DENVER and VANCOUVER, BC,
Sept. 18, 2020 /CNW/ - SSR Mining
Inc. ("SSR Mining" or the "Company") (NASDAQ: SSRM) (TSX: SSRM)
(ASX: SSR) announces updated full year 2020 outlook following the
successful completion of the merger of equals transaction with
Alacer Gold Corp. ("Alacer") on September
16, 2020 and reflecting the COVID-19 related impacts to
operations at Seabee and Puna. The Company expects to produce, on a
consolidated basis, 680,000 to 760,000 gold equivalent ounces from
its four operating mines at consolidated all-in sustaining costs
("AISC") of $965 to $1,040 per ounce.
Rod Antal, President and
CEO said, "The completion of the merger between SSR
Mining and Alacer has created one of the premier free cash flow
generators in the sector with a number of near term, value
enhancing catalysts on the horizon. Despite the COVID-19 related
challenges, our full year 2020 outlook demonstrates the strength
and resilience of the Company's diversified operational base. We
anticipate a strong finish to the year, particularly in the fourth
quarter, as Çöpler and Marigold continue to operate and deliver
uninterrupted and Seabee and Puna return to normal operations. We
are currently focused on completing our integration efforts and
assessing our extensive growth and development portfolio. The
upcoming Çöpler technical report in the fourth quarter will be the
first step in this process and will begin to define our low capital
intensity growth pipeline within the Çöpler District."
Full Year 2020 Outlook
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|
|
|
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Operating Guidance
(100%) (1)
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|
Çöpler
(2)
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Marigold
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Seabee
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Puna
|
Other
|
Consolidated
|
Gold
Production
|
koz
|
310 - 360
|
225 - 240
|
80 - 90
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—
|
—
|
615 - 690
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Silver
Production
|
Moz
|
—
|
—
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—
|
4.9 - 5.3
|
—
|
4.9 - 5.3
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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
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Sustaining
Capital
Expenditures
(4)
|
$M
|
40
|
55
|
15
|
15
|
—
|
125
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Capitalized Stripping
/
Capitalized Development
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$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
|
—
|
—
|
—
|
—
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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
|
$M
|
13
|
12
|
8
|
—
|
—
|
33
|
Total Growth
Capital
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$M
|
53
|
12
|
12
|
6
|
7
|
90
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(1)
|
Figures may not
add due to rounding.
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(2)
|
Figures are
reported on a 100% basis. Çöpler is 80% owned by SSR
Mining.
|
(3)
|
SSR Mining reports
the non-GAAP financial measures of cash costs and AISC per payable
ounce of gold and silver sold to manage and evaluate operating
performance at Çöpler, Marigold, Seabee and Puna. See "Cautionary
Note Regarding Non-GAAP Measures".
|
(4)
|
Excludes
sustaining exploration expenditures. Includes $9 million oxygen
plant lease payment at Çöpler.
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(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.
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Based on the financial statements of each of SSR Mining and
Alacer at June 30, 2020, the combined
cash balances were $703 million and
debt balances were $475
million.(6) 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.
________________________________
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(6)
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Combined cash
balance, a non-GAAP financial measure, is the sum of Alacer's
reported consolidated cash and cash equivalents of $241 million and
SSR Mining's reported consolidated cash and cash equivalents of
$462 million both as reported in the respective company's unaudited
condensed consolidated financial statements as at June 30, 2020.
Alacer's consolidated cash excludes restricted cash of $33 million
as at June 30, 2020. Combined debt balance, a non-GAAP financial
measure, is the sum of Alacer's short term and long term portion of
finance facility totaling $245 million as disclosed in note 17 of
Alacer's unaudited condensed consolidated financial statements as
at June 30, 2020 and SSR Mining's 2019 convertible notes of $230
million as disclosed in note 6 of SSR Mining's unaudited condensed
consolidated financial statements as at June 30, 2020. See
"Cautionary Note Regarding Non-GAAP Measures".
|
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
- Puna working capital build on concentrate inventories
SSR Mining will consolidate the operational and financial
results of Çöpler commencing from the Alacer transaction closing
date of September 16, 2020.
Therefore, Çöpler will have limited contribution to SSR Mining's
third quarter financial results with full contribution commencing
in the fourth quarter.
