SSR Mining Reports First Quarter 2019 Results
News Release 19-09
May 9, 2019
SSR MINING REPORTS FIRST QUARTER 2019 RESULTS
VANCOUVER, B.C. - SSR Mining Inc. (NASDAQ: SSRM) (TSX: SSRM) (“SSR Mining”) reports consolidated financial results for the first quarter ended March 31, 2019.
Paul Benson, President and CEO said, "Pleasingly, we had a strong first quarter with near-record consolidated production of over 112,000 gold equivalent ounces at lower cash costs, driven by solid performance at all three operations. Seabee achieved record production at near-record low cash costs, while Puna production and costs benefited from a full quarter of processing higher grade Chinchillas ore and increasing by-product credits. As a result, we delivered another quarter of solid financial performance and are well positioned to achieve record production for 2019."
First Quarter 2019 Highlights:
(All figures are in U.S. dollars unless otherwise noted)
- Increased production at lower costs: Achieved quarterly consolidated production of nearrecord 112,513 gold equivalent ounces at cash costs of $712 per payable ounce of gold sold.
- Solid financial performance: Reported positive income from mine operations at all three mines totaling $30.2 million, net income of $5.7 million and adjusted attributable net income of $17.2 million or $0.14 per share.
- Low-cost record production at the Seabee Gold Operation: Produced 31,183 ounces of gold at cash costs of $467 per payable ounce of gold sold, second lowest quarterly cash costs since acquiring the operation in 2016.
- Solid operating performance at the Marigold mine: Mined 17.3 million tonnes of material with strong gold production of 53,151 ounces at cash costs of $812 per payable ounce of gold sold.
- Doubled silver production with lower costs at Puna Operations: Produced 2.4 million ounces of silver at lower cash costs of $9.94 per payable ounce of silver sold, as we processed higher grade silver ore from the Chinchillas mine.
- Chinchillas mine ramp up substantially completed: The Chinchillas mine was substantially completed during the quarter on budget. Focus is now on achieving steady state production.
- Completed $230 million convertible notes offering: Issued $230 million aggregate principal amount of 2.50% unsecured convertible senior notes on March 19, 2019. A portion of the proceeds was used to repurchase $150 million of our outstanding $265 million 2.875% convertible notes.
- Maintained strong balance sheet: Quarter-end cash increased to $461 million.
SSR Mining Inc. PHONE +1 604.689.3846 Suite 800 - 1055 Dunsmuir Street www.ssrmining.com TOLL FREE +1 888.338.0046 PO Box 49088 Vancouver, BC, Canada V7X 1G4
Marigold mine, U.S.
| March 31 December 31 September 30 | June 30 | March 31 | |||
|---|---|---|---|---|---|
| Operating data | 2019 | 2018 | 2018 | 2018 | 2018 |
| Total material mined (kt) | 17,295 | 17,039 | 21,284 | 15,958 | 16,150 |
| Waste removed (kt) | 11,767 | 11,361 | 14,411 | 8,083 | 9,052 |
| Total ore stacked (kt) | 5,528 | 5,679 | 6,873 | 7,875 | 7,099 |
| Strip ratio | 2.1 | 2.0 | 2.1 | 1.0 | 1.3 |
| Mining costs ($/t mined) | 1.73 | 1.86 | 1.51 | 1.92 | 1.80 |
| Gold stacked grade (g/t) | 0.34 | 0.34 | 0.32 | 0.42 | 0.37 |
| Processing costs ($/t processed) | 1.20 | 1.27 | 1.12 | 0.86 | 0.93 |
| Gold recovery (%) | 73.0 | 72.9 | 72.3 | 74.4 | 73.6 |
General and admin costs ($/t
| processed) | 0.54 | 0.51 | 0.50 | 0.41 | 0.42 |
| Gold produced (oz) | 53,151 | 54,306 | 58,459 | 49,436 | 42,960 |
| Gold sold (oz) | 55,517 | 50,550 | 59,612 | 46,644 | 42,078 |
| Realized gold price ($/oz)(1) | 1,303 | 1,227 | 1,207 | 1,304 | 1,331 |
| Cash costs ($/oz)(1) | 812 | 760 | 711 | 700 | 720 |
| AISC ($/oz)(1) | 984 | 995 | 965 | 981 | 954 |
Financial data ($000s)
| Revenue | 72,263 | 61,861 | 71,848 | 60,752 | 55,880 |
| Income from mine operations | 12,981 | 9,977 | 13,254 | 14,670 | 12,312 |
| Capital expenditures(2) | 3,167 | 8,328 | 25,461 | 14,481 | 4,665 |
| Capitalized stripping | 2,293 | 1,208 | 2,529 | 850 | 2,902 |
| Exploration expenditures(3) | 3,653 | 2,096 | 2,956 | 3,243 | 1,914 |
(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. See “Cautionary Note Regarding Non-GAAP Measures”.
