Denver-based SSR Mining Inc. has finalized the sale of its 20% stake in the Hod Maden project. In exchange, the company will hold an uncapped 4.0% royalty.
The strategic pivot from Türkiye to the Americas
This transaction marks a significant shift in the geographic focus of SSR Mining Inc. Following the recent divestment of the Çöpler mine in Türkiye, the company is now concentrating its resources on assets within the Americas. As reported by the company, this move is intended to establish SSR Mining as a leading producer of gold and silver in the region, anchored by its operations in the United States, Canada, and Argentina.
The company is currently positioning itself as a free-cash-flow-focused entity. According to the company's recent announcement, SSR Mining expects to produce between 450,000 and 535,000 Gold Equivalent Ounces in 2026. This production target is central to its goal of maintaining its status as the third-largest gold producer in the United States.
Expanding a royalty portfolio including San Luis and Pitarrilla
The 4.0% net smelter return (NSR) from the Hod Maden project significantly bolsters an already diverse collection of royalty assets. SSR Mining has been aggressively building a portfolio that provides steady revenue without the direct operational costs of mine ownership. This new NSR joins several existing holdings that provide exposure to various mining projects across the continent.
The company's current royalty stack includes a 4.0% NSR on the San Luis project owned by Highlander Silver, as well as a 1.25% NSR on the Pitarrilla project held by Endeavour Silver. Additionally, SSR Mining maintains a 3.0% NSR on the Rowan property owned by West Red Lake Gold and a 4.0% NSR on the Sunrise Lake property owned by Honey Badger Silver. by layering these royalties, the firm is creating a diversified stream of income tied to the sucess of multiple independent operators.
Royal Gold’s $160 million call right on the NSR
The deal includes specific provisions for Royal Gold, which holds significant rights regarding the future of the Hod Maden royalty. Royal Gold possesses a fixed-price call right that allows it to acquire 2.0% of the NSR from SSR Mining for $160 million.. This option is set to expire 12 months after the project declares commercial production.
Beyond the potential buyout, Royal Gold also maintains a level of control over the asset. The company holds a consent right regarding any sale of the NSR prior to January 1, 2028, and a right of first refusal if SSR Mining decides to sell the royalty. These clauses ensure that Royal Gold remains a primary stakeholder in the financial upside of the Hod Maden project.
The uncertainty of Artmin’s production timeline
While the sale is closed, several critical variables remain unverified. The ultimate value of the royalty depends heavily on the ability of Artmin to generate revenues from the Hod Maden project, a factor that reamins subject to operational risks. Furthermore, it is currently unknown whether Royal Gold will choose to exercise its $160 million call option once commercial production begins, or if SSR Mining will find other ways to monetize the NSR.
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