Date of significant change
January 12, 2022
Article3.press release
Press release dated January 13, 2022 was distributed via GlobeNewswire.
Article4.Summary of the main changes
On January 12, 2022, the Company entered into a definitive agreement to purchase the Pitarrilla Project (“pitarilla“) in the State of Durango, Mexico by acquiring all of the issued and outstanding shares of SSR Durango, SA de CV (the “transaction“) by SSR Mining Inc. (“SSR mining“) for an aggregate consideration of $70 million and a 1.25% Net Smelter Return Royalty (“NSR Royalties“).
Point 5.1Full description of the significant change
On January 12, 2022, the Company entered into a definitive agreement to purchase Pitarrilla in Durango State, Mexico pursuant to the transaction for a total consideration of US$70 million and the NSR royalty. All references to dollars ($) in this Significant Changes Report are to United States dollars (US$).
Pitarrilla is a large undeveloped silver, lead and zinc project located 160 kilometers north of Durango City in northern Mexico. The Pitarrilla Property consists of 4,950 hectares in five claims and has significant infrastructure with direct access to utilities. SSR Mining submitted a technical report prepared in accordance with National Instrument 43-101 – Standards of Disclosure for Mineral Projects (“NI 43-101“) entitled “NI 43-101 Technical Report on the Pitarrilla Project” dated December 14, 2012 (the “Technical Report 2012“). The 2012 Technical Report included a feasibility study outlining a large, primarily open pit mine operation and mineral resource estimate that has since been submitted by SSR Mining for its Annual Information Form for the 31stSSR Mining 2020 AIF“) (together the”Historical Estimate“).
overall consideration
Total consideration to be paid upon closing of the transaction is $70 million consisting of $35 million in Endeavor common stock and an additional $35 million in cash or Endeavor common stock, at SSR Mining’s option and Endeavor’s approval. The number of Endeavor shares to be issued is based on an assumed price of $4.0805 per share, which is the volume weighted average price of Endeavor common shares on the New York Stock Exchange (“NYSE“) for the 10 business days immediately prior to the date of signing of the definitive agreement. The shares are subject to a hold period of four months and one day following the closing date.
SSR Mining will retain the NSR royalty on Pitarrilla. Endeavor will have matching rights to purchase the NSR royalty should SSR Mining propose to sell it.
Any cash component will be settled with cash funds. As of September 30, 2021, Endeavor had $101 million in cash and cash equivalents and $129 million in working capital.
Historical Resource Estimate
As detailed in the 2012 Technical Report and updated in SSR Mining’s 2020 AIF, Pitarrilla has the following mineral resource estimate, which Endeavor is treating as a historical estimate:
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a Measured and Indicated Mineral Resource (open pit and underground) of 525.27 million ounces (oz) of silver (Ag) in 164.79 million tonnes grading 99.1 grams per tonne (gpt) Ag.
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an open pit Inferred Mineral Resource of 21.21 million Ag ounces in 8.52 million tonnes grading an average of 77.4 g/t; and an underground Inferred Mineral Resource of 5.46 million Ag ounces in 1.23 million tonnes grading of 138.1 g/t.
Additional information on the historical estimate and related notes can be found in the 2012 Technical Report and SSR Mining 2020 AIF available at www.ssrmining.com and on SEDAR at www.sedar.com. The economic analysis presented in the 2012 Technical Report is not considered current, is not relied upon by Endeavor and should not be relied upon as representing the expected economic results of Endeavor’s property. A Qualified Person has not done sufficient work to classify the historical estimate as current mineral resources or mineral reserves. The Company is not treating this information as current mineral resources or reserves, has not verified and does not rely on this information. Upon completion of the transaction, Endeavor plans to prepare an updated mineral resource estimate for Pitarrilla, develop exploration targets and analyze the economics of various scales of production.
permits and timing
The transaction has been approved by Endeavor’s board of directors.
Closing of the transaction remains subject to regulatory approvals from the TSX and NYSE and receipt of approval from Mexico’s Federal Economic Competition Commission, as well as customary closing conditions for a transaction of this type, which is expected to occur in the first half of 2022.
Upon completion, Endeavor plans to complete an updated mineral resource estimate for Pitarrilla, develop exploration targets and analyze the economics of various scales of production.
Strive for qualified person and QA/QC
The scientific and technical data contained in this Pitarrilla Project Significant Change Report has been reviewed and approved by Dale Mah, P.Geo., a Qualified Person as defined by NI 43-101. Mr. Mah is Endeavor’s Vice President of Corporate Development.
Item 5.2Disclosure for Restructuring Transactions
Not applicable.
Article6.Relying on subsection 7.1(2) of National Instrument 51-102
Not applicable.
Article7.Omitted information
Not applicable.
Article8.managing Director
Daniel Dickson, Chairman of the Board
Phone: (604) 685-9775
Article9.Date of report
January 19, 2022
Cautionary Note Regarding Forward-Looking Statements
This Material Changes Report contains “forward-looking statements” within the meaning of the United States Private Securities Litigation Reform Act of 1995 and “forward-looking information” within the meaning of applicable Canadian securities laws. Such forward-looking statements and information herein include, but are not limited to, statements regarding the timing and completion of the transaction, estimates of mineral resources including the historical estimate, future plans and objectives of the Company, proposed operations of the Company at Pitarrilla including mine development and future events and conditions that are not historical facts. The Company does not intend and assumes no obligation to update any such forward-looking statements or information, except as required by law.
Forward-looking statements are based on assumptions that management believes are reasonable, including without limitation, the ability to obtain regulatory approvals required to complete the transaction, the reliability of the mineral resource estimate, the continuation of exploration and mining operations, no Material adverse changes in the market price of commodities, mining operations and production will be completed in accordance with management’s expectations and achieve the stated production results and other assumptions and factors set forth herein. Although the Company has attempted to identify important factors that could cause actual results to differ materially from those contained in any forward-looking statements or information, there may be other factors that could cause results to differ materially from those anticipated, described, estimated or evaluated results intended to deviate. There can be no assurance that any forward-looking statement or information will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statement or information. Accordingly, readers should not place undue reliance on any forward-looking statements or information.
Forward-looking statements or information involve known and unknown risks, uncertainties and other factors that could cause actual results, performance or achievements to differ materially from those expressed or implied by such statements. Such factors include, without limitation, the Company’s or SSR Mining’s inability or failure to satisfy any conditions to the closing of the Transaction, including any regulatory approvals; the availability of funds; the Company’s financial condition, timing and content of work programs; results of exploration activities and development of mineral properties; the calculation of mineral resources including historical estimation; the preservation and security of proprietary rights in mineral resources; project cost overruns or unanticipated costs and expenses; currency fluctuations; the ultimate impact of the COVID-19 pandemic on operations and results; Legislation, taxation, controls, regulations and political or economic developments of the national and local governments in Canada and Mexico; financial risks due to precious metal prices; operational or technical difficulties in mineral exploration, development and mining activities; risks and hazards of mineral exploration, development and mining; the speculative nature of mineral exploration and development and the risks involved in obtaining necessary licenses and permits.
Although the forward-looking statements contained herein reflect management’s current beliefs and reasonable assumptions based on information available to management as of the date of this release, Endeavor can not be assured that actual results will be consistent with such forward-looking information. As a result, the Company cannot guarantee that the transaction will be completed on the terms and within the time specified herein, or at all.
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