VANCOUVER, Aug. 9, 2018
/PRNewswire/ - SSR Mining Inc. (NASDAQ: SSRM) (TSX: SSRM) ("SSR
Mining") reports consolidated financial results for the second
quarter ended June 30, 2018.
Paul Benson, President and CEO
said, "We increased consolidated production in the second quarter
to over 85,000 gold equivalent ounces at lower cash costs, putting
us on track to achieve full year guidance. This achievement
is also reflected in our improved financial performance, where we
increased earnings and operating cash flow, and added cash to the
balance sheet for the eleventh consecutive quarter. With
these results and the Chinchillas project moving closer to
completion, we maintain positive momentum towards our 2018 goals
and near-term growth outlook."
Second Quarter 2018 Highlights:
(All figures are in
U.S. dollars unless otherwise noted)
- Improved financial performance: Cash generated from
operating activities of $17.1 million
and adjusted attributable net income of $12.1 million or $0.10 per share.
- Increased production at lower costs: Consolidated
quarterly production increased to 85,082 gold equivalent ounces
while achieving lower cash costs of $758 per payable ounce of gold sold.
- Strong performance at the Marigold mine: Produced 49,436
ounces of gold at cash costs of $700
per payable ounce of gold sold, and stacked a record 7.9 million
tonnes of ore.
- Delivered updated Marigold life of mine plan: Released
updated plan outlining a 10-year reserve life, 30% growth in
production through 2021, and robust economics.
- Performance in line with guidance at the Seabee Gold
Operation: Produced 23,582 ounces of gold at cash costs of
$616 per payable ounce of gold sold,
a solid result considering lower quarterly mill throughput.
- Exceeded first half guidance at Puna Operations:
Produced 1.0 million ounces of silver at cash costs of $14.73 per payable ounce of silver sold,
exceeding first half production guidance.
- Chinchillas project remains on track: Subsequent to
quarter-end, trucked first ore to the Pirquitas site in
July 2018. The project remains on
schedule for sustained ore delivery in the fourth quarter of the
year and on budget, with material advancements in construction and
development activities made during the quarter.
- Increased cash position: Quarter-end cash increased to
$493.6 million, up $20.7 million.
Marigold mine, U.S.
|
Three months
ended
|
Operating
data
|
June 30
2018
|
March 31
2018
|
December 31
2017
|
September 30
2017
|
June 30
2017
|
Total material mined
(kt)
|
15,958
|
16,150
|
13,979
|
20,311
|
17,985
|
Waste removed
(kt)
|
8,083
|
9,052
|
8,136
|
13,149
|
11,075
|
Total ore stacked
(kt)
|
7,875
|
7,099
|
5,843
|
7,162
|
6,910
|
Strip
ratio
|
1.0
|
1.3
|
1.4
|
1.8
|
1.6
|
Mining costs ($/t
mined)
|
1.92
|
1.80
|
1.98
|
1.52
|
1.67
|
Gold stacked grade
(g/t)
|
0.42
|
0.37
|
0.37
|
0.31
|
0.31
|
Processing costs ($/t
processed)
|
0.86
|
0.93
|
1.08
|
0.89
|
0.82
|
Gold recovery
(%)
|
74.4
|
73.6
|
74.0
|
72.0
|
73.0
|
General and admin
costs ($/t processed)
|
0.41
|
0.42
|
0.51
|
0.40
|
0.42
|
|
|
|
|
|
|
Gold produced
(oz)
|
49,436
|
42,960
|
52,768
|
38,699
|
55,558
|
Gold sold
(oz)
|
46,644
|
42,078
|
51,420
|
38,818
|
57,426
|
|
|
|
|
|
|
Realized gold price
($/oz) (1)
|
1,304
|
1,331
|
1,269
|
1,270
|
1,265
|
|
|
|
|
|
|
Cash costs ($/oz)
(1)
|
700
|
720
|
699
|
684
|
632
|
AISC ($/oz)
(1)
|
981
|
954
|
1,001
|
979
|
833
|
|
|
|
|
|
|
Financial data
($000s)
|
|
|
|
|
|
Revenue
|
60,752
|
55,880
|
65,217
|
49,395
|
72,451
|
Income from mine
operations
|
14,670
|
12,312
|
12,777
|
11,189
|
21,373
|
Capital expenditures
(2)
|
14,481
|
4,665
|
8,194
|
3,855
|
5,272
|
Capitalized
stripping
|
850
|
2,902
|
5,712
|
6,056
|
4,350
|
Exploration
expenditures (3)
|
3,243
|
1,914
|
1,208
|
1,130
|
1,538
|
|
|
(1)
|
We report the
non-GAAP financial measures of realized gold price, cash costs and
all-in sustaining costs ("AISC") per payable ounce of gold sold to
manage and evaluate operating performance at the Marigold mine. For
a better understanding and a reconciliation of these measures to
cost of sales, as shown in our Consolidated Statements of Income
(Loss), please refer to "Non-GAAP Financial Measures" in Section 9
of our Management's Discussion and Analysis for the three and six
months ended June 30, 2018 ("MD&A") .
|
(2)
|
Includes expansion
capital expenditures of $5.9 million for the three months ended
June 30, 2018 ($nil for the previous four quarters).
|
(3)
|
Includes
capitalized and expensed exploration expenditures.
|
Mine production
In the second quarter of 2018, the Marigold mine produced 49,436
ounces of gold, a 15% increase over the first quarter.
