ADJUSTED ATTRIBUTABLE EPS OF $0.49 PER SHARE
DENVER, Nov. 12, 2020 /CNW/ - SSR Mining Inc. (NASDAQ:
SSRM) (TSX: SSRM) (ASX: SSR) ("SSR Mining") reports
consolidated financial results for the third quarter ended
September 30, 2020.
Rod Antal, President and CEO
said, "With the transformational merger with Alacer Gold finalized,
integration efforts near completion, and our operations running at
steady state following COVID-19 interruptions, the focus has turned
towards delivering a number of value enhancing catalysts before
year-end.
From a growth perspective, we intend on publishing the Çöpler
technical report and global exploration updates in the coming
weeks. Operationally, we anticipate a robust fourth quarter with
strong free cash flow generation, further strengthening our balance
sheet. This continued peer-leading free cash flow generation has
allowed us to put in place a dividend policy beginning in the first
quarter of 2021. Our capital allocation strategy is intended to
balance investment in high-return growth opportunities, maintaining
peer leading financial strength, and providing sustainable capital
returns to shareholders. A recurring quarterly dividend is expected
to be the primary method of capital return, and we will
periodically evaluate supplementing this dividend from trailing
excess attributable free cash flow through incremental dividends
and/or share buyback programs."
Third Quarter 2020 Highlights:
(All figures are in
U.S. dollars unless otherwise noted)
- Closed zero-premium merger with Alacer: Completed the
transaction with Alacer to create a leading intermediate precious
metals producer with robust margins, strong free cash flow
generation and long mine lives led by a highly experienced
leadership team with a track record of value creation.
- Dividend policy announced: On November 12, 2020, the Board approved the
initiation of a quarterly cash dividend of $0.05 per share beginning in the first quarter of
2021. In addition, the Board will periodically consider
supplementing the quarterly dividend from trailing excess
attributable free cash flow in the form of incremental dividends
and/or share buyback programs.
- On-track to meet full year 2020 updated production
guidance: Year-to-date production of 491,821 gold equivalent
ounces across the four operations.(1)
- Updated full year 2020 outlook on completion of merger:
Production of 680,000 to 760,000 gold equivalent ounces at AISC of
$965 to $1,040 per gold equivalent ounce.(2)
- Strong financial performance: Reported attributable net
income of $26.8 million, or
$0.19 per share and adjusted
attributable net income of $67.8
million, or $0.49 per
share.(2) At the beginning of the fourth quarter all
four mines were at steady-state operation.
- Maintained strong balance sheet and liquidity:
Consolidated cash (2) balance at quarter end increased
to $772.8 million, further
strengthening our balance sheet.
- Çöpler contributes low-cost production: From the date of
acquisition to quarter-end, produced 19,586 ounces of gold at AISC
of $737 per ounce.(2)
Produced 76,666 ounces of gold during the full quarter. Pit cutback
to provide access to higher grade ore expected in the fourth
quarter of 2020.
- Strong operational result at Marigold: Produced 49,137
ounces of gold at AISC of $1,243 per
ounce.(2) Stacked over 73,000 recoverable ounces of gold
in the third quarter, setting the operation up for a strong finish
to the year.
- Safe ramp-up of operations at Seabee: Produced 20,249
ounces of gold at AISC of $988 per
ounce.(2) Mill throughput averaged 1,271 tonnes per day
in September 2020, a monthly
record.
- Strong margins at Puna: Produced 1.3 million ounces of
silver at AISC of $11.26 per
ounce.(2) Generated income from mine operations of
$17.4 million in the third
quarter.
- Continued exploration success: Encouraging exploration
results in the third quarter across our portfolio at Çöpler,
Marigold and Seabee.
(1)
|
Year-to-date
production includes full year 2020 production from Çöpler. SSR
Mining is not entitled to the economic benefits from Çöpler prior
to acquisition.
|
(2)
|
We report the
non-GAAP financial measures of all-in sustaining costs ("AISC") per
ounce of gold and silver sold, adjusted attributable net income,
adjusted attributable net income per share and consolidated cash to
manage and evaluate our operating performance. Note that we have
made adjustments to the items which are included in the
determination of adjusted attributable net income compared to prior
periods. See "Cautionary Note Regarding Non-GAAP
Measures".
|
Cöpler, Turkey
(amounts presented on 100%
basis)
|
Period from
acquisition
to September 30
|
Three months
ended
September 30
|
Nine months ended
September 30
|
Operating
Data
|
2020
(1)
|
2020
(2)
|
2020
(2)
|
Ore mined - oxide
(kt)
|
147
|
497
|
1,469
|
Ore mined - sulfide
(kt)
|
99
|
715
|
1,320
|
Total material mined
(kt)
|
1,063
|
6,851
|
18,816
|
Waste removed
(kt)
|
817
|
5,639
|
16,027
|
Strip
ratio
|
3.3
|
4.7
|
5.7
|
|
|
|
|
Ore stacked - oxide
(kt)
|
121
|
535
|
1,549
|
Gold grade stacked -
oxide (g/t)
|
1.24
|
0.97
|
1.08
|
|
|
|
|
Ore processed -
sulfide (kt)
|
85
|
530
|
1,573
|
Gold grade processed
- sulfide (g/t)
|
3.74
|
3.65
|
3.79
|
Gold recovery -
sulfide (%)
|
89.0
|
90.7
|
90.8
|
|
|
|
|
Gold produced - oxide
(oz)
|
5,258
|
19,617
|
66,348
|
Gold produced -
sulfide (oz)
|
14,328
|
57,049
|
177,530
|
Total gold produced
(oz)
|
19,586
|
76,666
|
243,878
|
Gold sold
(oz)
|
27,895
|
74,665
|
240,885
|
|
|
|
|
Average realized gold
price ($/oz sold)
|
$
|
1,920
|
$
|
1,902
|
$
|
1,725
|
|
|
|
|
Cash costs ($/oz gold
sold) (3, 4)
|
$
|
609
|
N/A
|
N/A
|
AISC ($/oz gold sold)
(3, 4)
|
$
|
737
|
N/A
|
N/A
|
|
|
|
|
Financial Data
($000s)
|
|
|
|
Revenue
|
$
|
53,566
|
N/A
|
N/A
|
Production
costs
|
$
|
40,670
|
N/A
|
N/A
|
Depletion and
depreciation
|
$
|
8,895
|
N/A
|
N/A
|
Income from mine
operations
|
$
|
4,001
|
N/A
|
N/A
|
Exploration and
evaluation expenses
|
$
|
953
|
N/A
|
N/A
|
Capital
expenditures
|
$
|
4,420
|
N/A
|
N/A
|
(1)
|
The data presented in
this column is for the period from September 16, 2020 to September
30, 2020, the period for which we were entitled to all economic
benefits of Çöpler following our acquisition of Alacer.
|
(2)
|
The operating data
presented in these columns includes operating results for Çöpler
for the entire three and nine months ended September 30, 2020,
including the period prior to our acquisition of Alacer on
September 16, 2020. As we were not entitled to the economic
benefits of Çöpler prior to the acquisition, financial results for
the period prior to September 16, 2020 are not provided.
|
(3)
|
We report the
non-GAAP financial measures of cash costs and AISC per ounce of
gold sold to manage and evaluate operating performance at Çöpler.
For further information, please refer to "Cautionary Note Regarding
Non-GAAP Measures".
|
(4)
|
Cash costs and AISC
per ounce of gold sold exclude the impact of the write-up of
inventory to fair value as at the date of our acquisition of
Alacer.
|
Production
Çöpler produced 19,586 ounces of gold from September 16, 2020, the date of our acquisition
of Alacer, to the end of the third quarter of 2020 (the
"Period").
Gold production from the Çöpler oxide plant was 19,617 and
66,348 ounces for the three and nine months ended September 30, 2020, respectively. Gold production
from the sulfide plant was 57,049 and 177,530 ounces for the three
and nine months ended September 30,
2020, respectively.
Çöpler produced 76,666 and 243,878 ounces of gold for the three
and nine months ended September 30,
2020, respectively. Production was in line with the revised
mine plan that was adopted in the second quarter of 2020 to
diversify ore sources and optimize production in light of the
shortfall in mine operators resulting from COVID-19.
Oxide ore tonnes mined in the three and nine months ended
September 30, 2020 were 0.5 million
and 1.5 million tonnes, respectively. The contained gold ounces in
the oxide ore mined were 11,575 and 45,334 for the three and nine
months ended September 30, 2020,
respectively, lower than similar periods in the prior year, but in
line with the mine plan, due to the completion of Çakmaktepe phase
one mining in 2019. The oxide ore mined grade was 0.72 g/t and 0.96
g/t for the three and nine months ended September 30, 2020, respectively.
The stacked oxide ore contained 16,747 and 53,563 ounces of gold
for the three and nine months ended September 30, 2020, respectively.
Sulfide ore tonnes mined in the three and nine months ended
September 30, 2020 were 0.7 million
and 1.3 million tonnes, respectively, in line with the revised mine
plan referred to above.
