VANCOUVER, Nov. 8, 2018
/PRNewswire/ - SSR Mining Inc. (NASDAQ: SSRM) (TSX: SSRM)
("SSR Mining") reports consolidated financial results for the third
quarter ended September 30, 2018.
Paul Benson, President and CEO
said, "Our improved financial performance during the quarter marks
another positive step forward in SSR Mining's growth plan. We
more than doubled operating cash flow and increased attributable
earnings compared to last quarter, having set new operating records
at Marigold and Seabee, and achieved key milestones at
Chinchillas. This added confidence in the business led to
improved 2018 guidance, as we deliver another year of value and
growth for our shareholders."
Third Quarter 2018 Highlights:
(All figures are in U.S. dollars unless otherwise
noted). Cash costs per payable ounce of gold sold is a
non-GAAP financial measure. Please see "Cautionary Note
Regarding Non-GAAP Measures".
- Increased cash flow and earnings: More than doubled cash
generated from operating activities from the prior quarter to
$35.4 million and increased
attributable net income to $0.05 per
share.
- Increased production and lowered costs: Consolidated
production increased to 94,808 gold equivalent ounces while
achieving lower cash costs of $682
per equivalent payable ounce of gold sold.
- Enhanced scale at Marigold: Moved a record 21.3 million
tonnes of material, a 33% quarterly increase, benefiting from four
additional haul trucks that entered service as scheduled.
- Production growth at Marigold: Produced 58,459 ounces of
gold, an 18% quarterly increase, at cash costs of $711 per payable ounce of gold sold.
- Record production and cash costs at the Seabee Gold
Operation: Produced a record 27,831 ounces of gold at record
low cash costs of $447 per payable
ounce of gold sold.
- Chinchillas project remains on track: Achieved key
milestones during the quarter, including successful test processing
of Chinchillas ore and production of saleable concentrates. The
project remains on budget and commercial production is expected by
the end of the year.
- Maintained strong liquidity: Quarter-end cash balance of
approximately $475 million and total
liquidity of approximately $550
million including our undrawn revolving credit
facility.
Marigold mine, U.S.
|
Three months
ended
|
Operating
data
|
September 30
2018
|
|
June 30
2018
|
|
March 31
2018
|
|
December 31
2017
|
|
September 30
2017
|
|
Total material mined
(kt)
|
21,284
|
|
15,958
|
|
16,150
|
|
13,979
|
|
20,311
|
Waste removed
(kt)
|
14,411
|
|
8,083
|
|
9,052
|
|
8,136
|
|
13,149
|
Total ore stacked
(kt)
|
6,873
|
|
7,875
|
|
7,099
|
|
5,843
|
|
7,162
|
Strip
ratio
|
2.1
|
|
1.0
|
|
1.3
|
|
1.4
|
|
1.8
|
Mining costs ($/t
mined)
|
1.51
|
|
1.92
|
|
1.80
|
|
1.98
|
|
1.52
|
Gold stacked grade
(g/t)
|
0.32
|
|
0.42
|
|
0.37
|
|
0.37
|
|
0.31
|
Processing costs ($/t
processed)
|
1.12
|
|
0.86
|
|
0.93
|
|
1.08
|
|
0.89
|
Gold recovery
(%)
|
72.3
|
|
74.4
|
|
73.6
|
|
74.0
|
|
72.0
|
General and admin
costs ($/t processed)
|
0.50
|
|
0.41
|
|
0.42
|
|
0.51
|
|
0.40
|
|
|
|
|
|
|
|
|
|
|
Gold produced
(oz)
|
58,459
|
|
49,436
|
|
42,960
|
|
52,768
|
|
38,699
|
Gold sold
(oz)
|
59,612
|
|
46,644
|
|
42,078
|
|
51,420
|
|
38,818
|
|
|
|
|
|
|
|
|
|
|
Realized gold price
($/oz) (1)
|
1,207
|
|
1,304
|
|
1,331
|
|
1,269
|
|
1,270
|
|
|
|
|
|
|
|
|
|
Cash costs ($/oz)
(1)
|
711
|
|
700
|
|
720
|
|
699
|
|
684
|
AISC ($/oz)
(1)
|
965
|
|
981
|
|
954
|
|
1,001
|
|
979
|
|
|
|
|
|
|
|
|
|
|
Financial data
($000s)
|
|
|
|
|
|
|
|
|
|
Revenue
|
71,848
|
|
60,752
|
|
55,880
|
|
65,217
|
|
49,395
|
Income from mine
operations
|
13,254
|
|
14,670
|
|
12,312
|
|
12,777
|
|
11,189
|
Capital expenditures
(2)
|
25,461
|
|
14,481
|
|
4,665
|
|
8,194
|
|
3,855
|
Capitalized
stripping
|
2,529
|
|
850
|
|
2,902
|
|
5,712
|
|
6,056
|
Exploration
expenditures (3)
|
2,956
|
|
3,243
|
|
1,914
|
|
1,208
|
|
1,130
|
(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 Interim Statements of
Income, please refer to "Non-GAAP Financial Measures" in Section 9
of our Management's Discussion and Analysis for the three and nine
months ended September 30, 2018 ("MD&A") .