Combined G&A expenditures for 2020 are forecast to total
$25 to $30
million. The combined share-based compensation for 2020 is
forecast to total $20 to $25 million as a result of the strong share price
performance.
Çöpler: Year-To-Date Performance and 2020 Outlook
Gold production from Çöpler was 167,212 ounces through
June 30, 2020 at mine site AISC of
$744 per ounce.
The 2020 Çöpler production outlook is unchanged, with gold
production expected to be 310,000 to 360,000 ounces. Mine site AISC
are forecast to be $710 to
$760 per ounce. Mine site AISC are
higher than original Alacer guidance mainly due to the impact of
higher gold prices on royalty costs and the announced increase to
government royalty rates in Turkey
in early September 2020.
Sustaining capital expenditures are planned to total
$40 million, which includes ongoing
construction of the tailings storage facility ("TSF") lifts,
construction of the first approximate six million tonne heap leach
pad expansion, oxygen plant lease payments and for optimization
work on the sulfide plant. Growth capital expenditures are planned
to total $40 million, which includes
capital for accelerating construction of the TSF, expected
construction of the flotation plant, work on the additional
approximate 20 million tonne heap leach pad expansion and for other
growth initiatives, including the Çöpler District Technical Report
("Technical Report"). Capitalized stripping is expected to be
$2 million for the full year. With
the ongoing oxide exploration success in the district, the 2020
exploration spend is forecast to be $17
million.
An updated Technical Report is planned to be released in the
fourth quarter of 2020. The Technical Report will include:
- Ardich preliminary development plans
- Updated performance expectations of the Çöpler sulfide
plant
- Economic and operating impact of the proposed flotation
circuit
- Opportunities for tailings storage expansion
Detailed engineering for the proposed flotation circuit is
underway and the construction decision remains subject to final
Board and other approvals once the technical work is complete. If
approved, the flotation circuit commissioning is targeted in the
first half of 2021. The preliminary capital estimate for the
proposed flotation circuit is approximately $15 million. The flotation circuit is anticipated
to increase the gold and sulfide sulfur grades processed through
the autoclaves (increasing autoclave and oxygen utilization),
reduce unit costs, and increase sulfide plant throughput and gold
production.
With respect to the COVID-19 pandemic, Çöpler continues to
operate uninterrupted. However, COVID-19 restrictions and the
diversion of resources to manage the pandemic have delayed
improvement initiatives which had an impact on operational
performance. Proactively sending home older staff and those with
existing health conditions also had an impact on mining operations
through a shortfall of mine operators. This contributed to a
decision in the first half of 2020 to adopt a revised mine plan to
diversify ore sources.
Marigold: Year-To-Date Performance and 2020 Outlook
Gold production from Marigold was 108,366 ounces through
June 30, 2020 at mine site AISC of
$1,319 per ounce.
The 2020 Marigold production outlook is unchanged, with gold
production expected to be 225,000 to 240,000 ounces. Mine site AISC
are forecast to be $1,170 to
$1,230 per ounce. Mine site AISC are
higher than the original SSR Mining guidance mainly due to the
impact of higher gold prices on royalty costs.
Sustaining capital expenditures are planned to total
$55 million, which includes the
construction of a new leach pad and the purchase of two new haul
trucks. Capitalized stripping is expected to be $25 million for the full year due to stripping of
upper portions of the next phase within the Mackay pit. The 2020
exploration spend is anticipated to be $16
million, focusing on expanding oxide Mineral Resources
across the Marigold, Valmy, and
Trenton Canyon properties, as well as discovery of higher-grade
sulfides at Trenton Canyon. The Marigold exploration spend has
increased from the original SSR Mining guidance due to the success
of the exploration program through the first half of the year.
With respect to the COVID-19 pandemic, Marigold continues to
operate uninterrupted. The mine continues to work with national and
local authorities in accordance with applicable regulations and
remains vigilant with respect to on-site specific protocols to
protect the health and safety of our employees and
stakeholders.
Seabee: Year-To-Date Performance and 2020 Outlook
Gold production from Seabee was 29,521 ounces through
June 30, 2020 at mine site AISC of
$982 per ounce.