The sulfide plant treated 0.5 million and 1.6 million tonnes of
sulfide ore for the three and nine months ended September 30, 2020, respectively. The sulfide
plant continued to efficiently operate above design throughput,
though marginally below that of the prior quarter as autoclave 1
was shutdown in July 2020 to perform
inspections, which indicated it was in excellent
condition. Plant gold recovery has averaged approximately 91%
through September 30, 2020. Projects
are underway to increase gold recovery. Some improvement in
recovery was achieved by installation of oxygen injection into the
leach tanks which was commissioned in late June.
Mine operator availability suffered in 2020 due to COVID-19
restrictions. The revised plan reduced the over-haulage of extra
material to the tailings storage facility ("TSF"), allowing for
available mining resources to be focused on the Manganese pit
cutback. The TSF is an approximately 5 km haul from the mine and is
constructed from competent mine waste. Despite the reduced
construction rate this year, the TSF is advancing ahead of
operational requirements. The Manganese pit cutback remains on
track to provide access to higher grade ore in the fourth quarter
of 2020. A mining area was also brought into production in the Main
pit to diversify ore sources, in part, as a risk management
strategy should COVID-19 related restrictions increase.
The total waste tonnes mined in the three and nine months ended
September 30, 2020 were 5.6 million
and 16.0 million tonnes, respectively, in line with the revised
mine plan.
The 2020 Çöpler technical report, planned to be issued in
the fourth quarter of 2020, will update the operating parameters of
the plant and include the results of optimization studies and
programs, including the proposed supplemental flotation circuit.
Detailed engineering for the proposed flotation circuit is underway
and the final construction decision remains subject to final Board
and other approvals once the technical work is complete. If
approved, the flotation circuit commissioning is targeted for the
third quarter of 2021. The proposed flotation circuit was included
in the recent amendment to the Çöpler Environmental Impact
Assessment application.
The proposed flotation circuit would treat a side stream from
the grinding circuit, with the concentrate reporting to autoclave
feed and the tails to leaching. Studies indicate a negative
recovery impact due to the float tails recovery; however, such
impact will be more than offset by increased plant throughput. The
currently-installed grinding mills have demonstrated significant
latent capacity, sufficient to support an increase in sulfide plant
throughput capacity up to approximately 3 million tonnes per annum.
The preliminary capital estimate for the proposed flotation circuit
is approximately $15 million. The
flotation circuit is anticipated to increase the gold and sulfur
grades processed through the autoclaves (increasing autoclave and
oxygen utilization), reduce unit costs, and increase total sulfide
plant throughput and gold production.
Revenue
Revenue for the Period was $53.6
million as 27,895 ounces of gold were sold at an average
realized gold price of $1,920 per
ounce. Finished goods inventory that was built-up prior to
acquisition was sold during the Period.
Operating Costs
Cash costs and AISC per ounce of gold sold are non-GAAP
financial measures. Please see the discussion under "Cautionary
Note Regarding Non-GAAP Measures".
Unit operating costs remained stable as a weaker local currency
helped offset COVID-19 associated impacts to operating
efficiencies. Cash costs per ounce sold in the Period were
$609. Cash costs were impacted by a
higher royalty expense due to higher realized gold prices.
AISC per ounce sold in the Period was $737 which is lower than planned due to lower
sustaining capital spend, primarily related to the deferral in TSF
expansion as discussed above and delays in Sabirli Road and heap
leach expansion construction due to COVID-19 related manning
shortfalls.
Marigold, USA
|
Three months
ended September 30
|
Nine months ended
September 30
|
|
|
|
Operating
Data
|
2020
|
2019
|
Change
|
2020
|
2019
|
Change
|
Total material mined
(kt)
|
20,582
|
19,033
|
8%
|
62,895
|
55,583
|
13%
|
Waste removed
(kt)
|
13,890
|
12,676
|
10%
|
46,092
|
36,628
|
26%
|
Total ore stacked
(kt)
|
6,692
|
6,357
|
5%
|
16,803
|
18,955
|
(11)%
|
Gold stacked grade
(g/t)
|
0.43
|
0.51
|
(16)%
|
0.35
|
0.41
|
(15)%
|
Strip
ratio
|
2.1
|
2.0
|
5%
|
2.7
|
1.9
|
42%
|
|
|
|
|
|
|
|
Gold produced
(oz)
|
49,137
|
52,968
|
(7)%
|
157,502
|
161,041
|
(2)%
|
Gold sold
(oz)
|
51,700
|
50,650
|
2%
|
156,117
|
165,871
|
(6)%
|
|
|
|
|
|
|
|
Average realized gold
price
($/oz sold)
|
$
|
1,912
|
$
|
1,481
|
29%
|
$
|
1,735
|
$
|
1,359
|
28%
|
|
|
|
|
|
|
|
Cash costs ($/oz gold
sold) (1)
|
$
|
899
|
$
|
822
|
9%
|
$
|
861
|
$
|
823
|
5%
|
AISC ($/oz gold sold)
(1)
|
$
|
1,243
|
$
|
1,104
|
13%
|
$
|
1,297
|
$
|
1,003
|
29%
|
|
|
|
|
|
|
|
Financial Data
($000s)
|
|
|
|
|
|
|
Revenue
|
$
|
98,748
|
$
|
74,820
|
32%
|
$
|
270,615
|
$
|
225,122
|
20%
|
Production
costs
|
$
|
46,387
|
$
|
41,551
|
12%
|
$
|
134,181
|
$
|
136,310
|
(2)%
|
Depletion and
depreciation
|
$
|
10,737
|
$
|
11,205
|
(4)%
|
$
|
32,092
|
$
|
39,828
|
(19)%
|
Income from mine
operations
|
$
|
41,624
|
$
|
22,064
|
89%
|
$
|
104,342
|
$
|
48,984
|
113%
|
Exploration and
evaluation expenses
|
$
|
953
|
$
|
893
|
7%
|
$
|
2,035
|
$
|
1,380
|
47%
|
Capital
expenditures
|
$
|
16,532
|
$
|
13,256
|
25%
|
$
|
64,329
|
$
|
27,778
|
132%
|
(1)
|
We report the
non-GAAP financial measures of cash costs and AISC per ounce of
gold sold to manage and evaluate operating performance at Marigold.
For further information, please refer to "Cautionary Note Regarding
Non-GAAP Measures".
|
Production
In the third quarter of 2020, 20.6 million tonnes of material
were mined, an 8% increase compared to the third quarter of 2019,
reflecting the impact of shorter haulage cycles coupled with
increased shovel fleet capacity. For the nine months ended
September 30, 2020, 62.9 million
tonnes of material were mined, a 13% increase over the first nine
months of 2019. The increase is attributable to shorter haulage
cycles, the addition of one haul truck to the fleet and increases
in shovel fleet capacity.
During the third quarter of 2020, 6.7 million tonnes of ore was
stacked at a gold grade of 0.43 g/t. This compares to 6.4 million
tonnes of ore was stacked at a gold grade of 0.51 g/t in the third
quarter of 2019. Higher tonnes stacked at a lower grade are
associated with the transition of primary mining from the higher
grade lower levels of Mackay 5 in the third quarter of 2019 to the
upper levels of Mackay 4, which transitioned from stripping to
primary ore delivery in the third quarter of 2020.
For the nine months ended September 30,
2020, 16.8 million tonnes of ore was stacked at a gold grade
of 0.35 g/t compared to approximately 19.0 million tonnes of ore
stacked at a gold grade of 0.41 g/t for the first nine months of
2019. The reduction in both ore tonnes stacked and gold grade are
in line with the mine plan and associated with the transition from
mining Mackay 5 ore mining in 2019 to the stripping and mining of
Mackay Phases 4 and 8 in 2020.
During the third quarter of 2020, Marigold produced 49,137
ounces of gold, a decrease of 7% compared to the third quarter of
2019, predominantly due to lower gold grades stacked within the
previous three months. Recoverable ounces stacked in the third
quarter of 2020 and 2019 were 73,595 and 79,306, respectively. The
majority of recoverable ounces stacked in the third quarter of 2020
were at low elevations on the heap leach pads to facilitate faster
leach recovery times.
For the nine months ended September 30,
2020, 157,502 ounces of gold were produced compared to
161,041 ounces of gold over the same period in 2019.
Revenue
Revenue increased by 32% to $98.7
million in the third quarter of 2020 as compared to the
third quarter of 2019 due to an increase of 29% in the average
realized gold price as well as 2% more ounces sold.
Revenue increased 20% for the nine months ending September 30, 2020 as compared to the same period
in the prior year, due to an increase of 28% in the average
realized gold price slightly offset by 6% fewer ounces sold.
Operating Costs
Cash costs and AISC per ounce of gold sold are non-GAAP
financial measures. Please see the discussion under "Cautionary
Note Regarding Non-GAAP Measures".
In the third quarter of 2020, cash costs per ounce of gold sold
were $899, a 9% increase compared to
the third quarter of 2019, primarily due to an increase in per unit
royalty costs due to higher realized gold prices and the impact of
lower grades mined which has resulted in a higher cost per ounce in
inventory.
In the third quarter of 2020, AISC per ounce of gold sold was
$1,243, a 13% increase compared to
the third quarter of 2019, due to higher cash costs and an increase
in capital expenditures per gold ounce sold. Capital expenditures
were higher than in the third quarter of 2019 primarily due to mine
equipment purchases as well as increased leach pad and dewatering
construction costs. Mine equipment additions included two
replacement haul trucks and support equipment.