|
(2)
|
Includes expansion
capital expenditures of $16.1 million for the three months ended
September 30, 2018 ($5.9 for the three months ended June 30, 2018
and $nil for the previous three quarters).
|
(3)
|
Includes
capitalized and expensed exploration expenditures.
|
Mine production
In the third quarter of 2018, the Marigold mine produced 58,459
ounces of gold, an 18% quarterly increase, benefiting from the
record ore tonnes stacked in the second quarter.
During the quarter, a record 21.3 million tonnes of material
were mined, a 33% increase compared to the second quarter, due to
four additional haul trucks that entered service during the
quarter, shorter haul distances and improved equipment
availabilities.
Approximately 6.9 million tonnes of ore were delivered to the
heap leach pads, at a gold grade of 0.32 g/t. This compares to 7.9
million tonnes of ore delivered to the heap leach pads at a gold
grade of 0.42 g/t in the second quarter of 2018. The strip ratio
was 2.1:1 for the 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 $711 per payable
ounce of gold sold in the third quarter of 2018 were in line with
the previous quarter. Mining costs of $1.51 per tonne in the third quarter of 2018 were
21% lower than in the previous quarter primarily due to 33% more
tonnes mined. Processing and general administrative unit costs were
30% and 22% higher, respectively, in the third quarter than in the
second quarter due to lower ore tonnes stacked.
AISC per payable ounce of gold sold decreased in the third
quarter of 2018 to $965 from
$981 in the second quarter due to
lower sustaining capital expenditures per payable ounce sold, which
more than offset higher cash costs and capitalized stripping per
payable ounce sold for the quarter.
Mine sales
A total of 59,612 ounces of gold were sold at an average
realized price of $1,207 per ounce
during the third quarter of 2018, an increase of 28% from the
46,644 ounces of gold sold at an average realized price of
$1,304 per ounce during the second
quarter of 2018.
Exploration
The main focus of our 2018 exploration program has been to
conduct infill drilling of the Red Dot resource area and to explore
higher grade structural zones within phases of the Mackay
pit. During the third quarter, we completed a total of 76
reverse circulation drillholes for 26,961 meters at Red Dot and
within the Mackay pit. Through the first nine months of 2018,
we have completed 199 drillholes for 72,017 meters.
During the third quarter at Red Dot and Mackay, we received
results from 44 holes that together with earlier drilling,
increases our confidence that a portion of the Red Dot Inferred
Mineral Resources will be upgraded at year-end 2018. If the
current Inferred Mineral Resources upgrade work is successful, the
upgraded Mineral Resources will be subject to additional
geotechnical drilling and engineering during the first half of
2019, with the goal of declaring a Mineral Reserve at Red Dot, and
also an updated mine plan, by mid-year 2019.
During the fourth quarter of 2018, we will complete the Red Dot
exploration and infill drilling program and continue exploration
drilling of the higher-grade structures in the Mackay Phase 5
area.