In 2020, Seabee is expected to produce 80,000 to 90,000 ounces
of gold at mine site AISC of $770 to
$820 per ounce.
Sustaining capital expenditures are planned to total
$15 million which includes mining
equipment, underground infrastructure and tailings facility
expansion. Investment in the tailings facility expansion is
expected to be completed in 2021. Growth capital expenditures are
planned to total $4 million, which
includes phase two of the TSF expansion and development work to
access the Santoy Gap Hanging Wall zone. Capitalized development is
expected to be $10 million for the
full year to support higher mining rates. The 2020 exploration
spend is anticipated to be $9 million
with a focus on expansion and definition of the Santoy Gap Hanging
Wall and surface drill programs at the Seabee and Fisher properties
following up on targets identified in 2019.
With respect to the COVID-19 pandemic, Seabee operations were
suspended in March 2020 and limited
underground development and ore mining operations re-commenced in
June 2020. Ore extraction and
development rates ramped up through July and milling operations at
Seabee commenced in early August. Milling operations re-commenced
with an ore stockpile providing mill operating flexibility relative
to mine extraction. Mill throughput is anticipated to average over
1,200 tonnes per operating day for the balance of 2020. The restart
sequencing and ongoing prioritization of activities at Seabee
maintain the flight and camp operations within the determined
health and safety protocols.
Puna: Year-To-Date Performance and 2020 Outlook
Silver production from Puna was 2.1 million ounces through
June 30, 2020 at mine site AISC of
$16.72 per ounce.
In 2020, Puna is expected to produce 4.9 to 5.3 million ounces
of silver at mine site AISC of $15.00
to $17.00 per ounce.
Sustaining capital expenditures are planned to total
$15 million, principally focused on
maintenance of the mine, mill and power generating equipment.
Growth capital expenditures are planned to total $6 million to replace contracted ore
transportation as the operation focuses on lowering unit costs.
Capitalized stripping is expected to be $7
million for the full year.
With respect to the COVID-19 pandemic, Puna operations were
suspended in March 2020. Puna
returned to production late in the second quarter with mining,
hauling and milling all re-commencing operations. Travel protocols
and restrictions within Argentina
and the province of Jujuy remain in place and infection rates have
escalated, causing impacts to operations. During the third quarter,
Puna has had to reduce and suspend operations sporadically to
manage camp occupancy, conduct testing and reduce transmission
risk. Strict protocols remain in place to manage COVID risk within
the camp and operation.
Pitarrilla
At the Pitarrilla project, located in Mexico, $5
million is expected to be spent in 2020 as part of a program
to extend an existing decline to provide drill access to the
underground Mineral Resources. An improved geological model from
work completed in 2019 indicates strong potential to better define
known, high-grade mineralized veining associated with steeply
dipping rhyolite dyke contacts. Extending the underground ramp
provides access for tighter spaced drilling at better orientations
to test the rhyolite dykes and veins for continuity. If infill
drilling confirms the continuity of high-grade mineralized
structures, there would be potential to enhance the grades of
existing Mineral Resources. The start of the decline development
was delayed due to COVID-19 restrictions and is now anticipated to
begin during the fourth quarter of 2020.
San Luis
At the San Luis project,
located in Peru, $2 million is expected to be spent in 2020 to
commence a detailed mapping program in the area of the existing
high-grade gold-silver Mineral Reserves and Resources. Subject to
the lifting of travel restrictions in Peru related to COVID-19, work is anticipated
to begin during the fourth quarter of 2020.
Assumptions
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.
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 Information and
Statements:
Except for statements of historical fact relating to us,
certain statements contained in this press release constitute
forward-looking information, future oriented financial information,
or financial outlooks (collectively "forward-looking information")
within the meaning of Canadian securities laws. Forward-looking
information may be contained in this document and our other public
filings. Forward-looking information relates to statements
concerning our outlook and anticipated events or results and in
some cases, can be identified by terminology such as "may", "will",
"could", "should", "expect", "plan", "anticipate", "believe",
"intend", "estimate", "projects", "predict", "potential",
"continue" or other similar expressions concerning matters that are
not historical facts.
Forward-looking statements in this press release are based on
certain key expectations and assumptions made by us. Although we
believe that the expectations and assumptions on which such
forward-looking statements are based are reasonable, undue reliance
should not be placed on the forward-looking statements because we
can give no assurance that they will prove to be correct.
