Saskatchewan's lone gold miner is spending millions to buy an exploration company in the province's north.
Vancouver-based SSR Mining Inc. has acquired Taiga Gold Corp. for $27 million at a price of CAD $.265 per share in an all-cash transaction that will expand the miner's footprint across the province.
SSR Mining operates the Seabee gold mine, which is about 125 kilometres northeast of La Ronge.
A joint news release hailed the sale — which both companies' boards of directors unanimously supported — as a friendly acquisition.
“This transaction with SSR Mining fulfils the goal we set out to accomplish upon Taiga Gold’s formation in 2018," Taiga Gold CEO Tim Termuende said.
SSR Mining CEO Rod Antal, in a prepared statement, said the deal underlines the Vancouver miner's commitment to extending the life of the Seabee mine into the next decade.
The deal includes 34,569 hectares across five new properties, which will be targets for exploration in areas running from south of the Seabee mine to the Amisk property near Flin Flon.
It also gives SSR Mining a 100 per cent interest in Taiga Gold's flagship Fisher property near the Seabee gold mine.
The Fisher property borders the Seabee gold operation on the north, south and east. As of January, SSR Mining had already spent $15 million on the project.
The property supplies potential future ore sources to extend the operating life of Seabee, "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," a news release said.
The miner and Taiga previously held the property as a joint venture.
Adding Taiga Gold exploration assets across the province's north expands the miner's presence in a "region we consider exceptionally prospective geologically and under-explored," Antal said.
Taiga Gold is also terminating an option agreement with SKRR Exploration Inc., which had a 75 per cent interest in one of the properties. The company has agreed to pay SKRR CAD $900,000 to make that effective immediately.
The company intends to call a meeting on or before March 15 to get shareholder approval for the deal.
A Scotiabank research note on the acquisition expected shareholders to view the deal positively in light of potential expansions to mine life.
"Although Taiga's assets appear to be in relatively early stages of exploration, the acquisition does add to SSR's exploration upside potential and we look forward to announcements about future exploration programs," the research note stated.
Nick Pearce, Local Journalism Initiative Reporter, The StarPhoenix