During the quarter, 16.0 million tonnes of material were mined,
similar to the first quarter primarily due to longer haul distances
associated with the increase in ore tonnes. We expect total
material mined to increase during the second half of 2018 due to
shorter haul distances and as the four additional haul trucks enter
service. These factors, along with completion of the new leach pad,
are expected to increase gold production through the second half of
the year.
Approximately 7.9 million tonnes of ore were delivered to the
heap leach pads, a quarterly record. Gold grade increased to 0.42
g/t. This compares to 7.1 million tonnes of ore delivered to the
heap leach pads at a gold grade of 0.37 g/t in the first quarter of
2018. The strip ratio was 1.0:1 for the quarter, 23% lower than the
prior quarter.
Mine operating costs
Cash costs and AISC per payable ounce of gold sold are
non-GAAP financial measures. Please see "Cautionary Note Regarding
Non-GAAP Measures".
Cash costs, which include all costs of inventory, refining costs
and royalties, of $700 per payable
ounce of gold sold in the second quarter of 2018 were 3% lower than
the previous quarter. This was primarily due to stacking 26% more
recoverable ounces in the second quarter compared to the first
quarter, which lowered the cost per ounce of inventory. The
increase in recoverable ounces stacked was a result of the
increased ore tonnage and grade in the second quarter compared to
the first quarter. Total mining costs of $1.92 per tonne in the second quarter of 2018
were 7% higher than in the previous quarter primarily due to a 25%
increase in total fuel costs through a combination of higher diesel
price and increased consumption due to longer haul distances.
Processing and general administrative unit costs were 8% and 2%
lower, respectively, in the second quarter than in the first
quarter due to higher tonnes processed while total costs remained
stable.
AISC per payable ounce of gold sold increased in the second
quarter of 2018 to $981 from
$954 in the first quarter due to
higher sustaining capital expenditures as construction of the new
leach pad resumed, and due to higher planned exploration
expenditures.
Mine sales
A total of 46,644 ounces of gold were sold at an average
realized price of $1,304 per ounce
during the second quarter of 2018, an increase of 11% from the
42,078 ounces of gold sold at an average realized price of
$1,331 per ounce during the first
quarter of 2018. Finished goods inventory increased as sales were
below production.
Exploration
The main focus of our 2018 exploration program is to conduct
infill drilling of the Red Dot resource area and to explore higher
grade structural zones within phases of the Mackay pit.
During the second quarter, we completed a total of 75 reverse
circulation drillholes for 27,886 meters at Red Dot and within the
Mackay pit.
Drilling of two east-west test sections were completed during
the quarter within the Red Dot area. Drill results met expectations
confirming the geologic interpretation and are expected to increase
Mineral Resources at year-end 2018. In June, we decided to continue
the program and complete infill drilling of the Red Dot area. Our
objective is to convert Inferred Mineral Resources to Indicated
Mineral Resources, and to upgrade existing Indicated Resources with
the ultimate goal of declaring a Mineral Reserve at Red Dot by
mid-2019.
In June, we completed the acquisition of a parcel of land, and
the associated mineral and surface rights, that is proximal to the
south-western margin of the Mackay pit. We anticipate that
operating synergies and exploration benefits will be realized from
the incorporation of these lands into the Marigold land
package.
During the third quarter of 2018, we will continue drilling for
higher grade structures in the Mackay Phase 5 area while advancing
the Red Dot exploration program.
Seabee Gold Operation, Canada
|
Three months
ended
|
Operating
data
|
June 30
2018
|
March 31
2018
|
December 31
2017
|
September 30
2017
|
June 30
2017
|
Total ore milled
(t)
|
84,010
|
93,269
|
89,237
|
84,315
|
84,469
|
Ore milled per day
(t/day)
|
923
|
1,036
|
970
|
916
|
928
|
Gold mill feed grade
(g/t)
|
7.95
|
8.95
|
8.89
|
7.03
|
7.97
|
Mining costs ($/t
mined)
|
60
|
59
|
66
|
74
|
60
|
Processing costs ($/t
processed)
|
27
|
21
|
24
|
22
|
20
|
Gold recovery
(%)
|
97.3
|
97.4
|
97.4
|
97.2
|
97.3
|
General and admin
costs ($/t processed)
|
62
|
53
|
61
|
53
|
50
|
|
|
|
|
|
|
Gold produced
(oz)
|
23,582
|
23,717
|
24,227
|
18,058
|
20,690
|
Gold sold (oz)
(1)
|
20,512
|
20,012
|
23,969
|
21,798
|
17,909
|
|
|
|
|
|
|
Realized gold price
($/oz) (2)
|
1,306
|
1,340
|
1,276
|
1,269
|
1,257
|
|
|
|
|
|
|
Cash costs ($/oz)
(2)
|
616
|
481
|
605
|
634
|
592
|
AISC ($/oz)
(2)
|
854
|
896
|
776
|
775
|
831
|
|
|
|
|
|
|
Financial data
($000s)
|
|
|
|
|
|
Revenue
|
26,706
|
26,789
|
30,571
|
27,652
|
22,502
|
Income from mine
operations
|
5,703
|
6,672
|
2,923
|
3,643
|
4,083
|
Capital
expenditures
|
1,035
|
4,426
|
920
|
799
|
711
|
Capitalized
development
|
2,069
|
2,283
|
2,301
|
1,314
|
2,165
|
Exploration
expenditures (3)
|
2,745
|
2,032
|
1,187
|
1,253
|
1,566
|
(1)
|
Beginning with the
first quarter of 2018, the holder of the 3% net smelter returns
royalty elected to receive its royalty in-kind and we will no
longer report these ounces within gold sold.
