SSR Mining Reports Third Quarter 2017 Results
News Release 17-30
November 7, 2017
SSR MINING REPORTS THIRD QUARTER 2017 RESULTS
VANCOUVER, B.C. - SSR Mining Inc. (NASDAQ: SSRM) (TSX: SSRM) (“SSR Mining”) reports consolidated financial results for the third quarter ended September 30, 2017.
Paul Benson, President and CEO said, "Operationally this was a solid quarter as our portfolio generated cash from operations of over $30 million which, combined with the proceeds of a partial sale of our interest in Pretium, lifted our cash balance to $424 million. With strong performance through the first nine months, we remain on track to meet our corporate-level annual guidance. Through the quarter we hit milestones important for future growth with the release of the Seabee PEA, the commencement of the Marigold equipment replacement study and ongoing positive exploration results, all of which were highlighted at our inaugural investor day."
Third Quarter 2017 Highlights
(All figures are in U.S. dollars unless otherwise noted)
- Increased cash position: Quarter-end cash increased to $424.0 million, up $70.5 million over the previous quarter, marking this as the eighth consecutive quarter of increased cash.
- Solid operating cash flow: Cash generated by operating activities totaled $30.3 million for the quarter and $99.6 million year-to-date.
- Net Income: Attributable net income for the quarter was $1.1 million, or $0.01 per share, with adjusted net income totaling $4.4 million, or $0.04 per share.
- Delivered Seabee mine expansion plan: Seabee PEA evaluates sustained milling rate of 1,050 tonnes per day for a seven-year mine life with average 100,000 ounces of gold per year, a 29% increase from 2016 production, at lower cash costs over the period from 2018 to 2023.
- Strong operating performance at Seabee: Sustained daily throughput and recovery rates generated solid gold production, positioning Seabee to achieve previously improved annual production and cash costs guidance.
- Record quarterly material moved at Marigold: Mined over 20 million tonnes of material at $1.52 per tonne during the quarter with ore stacked increasing to over 7 million tonnes.
- Puna Operations exceeds expectations: The Pirquitas mill operated at a rate of approximately 5,000 tonnes per day, with higher than expected grades resulting in production of 1.5 million ounces of silver during the quarter and 5.0 million ounces year-to-date, surpassing the lower end of annual production guidance. The operation is on track to achieve annual cash costs guidance.
SSR Mining Inc. PHONE +1 604.689.3846 Suite 800 - 1055 Dunsmuir Street www.ssrmining.com TOLL FREE +1 888.338.0046 PO Box 49088 Vancouver, BC, Canada V7X 1G4
Marigold mine, U.S.
| September 30 | June 30 | March 31 December 31 September 30 | |||
|---|---|---|---|---|---|
| Operating data | 2017 | 2017 | 2017 | 2016 | 2016 |
| Total material mined (kt) | 20,311 | 17,985 | 16,736 | 19,559 | 19,558 |
| Waste removed (kt) | 13,149 | 11,075 | 11,062 | 13,123 | 14,741 |
| Total ore stacked (kt) | 7,162 | 6,910 | 5,674 | 6,436 | 4,817 |
| Strip ratio | 1.8 | 1.6 | 1.9 | 2.0 | 3.1 |
| Mining costs ($/t mined) | 1.52 | 1.67 | 1.65 | 1.52 | 1.48 |
| Gold stacked grade (g/t) | 0.31 | 0.31 | 0.42 | 0.48 | 0.42 |
| Processing costs ($/t processed) | 0.89 | 0.82 | 0.89 | 0.80 | 0.95 |
| Gold recovery (%) | 72.0 | 73.0 | 74.0 | 75.0 | 71.0 |
| General and admin costs ($/t processed) | 0.40 | 0.42 | 0.52 | 0.46 | 0.56 |
| Gold produced (oz) | 38,699 | 55,558 | 55,215 | 59,945 | 47,456 |
| Gold sold (oz) | 38,818 | 57,426 | 52,528 | 61,308 | 47,278 |
| Realized gold price ($/oz)(1) | 1,270 | 1,265 | 1,214 | 1,247 | 1,330 |
| Cash costs ($/oz)(1) | 684 | 632 | 585 | 585 | 636 |
| AISC ($/oz)(1) | 979 | 833 | 799 | 835 | 1,139 |
Financial data ($000s)
| Revenue | 49,395 | 72,451 | 63,762 | 77,047 | 62,831 |