(2) Includes expansion capital expenditure of $22 million in 2018.
(3) Includes capitalized and expensed exploration expenditures.
Mine production
In the first quarter of 2019, the Marigold mine produced 53,151 ounces of gold, a 2% decline from the fourth quarter of 2018 mainly due to wet weather conditions during the period. Gold sales totaled 55,517 ounces, 10% higher than the previous quarter as we sold bullion inventory accumulated in the fourth quarter of 2018.
During the quarter, 17.3 million tonnes of material were mined, a 2% increase compared to the fourth quarter of 2018, as we commenced mining the next phase of the Mackay pit, which resulted in shorter haul distances and offset the weather events early in the quarter.
Approximately 5.5 million tonnes of ore were delivered to the heap leach pads at a grade of 0.34 g/t gold. This compares to 5.7 million tonnes of ore delivered to the heap leach pads at a grade of 0.34 g/t gold in the fourth quarter of 2018. The strip ratio was 2.1:1 for the quarter.
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Mine operating costs
Cash costs and AISC per payable ounce of gold sold and realized gold price 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 $812 per payable ounce of gold sold in the first quarter of 2019 was 7% higher than the previous quarter primarily due to planned lower grades mined in the second half of 2018 and the first quarter of 2019. Total mining costs of $1.73 per tonne in the first quarter of 2019 were 7% less than in the previous quarter due to 2% more tonnes mined and lower maintenance costs. Processing unit costs were 6% lower in the first quarter due to a 17% reduction in cyanide costs that resulted from the start up of a new leach pad. This reduction in costs offset the 3% reduction in ore tonnes stacked. General and administrative unit costs were 6% higher in the first quarter of 2019 than in the fourth quarter of 2018 primarily due to lower ore tonnes stacked.
Despite the higher cash costs, AISC per payable ounce of gold sold decreased in the first quarter of 2019 to $984 from $995 in the fourth quarter due to decreased capital spending, partially offset by higher deferred stripping and capitalized exploration.
Mine sales
A total of 55,517 ounces of gold were sold at an average realized gold price of $1,303 per ounce during the first quarter of 2019, an increase of 10% from the 50,550 ounces of gold sold at an average realized gold price of $1,227 per ounce during the fourth quarter of 2018.
Exploration
The primary objective for exploration work in 2019 is to explore the north and south extensions of Red Dot, and the western area of the Mackay pit. Activities in these areas have the potential to discover additional Mineral Resources due to their proximity to existing Mineral Resources. During the first quarter, we completed 70 reverse circulation (RC) drillholes for 23,447 meters.
A limited amount of work during the period advanced the Mineral Resource to Mineral Reserve conversion at Red Dot through the completion of geotechnical and QA/QC core drilling. This work comprised 12 core holes for 4,893 meters.
During the period, results were received from 40 of the 70 RC holes, with 29 reporting resource grade intercepts. These results will be compiled later in the year with our existing data.
Looking ahead to the second quarter, RC drilling on the East Basalt and Valmy targets will commence once ground conditions improve from the wet weather conditions.
