agreement to acquire up to 40% ownership and operational control of the Hod Maden gold-copper development project from Lidya Mines.
Lidya Mines and Horizon Copper Corp. currently hold ownership of the Hod Maden Project, located in northeastern Turkiye.
SSR Mining’s payments in exchange for a 40% stake in Hod Maden include:
- $120 million upfront cash payment to purchase a 10% stake in the Project paid upon transaction close on 8 May 2023; and
- $150 million in earn-in structured cash milestone payments to acquire an additional 30% equity in the Project, payable on an agreed-upon schedule commencing with construction and ending on the first anniversary of commercial production.
SSR Mining has assumed exclusive project operator responsibilities for project development, construction, and operations after making the upfront cash payment at closing. 40% of the Hod Maden Project will be owned by SSR Mining after the milestone payments are made.
“We have been closely monitoring Hod Maden for well over seven years as it has progressed through critical development and permitting milestones, largely de-risking the Project as it approaches a construction decision in 2024. Our due diligence team was complimentary as to the detail and quality of work completed so far on the Project. Following our review and after discussions with our joint venture partners, we believe there are several positive operational value levers as well as exploration potential beyond the existing life of mine plan that was presented in the 2021 Feasibility Study. We will now spend the next twelve months updating the existing technical report for these value enhancing opportunities, as well as to account for changes in market conditions,” SSR Mining President and CEO Rod Antal said.
Antal stated that the Hod Maden Project is one of the highest margin, lowest capital-intensive projects in the sector and could contribute considerable free cash flow to SSR Mining as our fifth producing asset. After acquisition expenditures, Antal noted that the Project will produce >15% IRR.
“Our proven project development team will work to advance Hod Maden to a full construction decision in 2024 with a goal of delivering first production in 2027. The same principles and discipline that enabled our team to deliver the Çöpler Sulfide Plant project in Türkiye on time and under budget will be applied to Hod Maden to help us maximize the value of the Project. The Project’s robust economics have the ability to support a project-level finance facility, and we will build upon the project finance work completed by the joint venture to date as a potential funding opportunity while limiting SSR Mining’s cash outlay. Overall, this prudently structured transaction presents an opportunity to further our commitment to low capital intensity growth, strong free cash flow generation and continued robust capital returns,” Antal added.
SSR Mining will hold 40%, Lidya Mines 30%, and Horizon 30% after the earn-in structured cash milestone payments. Horizon received a gold stream on production from a portion of its 30% stake in the Project from Sandstorm Gold Ltd. on August 31, 2022. Horizon and Sandstorm’s gold streaming deal doesn’t affect SSR Mining’s output or cash flow. SSR Mining will pay Lidya Mines $84 million if an additional 500,000 ounces of gold-equivalent Mineral Reserves are discovered after the 2021 Feasibility Study.
The Transaction received key regulatory approvals, and the deal concluded on 8 May 2023.