Seabee Gold Operation, Canada
|
Three months
ended
|
Operating
data
|
September 30
2018
|
|
June 30
2018
|
|
March 31
2018
|
|
December 31
2017
|
|
September 30
2017
|
|
Total ore milled
(t)
|
88,273
|
|
84,010
|
|
93,269
|
|
89,237
|
|
84,315
|
Ore milled per day
(t/day)
|
959
|
|
923
|
|
1,036
|
|
970
|
|
916
|
Gold mill feed grade
(g/t)
|
9.52
|
|
7.95
|
|
8.95
|
|
8.89
|
|
7.03
|
Mining costs ($/t
mined)
|
48
|
|
60
|
|
59
|
|
66
|
|
74
|
Processing costs ($/t
processed)
|
26
|
|
27
|
|
21
|
|
24
|
|
22
|
Gold recovery
(%)
|
97.1
|
|
97.3
|
|
97.4
|
|
97.4
|
|
97.2
|
General and admin
costs ($/t processed)
|
47
|
|
62
|
|
53
|
|
61
|
|
53
|
|
|
|
|
|
|
|
|
|
|
Gold produced
(oz)
|
27,831
|
|
23,582
|
|
23,717
|
|
24,227
|
|
18,058
|
Gold sold (oz)
(1)
|
29,175
|
|
20,512
|
|
20,012
|
|
23,969
|
|
21,798
|
|
|
|
|
|
|
|
|
|
|
Realized gold price
($/oz) (2)
|
1,210
|
|
1,306
|
|
1,340
|
|
1,276
|
|
1,269
|
|
|
|
|
|
|
|
|
|
|
Cash costs ($/oz)
(2)
|
447
|
|
616
|
|
481
|
|
605
|
|
634
|
AISC ($/oz)
(2)
|
596
|
|
854
|
|
896
|
|
776
|
|
775
|
|
|
|
|
|
|
|
|
|
|
Financial data
($000s)
|
|
|
|
|
|
|
|
|
|
Revenue
|
35,270
|
|
26,706
|
|
26,789
|
|
30,571
|
|
27,652
|
Income from mine
operations
|
11,061
|
|
5,703
|
|
6,672
|
|
2,923
|
|
3,643
|
Capital
expenditures
|
968
|
|
1,035
|
|
4,426
|
|
920
|
|
799
|
Capitalized
development
|
1,812
|
|
2,069
|
|
2,283
|
|
2,301
|
|
1,314
|
Exploration
expenditures (3)
|
2,860
|
|
2,745
|
|
2,032
|
|
1,187
|
|
1,253
|
|
|
(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 price, 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 Interim Statements of Income,
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 a record 27,831 ounces of gold in
the third quarter, a quarterly increase of 18%, driven by higher
average mill feed grade and increased mill throughput.
The mill achieved an average throughput of 959 tonnes per day, a
4% quarterly increase reflecting a higher mining rate at the Santoy
mine. Gold recovery for the quarter remained consistent at
97.1%.
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 $447 in the third quarter of 2018, 27% lower than
the $616 recorded in the second
quarter of 2018. Lower cash costs were primarily the result of
higher tonnes milled at higher grades, while we incurred total
operating costs that were comparable to the prior quarter. Mining
costs per tonne mined were $48 in the
third quarter of 2018, lower than the previous quarter of
$60 due to higher tonnes of material
mined. Processing costs per tonne remained comparable to the
prior quarter, while general and administrative unit costs
decreased by 24% in the third quarter of 2018 compared to the
second quarter of 2018, due to higher tonnes milled.
AISC per payable ounce of gold sold were $596 in the third quarter of 2018, lower than the
$854 in the second quarter of 2018,
primarily due to lower cash costs and lower underground capital
development and capital expenditures per payable ounce sold.
Mine sales
A total of 29,175 ounces of gold were sold at an average
realized price of $1,210 per ounce
during the third quarter of 2018, compared to 20,512 ounces of gold
sold in the second quarter of 2018, at an average realized price of
$1,306 per ounce.
Exploration
For 2018, the Seabee Gold Operation has planned 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 in the Santoy mine area. In the third quarter of 2018, in
the Santoy mine area, we completed 14,577 meters of underground
drilling and 13,539 meters of surface drilling in 59 and 58
drillholes, respectively. Our surface and underground drill
programs focused on three targets for the third quarter, including
Santoy Gap hanging wall ("HW"), the Santoy 8A area and Santoy
Gap. Results at Santoy Gap HW confirm a discovery close to
existing infrastructure that we expect to contribute new,
additional Inferred Mineral Resources at year-end. Results
have been positive and increase our confidence that the majority of
the Santoy 8A area will be upgraded in classification, providing
additional Mineral Reserves at year-end 2018.
