ASX-listed gold explorer SSR Mining (ASX:SSR) has inked a deal to secure a 40% interest and the operatorship of the Hod Maden Gold-Copper Project in northeast Turkey.
As consideration for the 40% ownership, SSR Mining paid $120 million on 8 May 2023 to acquire a 10% interest in the project. The company will also pay $150 million in earn-in structured cash milestone payments to acquire an additional 30% interest in the project.
With the upfront cash payment made on closing, SSR Mining reports it now serves as the sole project operator responsible for project development, construction, and operations.
Currently, Turkish gold miner Lidya Mines and Canadian resource company Horizon Copper (CVE:HCU) hold a 70% and 30% respective interest in Hod Maden. Following the completion of the milestone payments, both companies will hold a 30% interest in the project.
SSR Mining also reports that under the deal, if an additional 500,000 ounces of gold equivalent mineral reserves is delineated beyond the current mineral resources and mineral resources, the company will make an $84 million payment to Lidya Mines.
Commenting on the acquisition, SSR Mining Chief Executive Officer (CEO) and President Rod Antal says: “We have been closely monitoring Hod Maden for well over 7 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”
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 12 months updating the existing technical report for these value-enhancing opportunities, as well as to account for changes in market conditions.
We would like to thank our joint venture partners in the project for their support and cooperation during this process. We are excited for the outcome, which delivers our stakeholders exposure to what we believe is one of the most compelling undeveloped gold-copper projects in the world.
It is clear that Hod Maden is one of the highest margin, lowest capital intensity projects in the sector, and once operational should be a meaningful free cash flow contributor to the SSR Mining business as our fifth producing asset. This is supported by the projected over 15% IRR (internal rate of return) the project will generate after acquisition costs.
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 Turkey on time and under budget will be applied to Hod Maden to help us maximise 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.”
The Hod Maden Project lies in north-eastern Turkey, within the Eastern Pontides metallogenic belt, about 330km from SSR’s Çöpler gold mine and 20km from the Copper Hill development prospect. SSR says the project licences cover about 3,500 hectares and host a mineral reserve of 8.7 million tonnes @ 8.8g/t Au and 1.5% Cu for 2,452 thousand ounces of gold and 287 million pounds copper.
SSR Mining is an ASX-listed gold explorer with a portfolio of projects across the globe. These projects include the Çöpler, Çakmaktepe Extension, and Hod Maden projects in Turkey, as well as the Marigold Project in the US, the Seabee Project in Canada, the Puna Project in Argentina, the San Luis Project in Peru, and the Pitarrilla NSR Project in Mexico.
Images: SSR Mining Inc