Cash costs per ounce of gold sold for the nine months ending
September 30, 2020 were $861, a 5% increase compared to the same period
of 2019, primarily due to an increase in per unit royalty costs due
to higher realized gold prices.
AISC per ounce of gold sold for the nine months ending
September 30, 2020 was $1,297, a 29% increase compared to the same
period of 2019 due to higher cash costs and an increase in capital
expenditures per gold ounce sold. Capital expenditures were higher
than the nine months ending September 30,
2019, primarily due to new mobile mine equipment purchases,
as well as increased leach pad and dewatering construction
costs.
Seabee, Canada
|
Three months ended
September 30
|
Nine months ended
September 30
|
|
|
|
Operating
Data
|
2020
|
2019
|
Change
|
2020
|
2019
|
Change
|
Total ore milled
(t)
|
66,409
|
77,465
|
(14)%
|
155,690
|
256,645
|
(39)%
|
Ore milled per day
(t/day)
|
722
|
842
|
(14)%
|
568
|
940
|
(40)%
|
Gold mill feed grade
(g/t)
|
10.17
|
12.39
|
(18)%
|
10.27
|
10.16
|
1%
|
Gold recovery
(%)
|
98.6
|
98.8
|
—
|
98.3
|
98.2
|
—
|
|
|
|
|
|
|
|
Gold produced
(oz)
|
20,249
|
32,345
|
(37)%
|
49,770
|
90,068
|
(45)%
|
Gold sold
(oz)
|
19,900
|
28,278
|
(30)%
|
47,614
|
80,553
|
(41)%
|
|
|
|
|
|
|
|
Average realized gold
price
($/oz sold)
|
$
|
1,913
|
$
|
1,480
|
29%
|
$
|
1,739
|
$
|
1,372
|
27%
|
|
|
|
|
|
|
|
Cash costs ($/oz
sold) (1)
|
$
|
538
|
$
|
373
|
44%
|
$
|
542
|
$
|
452
|
20%
|
AISC ($/oz sold)
(1)
|
$
|
988
|
$
|
715
|
38%
|
$
|
1,035
|
$
|
830
|
25%
|
|
|
|
|
|
|
|
Financial Data
($000s)
|
|
|
|
|
|
|
Revenue
|
$
|
38,035
|
$
|
41,331
|
(8)%
|
$
|
82,732
|
$
|
109,999
|
(25)%
|
Production
costs
|
$
|
10,677
|
$
|
10,426
|
2%
|
$
|
25,725
|
$
|
36,187
|
(29)%
|
Depletion and
depreciation
|
$
|
7,167
|
$
|
8,771
|
(18)%
|
$
|
17,085
|
$
|
26,244
|
(35)%
|
Income from mine
operations
|
$
|
20,191
|
$
|
22,134
|
(9)%
|
$
|
39,922
|
$
|
47,568
|
(16)%
|
Exploration and
evaluation expenses
|
$
|
1,108
|
$
|
2,131
|
(48)%
|
$
|
4,020
|
$
|
7,300
|
(45)%
|
Capital
expenditures
|
$
|
10,371
|
$
|
8,759
|
18%
|
$
|
25,555
|
$
|
27,613
|
(7)%
|
(1)
|
We report the
non-GAAP financial measures of cash costs and AISC per ounce of
gold sold to manage and evaluate operating performance at Seabee.
For further information, please refer to "Cautionary Note Regarding
Non-GAAP Measures".
|
Production
In response to the COVID-19 pandemic, Seabee was voluntarily
placed into temporary care and maintenance on March 25, 2020 as a precautionary measure to
protect our employees, their families and our communities. Through
this period, employees maintained the mine in a state of
operational readiness.
In June 2020, a phased restart of
the operation commenced. The first phase focused on underground
ventilation raises and capital development within the mine while
COVID-19-related protocols were assessed. Limited ore extraction
was initiated at the end of June. In early July, we commenced the
second phase, which involved increasing underground development
rates and mine production while continuing to monitor COVID-19
related protocols. In August, the third and final phase commenced,
which involved a restart of milling operations and ramp-up to full
mine production with a complete workforce, while continuing to
maintain effective COVID-19-related protocols. The mine has
operated at full capacity since that date.
For the three months ended September 30,
2020, Seabee produced 20,249 ounces of gold, a 37% decrease
compared to the same period in the prior year, reflecting that the
mill restarted operations in early August
2020. Mill feed grade was 10.17 g/t gold during the three
months ended September 30, 2020, an
18% decrease compared to the same period in the prior year, due to
the natural sequencing of the mine plan. Mill throughput achieved a
monthly record 1,271 tonnes per day in September 2020 and ore stockpile at the end of
the third quarter totaled over 17,000 tonnes.
For the nine months ended September 30,
2020, Seabee produced 49,770 ounces of gold, a 45% decrease
compared to the same period in the prior year, reflecting that the
mill shut and restarted operations in March and August 2020, respectively, whereas the mill was
fully operational in 2019.
Revenue
Revenue decreased by 8% in the third quarter of 2020 as compared
to the same period in the prior year, due to a 30% decrease in gold
ounces sold compared to the third quarter of 2019, largely offset
by an increase of 29% in the average realized gold price. The
decrease in sales volume was caused by lower production associated
with the temporary suspension of milling operations during the
beginning of the third quarter of 2020 in response to the COVID-19
pandemic.
Revenue decreased by 25% for the nine months ended September 30, 2020 as compared to the same period
in the prior year, due to a 41% decrease in gold ounces sold
compared to the same period of 2019, partially offset by an
increase of 27% in the average realized gold price. The decrease in
sales volume was caused by lower production associated with the
temporary suspension of milling operations for all of the second
quarter and beginning of the third quarter of 2020 in response to
the COVID-19 pandemic.
Operating Costs
Cash costs and AISC per ounce of gold sold are non-GAAP
financial measures. Please see the discussion under "Cautionary
Note Regarding Non-GAAP Measures".
In the third quarter of 2020, cash costs per ounce of gold sold
were $538, a 44% increase compared to
the third quarter of 2019. Third quarter 2019 cash costs were
positively impacted by ounces recovered from carbon and certain
cost reclassifications. The increase is also due to the impact of
lower gold sales volume, coupled with incremental costs associated
with the COVID-19 pandemic and fixed general and administrative
expenses associated with ramp up to full production. Expenditures
incurred while Seabee's operations were temporarily suspended were
classified as care and maintenance expenses.
In the third quarter of 2020, AISC per ounce of gold sold was
$988, a 38% increase compared to the
third quarter of 2019, due to higher cash costs and an increase in
capital expenditures per gold ounce sold due to lower ounces sold
in the quarter. Capital expenditures related mainly to an increase
in underground capital development completed during the temporary
shutdown and the tailings expansion project. The tailings expansion
project contractor resumed full construction activities in early
August 2020.
For the nine months ended September 30,
2020, cash costs per ounce of gold sold were $542, a 20% increase compared to the same period
in the prior year, due to higher unit mining and general and
administrative costs, driven by the temporary suspension of
operations for all of the second quarter and beginning of the third
quarter, as well as incremental costs associated with the COVID-19
pandemic.
For the nine months ended September 30,
2020, AISC per ounce of gold sold was $1,035, a 25% increase, due to higher cash costs
and an increase in capital expenditures per gold ounce sold.
Capital expenditures incurred to date in 2020 are in-line with
budget.