Surface exploration drilling in the third quarter of 2018
focused on two areas including Santoy 8A East, with 1,113 meters in
two drillholes, and the Fisher project, with 1,866 meters completed
in four drillholes. Our activities in the quarter shifted from
drilling to completing field-based programs of mapping, continued
overburden geochemical surveys of soils and tills, prospecting, and
drill testing of first pass targets on the extension of the Santoy
shear zone identified along the length of the Fisher project.
Mapping and prospecting on Fisher has identified new gold bearing
shear zone quartz vein targets, and first pass drill results have
been returned with anomalous gold values. We continue to be
encouraged by the potential of this early stage property.
Activities in the fourth quarter will focus on continuing the
conversion drilling from underground on the Santoy Gap and Santoy
8A targets, resource definition drilling on Santoy Gap HW, and
advancing our surface exploration programs on Fisher. Surface
drilling activity in the fourth quarter will also take place at
Santoy 8A East.
Puna Operations, Argentina
(75% interest)
(Amounts presented on 100% basis unless
otherwise stated)
|
Three months
ended
|
Operating
data
|
September 30
2018
|
|
June 30
2018
|
|
March 31
2018
|
|
December 31
2017
|
|
September 30
2017
|
|
Ore milled
(kt)
|
308
|
|
396
|
|
373
|
|
442
|
|
461
|
Silver mill feed
grade (g/t)
|
96
|
|
110
|
|
115
|
|
125
|
|
153
|
Zinc mill feed grade
(%)
|
1.25
|
|
0.71
|
|
—
|
|
—
|
|
—
|
Processing costs ($/t
milled)
|
20.87
|
|
17.26
|
|
15.34
|
|
13.53
|
|
11.92
|
Silver recovery
(%)
|
69.9
|
|
68.1
|
|
67.7
|
|
66.0
|
|
67.8
|
Zinc recovery
(%)
|
38.1
|
|
31.5
|
|
—
|
|
—
|
|
—
|
General and admin
costs ($/t milled)
|
7.98
|
|
7.07
|
|
6.33
|
|
5.74
|
|
4.81
|
|
|
|
|
|
|
|
|
|
Silver produced ('000
oz)
|
666
|
|
954
|
|
938
|
|
1,169
|
|
1,541
|
Silver produced
(attributable) ('000 oz) (1)
|
500
|
|
716
|
|
704
|
|
877
|
|
1,156
|
Lead produced ('000
lb) (2)
|
372
|
|
—
|
|
—
|
|
—
|
|
—
|
Lead produced
(attributable) ('000 lb) (1,2)
|
279
|
|
—
|
|
—
|
|
—
|
|
—
|
Zinc produced ('000
lb) (3)
|
3,241
|
|
1,521
|
|
—
|
|
—
|
|
—
|
Zinc produced
(attributable) ('000 lb) (1,3)
|
2,431
|
|
1,141
|
|
—
|
|
—
|
|
—
|
Silver sold ('000
oz)
|
623
|
|
1,142
|
|
1,064
|
|
820
|
|
2,076
|
Silver sold
(attributable) ('000 oz) (1)
|
467
|
|
857
|
|
798
|
|
615
|
|
1,557
|
Zinc sold ('000 lb)
(3,5)
|
383
|
|
—
|
|
—
|
|
—
|
|
—
|
Zinc sold
(attributable) ('000 lb) (1,3)
|
287
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|
|
|
|
|
|
|
|
|
Realized silver price
($/oz) (4)
|
15.45
|
|
16.49
|
|
16.79
|
|
16.96
|
|
16.77
|
|
|
|
|
|
|
Cash costs ($/oz)
(4,5,6)
|
17.41
|
|
14.73
|
|
17.07
|
|
16.36
|
|
12.76
|
AISC ($/oz)
(4,6)
|
22.39
|
|
17.66
|
|
18.37
|
|
18.30
|
|
13.56
|
|
|
|
|
|
|
|
|
|
|
Financial Data
($000s)
|
|
|
|
|
|
|
|
|
|
Revenue
|
7,915
|
|
16,570
|
|
15,233
|
|
12,093
|
|
28,958
|
(Loss) income from
mine operations
|
(2,440)
|
|
830
|
|
(1,753)
|
|
5,490
|
|
7,690
|
Capital expenditures
(7)
|
2,390
|
|
2,652
|
|
789
|
|
917
|
|
1,006
|
Exploration
expenditures (7)
|
6
|
|
429
|
|
6
|
|
—
|
|
—
|
|
|
(1)
|
Figures are on a
75% attributable basis.