Forward-looking statements are subject to various risks and
uncertainties which could cause actual results and experience to
differ materially from the anticipated results or expectations
expressed in this press release. The key risks and uncertainties
include, but are not limited to: local and global political and
economic conditions; governmental and regulatory requirements and
actions by governmental authorities, including changes in
government policy, government ownership requirements, changes in
environmental, tax and other laws or regulations and the
interpretation thereof; developments with respect to the COVID-19
pandemic, including the duration, severity and scope of the
pandemic and potential impacts on mining operations; and other risk
factors detailed from time to time in our reports filed with the
Canadian securities regulatory authorities.
Forward-looking statements in this press release include
statements concerning, among other things: preliminary cost
reporting in this document; timing and content of the updated
Technical Report; production, cost, and capital expenditure
guidance; the results of the merger-of-equals transaction; our near
term catalysts; the results of any gold reconciliations; the
ability to discover additional oxide gold ore; the generation of
free cash flow and payment of dividends; matters relating to
proposed exploration; communications with local stakeholders;
maintaining community and government relations; negotiations of
joint ventures; negotiation and completion of transactions;
commodity prices; Mineral Resources, Mineral Reserves, realization
of Mineral Reserves, and the existence or realization of Mineral
Resource estimates; the development approach; the timing and amount
of future production; the timing of studies, announcements, and
analysis; the timing of construction and development of proposed
mines and process facilities; capital and operating expenditures;
economic conditions; availability of sufficient financing;
exploration plans; receipt of regulatory approvals; expectations
regarding COVID-19, its ongoing impact on us and any interruptions
it may cause on our operations; and any and all other timing,
exploration, development, operational, financial, budgetary,
economic, legal, social, environmental, regulatory, and political
matters that may influence or be influenced by future events or
conditions.
Such forward-looking information and statements are based on
a number of material factors and assumptions, including, but not
limited in any manner to, those disclosed in any other of our
filings, and include: the inherent speculative nature of
exploration results; the ability to explore; communications with
local stakeholders; maintaining community and governmental
relations; status of negotiations of joint ventures; weather
conditions at our operations; commodity prices; the ultimate
determination of and realization of Mineral Reserves; existence or
realization of Mineral Resources; the development approach;
availability and receipt of required approvals, titles, licenses
and permits; sufficient working capital to develop and operate the
mines and implement development plans; access to adequate services
and supplies; foreign currency exchange rates; interest rates;
access to capital markets and associated cost of funds;
availability of a qualified work force; ability to negotiate,
finalize, and execute relevant agreements; lack of social
opposition to our mines or facilities; lack of legal challenges
with respect to our properties; the timing and amount of future
production; the ability to meet production, cost, and capital
expenditure targets; timing and ability to produce studies and
analyses; capital and operating expenditures; economic conditions;
availability of sufficient financing; the ultimate ability to mine,
process, and sell mineral products on economically favorable terms;
and any and all other timing, exploration, development,
operational, financial, budgetary, economic, legal, social,
geopolitical, regulatory and political factors that may influence
future events or conditions. While we consider these factors and
assumptions to be reasonable based on information currently
available to us, they may prove to be incorrect.
You should not place undue reliance on forward-looking
information and statements. Forward-looking information and
statements are only predictions based on our current expectations
and our projections about future events. Actual results may vary
from such forward-looking information for a variety of reasons
including, but not limited to, risks and uncertainties disclosed in
our filings on our website at www.ssrmining.com, on
SEDAR at www.sedar.com, on EDGAR at
www.sec.gov and on the ASX at
www.asx.com.au and other unforeseen events or
circumstances. Other than as required by law, we do not intend, and
undertake no obligation to update any forward-looking information
to reflect, among other things, new information or future
events.
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.
Cash costs and AISC per ounce sold are Non-GAAP Measures with
no standardized definition under IFRS. For further information and
a detailed reconciliation to IFRS, please see the "Non-GAAP
Financial Measures" section of our Management's Discussion and
Analysis dated as of August 6, 2020
filed on SEDAR at www.sedar.com.
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SOURCE SSR Mining Inc.