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Seabee Gold Operation, Canada
| Operating data | March 31 December 31 September 30 | June 30 | March 31 | ||
|---|---|---|---|---|---|
| 2019 | 2018 | 2018 | 2018 | 2018 | |
| Total ore milled (t) | 90,756 | 86,447 | 88,273 | 84,010 | 93,269 |
| Ore milled per day (t/day) | 1,008 | 940 | 959 | 923 | 1,036 |
| Gold mill feed grade (g/t) | 8.59 | 10.20 | 9.52 | 7.95 | 8.95 |
| Mining costs ($/t mined) | 52 | 57 | 48 | 60 | 59 |
| Processing costs ($/t processed) | 28 | 26 | 26 | 27 | 21 |
| Gold recovery (%) | 97.2 | 97.6 | 97.1 | 97.3 | 97.4 |
General and admin costs ($/t
| processed) | 53 | 63 | 47 | 62 | 53 |
| Gold produced (oz) | 31,183 | 20,473 | 27,831 | 23,582 | 23,716 |
| Gold sold (oz)(1) | 27,999 | 21,711 | 29,175 | 20,512 | 20,012 |
| Realized gold price ($/oz)(2) | 1,302 | 1,236 | 1,210 | 1,306 | 1,340 |
| Cash costs ($/oz)(2) | 467 | 502 | 447 | 616 | 481 |
| AISC ($/oz)(2) | 973 | 743 | 596 | 854 | 896 |
Financial data ($000s)
| Revenue | 36,431 | 26,890 | 35,270 | 26,706 | 26,789 |
| Income from mine operations | 13,672 | 7,347 | 11,061 | 5,703 | 6,672 |
| Capital expenditures | 8,772 | 625 | 968 | 1,035 | 4,426 |
| Capitalized development | 3,379 | 2,910 | 1,812 | 2,069 | 2,283 |
| Exploration expenditures(3) | 3,172 | 1,661 | 2,860 | 2,745 | 2,032 |
(1) Beginning with the first quarter of 2018, the holder of the 3% net smelter return 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. See “Cautionary Note Regarding Non-GAAP Measures”.
(3) Includes capitalized and expensed exploration expenditures.
Mine production
Seabee Gold Operation produced a record 31,183 ounces of gold in the first quarter of 2019, largely due to timing of gold pours at year-end 2018 and aided by the increased mill throughput rate. Gold sales totaled 27,999 ounces for the first quarter, 29% higher than the fourth quarter of 2018.
The mill achieved an average throughput of 1,008 tonnes per day over the first quarter, a 7% increase compared to the previous quarter, reflecting a higher mining rate at the Santoy mine. Gold mill feed grade was 8.59 g/t, in line with plan. Gold recovery remained consistent at 97.2%.
Mine operating costs
Cash costs and AISC per payable ounce of gold sold and realized gold price are non-GAAP financial measures. Please see “Cautionary Note Regarding Non-GAAP Measures”.
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Cash costs per payable ounce of gold sold, which include all costs of inventory and refining costs, were $467 in the first quarter of 2019, 7% lower than the $502 recorded in the fourth quarter of 2018. Lower cash costs were due to lower unit operating costs for mining and general and administrative as a higher proportion of underground activities were directed to capitalized development. Costs per tonne mined were $52 in the first quarter of 2019, 9% lower than in the previous quarter due to higher tonnes mined. Processing costs per tonne were higher than the prior quarter, while general and administrative unit costs decreased by 16% in the first quarter of 2019 compared to the fourth quarter of 2018 due to adjustments to payroll accruals and lower tonnes milled in the fourth quarter of 2018. Lower unit costs more than offset lower grades processed.
AISC per payable ounce of gold sold were $973 in the first quarter of 2019, 31% higher than the $743 in the fourth quarter of 2018 as increased capital expenditures, capital development and capitalized exploration were somewhat offset by payable ounce of gold sold. This increase is due to the seasonal nature of our operation whereby a majority of annual sustaining capital items are purchased in the first quarter of each year for delivery on the ice road for summer construction. In the first quarter, sustaining capital included approximately $7 million for our planned investment in underground mining equipment to increase capacity, flexibility and reliability at the Seabee mine.