|
(2)
|
Data for lead
production relates only to lead in lead-silver
concentrate.
|
(3)
|
Data for zinc
production and sales relate only to zinc in zinc
concentrate.
|
(4)
|
We report the
non-GAAP financial measures of realized silver price, cash costs,
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 Interim Statements of Income,
please refer to "Non-GAAP Financial Measures" in Section 9 of our
MD&A.
|
(5)
|
Zinc revenue is
treated as a by-product credit in cash costs and AISC. Refer
to "Non-GAAP Financial Measures" in Section 9 of our
MD&A.
|
(6)
|
Cash costs and
AISC per payable ounce of silver sold include stockpile inventory
costs previously incurred of $nil for the three months ended
September 30, 2018 (June 30, 2018 - $nil, March 31, 2018 - $5.75,
December 31, 2017 - $5.30, September 30, 2017 -
$5.20).
|
(7)
|
Does not include
exploration or development of the Chinchillas
project.
|
Mine production
During the third quarter of 2018, Puna Operations produced 0.7
million ounces of silver and 3.2 million pounds of zinc, reflecting
a shift to processing stockpiles with higher zinc content.
Ore was milled at an average rate of 3,348 tonnes per day in the
third quarter, 23% below the second quarter, due to planned major
mill maintenance occurring in July and test processing of
Chinchillas ore. Ore milled in the third quarter contained an
average silver grade of 96 g/t, 13% lower than the 110 g/t average
silver grade in the second quarter, consistent with processing of
increasingly lower grade stockpiles. The average silver
recovery in the third quarter was 70%, a 3% improvement compared to
the previous quarter.
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 costs of inventory, treatment and
refining costs, provincial royalties, export duties and by-product
credits, were $17.41 per payable
ounce of silver sold in the third quarter of 2018, an increase from
$14.73 per payable ounce of silver
sold in the second quarter of 2018. Such increase was
primarily due to lower production resulting from lower silver grade
of the stockpiled ore processed. Zinc sales were
significantly below production in the period and generated minimal
by-product credits.
AISC per payable ounce of silver sold in the third quarter of
2018 were $22.39, 27% higher than
$17.66 in the second quarter of 2018
due to higher cash costs and sustaining capital expenditures per
payable ounce of silver sold compared to the second quarter.
During the third quarter, the Federal Government of Argentina instituted export duties on several
goods, including metal concentrate exports. Effective
September 3, 2018, the export of
silver, lead and zinc concentrates were levied with an export duty
of three Argentine Pesos per one U.S.
dollar of export value. Such export duty is mandated
to cease at the end of 2020.
Mine sales
Silver sales were 0.6 million ounces for the quarter, marginally
lower than production. We re-commenced zinc concentrate sales
during the third quarter, selling 0.4 million pounds of
zinc with a ramp-up of zinc sales anticipated through the
fourth quarter.
Exploration
There were no exploration activities during the third quarter at
Puna Operations as we focused on commencing mining activities at
Chinchillas. We continue to evaluate the results from the
drill program conducted in the first half of 2018 on the
Potosi vein extension for its
potential to enhance our underground Mineral Resources.
Chinchillas project, Argentina
During the third quarter, pre-stripping activities at the
Chinchillas project continued to advance, with approximately 2.1
million tonnes of waste and 0.3 million tonnes of ore mined.
Approximately 73,000 tonnes of ore from the Chinchillas pit were
delivered to the Pirquitas mill, of which approximately 39,000
tonnes were processed in two separate test runs as part of the
project execution. The tests successfully validated
metallurgical performance of the ore and produced saleable
lead-silver and zinc concentrates. Data related to
pre-commercial processing of ore from the Chinchillas pit is
included in the table above.
