SSR Mining (SSRM, TSX), formerly Silver Standard, announced it is planning a US$90-million expansion of its Seabee underground Goldmine in northern Saskatchewan. According to CEO Paul Benson, they don't know what the operating capacity of the mill will increase to, but there are signs that suggest it could increase to 1,200 tpd (up from 870 tpd).
That's great news for Eagle Plains (EPL, TSX-V), because the bigger SSR Mining's mill gets the hungrier it will be. Following this expansion, they will have invested more than $400 million into the Seabee operation. In my view, there's no turning back from there, andEagle Plains exploration ground to the south (the Fisher Camp) becomes even more valuable.
SSR Mining provides a powerful image there! Anyone that's paying attention can see the "Santoy shear zone" carries onto Eagle Plainsproperty (in a big way!).
According to Benson: “The shear that hosts the Santoy deposit extends for a longer strike length on the Fisher property than it does on our ground, so we’re really exposing ourselves to as much prospective ground as possible,” he said. “This year we’ve completed mapping, geochemistry and flown high resolution magnetics with a drone — all to set us up for drilling on the property next year.”
As a reminder, Eagle Plains will be spinning out the Fisher property (and others in the region) early next year. In other words, it's going to pay shareholders a dividend. I think that new entity, Taiga Gold, will trade well, perhaps right out of the gates, as the market begins to anticipate it will be acquired by SSR Mining.
Well financed, with more than $6 million in working capital, EPL is currently a bargain -- plain and simple (market cap ($12.5 million). I'm convinced this is a low-risk stock that offers high reward. Some say that combination doesn't exist, mainly Professor types, but we've got it right here with EPL.