Information on the Target

Western Exploration LLC ("Western") is an advanced-stage precious metals exploration company based in Reno, Nevada. The Company has an impressive portfolio that includes the Aura Mining District Project, which exhibits significant gold production potential. Recently, Western announced the sale of its Trout Creek property, located in Humboldt County, Nevada, to Marigold Mining Company ("MMC"), a subsidiary of SSR Mining Inc. The Trout Creek property comprises two parcels totaling 200 hectares and is contiguous to the Marigold Mine.

Between 1989 and 2008, Western Exploration conducted drilling activities at the Trout Creek property, which resulted in a National Instrument (NI) 43-101 compliant resource estimate of 223,000 indicated and inferred gold equivalent ounces. This sale is set to bolster Western’s financial resources and facilitate the advancement of the Aura Project, which hosts significant gold and silver resources of 688,000 ounces of gold and 3.9 million ounces of silver.

Industry Overview in the Target’s Specific Country

The mining industry in the United States, particularly in Nevada, is one of the most vital sectors of the economy, renowned for its rich mineral resources, which include gold, silver, and lithium. Nevada is the leading gold-producing state in the U.S., contributing over 80% of the nation’s gold output. The state's favorable geology, established infrastructure, and a regulatory environment facilitate exploration and mining activities.

Recent advancements in mining technologies and increased investments have bolstered the prospects for resource exploration in Nevada. Additionally, the economic recovery post-COVID-19 has led to higher commodity prices, further driving investments in precious metals exploration. The focus on sustainable mining practices has also prompted companies within the sector to adapt to changing regulations and consumer expectations.

Furthermore, the demand for gold remains strong, particularly as a hedge against inflation and economic instability. This has spurred interest from both institutional and retail investors, resulting in a surge of capital influx in the industry. Therefore, companies operating in this space are positioned to benefit from the growing market dynamics and increasing resource extraction efficiency.

The Rationale Behind the Deal

The sale of the Trout Creek property represents a strategic move for Western Exploration, allowing the company to monetize an asset while simultaneously enhancing its cash flow and strengthening its financial position. The funds acquired from this transaction will be directed towards ongoing exploration and development activities at the Aura Project, which holds significant gold and silver resources.

The additional “top-up” payments based on gold discoveries at Trout Creek and the Net Smelter Royalty on all recoverable gold ounces above the initial threshold further incentivize this transaction, ensuring continued revenue potential for Western as MMC develops the property.

Information About the Investor

Marigold Mining Company (MMC), a subsidiary of SSR Mining Inc., is a well-established player in the mining sector. SSR Mining Inc. operates several mines across the Americas and is committed to sustainable mining practices and operational excellence. MMC’s acquisition of Trout Creek enhances its portfolio and aligns with its strategic initiatives to optimize and expand existing mining operations.

As a part of SSR Mining, MMC benefits from substantial resources, proven management expertise, and a commitment to creating value for shareholders through efficient resource management. The acquisition of Trout Creek aligns with MMC’s goals to increase its gold production and enhance the overall value of its assets.

View of Dealert

The sale of the Trout Creek property by Western Exploration is deemed to be a strategic and financially sound decision. By unlocking immediate revenue from the asset, Western can focus on advancing its flagship Aura Project, which has the potential for significant production growth. Having a well-defined resource base strengthens the Company's position in the competitive precious metals market.

The additional financial arrangements in the sale, specifically the potential for further income through future gold discoveries and royalties, add layers of potential financial upside for Western Exploration. This structured deal allows the Company to benefit from the mining activities at Trout Creek, highlighting a forward-thinking approach to asset management.

Considering the robust environment for gold mining in Nevada, characterized by a favorable regulatory landscape and growing demand, this deal presents a positive outlook for both Western Exploration and MMC. Overall, it is likely to lead to enhanced operational capabilities and strengthen investment confidence in both entities.

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