The companies will now be able to start development activities at Chinchillas, which they both hold stakes in through the joint venture Puna Operations.
SSR Mining (TSX:SSRM,NASDAQ:SSRM) announced Wednesday (December 27) that the Chinchillas project has received environmental impact assessment (EIA) approval.
Based in Argentina, Chinchillas is a silver-lead–zinc deposit owned by SSR Mining and Golden Arrow Resources (TSXV:GRG). The companies hold the asset through Puna Operations, a joint venture that is 75-percent owned by SSR mining and 25-percent owned by Golden Arrow.
With EIA approval from Argentina’s regulatory authorities in hand, the companies will be able to start development activities at Chinchillas, with priorities including initiating earthworks programs and releasing construction contracts. First ore feed at the mill is expected in the second half of 2018.
“Receipt of the EIA approval is another positive step forward for our growth strategy. Our team can now accelerate development and construction activities to begin processing ore in 2018,” said Paul Benson, CEO of SSR Mining. The company will also be pioneering works for pre-stripping at Chinchillas.
He added, “[b]rownfields development of Chinchillas is a low capital, short payback opportunity to create value and growth for our shareholders in the near term.”
SSR Mining and Golden Arrow have been working together at Chinchillas since October 2015, when they signed a deal allowing SSR Mining to evaluate whether Chinchillas could be used to supply feed for its nearby Pirquitas mill. The companies agreed that they would form a joint venture encompassing Chinchillas and Pirquitas if the operation was deemed viable by SSR Mining.
In March of this year, SSR Mining decided to move forward with the deal, and two months later Puna Operations was formed.
According to a prefeasibility study, Chinchillas will produce a silver-lead concentrate and a zinc concentrate, with average annual production coming in at 6.1 million ounces of silver, 35 million pounds of lead and 12.3 million pounds of zinc at cash costs of $7.40 per payable ounce of silver sold.
In addition to its stake in Puna Operations, SSR Mining owns the Marigold and Seabee gold mines, as well as numerous exploration and development properties. In a recent conversation, Nicholas Konkin detailed Golden Arrow’s other assets and future plans — click here to read more.
SSR Mining’s share price closed Wednesday at $10.96 on the TSX and $8.68 on the NASDAQ. Meanwhile, Golden Arrow’s share price ended the day at $0.64 on the TSXV.
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Securities Disclosure: I, Charlotte McLeod, hold no direct investment interest in any company mentioned in this article.