|
(2)
|
We report the
non-GAAP financial measures of realized gold prices, cash costs and
AISC per payable ounce of gold sold to manage and evaluate
operating performance at the Seabee Gold Operation. For a better
understanding and a reconciliation of these measures to cost of
sales, as shown in our Consolidated Statements of Income (Loss),
please refer to "Non-GAAP Financial Measures" in Section 9 of our
MD&A.
|
(3)
|
Includes
capitalized and expensed exploration expenditures.
|
Mine production
Seabee Gold Operation produced 23,582 ounces of gold in the
second quarter, in line with production in the previous
quarter.
The mill achieved an average throughput of 923 tonnes per day,
an 11% decrease from the first quarter. Production during the
second quarter was impacted by planned maintenance, the transition
of mining activities to the high-grade Santoy mine, and a forest
fire. Mill throughput is expected to increase through the second
half of the year relative to the second quarter. Gold recovery for
the quarter remained consistent at 97.3%.
Mine operating costs
Cash costs and AISC per payable ounce of gold sold are
non-GAAP financial measures. Please see "Cautionary Note Regarding
Non-GAAP Measures".
Cash costs per payable ounce of gold sold, which include all
costs of inventory and refining costs, were $616 in the second quarter of 2018, higher than
the $481 in the first quarter of
2018. Higher cash costs per payable ounce sold were primarily the
result of lower tonnes milled at lower grades while incurring
similar total operating costs compared to the prior quarter. Costs
per tonne mined were $60 in the
second quarter of 2018, in line with the previous quarter.
Processing and general and administrative unit costs increased by
29% and 17%, respectively, in the second quarter of 2018 compared
to the first quarter of 2018, due to lower tonnes milled impacted
by planned maintenance and the forest fire.
AISC per payable ounce of gold sold were $854 in the second quarter of 2018, lower than
the $896 in the first quarter of
2018. This decrease was due to the seasonal nature of our
sustaining capital expenditures as equipment and materials are
purchased primarily in the first quarter of each year for delivery
on the ice road.
Mine sales
A total of 20,512 ounces were sold at an average realized price
of $1,306 per ounce during the second
quarter of 2018, comparable to the 20,012 ounces of gold sold in
the first quarter of 2018, at an average realized price of
$1,340 per ounce of gold. Finished
goods inventory increased as sales were below production.
Exploration
For 2018, the Seabee Gold Operation plans 45,000 meters of
underground drilling and 20,000 meters of surface drilling with the
objective to increase and convert Mineral Resources into Mineral
Reserves near the Santoy mine. In the second quarter of 2018, close
to the Santoy mine area, we completed 12,157 meters of underground
drilling and 6,840 meters of surface drilling in 40 and 12
drillholes, respectively. Our underground drill program for
the second quarter of 2018 focused on three targets, including
Santoy Gap, Santoy 8A zone and Santoy Gap hanging wall.
Surface exploration drilling in the second quarter of 2018
outside the Santoy mine area, focused on three areas including CRJ,
Santoy 3 and Fisher with 12,052 meters being completed in 23
drillholes. Current activities are focused on testing first pass
targets on the Fisher property identified along the length of the
Santoy shear zone extension. Holes completed during the
quarter partially tested the Santoy shear zone extension and have
intersected favourable lithologies, alteration and mineralization.
Analytical results are pending and we continue to be encouraged by
the potential of this early stage property.
Activities in the third quarter will focus on continuing the
conversion drilling from underground on the Santoy Gap, Santoy Gap
hanging wall and Santoy 8A targets, and completing our planned
surface field and drill programs on Fisher.