Mine sales
A total of 27,999 ounces were sold at an average realized gold price of $1,302 per ounce during the first quarter of 2019, 29% higher than the 21,711 ounces of gold sold in the fourth quarter of 2018, at an average realized gold price of $1,236 per ounce of gold.
Exploration
For 2019, the Seabee Gold Operation planned 45,000 meters of underground drilling and 23,000 meters of surface drilling with the objective to increase and convert Mineral Resources into Mineral Reserves near the Santoy Mine. In the first quarter of 2019, we completed 12,576 meters of underground drilling and 15,561 meters of surface drilling in 24 and 58 drillholes, respectively.
Underground activities for the first quarter of 2019 centered on three targets, including Santoy Gap hanging wall (“Gap HW”), Santoy 8A vein zone and Santoy 9 A and C vein zones. Surface drilling in the first quarter focused on three areas including Gap HW, 8A East, Batman Lake and the Fisher project with 7,639 meters being completed in 20 core drillholes. Several Gap HW holes intersected visible gold, particularly in the near surface drillholes targeting the up plunge extension of the structure. We expect that these results will increase Mineral Resources for Gap HW once compiled with our existing drill data.
On greenfields targets, we received anomalous positive results from two holes at Batman Lake, located 800 meters south of Santoy mine on the Seabee property, and the last hole completed on the north Mac showing at the Fisher project. Results from the majority of the Fisher property drilling are pending assay results.
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Puna Operations, Argentina (75% interest)
(amounts presented on a 100% basis unless otherwise stated)
Three months ended
| March 31 December 31 September 30 | June 30 | March 31 | |||
|---|---|---|---|---|---|
| Operating data | 2019 | 2018 | 2018 | 2018 | 2018 |
| Total material mined (kt)(1) | 2,618 | 897 | — | — | — |
| Waste removed (kt)(1) | 2,469 | 696 | — | — | — |
| Strip ratio(1) | 16.5 | 3.5 | — | — | — |
| Mining costs ($/t mined)(1) | 2.74 | 2.61 | — | — | — |
| Ore milled (kt) | 345 | 342 | 308 | 396 | 374 |
| Silver mill feed grade (g/t) | 235 | 133 | 96 | 110 | 115 |
| Zinc mill feed grade (%) | 0.46 | 1.14 | 1.25 | 0.71 | — |
| Lead mill feed grade (%)(1) | 1.07 | 0.92 | — | — | — |
| Processing costs ($/t milled) | 29.62 | 22.18 | 20.87 | 17.26 | 15.34 |
| Silver recovery (%) | 91.7 | 81.5 | 69.9 | 68.1 | 67.7 |
| Zinc recovery (%) | 47.3 | 49.5 | 38.1 | 31.5 | — |
| Lead recovery (%)(1) | 83.6 | 83.1 | — | — | — |
| General and admin costs ($/t milled) | 8.02 | 8.16 | 7.98 | 7.07 | 6.33 |
| Silver produced ('000 oz) | 2,392 | 1,189 | 666 | 954 | 938 |
| Silver sold ('000 oz) | 927 | 932 | 623 | 1,142 | 1,064 |
| Zinc produced ('000 lb)(2) | 1,640 | 4,014 | 3,241 | 1,520 | — |
| Zinc sold ('000 lb)(2) | 3,218 | 1,983 | 382 | — | — |
| Lead produced ('000 lb)(3) | 6,789 | 2,735 | 372 | — | — |
| Lead sold ('000 lb)(3) | 2,977 | 1,059 | — | — | — |
| Realized silver price ($/oz)(4) | 15.35 | 14.42 | 15.45 | 16.49 | 16.79 |
| Cash costs ($/oz) (4) | 9.94 | 15.02 | 17.41 | 14.73 | 17.07 |
| AISC ($/oz)(4) | 19.76 | 20.45 | 22.39 | 17.66 | 18.37 |
Financial Data ($000s)
| Revenue | 17,556 | 14,961 | 7,915 | 16,570 | 15,233 | |
| Income (loss) from mine operations | 3,584 | (788 ) | (2,440 ) | 830 | (1,753) | |
| Capital expenditures | 1,543 | 3,849 | 2,390 | 2,652 | 789 | |
| Capitalized stripping | 6,191 | — | — | — | — | |
| Exploration expenditures(5) | 1 | 21 | 6 | 429 | 6 |
(1) Data for the fourth quarter of 2018 is for the period subsequent to December 1, 2018, the date upon which commercial production was declared at the Chinchillas mine.