Puna, Argentina
(amounts presented on 100%
basis)
|
Three months ended
September 30
|
Nine months ended
September 30
|
|
|
|
Operating
Data
|
2020
|
2019
|
Change
|
2020
|
2019
|
Change
|
Total material mined
(kt)
|
902
|
3,116
|
(71)%
|
2,945
|
9,024
|
(67)%
|
Waste removed
(kt)
|
722
|
2,531
|
(71)%
|
2,439
|
8,099
|
(70)%
|
Strip
ratio
|
4.0
|
4.3
|
(7)%
|
4.8
|
8.8
|
(45)%
|
|
|
|
|
|
|
|
Ore milled
(kt)
|
284
|
336
|
(15)%
|
703
|
933
|
(25)%
|
Silver mill feed
grade (g/t)
|
150
|
165
|
(9)%
|
154
|
188
|
(18)%
|
Lead mill feed grade
(%)
|
0.71
|
0.81
|
(12)%
|
0.77
|
0.87
|
(11)%
|
Zinc mill feed grade
(%)
|
0.57
|
0.60
|
(5)%
|
0.51
|
0.51
|
—
|
Silver recovery
(%)
|
93.5
|
93.5
|
—
|
94.2
|
92.4
|
2%
|
Lead recovery
(%)
|
88.3
|
88.1
|
—
|
89.8
|
84.0
|
7%
|
Zinc recovery
(%)
|
52.4
|
49.3
|
6%
|
51.2
|
48.3
|
6%
|
|
|
|
|
|
|
|
Silver produced ('000
oz)
|
1,280
|
1,664
|
(23)%
|
3,416
|
5,541
|
(38)%
|
Silver sold ('000
oz)
|
1,193
|
1,505
|
(21)%
|
3,651
|
5,111
|
(29)%
|
Lead produced ('000
lb) (1)
|
3,952
|
5,304
|
(25)%
|
10,664
|
15,972
|
(33)%
|
Lead sold ('000 lb)
(1)
|
3,655
|
4,119
|
(11)%
|
11,745
|
14,748
|
(20)%
|
Zinc produced ('000
lb) (1)
|
1,876
|
2,206
|
(15)%
|
4,056
|
5,385
|
(25)%
|
Zinc sold ('000 lb)
(1)
|
1,557
|
2,030
|
(23)%
|
4,141
|
11,005
|
(62)%
|
|
|
|
|
|
|
|
Average realized
silver price ($/oz)
|
$
|
26.69
|
$
|
17.31
|
54%
|
$
|
20.25
|
$
|
15.71
|
29%
|
|
|
|
|
|
|
|
Cash costs ($/oz
silver sold) (2,3)
|
$
|
9.33
|
$
|
14.22
|
(34)%
|
$
|
12.13
|
$
|
11.15
|
9%
|
AISC ($/oz silver
sold) (2,3)
|
$
|
11.26
|
$
|
17.36
|
(35)%
|
$
|
15.03
|
$
|
15.55
|
(3)%
|
|
|
|
|
|
|
|
Financial Data
($000s)
|
|
|
|
|
|
|
Revenue
|
$
|
35,063
|
$
|
31,697
|
11%
|
$
|
75,447
|
$
|
94,126
|
(20)%
|
Production
costs
|
$
|
13,112
|
$
|
22,638
|
(42)%
|
$
|
48,495
|
$
|
68,134
|
(29)%
|
Depreciation and
depletion
|
$
|
4,541
|
$
|
1,351
|
236%
|
$
|
13,031
|
$
|
10,574
|
23%
|
Income from mine
operations
|
$
|
17,410
|
$
|
7,708
|
126%
|
$
|
13,921
|
$
|
15,418
|
(10)%
|
Exploration and
evaluation expense
|
$
|
38
|
$
|
230
|
(83)%
|
$
|
193
|
$
|
295
|
(35)%
|
Capital
expenditures
|
$
|
4,616
|
$
|
4,857
|
(5)%
|
$
|
11,210
|
$
|
28,262
|
(60)%
|
(1)
|
Data for lead
production and sales relate only to lead in lead concentrate. Data
for zinc production and sales relate only to zinc in zinc
concentrate.
|
(2)
|
We report the
non-GAAP financial measures of cash costs and AISC per ounce of
silver sold to manage and evaluate operating performance at Puna.
For further information, please refer to "Cautionary Note Regarding
Non-GAAP Measures".
|
(3)
|
Puna cash costs and
AISC per silver ounce sold include a write-down of metal
inventories to net realizable value of nil and $8.6 million for the
three and nine months ended September 30, 2020, respectively (three
and nine months ended September 30, 2019 - $1.8 million and $2.4
million, respectively).
|
Production
On March 20, 2020, Puna
temporarily suspended operations as a result of government-mandated
restrictions due to the COVID-19 pandemic. Subsequently, the
Government of Argentina reinstated
mining as an essential business activity. During the second quarter
of 2020, a phased restart complying with government regulations and
guidelines was implemented with mining, hauling and milling
operations re-commencing. During the third quarter of 2020,
COVID-19 infection rates in the province of Jujuy escalated,
resulting in further interruptions to operations. In September,
operations were suspended in order to manage camp occupancy,
conduct testing and reduce the risk of transmission.
Due to the significant ore stockpiles at Puna, milling
operations were prioritized over mining operations through
restarts. As a result, tonnes mined in the third quarter of 2020
were impacted due to COVID-19 related interruptions. Mining and
milling activities were operating at expected levels by the
beginning of October.
In the third quarter of 2020, Puna produced 1.3 million ounces
of silver, a 23% decrease compared to the third quarter of 2019,
due to the temporary suspension of operations during September in
response to COVID-19. Ore milled was 0.3 million tonnes, a 15%
decrease compared to the third quarter of 2019 as a result of fewer
operating days. Processed ore contained an average silver grade of
150 g/t, a 9% decrease compared to the third quarter of 2019, but
in-line with the mine plan. When operational, the mill averaged
approximately 4,247 tonnes per day during the third quarter of
2020, demonstrating the improved performance of the plant and
tailings pumping system.
For the nine months ended September 30,
2020, Puna produced 3.4 million ounces of silver, a 38%
decrease compared to the same period in the prior year, due to the
temporary suspension of operations in response to COVID-19 during
most of the second quarter and part of the third quarter of 2020.
Ore milled was 0.7 million tonnes, a 25% decrease compared to the
nine months ended September 30, 2019,
as a result of fewer operating days. Processed ore contained an
average silver grade of 154 g/t, an 18% decrease compared to the
same period in the prior year, but in-line with the mine plan.
Revenue
Revenue for the third quarter of 2020 increased by 11% compared
to the third quarter of 2019, due to a 54% increase in the average
realized silver price in the third quarter of 2020, partially
offset by a 21% decrease in silver ounces sold.
Revenue for the nine months ended September 30, 2020 decreased by 20% compared to
the same period in the prior year, due to a 29% decrease in silver
ounces sold, partially offset by a 29% increase in the average
realized silver price.
Operating Costs
Cash costs and AISC per ounce of silver sold are non-GAAP
financial measures. Please see the discussion under "Cautionary
Note Regarding Non-GAAP Measures".
In the third quarter of 2020, cash costs per ounce of silver
sold were $9.33, a decrease of 34%
compared to the third quarter of 2019, primarily due to lower unit
processing and general and administrative costs as a result of
higher average daily plant throughput. Expenditures incurred during
the quarter that were not related to operating activities were
classified as care and maintenance expenses.
In the third quarter of 2020, AISC per ounce of silver sold was
$11.26, a decrease of 35% compared to
the third quarter of 2019. The decrease in AISC was primarily due
to lower cash costs for the period.
For the nine months ended September 30,
2020, cash costs per ounce of silver sold were $12.13, an increase of 9% compared to the same
period in the prior year. The increase is primarily due to higher
mining unit costs, offset by lower processing and general and
administrative unit costs as a result of higher average daily plant
throughput. Mining costs were higher due to operating
inefficiencies through shut-down and start-up phases and an
increase in maintenance work performed during the temporary
suspensions.
For the nine months ended September 30,
2020, AISC per ounce of silver sold was $15.03, a decrease of 3% compared to the same
period on the prior year, due to 34% lower capital expenditures per
ounce sold, mainly due to lower deferred stripping costs, offset
partially by higher cash costs.
Exploration and Development
We hold a portfolio of prospective exploration tenures across
Turkey, the USA, Canada,
Mexico and Peru, some of which are becoming advanced
projects. We continue to explore and expand our development
pipeline, looking for both near-mine projects that can leverage
existing mine infrastructure and new standalone projects.
Çöpler District Exploration
We take a disciplined approach to exploration at our Çöpler
District and elsewhere, optimizing the historical exploration
database, remapping and reinterpreting data, and judicious drill
testing new targets. Recent discoveries, such as the Saddle
prospect, Çakmaktepe, the Ardich deposit and other advanced
exploration targets, prove the effectiveness of our systemic and
pragmatic approach.
Our capital allocation focus is to fast-track the extension of
Çöpler oxide ore production, along with the mobilization of a
project and development team to deliver the growth potential
identified around the Çöpler District.
The Saddle prospect, Çakmaktepe and the Ardich deposit represent
the next phase of priority as near–mine development projects with
potential to add near-surface ounces to our production profile
within the next two to three years. The current work program
includes definition drilling to understand the Mineral Resource
distribution and provide samples for metallurgical
characterization. For project development, work is underway to
optimize pit designs and advance permitting.
Çöpler (80% owned by SSR Mining)
The operating mine is the foundation for district exploration
activities, with established infrastructure for treating both oxide
and sulfide gold ores.
Commencing in 2017, a Çöpler in–pit exploration program
successfully provided additional oxide ore to the processing
facilities. The in–pit exploration program is ongoing, targeting
both oxide and sulfide ore, with some contribution being included
in the 2020 production schedules. Recently, the in-pit exploration
program identified the possibility of a copper-gold porphyry system
below the Main pit. Drill testing of this target commenced at the
end of the second quarter of 2020 and continued through the third
quarter. Initial drill results are encouraging.
The potential for heap leach pad constraints has been eliminated
with the progression of an approximate 25 million tonne Çöpler heap
leach pad expansion, that will be built in phases over the coming
years as required for the mine plan.
Çöpler Saddle (80% owned by SSR Mining)
The Saddle prospect borders the western flank of Çöpler as a two
km long north-south shear zone passing through West pit. The
Company announced assays for 50 drill holes at the Saddle prospect
in September 2019, which relate to mineralization outside
current Mineral Resources.
Çakmaktepe Mine (50% owned by SSR Mining)
Connected by a haul road, Çakmaktepe lies five km east of our
processing infrastructure. In 2019, Phase 1 was mined. Exploration
is focused on the connection to Ardich which is immediately
adjacent to the northeast of Çakmaktepe.
Ardich Gold Deposit (80% owned by SSR Mining)
The Ardich gold deposit is six km northeast of the Çöpler
processing facilities and is accessible by the nearby haul road to
Çakmaktepe. The deposit mostly forms a tabular flat-lying gold-rich
oxide and sulfide zone at the contact between an overlying
assemblage of ultramafic rocks and underlying clastic and limestone
rock types. The deposit is predominantly oxide mineralization.