Puna Operations, Argentina
(75% interest)
(amounts presented on 100% basis unless
otherwise stated)
|
Three months
ended
|
Operating
data
|
June 30
2018
|
March 31
2018
|
December 31
2017
|
September 30
2017
|
June 30
2017
|
Ore milled
(kt)
|
396
|
373
|
442
|
461
|
446
|
Silver mill feed
grade (g/t)
|
110
|
115
|
125
|
153
|
185
|
Zinc mill feed grade
(%) (2)
|
0.71
|
—
|
—
|
—
|
—
|
Processing costs ($/t
milled)
|
17.26
|
15.34
|
13.53
|
11.92
|
12.94
|
Silver recovery
(%)
|
68.1
|
67.7
|
66.0
|
67.8
|
73.5
|
Zinc recovery (%)
(2)
|
31.5
|
—
|
—
|
—
|
—
|
General and admin
costs ($/t milled)
|
7.07
|
6.33
|
5.74
|
4.81
|
5.00
|
|
|
|
|
|
|
Silver produced ('000
oz)
|
954
|
938
|
1,169
|
1,541
|
1,947
|
Silver produced
(attributable) ('000 oz) (1)
|
716
|
704
|
877
|
1,156
|
1,777
|
Zinc produced ('000
lb) (2)
|
1,521
|
—
|
—
|
—
|
—
|
Zinc produced
(attributable) ('000 lb) (1,2)
|
1,141
|
—
|
—
|
—
|
—
|
Silver sold ('000
oz)
|
1,142
|
1,064
|
820
|
2,076
|
1,655
|
Silver sold
(attributable) ('000 oz) (1)
|
857
|
798
|
615
|
1,557
|
1,473
|
Zinc sold ('000 lb)
(2)
|
—
|
—
|
—
|
—
|
—
|
Zinc sold
(attributable) ('000 lb) (1,2)
|
—
|
—
|
—
|
—
|
—
|
|
|
|
|
|
|
Realized silver price
($/oz) (3)
|
16.49
|
16.79
|
16.96
|
16.77
|
17.31
|
|
|
|
|
|
Cash costs ($/oz)
(3,4)
|
14.73
|
17.07
|
16.36
|
12.76
|
12.15
|
AISC ($/oz)
(3,4)
|
17.66
|
18.37
|
18.30
|
13.56
|
12.78
|
|
|
|
|
|
|
Financial Data
($000s)
|
|
|
|
|
|
Revenue
|
16,570
|
15,233
|
12,093
|
28,958
|
22,029
|
Income (loss) from
mine operations
|
830
|
(1,753)
|
5,490
|
7,690
|
4,006
|
Capital expenditures
(5)
|
2,652
|
789
|
917
|
1,006
|
420
|
Exploration
expenditures (5)
|
429
|
6
|
—
|
—
|
—
|
(1)
|
Attributable
production and sales for the second quarter of 2017 represent 100%
for April and May and 75% for June 2017. Attributable
production and sales for all subsequent quarters represent
75%.
|
(2)
|
Data for zinc
production and sales relate only to zinc in zinc
concentrate.
|
(3)
|
We report the
non-GAAP financial measures of cash costs per payable ounce of
silver sold, realized silver prices and AISC per payable ounce of
silver sold to manage and evaluate operating performance at Puna
Operations. For a better understanding and a reconciliation of
these measures to cost of sales, as shown in our Consolidated
Statements of Income (Loss), please refer to "Non-GAAP Financial
Measures" in Section 9 of our MD&A.
|
(4)
|
Cash costs and
AISC per payable ounce of silver sold include stockpile inventory
costs previously incurred of $nil for the three months ended June
30, 2018 (March 31, 2018 - $5.75, December 31, 2017 - $5.30,
September 30, 2017 - $5.20, June 30, 2017 - $3.30).
|
(5)
|
Does not include
exploration or development of the Chinchillas
project.
|
Mine production
During the second quarter of 2018, the operation produced 1.0
million ounces of silver, for a total of 1.9 million ounces
produced in the first half of 2018, exceeding our silver production
guidance of 1.6 million ounces. Our attributable share of
silver production in the second quarter was approximately 716,000
ounces.
Ore was sourced exclusively from residual surface stockpiles and
milled at an average rate of 4,353 tonnes per day in the second
quarter, 5% above the previous quarter. Ore milled in the second
quarter contained an average silver grade of 110 g/t, 4% lower than
the 115 g/t reported in the first quarter, consistent with
processing of increasingly lower grade stockpiles. The average
recovery of silver in the silver concentrate in the second quarter
was 63.4%, 6% lower than the previous quarter consistent with
increasing metallurgical complexity of the residual stockpiled
material.
We commenced production of zinc concentrate from stockpiled ore
near the end of the second quarter, and produced approximately 1.5
million pounds of zinc. Approximately 70,000 ounces of silver
were recovered in zinc concentrate over the quarter, for a total
silver recovery of 68.1%.
Mine operating costs
Cash costs and AISC per payable ounce of silver sold are
non-GAAP financial measures. Please see "Cautionary Note Regarding
Non-GAAP Measures".
Cash costs, which include cost of inventory, treatment and
refining costs and provincial royalties were
$14.73 per payable ounce of silver
sold in the second quarter of 2018, a decline from the $17.07 per payable ounce of silver sold in the
first quarter of 2018 principally due to processing stockpiles with
no inventory value. This benefit was partly offset by an increase
in processing and general and administrative unit costs by 13% and
12%, respectively, when compared to the previous quarter.
AISC per payable ounce of silver sold in the second quarter of
2018 were $17.66, 4% lower than
$18.37 in the first quarter of
2018.
Mine sales
Silver sales totaled 1.1 million ounces and attributable sales
were 0.9 million ounces in the second quarter of 2018, each a 7%
increase from the first quarter of 2018. No zinc sales occurred
during the quarter.
Exploration
During the first quarter of 2018, we commenced a 2,400 meter
surface drill program at Pirquitas targeting mineralization that
would augment the Cortaderas underground Mineral Resources.
During the second quarter of 2018, twelve drillholes were completed
for 1,587 meters. All drillholes intersected high-grade
silver-zinc mineralization from the Potosi structure having the form of two
narrow, but vertically and laterally continuous veins.
Results will be evaluated when finalized.
Chinchillas project, Argentina
The second quarter saw increased activities in both
pre-stripping and construction with the completion of recruitment
of new mine personnel and mobilization of contractors at both
Pirquitas and Chinchillas.
Material movement related to Chinchillas pre-stripping ramped up
over the quarter with the hiring of the new mine operations
team. The workforce was employed exclusively out of the local
communities and a major mine fleet operations and maintenance
training program was initiated late in the first quarter.