(2) Data for zinc production and sales relate only to zinc in zinc concentrate.
(3) Data for lead production and sales relate only to lead in lead 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. See “Cautionary Note Regarding Non- GAAP Measures”.
(5) Does not include exploration or development expenditures of the Chinchillas project.
Mine production
The Chinchillas mine ramp up was substantially completed during the first quarter of 2019. Total material mined from the Chinchillas open pit increased significantly compared to the previous quarter as commercial production was achieved on December 1, 2018.
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As noted in our annual guidance, waste removal is elevated in 2019 as the Chinchillas mine completes the highwall pushback and commences the next pit phase. This was demonstrated by the elevated strip ratio in the first quarter and is expected to continue through the third quarter of 2019 with a downward trend to year-end 2019. As a result, the Pirquitas mill will predominantly process stockpiled Chinchillas ore into the third quarter of 2019, with ore mined in 2019 principally supplying the Pirquitas mill in the fourth quarter of 2019.
Silver production was 2.4 million ounces for the quarter, an increase of 101% relative to the fourth quarter of 2018, mainly due to higher silver mill feed grade and silver recovery, as ore was sourced exclusively from the Chinchillas mine. Silver sales totaled 0.9 million ounces as concentrate shipments commenced later in the quarter. On an attributable basis, silver production and sales for the first quarter totaled 1.8 million ounces and 0.7 million ounces, respectively.
During the first quarter, ore was milled at an average of 3,830 tonnes per day, a 3% increase compared to ore milled in the previous quarter, mainly due to improvements in mill flotation pumping. Processed ore in the first quarter of 2019 contained an average silver grade of 235 g/t, a 77% increase compared to the fourth quarter of 2018, due to solely processing higher grade Chinchillas ore. Metallurgical recoveries of silver, lead and zinc are expected to be variable until we achieve steady state production. The new tailings pump system at the Pirquitas mill was completed during the 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 cost of inventory, treatment and refining costs, provincial royalties, export duties and by-product credits, were $9.94 per payable ounce of silver sold in the first quarter of 2019, a 34% decrease from $15.02 per payable ounce of silver sold in the fourth quarter of 2018. The decrease was primarily due to higher production resulting from higher silver grade of ore processed with Chinchillas supplying all the processed ore and recognition of higher by-product credits.
AISC per payable ounce of silver sold in the first quarter of 2019 were $19.76, slightly lower than the fourth quarter of 2018 as significantly lower cash costs were offset by high sustaining capital per payable ounce in the first quarter. As discussed above, mining activities in the quarter focused on waste removal and drove high capitalized stripping costs. This, combined with payable silver ounces sold well below production due to the required ramp-up in concentrate sales, drove higher per payable ounce sustaining capital costs in the quarter.
Mine sales
Silver sales totaled 0.9 million ounces and attributable sales were 0.7 million in the first quarter of 2019, comparable to the fourth quarter of 2018. Sales of silver/lead and zinc concentrates increased through the first quarter and are expected to be in line with production over the remainder of 2019. Subsequent to the quarter, we entered into annual contracts for all expected 2019 concentrate tonnage, in line with past practice.
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Exploration
At Puna Operations, exploration activities were limited to the completion of detailed drone magnetic data at Chinchillas and the Pirquitas mine areas. Magnetic inversions have been completed and contribute to target selection at both properties.