| Income from mine operations | 11,189 | 21,373 | 21,327 | 28,648 | 23,156 |
| Capital expenditures | 3,855 | 5,272 | 3,043 | 3,271 | 8,310 |
| Capitalized stripping | 6,056 | 4,350 | 6,745 | 10,171 | 13,787 |
| Exploration expenditures(2) | 1,130 | 1,538 | 1,024 | 1,276 | 1,145 |
(1) We report the non-GAAP financial measures of realized gold prices, cash costs and all-in sustaining costs ("AISC") per payable ounce of gold sold to manage and evaluate operating performance at the Marigold mine. For a better understanding and a reconciliation of these measures to cost of sales, as shown in our consolidated statements of comprehensive income (loss), please refer to “Non-GAAP and Additional GAAP Financial Measures” in section 12 of our management's discussion and analysis of the financial position and results of operation for the three and nine months ended September 30, 2017 ("MD&A").
(2) Includes capitalized and expensed exploration expenses.
Mine production
In the third quarter of 2017, the Marigold mine produced 38,699 ounces of gold, 30.3% less than the previous quarter due to lower grades of ore stacked as we began mining the upper benches of the current phase of the Mackay pit. Additionally, within these upper benches more clay ore was encountered than anticipated which negatively impacted the leaching cycle as the solution pumping rate was decreased to eliminate ponding in certain low permeability areas on the pads.
A quarterly record of 20.3 million tonnes of material was mined in the third quarter of 2017, 13% more than the second quarter of 2017, primarily due to planned shorter hauls for waste. Approximately 7.2 million tonnes of ore were delivered to the heap leach pads at an average gold grade of 0.31 g/t. This compares to 6.9 million tonnes of ore delivered to the heap leach pads at a gold grade of 0.31 g/t in the second quarter of 2017. The strip ratio was 1.8:1 for the quarter, a 13% increase compared to the previous quarter.
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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 $684 per payable ounce of gold sold in the third quarter of 2017 was 8% higher than the previous quarter due to the higher cost per ounce placed on the leach pads as a result of continued lower grades mined. Total mining costs of $1.52 per tonne were 9% lower in the third quarter versus the second quarter due to more material mined as a result of shorter planned waste hauls and higher availability of loading equipment. Processing unit costs were 9% higher in the third quarter of 2017 than in the second quarter of 2017 due to increased reagent consumption as a result of increased barren solution flow and higher tonnes stacked. General and administrative unit costs were 5% lower in the third quarter of 2017 than in the second quarter due to the increase in tonnes stacked but were comparable on an absolute basis.
AISC of $979 per payable ounce of gold sold in the third quarter of 2017 increased from $833 in the second quarter of 2017 predominantly due to higher cash costs and higher capital expenditures, partially offset by lower exploration expenditures, over fewer ounces sold.
Mine sales
A total of 38,818 ounces of gold were sold at an average price of $1,270 per ounce during the third quarter of 2017, compared to 57,426 ounces of gold sold at comparable average price of $1,265 per ounce during the second quarter of 2017.
Exploration
Exploration activities continued with the objective of Mineral Reserve growth in proximity to, and within, existing open pits. During the third quarter of 2017, we completed 13,167 meters of drilling in 39 reverse circulation ("RC") holes at the Mackay Pit, East Basalt, Valmy, Red Dot and North Red Dot targets. Total RC drilling to the end of the third quarter amounts to 38,752 meters in 138 RC holes.