During the third quarter of 2020, activities included both
step-out and infill drilling to increase confidence in the Mineral
Resource and provide data on metallurgical and geotechnical
characteristics. The 2020 Çöpler technical report, planned to
be issued in the fourth quarter of 2020, will include a preliminary
economic assessment for a starter pit option for Ardich. Drilling
continues at Ardich as the resource remains open.
The Mavialtin Porphyry Belt (50% owned by SSR Mining)
The Mavialtin Porphyry Belt represents at least four gold-copper
porphyry type exploration targets over a seven by 20 km area from
Çakmaktepe in the north to the deposit at Mavidere in the south. In
February 2020, positive drill results
were announced for Mavidere, Findiklidere, and Aslantepe. The
mineralization is close to surface and appears to be low in
deleterious elements.
The exploration and future development strategy for Mavialtin is
two–fold:
- Expand the known areas of mineralization, while concurrently
making new discoveries, to economically justify a stand-alone mine;
and/or
- Develop a Mavialtin Complex where various smaller deposits
could be processed through a central facility.
Mavialtin's future developmental potential and optionality are
illustrated by:
- Proximity to existing operations/infrastructure in the Çöpler
Gold Mining District;
- Near-surface nature of the mineralization;
- Length of the mineralized intercepts which indicate the
potential for volume; and
- Some high-grade intercepts
Drill testing of Findiklidere and Saridere continued through the
third quarter of 2020.
Demirmağara Prospect (80% owned by SSR Mining)
The Demirmağara prospect has both epithermal mineralization and
evidence of porphyry alteration with areas of elevated soil and
rock, gold and copper geochemistry.
Similar to the other prospects in the portfolio, our exploration
team has taken a very disciplined approach to exploration in
Demirmağara, such as data mining our historical exploration
database, remapping, reinterpretation and conservative drill
confirmation of models, resulting in a re-interpretation of
Demirmağara. Subsequently, we discovered a covered porphyry
stockwork system near surface which was identified by trench
sampling revealing potassic granodiorites. We have received
forestry permits and plans to drill test the copper gold porphyry
target.
Copper Hill Copper Exploration Prospect (50% owned by SSR
Mining)
In April 2020, encouraging drill
results from the Copper Hill exploration prospect in the Black Sea
region (northeast Turkey) were
released by the Company. The intercepts were high grade, close to
surface and appear to be very low in contaminates. The drilling
pattern was constrained to areas previously permitted for drilling.
Additional diamond drilling planned in 2020, to test the extension
of the mineralization, was deferred due to COVID-19 related
issues.
We own 50% of the Copper Hill copper exploration prospect in a
joint venture with our long-term partner, Lidya Mining. The Lidya
Mining exploration team made the discovery of the Copper Hill
prospect, and is now preparing to drill at the Copper Hill prospect
in the 2021 summer drill season.
Turkey Regional Exploration
We hold a significant portfolio of highly prospective
exploration land holdings across Turkey, some of which are progressively
advancing to prospective projects. Drill testing of one of these
targets, a porphyry system in western Turkey, commenced in the third quarter of
2020. Other fieldwork advanced planning for future drill testing of
highly prospective gold mineralization approximately 40 km to the
southwest of Çöpler.
Marigold Exploration
Recognizing the land limitations in advance of the previous
exploration drilling program at Red Dot, we implemented a land
acquisition strategy that added 11,740 hectares between 2015 and
2019.
At Valmy, there are three
historic pits mined by previous owners between 2002 and 2005, which
produced approximately 196,000 ounces of gold. We have been
expanding Mineral Resources around these pits since acquisition in
2015. We received assays from 19 holes on Valmy targets at East Basalt and Crossfire
during the third quarter of 2020, with positive results that are
expected to provide Mineral Resources additions.
At Trenton Canyon, there is a historical mineral resource area
and three mined pits developed by previous owners between 1996 and
2005, which produced approximately 290,000 ounces of gold.
Since acquisition in 2019, we have been conducting exploration to
confirm the historic drill database validity and expand known
mineralization areas. The main objective is to define an open-pit
oxide hosted gold Mineral Resource amenable to heap leach
processing. We have received assays from 18 holes drilled on
targets at West and South Pits during the third quarter of 2020,
with encouraging results to support definition of Mineral
Resources.
To expand the sulfide intercepts reported in May 2020, follow-up drilling indicates that this
mineralization trends east-west and is inclined steeper than
initial interpretation. The orthogonal thickness is believed to be
10 to 30 meters, where the reported intersected (down hole)
lengths, range from 77 to 99 meters.
Predecessor companies at Buffalo Valley mined a small open pit,
which produced approximately 50,000 ounces of gold between 1987 and
1990. The previous owner worked to advance the project and stated a
historical estimate of 418,000 ounces of gold (20 million tonnes at
an average gold grade of 0.65 g/t) in 2019. Following acquisition
in mid-2019, our work has focused on verifying historical
information and assessing the potential for oxide hosted gold
Mineral Resources.
Geological mapping continued through the third quarter of 2020,
and we completed a seismic geophysical survey south of the Basalt
and Antler open pits. Once compiled, we will validate the
interpretation with the current core drilling results that have
identified the favourable Comus Formation beneath the property's
southern half. This work aims to establish a method of mapping the
3D structure of the main rock assemblages beneath the entire
property to identify targets with potential for high-grade
underground sulfide Mineral Resources.
Canada Exploration
We control two separate but contiguous claim groupings in
Saskatchewan, Canada: Seabee and
the Amisk project 140 km southeast of Seabee.
Seabee
Our mineral tenures comprise a 100%-owned parcel that are
referred to as Seabee claims and an earn-in option parcel where we
have the right to earn up to an 80% interest referred to as the
Fisher Option. Since 2016, our growth and development strategy has
been to increase production by optimizing the milling and mining
processes and exploring new mill feed sources.
At Santoy, recent exploration success on Gap Hanging Wall ("Gap
HW") encouraged us to establish underground access to the zone on
the 46 level, which is 450 meters below surface. Gap HW has
excellent potential to provide additional ore feed and is
approximately 220 meters in the 8A mining area's hanging wall.
Sheeted quartz veins in siliceous intrusive rock host gold
mineralization at Gap HW, and the metallurgy is similar to other
ores from Santoy. The excavation into the Mineral Resource is
intended to help confirm structural interpretation, continuity and
grades as part of our technical work to convert to Mineral
Reserves. We mined 9,500 tonnes of ore, confirming continuity with
grades slightly lower than block estimates.
After the temporary COVID-19 suspension, underground and surface
drilling at Seabee recommenced in July and September, 2020,
respectively. The focus for the third quarter of 2020 remained on
infill and extension drilling of the Gap HW as well as exploring
the prospective Santoy hanging wall ("Santoy HW") target for
additional resources. During the third quarter, we drilled 24
underground holes and an additional four holes from surface. We
continue to receive resource grade intercepts on the Gap HW infill
and step-out drilling program.
For the remainder of 2020, we intend to continue to focus on
infill drilling and lateral development in support of Mineral
Resource to Mineral Reserve conversion and assessment of mining
methods for the Gap HW zone. Exploration to extend the area of
resource grade intercepts in the Santoy HW domain is expected to
continue to define further Mineral Resource additions.
The Fisher property is contiguous to Seabee claims and in
May 2020, we reported encouraging
drill results from gold prospects at Mac North, Yin, Abel Lake and Aurora. By the end of the third
quarter of 2020, we had mobilized a drill and crew to Mac North
with the objective to expand the mineralization discovered and
reported earlier. Results from the planned 3,000 meter program will
be released once completed.
Amisk
The Amisk property is 39,882 hectares and hosts an Indicated
Mineral Resource estimate of 827,000 gold equivalent ounces (30.15
million tonnes at an average gold equivalent grade of 0.85 g/t).
Proterozoic volcano-sedimentary rock assemblages, prospective for
both base metal massive sulfide deposits and orogenic gold
deposits, underlie the area. Our plan for this property is to
investigate its potential for lode gold mineralization on the
claim's western portion. During the third quarter, detailed mapping
and prospecting of the numerous gold showings on the property was
completed.
Puna Exploration
There were no exploration activities at Puna during the
period.
Outlook
This section provides management's production, cost, capital,
exploration and development expenditure estimates for 2020. These
are "forward-looking statements" and subject to the "Cautionary
Note Regarding Forward-Looking Statements". Cash costs and AISC per
ounce of gold and silver sold are non-GAAP financial measures.
Please see the discussion under "Cautionary Note Regarding Non-GAAP
Measures".
On September 18, 2020, we updated
our full year 2020 guidance following the successful completion of
the merger with Alacer. The updated outlook also reflects the
expected COVID-19 related impacts to operations at Seabee and
Puna.
For fiscal 2020, we expect to produce, on a consolidated basis,
680,000 to 760,000 gold equivalent ounces from our four operating
mines at consolidated AISC of $965 to
$1,040 per gold equivalent ounce.