In 2018, we evaluated the potential for an underground mine at the Pirquitas deposit to provide supplemental ore to the Pirquitas mill. The study confirmed a technically feasible and economic project; however, with a return below our investment thresholds at current metal prices. We have budgeted $1 million in 2019 for a 3,000-meter drill program to test for extensions to the mineralization that could have a positive impact on the project economics. We plan to commence this drilling in the second quarter of 2019.
Chinchillas project, Argentina
During the first quarter, ore feed to the Pirquitas plant has been exclusively from the Chinchillas mine.
The in-pit tailings pumping system was commissioned during the quarter and tailings deposition to the pit is ongoing.
The Chinchillas truck shop structure is complete with equipping remaining in process. Three truck bays are being used for operating maintenance while works are completed.
Road upgrades and improvements were completed during the quarter. Infrastructure and diesel fueling station construction will continue into the second quarter of 2019 with remaining expected capital expenditures totaling $8 million. The project remains on budget.
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Outlook
This section of the news release provides management's production, cost, capital, exploration and development expenditure estimates for 2019. See "Cautionary Note Regarding Forward-Looking Statements."
Our guidance is unchanged from that reported on January 15, 2019. For the full year 2019, we expect:
Seabee Gold Puna Operations Operating Guidance Marigold mine Operation (75% interest) (4) Gold Production oz 200,000 - 220,000 95,000 - 110,000 — Silver Production 6.0 - 7.0 Moz — — (Attributable) (4.5 - 5.3) Lead Production 20.0 - 26.0 Mlb — — (Attributable) (15.0 - 19.5) Zinc Production 15.0 - 20.0 Mlb — — (Attributable) (11.3 - 15.0) Cash Cost per Payable Ounce Sold (1) $/oz 750 - 790 525 - 555 8.00 - 10.00 Sustaining Capital Expenditures (2) $M 35 25 12 Capitalized Stripping / Capitalized $M 20 12 20 Development Exploration Expenditures (3) $M 7.5 6 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 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 by "attributable", which is shown on a 75% basis.
Based on the mid-points of guidance, on a consolidated basis we expect to produce 395,000 gold equivalent ounces in 2019 at gold equivalent cash costs of $700 per payable ounce sold. On an attributable basis we expect to produce 375,000 gold equivalent ounces in 2019 at gold equivalent cash costs of $700 per payable ounce sold based on the mid-points of guidance.
Gold equivalent figures for our 2019 operating guidance are based on a gold-to-silver ratio of 81:1. Cash costs and capital expenditures guidance is based on an oil price of $65 per barrel and exchange rate of 1.25 Canadian dollar to U.S. dollar.
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Consolidated Financial Summary
(presented in thousands of U.S. dollars, except for per share values)
Selected Financial Data (1)
Three months ended March 31,
2019 2018 $ $
| Revenue | 126,250 | 97,902 |
| Income from mine operations(1) | 30,237 | 17,231 |
| Gross margin (%) | 24 | 18 |
| Operating income(1) | 19,628 | 7,731 |
| Net income (loss) | 5,732 | (2,322) |
| Basic attributable income (loss) per share | 0.05 | (0.01) |
| Adjusted attributable income before tax(1) | 21,546 | 6,736 |
| Adjusted attributable net income(1) | 17,200 | 5,662 |
| Adjusted basic attributable income per share(1) | 0.14 | 0.05 |
| Cash(used in) generated by operating activities | (303 ) | 11,007 |
| Cash (used in) generated by investing activities | (33,762 ) | 1,387 |
| Cash generated by financing activities | 77,441 | 1,916 |
Financial Position
March 31, 2019 December 31, 2018 Cash and cash equivalents 461,351 419,212
32,634
Marketable securities 29,542
| Current assets | 800,491 | 733,119 |
| Current liabilities | 183,733 | 83,254 |
| Working capital | 616,758 | 649,865 |
| Total assets | 1,607,142 | 1,521,138 |
(1) We report non-GAAP measures including income from mine operations, operating income, adjusted attributable income before tax, adjusted attributable net income, and adjusted basic attributable income per share, to manage and evaluate our operating performance. Please see “Cautionary Note Regarding Non-GAAP Measures”.