On September 5, 2017, we published exploration drill results for the period from April 1, 2017 to July 31, 2017. Since that period we have received further positive assay results that should contribute to Mineral Resource addition at Red Dot, including drillhole MRA6517, which intersected 47.2 meters at a grade of 0.79 g/t gold.
In the third quarter of 2017, we also received results that indicate a higher grade zone exists 200 meters west of our current Mineral Resource pit at Red Dot. At our North Red Dot target, drillhole MRA6512 intersected 50.3 meters at a grade of 0.95 g/t gold within an area currently modeled as narrow lower grade mineralization.
See in this news release Table 1 for selected exploration results, Table 3 for drill results and Table 4 for a list of all drillholes completed for the relevant period.
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Seabee Gold Operation, Canada
Three months ended
| Operating data | September 30 | June 30 | March 31 December 31 September 30 | ||
|---|---|---|---|---|---|
| 2017 | 2017 | 2017 | 2016 | 2016 | |
| Total ore milled (t) | 84,315 | 84,469 | 72,394 | 84,526 | 82,756 |
| Ore milled per day (t/day) | 916 | 928 | 804 | 919 | 900 |
| Gold mill feed grade (g/t) | 7.03 | 7.97 | 9.22 | 7.40 | 7.40 |
| Mining costs ($/t mined) | 74 | 60 | 68 | 62 | 58 |
| Processing costs ($/t processed) | 22 | 20 | 23 | 19 | 19 |
| Gold recovery (%) | 97.2 | 97.3 | 97.7 | 97.0 | 96.5 |
General and admin costs ($/t
| processed) | 53 | 50 | 59 | 44 | 37 |
| Gold produced (oz) | 18,058 | 20,690 | 21,023 | 19,711 | 20,142 |
| Gold sold (oz) | 21,798 | 17,909 | 22,411 | 17,229 | 21,911 |
| Realized gold price ($/oz)(1) | 1,269 | 1,257 | 1,233 | 1,230 | 1,334 |
| Cash costs ($/oz)(1, 3) | 634 | 592 | 574 | 595 | 661 |
| AISC ($/oz)(1, 3) | 775 | 831 | 990 | 833 | 841 |
Financial data ($000s)
| Revenue | 27,652 | 22,502 | 27,609 | 21,175 | 29,214 |
| Income from mine operations | 3,643 | 4,083 | 4,995 | 2,864 | 4,126 |
| Capital expenditures | 799 | 711 | 4,760 | 1,010 | 579 |
| Capitalized development | 1,314 | 2,165 | 2,514 | 2,432 | 2,141 |
| Exploration expenditures(2) | 1,253 | 1,566 | 1,953 | 829 | 1,206 |
(1) We report the non-GAAP financial measures of realized gold prices, cash costs and AISC per payable ounce of gold sold to manage and evaluate operating performance at the Seabee Gold Operation. For a better understanding and a reconciliation of these measures to cost of sales, as shown in our consolidated statements of comprehensive income (loss), please refer to “Non-GAAP and Additional GAAP Financial Measures” in section 12 of our MD&A.
(2) Includes capitalized and expensed exploration expenses.
(3) The non-GAAP financial measures of cash costs per payable ounce of gold sold and AISC per payable ounce of gold sold from the Seabee Gold Operation were adjusted to eliminate the adjustment of inventory to fair value as at the date of our acquisition of the Seabee Gold Operation.
Mine production
In the third quarter of 2017, the Seabee Gold Operation produced 18,058 ounces of gold, a strong result considering several operating interruptions.
During the third quarter, 84,315 tonnes of ore were milled at an average gold grade of 7.03 g/t. This compares to a total of 84,469 tonnes of ore at an average grade of 7.97 g/t in the second quarter. The Santoy mine supplied 85% of ore milled, predominantly from long hole stopes. Underground mining activities at Santoy experienced operating interruptions during the third quarter as a result of forest-fire-related power outages and smoke ingress.