Operating Guidance
(100%) (1)
|
|
Çöpler
(2)
|
Marigold
|
Seabee
|
Puna
|
Other
|
Consolidated
|
Gold
Production
|
koz
|
310 - 360
|
225 - 240
|
80 - 90
|
—
|
—
|
615 - 690
|
Silver
Production
|
Moz
|
—
|
—
|
—
|
4.9 - 5.3
|
—
|
4.9 - 5.3
|
Gold Equivalent
Production
|
koz
|
310 -
360
|
225 -
240
|
80 -
90
|
66 -
72
|
—
|
680 -
760
|
Cash Cost per Ounce
(3)
|
$/oz
|
590 - 640
|
810 - 860
|
450 - 500
|
11.00 -
12.50
|
—
|
665 - 720
|
Sustaining
Capital
Expenditures
(4)
|
$M
|
40
|
55
|
15
|
15
|
—
|
125
|
Capitalized Stripping
/ Capitalized
Development
|
$M
|
2
|
25
|
10
|
7
|
—
|
44
|
Sustaining
Exploration
Expenditures
|
$M
|
4
|
4
|
1
|
—
|
—
|
9
|
General &
Administrative (5)
|
$M
|
—
|
—
|
—
|
—
|
25 - 30
|
25 - 30
|
Share-based
Compensation (5)
|
$M
|
—
|
—
|
—
|
—
|
20 - 25
|
20 - 25
|
All-In Sustaining
Cost per Ounce (3)
|
$/oz
|
710 -
760
|
1,170 -
1,230
|
770 -
820
|
15.00 -
17.00
|
—
|
965 -
1,040
|
Growth Capital
Expenditures
|
$M
|
40
|
—
|
4
|
6
|
7
|
57
|
Growth Exploration
Expenditures
|
$M
|
13
|
12
|
8
|
—
|
—
|
33
|
Total Growth
Capital
|
$M
|
53
|
12
|
12
|
6
|
7
|
90
|
(1)
|
Figures may not add
due to rounding.
|
(2)
|
Figures are reported
on a 100% basis. Çöpler is 80% owned by SSR Mining.
|
(3)
|
We report the
non-GAAP financial measures of cash costs and AISC per ounce of
gold and silver sold to manage and evaluate operating performance
at Çöpler, Marigold, Seabee and Puna. Refer to "Cautionary Note
Regarding Non-GAAP Measures".
|
(4)
|
Excludes sustaining
exploration expenditures and capitalized stripping and development.
Includes $9 million oxygen plant lease payment at
Çöpler.
|
(5)
|
Figures represent the
actual and projected combined expenditures and accruals for both
Alacer pre-acquisition and SSR Mining for full year 2020 without
considering financial reporting impacts of the acquisition. General
and administrative expenses exclude share-based compensation, which
is reported separately.
|
(6)
|
All figures in U.S.
dollars, unless otherwise noted. Gold equivalent figures for 2020
operating guidance are based on a gold-to-silver ratio of 74:1.
Cash costs and capital expenditures guidance is based on an oil
price of $40 per barrel and an exchange rate of 1.35 Canadian
dollars to one U.S. dollar and 7 Turkish lira to one U.S.
dollar.
|
Production for the second half of the year is expected to be 55%
to 60% weighted towards the fourth quarter due to both Seabee and
Puna ramping up operations in the third quarter following COVID-19
shutdowns, stacking of higher-grade ounces later in the year at
Marigold, and higher processed grades during the fourth quarter at
Çöpler in line with the mine plan.
In addition to the impact of higher anticipated fourth quarter
production, free cash flow generation is also expected to be
heavily weighted to the fourth quarter due to the timing of the
following expenditures in the third quarter:
- Transaction, integration and severance payments;
- Mine equipment and leach pad spend at Marigold;
- Tailings facility expansion spend at Seabee;
- Puna ore transportation truck purchases; and
- Puna working capital build on concentrate inventories.
Capital Returns
Capital Allocation
Our capital allocation strategy is to balance continuing
investment in high-return growth, maintaining peer leading
financial strength, and providing sustainable capital returns to
shareholders.
In recognition of our position as a leading and sustainable free
cash flow generator in the intermediate gold sector, it is our
intention to return excess attributable free cash flow to
shareholders through a two-tiered capital return structure. While a
recurring quarterly dividend is expected to be the primary method
of capital return, we will periodically evaluate supplementing this
dividend from excess attributable free cash flow in the form of
incremental dividends and/or share buyback programs.
Dividend Announcement and Structure
We are pleased to announce that our Board of Directors approved
the initiation of a quarterly dividend ("Base Dividend") of
$0.05 per common share commencing in
the first quarter of 2021. On an annualized basis, the Base
Dividend represents a yield of approximately 1.0% based on the
20-day volume weighted average price as of November 11, 2020.
Periodically, the Board will consider supplementing the Base
Dividend should the realized gold price remain above our Mineral
Reserves gold price. Any such supplemental dividend ("Supplemental
Dividend") will be assessed using the trailing 12-month
attributable excess free cash flow.
This dividend structure is intended to recognize SSR Mining as
one of the highest free cash flow generating intermediate producers
and provides greater alignment with the interests of shareholders
in stronger gold price environments. Furthermore, we may
periodically evaluate initiating a share buyback program in lieu of
the Supplemental Dividend depending on prevailing market conditions
and equity valuations. The declaration of any dividend is at the
discretion of SSR Mining's Board of Directors. The decision to
declare a Supplemental Dividend will be based on the Company's
financial results, sustaining and growth capital investment
requirements, future business outlook and other factors deemed
relevant.
The dividend will be designated as an "eligible dividend" for
Canadian federal and provincial income tax purposes. Dividends paid
to shareholders who are non-residents of Canada will be subject to Canadian
non-resident withholding taxes.
Financial and Operating Highlights
A summary of our consolidated financial and operating results
for the three and nine months ended September 30, 2020 and 2019 are presented
below:
(in thousands of US
dollars, except per share data)
|
Three months ended
September 30,
|
Nine months ended
September 30,
|
|
2020
|
2019
|
2020
|
2019
|
Financial
Results
|
|
|
|
|
Revenue
|
$
|
225,412
|
$
|
147,848
|
$
|
482,360
|
$
|
429,247
|
Income from mine
operations
|
$
|
83,226
|
$
|
51,906
|
$
|
162,186
|
$
|
111,970
|
Gross margin
(2)
|
37%
|
35%
|
34%
|
26%
|
Operating
income
|
$
|
52,725
|
$
|
39,891
|
$
|
82,380
|
$
|
79,110
|
Net income
|
$
|
25,113
|
$
|
18,132
|
$
|
42,813
|
$
|
36,278
|
Net income
attributable to equity holders of SSR
Mining
|
$
|
26,754
|
$
|
20,741
|
$
|
44,454
|
$
|
37,836
|
Basic attributable
income per share
|
$
|
0.19
|
$
|
0.17
|
$
|
0.35
|
$
|
0.31
|
Adjusted attributable
net income (1)
|
$
|
67,841
|
$
|
35,778
|
$
|
104,788
|
$
|
55,061
|
Adjusted basic
attributable income per share (1)
|
$
|
0.49
|
$
|
0.29
|
$
|
0.82
|
$
|
0.45
|
|
|
|
|
|
Cash generated by
operating activities
|
$
|
44,099
|
$
|
54,780
|
$
|
131,232
|
$
|
93,927
|
Cash generated by
(used in) investing activities
|
$
|
245,106
|
$
|
(29,308)
|
$
|
234,889
|
$
|
(108,025)
|
Cash (used in)
generated by financing activities
|
$
|
(17,077)
|
$
|
294
|
$
|
(136,266)
|
$
|
72,443
|
|
|
|
|
|
Operating
Results
|
|
|
|
|
Gold produced
(oz)
|
88,972
|
85,313
|
226,858
|
251,109
|
Gold sold
(oz)
|
99,495
|
78,928
|
231,626
|
246,424
|
Silver produced ('000
oz)
|
1,280
|
1,664
|
3,416
|
5,541
|
Silver sold ('000
oz)
|
1,193
|
1,505
|
3,651
|
5,111
|
Lead produced ('000
lb) (4)
|
3,952
|
5,304
|
10,664
|
15,972
|
Lead sold ('000 lb)
(4)
|
3,655
|
4,119
|
11,745
|
14,748
|
Zinc produced ('000
lb) (4)
|
1,876
|
2,206
|
4,056
|
5,385
|
Zinc sold ('000 lb)
(4)
|
1,557
|
2,030
|
4,141
|
11,005
|
|
|
|
|
|
Gold equivalent
produced (oz) (5)
|
106,838
|
104,775
|
267,529
|
315,622
|
Gold equivalent sold
(oz) (5)
|
115,312
|
95,112
|
271,315
|
300,586
|
|
|
|
|
|
Average realized gold
price ($/oz sold) (1)
|
$
|
1,914
|
$
|
1,480
|
$
|
1,758
|
$
|
1,364
|
Average realized
silver price ($/oz sold) (1)
|
$
|
26.69
|
$
|
17.31
|
$
|
20.25
|
$
|
15.71
|
|
|
|
|
|
Cash cost per gold
equivalent ounce sold (1, 5, 6)
|
$
|
735
|
$
|
759
|
$
|
807
|
$
|
750
|
AISC per gold
equivalent ounce sold (1, 5, 6)
|
$
|
1,034
|
$
|
1,136
|
$
|
1,255
|
$
|
1,089
|
|
|
|
|
|
Financial
Position
|
September 30,
2020
|
December 31,
2019
|
Cash and cash
equivalents
|
$
|
733,571
|
$
|
503,647
|
Current
assets
|
$
|
1,238,463
|
$
|
899,662
|
Total
assets
|
$
|
5,081,054
|
$
|
1,750,107
|
Current
liabilities
|
$
|
230,525
|
$
|
234,171
|
Total
liabilities
|
$
|
1,276,523
|
$
|
616,153
|
Working capital
(3)
|
$
|
1,007,938
|
$
|
665,491
|
(1)
|
We report non-GAAP
financial measures including adjusted attributable net income,
adjusted basic attributable income per share, cash costs and AISC
per ounce of precious metal sold to manage and evaluate our
operating performance at our mines. See "Cautionary Note Regarding
Non-GAAP Measures".