Quarterly financial summary
Revenue in the first quarter of 2019 increased by 29% relative to the comparative quarter in 2018, due principally to an increase in gold sales both at the Marigold mine and the Seabee Gold Operation. Puna Operations' revenue also increased on higher sales of lead and zinc, partially offset by lower silver sales. Concentrate sales increased relative to the previous quarter, but lagged the increase in production of silver and lead resulting from processing solely Chinchillas ore in the first quarter of 2019.
Income from mine operations in the first quarter of 2019 generated a gross margin of 24%, higher than the 18% gross margin in the first quarter of 2018, due to higher income from mine operations generated by the Seabee Gold Operation and Puna Operations as lower cost and depreciation more than offset lower realized metal prices. Relative to the prior year quarter, the Marigold mine generated a lower gross margin due to higher costs and lower realized prices.
In the first quarter of 2019, we generated net income of $5.7 million, compared to a net loss of $2.3 million in the first quarter of 2018.
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Cash used in operating activities in the quarter was $0.3 million compared to $11.0 million generated in the first quarter of 2018. Both the Seabee Gold Operation and Puna Operations had higher sales at lower unit costs while the Marigold mine had higher gold sales at higher unit costs. Cash from operating activities was negatively impacted by a $27.4 million increase in non-cash working capital, compared to a $11.9 million increase in the first quarter of 2018, due primarily to a combination of supplies inventory restocking at Seabee Gold Operation, increased concentrate finished goods inventories at Chinchillas as sales lagged production, higher leach pad inventory costs at the Marigold mine and a reduction in trade payables at the end of the quarter. We used $33.8 million in investing activities in the first quarter of 2019. This included expenditures of $13.2 million on property, plant and equipment and $6.1 million on the Chinchillas project. This compared to $1.4 million generated from investing activities in the first quarter of 2018. In the first quarter of 2018, we received $28.1 million from the sales of common shares of Pretium Resources Inc., which was partially offset by investing $8.8 million in property, plant and equipment, and $11.7 million on the Chinchillas project.
Cash generated from financing activities of $77.4 million resulted from the completion of our $230 million aggregate principal amount of 2.50% unsecured convertible senior notes (the “2019 Notes") offering for net proceeds of $222.9 million somewhat offset by the partial repurchase of our outstanding $265 million 2.875% convertible senior notes (the “2013 Notes”) for $152.3 million.
Corporate summary
SSR Mining has an experienced management team of mine-builders and operators with proven capabilities. We have a strong balance sheet with $461.4 million in cash and cash equivalents as at March 31, 2019. 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 March 19, 2019, we issued the 2019 Notes for net proceeds of $222.9 million after payment of commissions and expenses related to the offering. For a full description of the 2019 Notes see the “Capital Resources” discussion in Section 5 of our MD&A.
Of the proceeds from the 2019 Notes, $152.3 million was used to repurchase, in separate privately negotiated transactions, $150 million of the 2013 Notes.
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Qualified Persons
The scientific and technical information contained in this news release relating to the Marigold mine has been reviewed and approved by Greg Gibson and James N. Carver, each of whom is a SME Registered Member and a qualified person under National Instrument 43-101 - Standards of Disclosure for Mineral Projects (“NI 43-101”). Mr. Gibson is our General Manager and Mr. Carver is our Chief Geologist at the Marigold mine. The scientific and technical information 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 Robert Gill, P.Eng., and F. Carl Edmunds, P.Geo., each of whom is a qualified person under NI 43-101. Mr. Gill is our General Manager at Puna Operations and Mr. Edmunds is our Vice President Exploration.
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, May 10, 2019, at 11:00 a.m. EDT.
Toll-free in U.S. and Canada: +1 (800) 319-4610 All other callers: +1 (416) 915-3239 http://ir.ssrmining.com/investors/events Webcast:
- 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 3089 All other callers: +1 (412) 317-0088, replay code 3089
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.
SOURCE: SSR Mining Inc.
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