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The mill achieved an average throughput of 916 tonnes per day during the quarter, 1.3% lower than the previous quarter due to a combination of scheduled crusher maintenance activities and forestfire-related power outages.
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, refining costs and royalties, were $634 in the third quarter of 2017, higher than the $592 in the second quarter of 2017. Costs per tonne mined were $74 in the third quarter of 2017, 23% higher than in the previous quarter due to the stronger Canadian dollar and less operating costs capitalized to underground development. Processing and general and administration unit costs were higher by 10% and 6%, respectively, in the third quarter of 2017 compared to the second quarter of 2017, mainly due to the stronger Canadian dollar. The mill feed grade was 12% lower in the current quarter than in the preceding period with lower production resulting in higher cash costs in the period.
AISC per payable ounce of gold sold were $775 in the third quarter of 2017, lower than the $831 in the second quarter of 2017, primarily due to a higher volume of ounces sold in the third quarter of 2017, but also due to lower underground capital development. Exploration spending in the period decreased due to lower planned drilling through the warmer months of the year.
Mine sales
A total of 21,798 ounces of gold were sold at an average price of $1,269 per ounce during the third quarter of 2017, higher than gold production as bullion inventory accumulated in the previous quarter was sold in the third quarter. Gold sales were 22% higher than the 17,909 ounces of gold sold at an average price of $1,257 per ounce in the second quarter of 2017.
Exploration
Mineral Resource conversion remained the main exploration objective in the third quarter of 2017. During the period, we completed 13,218 meters of underground drilling and 2,592 meters of surface drilling. Underground drilling was active at the Santoy and Seabee mines with the majority of expenditures at Santoy.
Drilling at Santoy Gap in the third quarter has yielded several intercepts that extend the limits of the Mineral Resources, including 2.4 meters at a grade of 14.77 g/t gold in drillhole SUG-17-050 and 1.3 meters at a grade of 14.39 g/t gold in drillhole SUG-17-047 within the Santoy Gap 9B vein. Similarly, step out drilling on the Santoy 8A vein returned 2.1 meters at a grade of 24.00 g/t gold in drillhole SUG-17-923. Drilling at the 8A target transects the Santoy 8A Footwall structural horizon and an intercept outside the Mineral Resource returned 2.5 meters at a grade of 17.31 g/t gold in drillhole JOY-17-770. One notable intercept was returned from the Gap Hanging Wall target including 2.2 meters at a grade of 9.91 g/t gold in the eastern sector, as reported in our news release dated September 5, 2017. Highlights of infill drilling are reported in Table 2 of this news release and drillhole collars are reported in Table 5 of this news release for the relevant period.
Greenfields exploration at the Seabee Gold Operation included the completion of a soils grid in the area of the Santoy mine. The results show the down-ice dispersion of anomalous gold values
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associated with the Santoy shear zone. We have identified two additional anomalous areas for follow up.
At the Fisher property, where we have an option agreement with Eagle Plains Resources Ltd. to acquire up to an 80% interest on the adjacent 34,000 hectares south of the Santoy mine, we completed our field program of prospecting, mapping, a drone magnetic survey and geochemical surveying of soil and till. Prospecting results confirm two new gold showings 1.5 kilometers and 8.0 kilometers south of the Santoy mine. As previously reported, due to wildfire conditions in and around the Fisher project area, exploration activities were suspended in August 2017. Our first drill campaign is planned for the first quarter of 2018.