|
(2)
|
Gross margin is
defined as income from mine operations divided by
revenue.
|
(3)
|
Working capital is
defined as current assets less current liabilities.
|
(4)
|
Data for lead
production and sales relate only to lead in lead concentrate. Data
for zinc production and sales relate only to zinc in zinc
concentrate.
|
(5)
|
Gold equivalent
ounces have been established using the average realized metal
prices per ounce of precious metals sold in the period and applied
to the recovered silver metal content produced by the mines. Zinc
and lead production are not included in gold equivalent ounces
produced.
|
(6)
|
Puna cash costs and
AISC per silver ounce sold include a write-down of metal
inventories to net realizable value of nil and $8.6 million for the
three and nine months ended September 30, 2020, respectively (three
and nine months ended September 30, 2019 - $1.8 million and $2.4
million, respectively).
|
Qualified Persons
The scientific and technical information contained in this news
release relating to Çöpler has been reviewed and approved by
Robert L. Clifford and Dr.
Cengiz Y. Demirci, each of whom is a
qualified person under National Instrument 43-101 - Standards of
Disclosure for Mineral Projects ("NI 43-101"). Mr. Clifford is our
Director, Open Pit Mine Planning and Dr. Demirci is our Vice
President, Exploration. The scientific and technical information
contained in this news release relating to Marigold has been
reviewed and approved by Greg Gibson, P.E., and James N. Carver, each of whom is a SME
Registered Member and a qualified person under NI 43-101. Mr.
Gibson is our General Manager and Mr. Carver is our Exploration
Manager at Marigold. The scientific and technical information
contained in this news release relating to Seabee has been reviewed
and approved by Samuel Mah, P.Eng.,
and Jeffrey Kulas, P. Geo., each of
whom is a qualified person under NI 43-101. Mr. Mah is our
Director, Underground Mine Planning, and Mr. Kulas is our Manager
Geology, Mining Operations at Seabee. The scientific and technical
information contained in this news release relating to Puna has
been reviewed and approved by Robert
Gill, P.Eng. and F. Carl
Edmunds, P. Geo., each of whom is a qualified person under
NI 43-101. Mr. Gill is our General Manager at Puna and Mr. Edmunds
is our employee.
Management Discussion & Analysis and Conference
Call
This news release should be read in conjunction with our
unaudited Condensed Consolidated Interim Financial Statements and
our MD&A as filed with the Canadian Securities Administrators
and available at www.sedar.com or our website at
www.ssrmining.com.
- Conference call and webcast: Thursday,
November 12, 2020, at 5:00 pm
EST.
Toll-free in U.S. and
Canada:
|
+1 (800)
319-4610
|
All other
callers:
|
+1 (416)
915-3239
|
Webcast:
|
http://ir.ssrmining.com/investors/events
|
- The conference call will be archived and available on our
website. Audio replay will be available for two weeks by
calling:
Toll-free in U.S. and
Canada:
|
+1 (855) 669-9658,
replay code 5448
|
All other
callers:
|
+1 (412) 317-0088,
replay code 5448
|
About SSR Mining
SSR Mining Inc. is a leading, free cash flow focused
intermediate gold company with four producing assets located in the
USA, Turkey, Canada, and Argentina, combined with a global pipeline of
high-quality development and exploration assets in the USA, Turkey,
Mexico, Peru, and Canada. In 2019, the four operating assets
produced over 720,000 ounces of gold and 7.7 million ounces of
silver.
SSR Mining's diversified asset portfolio is comprised of high
margin, long-life assets along several of the world's most prolific
precious metal districts including the Çöpler mine along the
Tethyan belt in Turkey; the
Marigold mine along the Battle
Mountain-Eureka trend in
Nevada, USA; the Seabee mine along
the Trans-Hudson Corridor in Saskatchewan, Canada; and the Puna mine
along the Bolivian silver belt in Jujuy, Argentina. SSR Mining has an experienced
leadership team with a proven track record of value creation.
Across SSR Mining, the team has expertise in project construction,
mining (open pit and underground), and processing (pressure
oxidation, heap leach, and flotation), with a strong commitment to
health, safety and environmental management.
SSR Mining intends to leverage its strong balance sheet and
proven track record of free cash flow generation as foundations to
organically fund growth across the portfolio and to facilitate
superior returns to shareholders.
SSR Mining is listed under the ticker symbol SSRM on the NASDAQ
and the TSX, and SSR on the ASX.
SSR Mining Contacts:
F. Edward
Farid, Executive Vice President, Chief Corporate Development
Officer
Michael McDonald, Director,
Corporate Development & Investor Relations
SSR Mining Inc.
E-Mail: invest@ssrmining.com
Phone: +1 (888) 338-0046 or +1 (604) 689-3846
To receive SSR Mining's news releases by e-mail, please
register using the SSR Mining website at www.ssrmining.com.
Cautionary Note Regarding Forward-Looking
Statements
This news release contains forward-looking information within
the meaning of Canadian securities laws and forward-looking
statements within the meaning of the U.S. Private Securities
Litigation Reform Act of 1995 (collectively, "forward-looking
statements"). All statements, other than statements of historical
fact, are forward-looking statements.
Generally, forward-looking statements can be identified by
the use of words or phrases such as "expects," "anticipates,"
"plans," "projects," "estimates," "assumes," "intends," "strategy,"
"objectives," "potential," "believes," or variations thereof, or
stating that certain actions, events or results "may," "could,"
"would," "might" or "will" be taken, occur or be achieved, or the
negative of any of these terms or similar expressions. The
forward-looking statements in this news release relate to, among
other things: forecasts; outlook; timing of production; our
intention to return excess attributable free cash flow to
shareholders; the timing and implementation of the dividend policy;
the granting of any Supplemental Dividends or the implementation of
any share buyback program or other supplements to the Base
Dividend; statements regarding plans or expectations for the
declaration of future dividends and the amount thereof; future cash
costs and AISC per payable ounce of gold, silver and other metals
sold; the prices of gold, silver and other metals; our ability to
discover new areas of mineralization, to add Mineral Reserves,
including establishing a new Mineral Reserves estimate at Gap HW at
Seabee by year-end 2020, and to define additional Mineral
Resources, including the discovery of additional Mineral Resources
at Trenton Canyon, Valmy, East
Basalt, and Crossfire; the continued construction of our new leach
pad at Marigold, including the expected completion and timing
thereof; the timing and extent of capital investment at our
operations; the timing and extent of capitalized stripping at our
operations; the timing of production and production levels and our
expected drill programs at each of Marigold, Seabee and Puna,
including the estimated mine life at each of these operations;
production for the second half of the year being weighted towards
the fourth quarter due to both Seabee and Puna ramping up
operations following COVID-19 shutdowns, stacking of higher-grade
ounces later in the year at Marigold and higher processed grades
during the fourth quarter at Çöpler; free cash flow generation
being heavily weighted to the fourth quarter due to the timing of
certain expenditures; the results of the 2020 Çöpler technical
report, including the timing and preliminary capital estimate for
the proposed flotation circuit, the impact of the proposed
flotation circuit on total sulfide plant throughput and gold
production and the results of production and exploration generally;
the impact of the COVID-19 outbreak on our business and financial
condition, including the ability to continue operations at Seabee
and Puna based on the implementation of our phased restart plans;
the timing, focus and results of our exploration and development
programs, including our ability to achieve certain exploration
objectives at Marigold and Seabee and our ability to fast track the
extension at Çöpler; Çöpler and Marigold continuing to operate with
limited impact from COVID-19, including exploration activities
continuing as planned; current financial resources being sufficient
to carry out plans, commitments and business requirements for the
next twelve months; movements in commodity prices not impacting the
value of any financial instruments; estimated production rates for
gold, silver and other metals produced by us; the estimated cost of
sustaining capital; ongoing or future development plans and capital
replacement; estimates of expected or anticipated economic returns
from our mining projects, including future sales of metals,
concentrate or other products produced by us and the timing
thereof; and our plans and expectations for our properties and
operations.