Construction of the in-pit tailings disposal system advanced
significantly, with welding of all carbon steel and HDPE piping to
and from the pit completed, and all slurry pumps installed and
aligned. Hydraulic testing is expected to be completed by the
end of November 2018. All electrical and instrumentation
cables were pulled between the tailings pumps and the electrical
room and final connections will be completed for overall system
commissioning in the fourth quarter. A final, key contract
was also awarded for construction of water diversion structures
around the Chinchillas pit. The fine ore stockpile dome near
the Pirquitas mill was completed by the end of October 2018.
The Chinchillas to Pirquitas access road by-passes around three
communities were completed, including road upgrades and water
crossings. The power line upgrade between Chinchillas and Pirquitas
was also completed and final connection to the Pirquitas power
plant is planned for mid-November
2018, including energizing transformers at Chinchillas.
At the Chinchillas truck shop, internal floor slabs were
completed and all structural steel erected allowing for the start
of cladding installation during the quarter. The dining room
and change house modules were also delivered to site and assembled,
and the office/administration building commenced fabrication.
Concurrent with sustainable ore delivery from the Chinchillas
mine to the Pirquitas mill, we expect that commercial production
will be achieved in the fourth quarter. Certain
infrastructure and remaining road upgrades within the scope of the
project will continue into the first quarter of 2019. The
project remains on budget.
Other Projects
The SIB exploration project is located immediately south of the
high-grade, past-producing Eskay
Creek mine property in northwest British Columbia. During the third quarter, we
completed our 2018 drill campaign of 9,134 meters of core drilling
in 11 holes. Results received to date do not meet our expectations,
as a result we plan to terminate this exploration earn-in agreement
by year-end 2018.
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 strong operating performance at Marigold and Seabee
through the nine-month period of 2018 and ore scheduling at Puna
Operations, we are improving and revising certain guidance
metrics.
At the Marigold mine, annual cash cost guidance is reduced for
the second time this year and is now expected to total between
$715 and $735 per payable ounce of gold sold, a
$25 per ounce reduction from original
guidance. Annual production guidance narrows to between
195,000 and 205,000 gold ounces, reflecting the faster leaching
kinetics that benefited the third quarter. Additionally,
strong ore delivery reduces annual capitalized stripping guidance
to $10 million from $15 million.
At Seabee Gold Operation, annual production guidance increased
to between 90,000 and 95,000 gold ounces, an approximate 4,000 gold
ounce increase reflecting higher grades of ore milled. Annual
cash cost guidance is also reduced for the second time this year to
between $535 and $560 per payable ounce of gold sold, firmly
positioning Seabee as a low cost gold producer.
With the Chinchillas open pit progressing toward sustained ore
delivery to the Pirquitas mill in the fourth quarter and
considering results of stockpiled ore processed through the third
quarter, annual silver production guidance is being narrowed,
annual zinc production guidance increased and annual lead
production guidance reduced. Sustaining capital expenditures
and capitalized stripping guidance for 2018 is also reduced to
$8 million and $2 million, respectively.
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
|
|
195,000 -
205,000
|
|
90,000 -
95,000
|
|
—
|
Silver
Production
|
|
Moz
|
|
—
|
|
—
|
|
3.0 - 3.5
|
Silver Production
(attributable)
|
|
Moz
|
|
—
|
|
—
|
|
2.3 - 2.6
|
Lead
Production
|
|
Mlb
|
|
—
|
|
—
|
|
1.5 - 2.0
|
Lead Production
(attributable)
|
|
Mlb
|
|
—
|
|
—
|
|
1.1 - 1.5
|
Zinc
Production
|
|
Mlb
|
|
—
|
|
—
|
|
9.0 - 10.0
|
Zinc Production
(attributable)
|
|
Mlb
|
|
—
|
|
—
|
|
6.7 - 7.5
|
Cash Cost per Payable
Ounce Sold (1)
|
|
$/oz
|
|
715 - 735
|
|
535 - 560
|
|
12.50 -
15.00
|
Sustaining Capital
Expenditures (2)
|
|
$M
|
|
35
|
|
10
|
|
8
|
Capitalized Stripping
/ Capitalized Development
|
|
$M
|
|
10
|
|
9
|
|
2
|
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.