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Puna Operations, Argentina (75% interest)
(Amounts presented on a 100% basis unless otherwise stated)
| September 30 | June 30 | March 31 | December 31 September 30 | ||
|---|---|---|---|---|---|
| Operating data | 2017 | 2017 | 2017 | 2016 | 2016 |
| Ore milled (kt) | 461 | 446 | 449 | 476 | 455 |
| Silver mill feed grade (g/t) | 153 | 185 | 145 | 194 | 264 |
| Processing costs ($/t milled) | 11.92 | 12.94 | 13.66 | 14.17 | 14.78 |
| Silver recovery (%) | 67.8 | 73.5 | 72.6 | 74.5 | 79.0 |
| General and admin costs ($/t milled) | 4.81 | 5.00 | 5.22 | 6.19 | 5.84 |
| Silver produced ('000 oz) | 1,541 | 1,947 | 1,520 | 2,210 | 3,047 |
| Silver produced (attributable) ('000 oz)(1) | 1,156 | 1,777 | 1,520 | 2,210 | 3,047 |
| Silver sold ('000 oz) | 2,076 | 1,655 | 1,443 | 2,633 | 2,947 |
| Silver sold (attributable) ('000 oz)(1) | 1,557 | 1,473 | 1,443 | 2,633 | 2,947 |
| Realized silver price ($/oz)(2) | 16.77 | 17.31 | 17.35 | 17.14 | 19.64 |
| Cash costs ($/oz)(2) | 12.76 | 12.15 | 12.68 | 9.80 | 8.48 |
| AISC ($/oz)(2) | 13.56 | 12.78 | 14.82 | 11.47 | 9.87 |
Financial Data ($000s)
| Revenue | 28,958 | 22,029 | 26,534 | 29,095 | 51,336 |
| Income (loss) from mine operations | 7,690 | 4,006 | 13,767 | (4,056) | 31,908 |
| Capital expenditures | 1,006 | 420 | 2,261 | 3,467 | 3,158 |
| Exploration expenditures(3) | — | — | — | 11 | 7 |
(1) Attributable production and sales figures for the third quarter of 2017 are on 75% attributable basis. Attributable production and sales figures for the second quarter of 2017 represent 100% for April and May 2017 and 75% for June 2017.
(2) We report the non-GAAP financial measures of cash costs per payable ounce of silver sold, realized silver prices and AISC to manage and evaluate operating performance at Puna Operations. For a better understanding and a reconciliation of these measures to cost of sales, as shown in our consolidated statements of comprehensive income (loss), please refer to “Non-GAAP and Additional GAAP Financial Measures” in section 12 of our MD&A.
(3) Does not include exploration or development of the Chinchillas project.
Mine production
During the first nine months of 2017, the operation produced a total of 5.0 million ounces of silver, surpassing the lower end of our 2017 production guidance as stockpile grades and metallurgical performance continued to exceed plan. In the third quarter of 2017, silver production from stockpiles totaled 1.5 million ounces. Attributable share of silver production in the third quarter was 1.2 million ounces.
Ore was milled at an average rate of 5,012 tonnes per day in the third quarter, similar to the previous quarter. Ore milled in the third quarter of 2017 contained an average silver grade of 153 g/t, 17% lower than the 185 g/t reported in the second quarter of 2017 as we continue to process lower grade stockpiles. The average silver recovery in the third quarter was 67.8%, lower than the previous quarter as expected due to planned lower silver mill feed grade.
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”.
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Cash costs, which include cost of inventory, treatment and refining costs and, if applicable, byproduct credits, increased by 5% to $12.76 per payable ounce of silver sold in the third quarter of 2017 from $12.15 per payable ounce of silver sold in the second quarter of 2017, principally due to lower production resulting from lower silver grades of the stockpiled ore processed. In the third quarter of 2017, the stockpile inventory costs include approximately $5.20 per payable ounce of inventory costs that were previously incurred.
AISC of $13.56 per payable ounce of silver sold were 6% higher in the third quarter of 2017 than the $12.78 per payable ounce of silver sold in the second quarter of 2017 due to higher cash costs and higher sustaining capital expenditure per payable ounce of silver sold resulting from timing of maintenance activities.
