Taking full ownership of the asset will increase SSR's near-term silver production to an expected 6.5 million ounces in 2019 at a time when silver prices are increasing as well as consolidating the ownership structure, which is expected to generate cost savings and operational flexibility.
Puna is also expected to produce between 20 million pounds and 26Mlb of lead and between 15Mlb and 20Mlb of zinc this year.
"This is a positive deal for both parties, in that it allows SSR Mining to consolidate our ownership in Puna Operations and streamline our reporting structure, while benefiting Golden Arrow by providing funding to pursue its exploration projects, eliminating its debt obligation to us, and cancelling our shares in Golden Arrow," said president and CEO Paul Benson.
"The transaction allows Golden Arrow to maintain diversified low-risk exposure to the continued success of SSR Mining at Puna Operations … and across their gold-focused producing portfolio in North America," said Golden Arrow executive chairman, president and CEO, Joseph Grosso.
SSR's payment will consist of $2.3 million in cash, cancellation of the outstanding principal and accrued interest on a $10 million non-revolving term loan, $20 million in SSR shares and the transfer to Golden Arrow for cancellation of the 4.3 million Golden Arrow shares held by SSR, which have a value of some $0.8 million.
The Puna operations are comprised of the Chinchillas mine and Pirquitas property and processing facilities. Chinchillas is a silver-lead-zinc deposit, which achieved commercial production in December 2018 and supplies ore to the Pirquitas processing facilities.
SSR formed a JV with Golden Arrow in March 2017 for the Chinchillas project after previously entering into an option agreement.
Shares in SSR Mining (TSX:SSRM) are trading at C$20.76 valuing the company at $2.5 billion. Its share price has increased 27% so far this year.
Shares in Golden Arrow Resources (TSXV:GRG) are trading at C28¢, valuing the company at $34 million. Its share price has fallen 9.6% so far this year.