|
Consolidated Financial Summary
(presented in
thousands of U.S. dollars, except for per share value)
Selected Financial
Data (1)
|
|
|
|
|
|
|
Three months ended
September 30,
|
|
Nine months ended
September 30,
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
|
$
|
|
$
|
|
$
|
|
$
|
Revenue
|
115,033
|
|
106,005
|
|
316,963
|
|
340,892
|
Income from mine
operations
|
21,875
|
|
22,522
|
|
60,309
|
|
92,073
|
Gross margin
(%)
|
19
|
|
21
|
|
19
|
|
27
|
Operating
income
|
10,220
|
|
10,393
|
|
26,834
|
|
81,395
|
Net income
|
2,228
|
|
1,821
|
|
2,513
|
|
54,616
|
Basic attributable
income per share
|
0.05
|
|
0.01
|
|
0.08
|
|
0.45
|
Adjusted attributable
income before tax
|
14,025
|
|
4,225
|
|
33,813
|
|
39,907
|
Adjusted attributable
net income
|
10,781
|
|
4,360
|
|
28,513
|
|
34,381
|
Adjusted basic
attributable income per share
|
0.09
|
|
0.04
|
|
0.24
|
|
0.29
|
Cash generated by
operating activities
|
35,374
|
|
30,292
|
|
63,513
|
|
99,550
|
Cash generated by
(used in) investing activities
|
(56,021)
|
|
38,570
|
|
(52,903)
|
|
(5,861)
|
Cash generated by
financing activities
|
2,449
|
|
1,774
|
|
8,613
|
|
2,659
|
|
|
|
|
|
|
|
|
Financial
Position
|
|
|
September 30,
2018
|
|
December 31,
2017
|
Cash and cash
equivalents
|
|
|
474,511
|
|
|
459,864
|
Marketable
securities
|
|
|
6,714
|
|
|
114,001
|
Current
assets
|
|
|
731,559
|
|
|
799,597
|
Current
liabilities
|
|
|
82,111
|
|
|
71,466
|
Working
capital
|
|
|
649,448
|
|
|
728,131
|
Total
assets
|
|
|
1,503,717
|
|
|
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 third quarter of 2018 increased by 9% relative to
the comparative quarter of 2017 due to increases at both the
Marigold mine and Seabee Gold Operation which more than offset a
decrease at Puna Operations and lower metal prices.
Income from mine operations in the third quarter of 2018
generated a gross margin of 19%, lower than the 21% margin in the
third quarter of 2017. Relative to the comparative prior year
quarter, the Seabee Gold Operation generated significantly higher
income from mine operations at lower costs, while Puna Operations
generated a loss from mine operations, due to higher costs as we
processed lower grade stockpiles.
Net income in the third quarter was negatively impacted by an
elevated effective tax rate due principally to the initial
recognition of a deferred tax liability of $2.6 million for Puna Operations arising
primarily from the impact of the devaluation of the ARS upon the
tax basis. There was an offsetting recovery of $1.1 million in the period related to the
re-organization in Argentina due
to favourable foreign exchange between the previous period when the
tax liability was recognized and the tax was paid.
Cash generated by operating activities in the quarter was
$35.4 million compared to
$30.3 million in the third quarter of
2017. Higher gold sales from both the Seabee Gold Operation
and Marigold mine were partially offset by lower silver sales from
Puna Operations. Seabee Gold Operation reported record low
cash costs, while cash costs at the Marigold mine and Puna
Operations were higher than the comparative period.
We used $56.0 million in investing
activities in the third quarter of 2018 compared to cash generated
by investing activities of $38.6
million in the third quarter of 2017. In the third quarter
of 2018, we funded certain investments in our business including
$37.0 million in property, plant and
equipment and $13.6 million in the
Chinchillas project. We received $2.4
million from our joint venture partner for its share of the
development costs of the Chinchillas project. Cash and cash
equivalents were $474.5 million at
quarter-end.
Year-to-date financial summary
The 7% decrease in revenue for the nine months of 2018 compared
to the nine months of 2017 was due to a 9% decrease in equivalent
payable gold ounces sold, partially offset by higher realized gold
prices. The decrease in equivalent payable gold ounces sold was due
to lower silver ounces sold from Puna Operations, as lower grade
ore was processed, which was partially offset by higher gold ounces
sold from the Seabee Gold Operation.