Total material moved in the pre-strip project to date was 1.83
million tonnes from the Chinchillas pit including 0.1 million
tonnes of ore. The mine completed construction of a waste dump and
the main pit temporary access ramp. Negotiations were also
completed towards the end of the quarter for an ore transport
contract with initial ore haulage from Chinchillas to Pirquitas
commencing in July 2018. Through the third quarter,
continued ramp up in mining rates and ore haulage rates are
expected to provide a stockpile of Chinchillas ore at the Pirquitas
mill to allow processing to commence in the second half of
2018.
Construction advanced with the receipt of all major equipment
and materials for the in-pit tailings pumping system.
Concrete foundations for the pumps were completed and the remaining
work to be completed is the dump/emergency discharge pond.
Both carbon steel and HDPE pipe welding were substantially
completed with pumps rough set, pre-fabricated electrical rooms
were set on foundations and cable pulling commenced. The overhead
power line to the Pirquitas pit for water reclaim also advanced
during the quarter with the power poles installed; line
installation is expected to be completed in the third quarter
2018.
The fine ore stockpile dome installation achieved 95% completion
of the geodesic structure and the entire cover is expected to be
completed, including cladding, by the end of the third quarter
2018.
Infrastructure works at the Chinchillas site saw significant
progress on the road between Chinchillas and Pirquitas with the
completion of one of three community village by-passes along with
road upgrades and water crossings. Power line upgrades
between Chinchillas and Pirquitas also advanced with installation
of the new main power transformer at Pirquitas and completion of
overhead line installation. Connection to the Pirquitas
substation and installation of new transformers at Chinchillas is
expected to be completed in the third quarter 2018.
The main foundations for the Chinchillas truck shop were
completed and all structural steel delivered to site. Gate houses
and the medical clinic were also delivered and put into
operation. Temporary power and water services are expected to
be completed, along with the dining room and change house, by the
end of the third quarter.
The project remains on budget and on schedule to support
sustained delivery of ore to the Pirquitas mill in the fourth
quarter of the year.
Other Projects
The SIB exploration project is located near the high-grade,
past-producing Eskay Creek mine in
northwest British Columbia. During
the fourth quarter of 2017, we announced plans to continue with the
exploration program committing to a $3.2
million drill program and geophysics activities in 2018. We
hold a three-year option to acquire up to a 60% undivided interest
in the project and have met the first year spending requirement of
$2.9 million. During the second
quarter, we completed an electromagnetic survey that identified a
new conductive anomaly in an area permissive for potential massive
sulphide mineralization. This anomaly will receive ground follow-up
and drilling in the third quarter as we commence our 2018 drill
campaign.
During the quarter, we made the decision to terminate our
purchase option agreement at the Perdito project in California due to overly restrictive
conditions attached to our drill permit granted by the Bureau of
Land Management.
Outlook
This section of the news release provides management's
production, cost, capital, exploration and development expenditure
estimates for 2018. Please see "Cautionary Note Regarding
Forward-Looking Statements."
Due to positive operating performance through the first half of
2018 and a continued positive operating outlook for the second half
of 2018, we are improving certain cost guidance metrics.
At the Marigold mine, annual cash cost guidance improves to
between $725 and $750 per payable ounce of gold sold, a
$25 per ounce reduction to the top
end of guidance due to higher grades mined more than offsetting
higher energy costs. Gold production at Marigold is expected to be
between 40,000 and 50,000 ounces in the third quarter, with fourth
quarter production of approximately 60,000 ounces as the new leach
pad is put into service.
Seabee Gold Operation annual cash cost guidance also improves to
between $560 and $585 per payable ounce of gold sold, a
$25 per ounce reduction to the top
end of guidance largely due to strong first quarter operating
performance and favourable exchange rate impact.
Remaining operating guidance is unchanged.
For the full year 2018, we now expect:
Operating
Guidance
|
|
Marigold
mine
|
|
Seabee Gold
Operation
|
|
Puna
Operations
(75% interest)(4)
|
Gold
Production
|
oz
|
190,000 -
210,000
|
|
85,000 -
92,000
|
|
—
|
Silver
Production
|
Moz
|
—
|
|
—
|
|
3.0 - 4.4
|
Silver Production
(attributable)
|
Moz
|
—
|
|
—
|
|
2.3 - 3.3
|
Lead
Production
|
Mlb
|
—
|
|
—
|
|
7.0 - 12.5
|
Lead Production
(attributable)
|
Mlb
|
—
|
|
—
|
|
5.3 - 9.4
|
Zinc
Production
|
Mlb
|
—
|
|
—
|
|
5.5 - 7.5
|
Zinc Production
(attributable)
|
Mlb
|
—
|
|
—
|
|
4.1 - 5.6
|
Cash Cost per Payable
Ounce Sold (1)
|
$/oz
|
725 - 750
|
|
560 - 585
|
|
12.50 -
15.00
|
Sustaining Capital
Expenditures (2)
|
$M
|
35
|
|
10
|
|
10
|
Capitalized Stripping
/ Capitalized Development
|
$M
|
15
|
|
9
|
|
10
|
Exploration
Expenditures (3)
|
$M
|
9
|
|
9
|
|
1
|
(1)
|
We report the
non-GAAP financial measure of cash costs per payable ounce of gold
and silver sold to manage and evaluate operating performance at the
Marigold mine, the Seabee Gold Operation and Puna Operations. See
"Cautionary Note Regarding Non-GAAP Measures".