These forward-looking statements are subject to a variety of
known and unknown risks, uncertainties and other factors that could
cause actual events or results to differ from those expressed or
implied, including, without limitation, the following: the risk
that we are unable to implement the dividend policy, or that
dividend payments thereunder are reduced, suspended or cancelled;
uncertainty of production, development and exploration plans and
cost estimates for Çöpler, Marigold, Seabee and Puna and our
projects, including as a result of the COVID-19 pandemic; the
continued development and resumption of operations at Seabee and
Puna; disruptions to our supply chain, customers and workforce due
to the COVID-19 outbreak; the responses of the relevant governments
to the COVID-19 outbreak not being sufficient to contain the impact
of the COVID-19 outbreak; an economic recession or downturn as a
result of the COVID-19 outbreak that materially adversely affects
our operations or liquidity position; the ability to successfully
integrate the acquisition of Alacer; transaction, integration and
severance payments in connection with the transaction, including
the risk of unanticipated liabilities, unanticipated costs and the
loss of key employees; our ability to replace Mineral Reserves;
metal price, commodity price (including oil price) and exchange
rate fluctuations; royalty expenses; political or economic
instability and unexpected regulatory changes; changes in global or
regional consumption, including changes in the supply or demand for
precious metals and the availability and costs of metal
substitutes; speculative activities; currency fluctuations; the
possibility of future losses; general economic conditions;
counterparty and market risks related to the sale of our
concentrates and metals; uncertainty in the accuracy of Mineral
Reserves and Mineral Resources estimates and in our ability to
extract mineralization profitably; differences in U.S. and Canadian
practices for reporting Mineral Reserves and Mineral Resources;
lack of suitable infrastructure or damage to existing
infrastructure; future development risks, including start-up delays
and cost overruns; our ability to obtain adequate financing for
mining, processing and further exploration and development programs
and opportunities and for the satisfaction of payment obligations
relating to our projects; uncertainty in acquiring additional
commercially mineable mineral rights; delays in obtaining or
failing to obtain, maintain or renew governmental permits, or
non-compliance with our permits; our ability to attract and retain
qualified personnel and management; the impact of governmental
regulations, taxation laws and royalty rates, which may be subject
to change, including health, safety and environmental regulations,
including increased costs and restrictions on operations due to
compliance with such regulations and the risk of non-compliance
with such regulations; unpredictable risks and hazards related to
the development and operation of a mine or mineral property that
are beyond our control; reclamation and closure requirements for
our mineral properties; potential labour unrest, including labour
actions by our unionized employees at Puna, and dependence on key
personnel and executives; indigenous peoples' title claims and
rights to consultation and accommodation may affect our existing
operations as well as development projects and future acquisitions;
certain transportation risks that could have a negative impact on
our ability to operate; assessments by taxation authorities in
multiple jurisdictions; recoverability of VAT and significant
delays in the VAT collection process in Argentina; claims and legal proceedings,
including adverse rulings in litigation against us and/or our
directors or officers; complying with anti-corruption laws and
internal controls, and increased regulatory compliance costs;
complying with emerging climate change regulations and the impact
of climate change and adverse weather conditions; the ability to
fully realize the value of our shareholdings in our marketable
securities, due to changes in price, liquidity or disposal cost of
such marketable securities; credit risk, liquidity risk, interest
rate risk, inflation rate risk and foreign currency risk; risks
associated with hedging; uncertainties related to title to our
mineral properties and the ability to obtain surface rights; the
sufficiency of our insurance coverage; civil disobedience in the
countries where our mineral properties are located; operational
safety and security risks; actions required to be taken by us under
human rights law; competition in the mining industry for mineral
properties; our ability to select appropriate acquisition
candidates, negotiate acceptable arrangements and complete and
successfully integrate an announced acquisition; reputation loss
resulting in decreased investor confidence; increased challenges in
developing and maintaining community relations and an impediment to
our overall ability to advance our projects; an event of default
under our 2019 Notes may significantly reduce our liquidity and
adversely affect our business; failure to meet covenants under our
senior secured revolving credit facility and the Term Loan;
epidemics, pandemics or other public health crises could adversely
affect our business; information systems security threats; the
ability to fully realize our interest in deferred consideration
received in connection with divestitures; conflicts of interest
that could arise from certain of our directors' and/or officers'
involvement with other natural resource companies; uninsured risks;
other risks related to our common shares; our ability to make
decisions on or otherwise influence our projects that are the
subject of joint ventures or are operated in conjunction with
strategic partners, including the risk of delays or disputes
between SSR Mining and Lidya Mining and/or Anagold; and those other
various risks and uncertainties identified under the heading "Risk
Factors" in our most recent Annual Information Form filed with the
Canadian securities regulatory authorities and included in our most
recent Annual Report on Form 40-F filed with the SEC.
This list is not exhaustive of the factors that may affect
any of our forward-looking statements. Our forward-looking
statements are based on what our management considers to be
reasonable assumptions, beliefs, expectations and opinions based on
the information currently available to it.
Assumptions have been made regarding, among other things, our
ability to carry on our exploration and development activities, our
ability to meet our obligations under our property agreements, the
timing and results of drilling programs, the discovery of Mineral
Resources and Mineral Reserves on our mineral properties, the
timely receipt of required approvals and permits, including those
approvals and permits required for successful project permitting,
construction and operation of our projects, the price of the
minerals we produce, the costs of operating and exploration
expenditures, our ability to operate in a safe, efficient and
effective manner, our ability to obtain financing as and when
required and on reasonable terms, current financial resources being
sufficient to carry out plans, commitments and business
requirements for the next twelve months, our ability to continue
operating at Çöpler and Marigold, our ability to resume operations
at Seabee and Puna, there being no cases of COVID-19 in our
workforce or any requirement for employees to self-isolate to the
extent that such cases of COVID-19 impact our operations, the
responses of the relevant governments to the COVID-19 outbreak
being sufficient to contain the impact of the COVID-19 outbreak,
long-term effects of the COVID-19 outbreak not having a material
adverse impact on our operations or liquidity position, including
no further temporary suspensions of operations or care and
maintenance costs; the successful integration of the acquisition of
Alacer; dilution and mining recovery assumptions, assumptions
regarding stockpiles, the success of mining, processing,
exploration and development activities, the accuracy of geological,
mining and metallurgical estimates, no significant unanticipated
operational or technical difficulties, maintaining good relations
with the communities surrounding Çöpler, Marigold, Seabee and Puna,
no significant events or changes relating to regulatory,
environmental, health and safety matters, certain tax matters and
no significant and continuing adverse changes in general economic
conditions or conditions in the financial markets other than as set
out herein (including commodity prices, foreign exchange rates and
inflation rates). You are cautioned that the foregoing list is not
exhaustive of all factors and assumptions which may have been used.
We cannot assure you that actual events, performance or results
will be consistent with these forward-looking statements, and
management's assumptions may prove to be incorrect.
Our forward-looking statements reflect current expectations
regarding future events and operating performance and speak only as
of the date hereof and we do not assume any obligation to update
forward-looking statements if circumstances or management's
beliefs, expectations or opinions should change other than as
required by applicable law. For the reasons set forth above, you
should not place undue reliance on forward-looking
statements.
Cautionary Note to U.S. Investors
This news release includes Mineral Reserves and Mineral
Resources classification terms that comply with reporting standards
in Canada and the Mineral Reserves
and the Mineral Resources estimates are made in accordance with NI
43-101. NI 43-101 is a rule developed by the Canadian Securities
Administrators that establishes standards for all public disclosure
an issuer makes of scientific and technical information concerning
mineral projects. These standards differ significantly from the
requirements of the SEC set out in SEC Industry Guide 7.
Consequently, Mineral Reserves and Mineral Resources information
included in this news release is not comparable to similar
information that would generally be disclosed by domestic U.S.
reporting companies subject to the reporting and disclosure
requirements of the SEC. Under SEC standards, mineralization may
not be classified as a "reserve" unless the determination has been
made that the mineralization could be economically produced or
extracted at the time the reserve determination is made.
In addition, the SEC's disclosure standards normally do not
permit the inclusion of information concerning "Measured Mineral
Resources," "Indicated Mineral Resources" or "Inferred Mineral
Resources" or other descriptions of the amount of mineralization in
mineral deposits that do not constitute "reserves" by U.S.
standards in documents filed with the SEC. U.S. investors should
understand that "Inferred Mineral Resources" have a great amount of
uncertainty as to their existence and great uncertainty as to their
economic and legal feasibility. Moreover, the requirements of NI
43-101 for identification of "reserves" are also not the same as
those of the SEC, and reserves reported by us in compliance with NI
43-101 may not qualify as "reserves" under SEC standards.
Accordingly, information concerning mineral deposits set forth
herein may not be comparable with information made public by
companies that report in accordance with U.S. standards.
Cautionary Note Regarding Non-GAAP Measures
We have included certain non-GAAP performance measures
throughout this document. These performance measures are employed
by us to measure our operating and economic performance internally
and to assist in decision-making, as well as to provide key
performance information to senior management. We believe that, in
addition to conventional measures prepared in accordance with GAAP,
certain investors and other stakeholders also use this information
to evaluate our operating and financial performance; however, these
non-GAAP performance measures do not have any standardized meaning.
Accordingly, these performance measures are intended to provide
additional information and should not be considered in isolation or
as a substitute for measures of performance prepared in accordance
with GAAP. These non-GAAP measures should be read in conjunction
with our condensed consolidated interim financial
statements.
View original content to download
multimedia:http://www.prnewswire.com/news-releases/ssr-mining-reports-third-quarter-2020-results-and-announces-dividend-policy-301171525.html
SOURCE SSR Mining Inc.