Income from mine operations in the nine months of 2018 generated
a gross margin of 19%, compared to the 27% margin in the nine
months 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 the Seabee Gold Operation. In the nine
months 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 nine months of 2018 was negatively impacted
by an elevated effective tax rate due to both a $4.7 million tax expense related to the Argentine
re-organization recorded in the second quarter of 2018, and the
initial recognition of a deferred tax liability of $2.6 million for Puna Operations arising
primarily from the impact of the devaluation of the ARS upon the
tax basis. Net income for the nine months of 2017 was
positively impacted by an impairment reversal of the Pirquitas
plant of $24.4 million resulting from
its life extension following the formation of Puna Operations.
Cash generated by operating activities in the nine months of
2018 decreased to $63.5 million
compared to $99.6 million in the nine
months of 2017. Lower sales combined with higher unit costs both at
Puna Operations and the Marigold mine were partially offset
by higher sales and lower unit costs at the Seabee Gold Operation.
We used $52.9 million from investing
activities in the nine months of 2018 compared to the use of
$5.9 million in the nine months of
2017. In the nine months of 2018, we received $63.4 million from the sale of our remaining
common shares of Pretium Resources Inc. ("Pretium") which was more
than offset by investments in our business including $57.2 million in property, plant and equipment
and $41.4 million in the Chinchillas
project. We received $6.4
million from our joint venture partner for its share of the
development costs of the Chinchillas project over this period.
Corporate summary
SSR Mining has an experienced management team of mine-builders
and operators with proven capabilities. We have a
strong balance sheet with $475
million in cash and cash equivalents as at
September 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.
As of June 30, 2018, we sold our
remaining position of 9.0 million Pretium common shares for pre-tax
cash proceeds of approximately $63.4
million and no longer hold any Pretium shares.
On July 6, 2018, we entered into a
credit agreement with Golden Arrow Resources Corporation ("Golden
Arrow"), pursuant to which we provided Golden Arrow with a two-year non-revolving term
loan in an aggregate principal amount equal to $10.0 million.
Qualified Persons
The scientific and technical information contained in this news
release relating to the Marigold mine has been reviewed and
approved by James Frost, PE 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. Frost is our
Technical Services Superintendent and Mr. Carver is our Chief
Geologist at the Marigold mine. The scientific and technical data
contained in this news release 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 news release 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. The scientific and technical information contained in
this news release relating to the SIB project has been reviewed and
approved by Mr. Edmunds.
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,
November 9, 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 2654
|
All other
callers:
|
+1 (412) 317-0088,
replay code 2654
|
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;
production and cost guidance; improvements to cash costs per
payable ounce of gold, silver and other metals sold; the prices of
gold, silver and other metals; future interest rates 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; our ability to
convert Inferred Mineral Resources to Indicated Mineral Resources
and to convert Mineral Resources into Mineral Reserves, including
(a) the goal of upgrading Inferred Mineral Resources at Red Dot at
year end 2018 and declaring a Mineral Reserve at Red Dot by
mid-2019, and (b) additional inferred resources at year end at
Santoy and the objective to increase and convert Mineral Resources
into Mineral Reserves near the Santoy mine; the potential to
enhance underground Mineral Resources at Puna Operations; timing of
production and production levels at the Marigold mine, the Seabee
Gold Operation and Puna Operations; timing and focus of our
exploration and development programs, expected timing of completion
of construction milestones at Puna Operations, including the
expectation that the Chinchillas project will remain on budget and
on schedule to support commercial production and sustained delivery
of ore to the Pirquitas mill in the fourth quarter of 2018, the
in-pit tailings disposal system will be commissioned in the fourth
quarter of 2018, the power line upgrade between Chinchillas and
Pirquitas will be connected to the Pirquitas power plant in
mid-November 2018 and all buildings
will be completed by the end of February
2019; 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, including the expected ramp up of zinc sales from
Puna Operations in the fourth quarter of 2018; our ability to
achieve our production guidance; 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: 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; inability to collect under the Loan to
Golden Arrow; 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 realized metal prices, cash costs and AISC per payable
ounce of precious metals sold, adjusted income before tax
attributable to our shareholders, adjusted income tax expense,
adjusted net income attributable to our shareholders, adjusted
basic income per share attributable to our shareholders and gross
margin. 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 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.
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SOURCE SSR Mining Inc.