|
(2)
|
Sustaining capital
expenditures for the Marigold mine exclude $22 million for four
additional haul trucks as announced in our news release dated
February 22, 2018, and for Puna Operations exclude initial capital
expenditures related to the development of the Chinchillas
project.
|
(3)
|
Includes
capitalized and expensed exploration expenditures.
|
(4)
|
Shown on a 100%
basis unless otherwise indicated.
|
On a consolidated basis, at the mid-point of guidance, we expect
to produce approximately 340,000 gold equivalent ounces in 2018 at
gold equivalent cash costs of between $715 and $760 per
payable ounce sold. On an attributable basis, we expect to produce
approximately 325,000 gold equivalent ounces in 2018 at gold
equivalent cash costs of between $705
and $750 per payable ounce sold.
Gold equivalent figures for our 2018 operating guidance are
based on gold-to-silver ratio of 79:1. Cash costs and capital
expenditures guidance is based on actual performance to
June 30, 2018 and a second half
2018 oil price of $70 per barrel and
exchange rate of 1.25 Canadian dollar
to U.S. dollar.
Consolidated Financial Summary
(presented in
thousands of U.S. dollars, except for per share value)
Selected Financial
Data (1)
|
|
|
|
|
|
Three months ended
June 30,
|
|
Six months ended
June 30,
|
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
|
|
$
|
|
$
|
|
$
|
|
$
|
|
Revenue
|
104,028
|
|
116,982
|
|
201,930
|
|
234,887
|
|
Income from mine
operations
|
21,203
|
|
29,462
|
|
38,434
|
|
69,551
|
|
Gross margin
(%)
|
20
|
|
25
|
|
19
|
|
30
|
|
Operating
income
|
8,883
|
|
46,193
|
|
16,614
|
|
71,002
|
|
Net income
|
2,607
|
|
37,747
|
|
285
|
|
52,795
|
|
Basic attributable
income per share
|
0.04
|
|
0.31
|
|
0.03
|
|
0.44
|
|
Adjusted attributable
income before tax
|
13,051
|
|
15,551
|
|
19,787
|
|
38,487
|
|
Adjusted attributable
net income
|
12,080
|
|
13,017
|
|
17,742
|
|
32,826
|
|
Adjusted basic
attributable income per share
|
0.10
|
|
0.11
|
|
0.15
|
|
0.27
|
|
Cash generated by
operating activities
|
17,132
|
|
38,614
|
|
28,139
|
|
69,258
|
|
Cash generated by
(used in) investing activities
|
1,731
|
|
(26,311)
|
|
3,118
|
|
(44,431)
|
|
Cash generated by
financing activities
|
4,248
|
|
550
|
|
6,164
|
|
885
|
|
|
|
|
|
Financial
Position
|
|
June 30,
2018
|
|
December 31,
2017
|
|
Cash and cash
equivalents
|
|
493,642
|
|
|
459,864
|
|
Marketable
securities
|
|
8,746
|
|
|
114,001
|
|
Current
assets
|
|
759,586
|
|
|
799,597
|
|
Current
liabilities
|
|
87,619
|
|
|
71,466
|
|
Working
capital
|
|
671,967
|
|
|
728,131
|
|
Total
assets
|
|
1,504,987
|
|
|
1,537,454
|
|
(1)
|
We report non-GAAP
measures, including gross margin, adjusted attributable income
before tax, adjusted attributable net income, adjusted basic
attributable income per share, and working capital to manage and
evaluate our operating performance. Please see "Cautionary Note
Regarding Non-GAAP Measures".
|
Quarterly financial summary
Revenue in the second quarter of 2018 decreased by 11% relative
to the comparative quarter of 2017 due principally to the expected
declines in sales at Puna Operations, as we processed lower grade
stockpiles, and at the Marigold mine, due to variations in
production and leach cycles.
Income from mine operations in the second quarter of 2018
generated a gross margin of 20%, lower than the 25% margin in the
second quarter of 2017. Relative to the comparative prior year
quarter, in the second quarter of 2018 cost of sales at Puna
Operations were elevated as we processed lower grade stockpiles,
and also higher cost of sales were experienced at the Marigold mine
as we stacked lower grade ore in the previous quarters.
Net income for the quarter was impacted by the recognition of a
one-time $5.8 million tax expense
related to the re-organization of our business units in
Argentina.
Cash generated by operating activities in the quarter was
$17.1 million compared to
$38.6 million in the second quarter
of 2017. Lower sales combined with higher unit costs at both
the Marigold mine and Puna Operations were partially offset by
higher gold sales at Seabee Gold Operation. We also saw an increase
in finished goods gold inventory which reduced operating cash flows
in the current period.
We generated $1.7 million from
investing activities in the second quarter of 2018 compared to a
use of $26.3 million in the second
quarter of 2017. In the second quarter of 2018, we received
$35.4 million from the sale of common
shares of Pretium Resources Inc. ("Pretium"), which funded
investments in our business including $11.4
million in property, plant and equipment and $16.1 million on the Chinchillas project. We
received $2.5 million from our joint
venture partner for its share of the development costs of the
Chinchillas project. Cash and cash equivalents increased to
$493.6 million during the
quarter.
Year-to-date financial summary
The 14% decrease in revenue in the first half of 2018 compared
to the first half of 2017 was due to a 19% decrease in equivalent
payable gold ounces sold, partially offset by higher gold and
silver prices. The decrease in equivalent gold ounces sold was due
to lower gold ounces sold from the Marigold mine and lower silver
ounces sold from Puna Operations as both mines processed lower
grade ore.
Income from mine operations in the first half of 2018 generated
a gross margin of 19%, compared to the 30% margin in the first half
of 2017 as higher cost of sales at both the Marigold mine and Puna
Operations was partially offset by higher gold prices and lower
cost of sales at Seabee Gold Operation. In the first half of 2017,
the resolution of our export duty claim in Argentina resulted in a $4.3 million reduction to cost of sales, thereby
increasing income from mine operations. Net income for the first
half of 2017 was positively impacted by an impairment reversal of
the Pirquitas plant of $24.4 million
resulting its life extension following the formation of Puna
Operations.
Cash generated by operating activities in the first half of 2018
decreased to $28.1 million compared
to $69.3 million in the first half of
2017. Lower volume of gold and silver sold at higher unit costs and
a build-up in working capital generated lower cash from operating
activities. We generated $3.1 million
from investing activities in the first half of 2018 compared to a
use of $44.4 million in the first
half of 2017. In the first half of 2018, we received $63.4 million from the sale of our remaining
common shares of Pretium which was partially offset by investments
in our business including $20.2
million in property, plant and equipment and $27.8 million in the Chinchillas project. We
received $4.0 million from our joint
venture partner for its share of the development costs of the
Chinchillas project.
Corporate summary
SSR Mining has an experienced management team of mine-builders
and operators with proven capabilities. We have an enviable balance
sheet with $493.6 million in cash and
cash equivalents as at June 30, 2018. We are committed to
delivering safe production through relentless emphasis on
Operational Excellence. We are also focused on growing production
and Mineral Reserves through the exploration and acquisition of
assets for accretive growth, while maintaining financial
strength.
On May 3, 2018, we announced the
appointment of Kevin O'Kane as Chief
Operating Officer effective June 4,
2018, replacing Alan
Pangbourne who retired at the end of May 2018.
During the six months ended June 30,
2018, we sold our remaining position of 9.0 million common
shares of Pretium for pre-tax cash proceeds of approximately
$63.4 million.
As of July 6, 2018, we entered
into a credit agreement (the "Credit Agreement") with Golden Arrow
Resources Corporation ("Golden Arrow"), pursuant to which we
provided Golden Arrow with a
non-revolving term loan (the "Loan") in an aggregate principal
amount equal to $10.0 million. The
Loan matures on the date which is the earlier of: (a) the date
which is 24 months from the first delivery of ore from Puna
Operations' Chinchillas property to the Pirquitas mill; and (b)
December 31, 2020.
The proceeds to Golden Arrow
under the Credit Agreement are required to be used by Golden Arrow to fund its contributions under the
shareholders' agreement we entered into with Golden Arrow on May 31,
2017, as the sole shareholders of Puna Operations. The Loan
is secured by Golden Arrow's
ownership and equity interests in Puna Operations.
The Loan will bear interest (computed on the basis of the actual
number of days elapsed over a year of 365 days and compounded
monthly) at a rate per annum equal to the US Base Rate (as such
term is defined in the Credit Agreement) plus 10%. Interest on the
Loan shall accrue from and including the date of each borrowing
under the Credit Agreement, compounded monthly, and shall be
capitalized and payable on the maturity date.
Qualified Persons
The scientific and technical information contained in this
MD&A relating to the Marigold mine has been reviewed and
approved by Karthik Rathnam, MAusIMM
(CP) and James N. Carver, SME
Registered Member, each of whom is a qualified person under
National Instrument 43-101 - Standards of Disclosure for Mineral
Projects ("NI 43-101"). Mr. Rathnam is our Chief Engineer and
Mr. Carver is our Chief Geologist at the Marigold mine. The
scientific and technical data contained in this MD&A relating
to the Seabee Gold Operation has been reviewed and approved by
Cameron Chapman, P.Eng., and
Jeffrey Kulas, P. Geo., each of whom
is a qualified person under NI 43-101. Mr. Chapman is our General
Manager and Mr. Kulas is our Manager Geology, Mining Operations at
the Seabee Gold Operation. The scientific and technical information
contained in this MD&A relating to Puna Operations has been
reviewed and approved by Bruce
Butcher, P.Eng., and F. Carl
Edmunds, P. Geo., each of whom is a qualified person under
NI 43-101. Mr. Butcher is our Director, Mine Planning and Mr. Edmunds is our Chief
Geologist.
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: Friday,
August 10, 2018, at 11:00 a.m.
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 2455
|
|
|
All other
callers:
|
+1 (412) 317-0088,
replay code 2455
|
About SSR Mining
SSR Mining Inc. is a Canadian-based precious metals producer
with three operations, including the Marigold mine in Nevada, U.S., the Seabee Gold Operation in
Saskatchewan, Canada and the
75%-owned and operated Puna Operations joint venture in Jujuy,
Argentina. We also have two
feasibility stage projects and a portfolio of exploration
properties in North and South
America. We are committed to delivering safe production
through relentless emphasis on Operational Excellence. We are also
focused on growing production and Mineral Reserves through the
exploration and acquisition of assets for accretive growth, while
maintaining financial strength.
For further information contact:
W. John DeCooman, Jr.
Vice President, Business Development and Strategy
SSR Mining Inc.
Vancouver, BC
Toll free: +1 (888) 338-0046
All others: +1 (604) 689-3846
E-Mail: invest@ssrmining.com
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") concerning the anticipated developments in our
operations in future periods, and other events or conditions that
may occur or exist in the future. 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,"
"goals," "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: future production of gold, silver and other metals;
improvements to cash costs per payable ounce of gold, silver and
other metals sold; the prices of gold, silver and other metals;
future successful development of our projects; the sufficiency of
our current working capital, anticipated operating cash flow or our
ability to raise necessary funds; estimated production rates for
gold, silver and other metals produced by us, including the
expected ramp up in mining and ore haulage rates from the
Chinchillas project to the Pirquitas mill to allow processing to
commence in the second half of 2018; our ability to convert
Inferred Mineral Resources to Indicated Mineral Resources and to
convert Mineral Resources into Mineral Reserves, including (a) the
goal of declaring a Mineral Reserve at Red Dot by mid-2019, and (b)
the objective to increase and convert Mineral Resources into
Mineral Reserves near the Santoy mine; timing of production and
production levels at (a) the Marigold mine, including the
expectation that total material mined will increase in 2018 due to
shorter haul distances, the addition of four haul trucks, and the
completion of the new leach pad, (b) the Seabee Gold Operation,
including the expectation that mill throughput will increase
through the second half of 2018, and (c) Puna
Operations; timing and focus of our exploration and development
programs, expected timing of completion of construction milestones
at Chinchillas project, including the expectation that the
Chinchillas project will remain on budget and on schedule to
support sustained delivery of ore to the Pirquitas mill in the
fourth quarter of 2018; ongoing or future development plans and
capital replacement, improvement or remediation programs; the
estimates of expected or anticipated economic returns from our
mining projects, including future sales of metals, concentrate or
other products produced by us; our ability to achieve our
production guidance; and our plans and expectations for our
properties and operations, including the anticipated operational
and exploration benefits resulting from the acquisition of land
proximal to the south-western margin of the Mackay pit and the
potential of the Fisher property.
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: uncertainty
of production, development plans and cost estimates for the
Marigold mine, the Seabee Gold Operation, Puna Operations and our
projects; our ability to replace Mineral Reserves; commodity price
fluctuations; political or economic instability and unexpected
regulatory changes; currency fluctuations; the possibility of
future losses; general economic conditions; counterparty and market
risks related to the sale of our concentrate 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 further exploration and
development programs and opportunities; uncertainty in acquiring
additional commercially mineable mineral rights; delays in
obtaining or failure to obtain governmental permits, or
non-compliance with our permits; our ability to attract and retain
qualified personnel and management; the impact of governmental
regulations, including health, safety and environmental
regulations, including increased costs and restrictions on
operations due to 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 Operations; 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 value added tax and significant
delays in the collection process in Argentina; claims and legal proceedings,
including adverse rulings in litigation against us and/or our
directors or officers; compliance with anti-corruption laws and
internal controls, and increased regulatory compliance costs;
complying with emerging climate change regulations and the impact
of climate change; fully realizing our interest in deferred
consideration received in connection with recent divestitures;
fully realizing the value of our shareholdings in our marketable
securities, due to changes in price, liquidity or disposal cost of
such marketable securities; 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 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; risks normally associated with the
conduct of joint ventures; an event of default under our
convertible notes may significantly reduce our liquidity and
adversely affect our business; failure to meet covenants under our
senior secured revolving credit facility; information systems
security threats; conflicts of interest that could arise from
certain of our directors' and officers' involvement with other
natural resource companies; other risks related to our common
shares; 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 U.S. Securities and Exchange Commission
("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 currently 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, our ability to continue operating the Marigold mine, the
Seabee Gold Operation and Puna Operations, 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 the
Marigold mine, the Seabee Gold Operation and Puna Operations, 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 (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
This news release includes certain terms or performance
measures commonly used in the mining industry that are not defined
under International Financial Reporting Standards ("IFRS"),
including cash costs and AISC per payable ounce of precious metals
sold, realized metal prices, adjusted attributable income before
tax, adjusted basic attributable net income, adjusted attributable
income (loss) per share and working capital. Non-GAAP financial
measures do not have any standardized meaning prescribed under IFRS
and, therefore, they may not be comparable to similar measures
reported by other companies. We believe that, in addition to
conventional measures prepared in accordance with IFRS, certain
investors use this information to evaluate our performance. The
data presented is intended to provide additional information and
should not be considered in isolation or as a substitute for
measures of performance prepared in accordance with IFRS. These
non-GAAP measures should be read in conjunction with our
consolidated financial statements. Readers should refer to
"Non-GAAP and Additional GAAP Financial Measures" in section 9 of
our MD&A, available under our corporate profile at
www.sedar.com or on our website at www.ssrmining.com, for a more
detailed discussion of how we calculate such measures and for a
reconciliation of such measures to IFRS terms.
View original
content:http://www.prnewswire.com/news-releases/ssr-mining-reports-second-quarter-2018-results-300695153.html
SOURCE SSR Mining Inc.