Mine sales
We recognized sales of 2.1 million ounces of silver at an average price of $16.77 per ounce in the third quarter of 2017, higher than the 1.7 million ounces at an average price of $17.31 per ounce in the second quarter of 2017, as a result of sales of current period production and selling down inventory that accumulated during the previous quarter. Attributable sales were 1.6 million ounces of silver in the third quarter of 2017, marginally higher than the 1.5 million ounces in the previous quarter.
Chinchillas project, Argentina
Since the initiation of development activities in June 2017, project execution is well under way with purchase commitments made on critical long lead equipment including a geodesic stockpile cover, tailings and reclaim water pumps, piping, pre-fabricated electrical rooms and all mining and supporting mobile equipment.
Construction contracts have been issued for tender and, conditional upon receipts of permits, will be awarded in the fourth quarter of 2017. These contracts include concrete and earthworks and general electromechanical installation at Pirquitas, and infrastructure buildings at Chinchillas, including administration buildings, truck shop, diesel and explosives storage and distribution systems. The pre-stripping operations plan has been completed with detailed mine planning ongoing by the Puna Operations technical services team.
The project is awaiting environmental, operating and construction permit approvals, which are expected in the fourth quarter. Project planning and execution, based on such permit expectations, supports first ore feed to the Pirquitas mill in the second half of 2018.
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Other Projects
SIB project, Canada
During the third quarter of 2017, we completed 9,336 meters of diamond drilling in 12 holes at the SIB exploration project located near the high-grade, past-producing Eskay Creek mine in northwest British Columbia. We hold a three-year option to acquire up to a 60% undivided interest in the project and have met the first year spending requirement of C$3.7 million.
The exploration target is precious metal enriched volcanogenic massive sulphides, and the SIB project boasts the only mineralization similar to Eskay Creek in the district. At the SIB project, previous work has defined a near surface zone of high grade gold-silver bearing massive sulphide mineralization. Our 2017 exploration program aims to identify extensions to this precious metal enriched massive sulphide zone. All the drillholes of the program encountered the targeted Salmon River formation geology over a strike length of at least 1,100 meters to a maximum depth of 700 meters below surface. Polymetallic vein sulphides over 10 meters and pyritic vein breccia has been intercepted in two holes in what are interpreted to be altered rocks footwall to the main targeted mafic to felsic volcanic contact. These zones of mineralization have returned weakly anomalous base and precious metal values. Analytical results are pending for seven of the twelve holes. Downhole geophysical surveys have been completed on all the drillholes.
Once all the assay results and geophysical interpretations have been received, we will review and determine our next steps for the project.
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Outlook
This section of the news release provides management's production and cost estimates. See "Cautionary Note Regarding Forward-Looking Statements."
We expect our total production to be within our previously improved annual production guidance as a result of strong results at the Seabee Gold Operation and Puna Operations, offset by lower production results at the Marigold mine. Production guidance at Marigold has been reduced by 10,000 ounces and is now expected to be between 195,000 and 205,000 ounces of gold. This change reflects third quarter gold production, lower pumping rates to the leach pads in the third and fourth quarters due to higher clay content, and the subsequent fourth quarter incident at Marigold mine. Within the current phase of the Mackay pit, more ore tonnes and gold ounces have been encountered, however, the majority of these incremental tonnes have been of a clay nature. Blending of these clay ores with rock ores is required as they are loaded on the leach pads to improve permeability and rate of recovery and this has been and will be an increased focus for the operation through the fourth quarter. While these incremental tonnes and gold ounces encountered are longer term positive, these operating impacts have reduced near term production. Mining of higher clay ore is expected through to the end of the first quarter of 2018.
Due to positive cost performance at all three operations throughout the year and enhanced production results at both the Seabee Gold Operation and Puna Operations, we expect our corporate cash cost per payable ounce sold to remain within the previously reduced guidance range.
As previously disclosed, the Marigold mine was shut down due to an incident on October 31, which resulted in the fatality of two of our employees. The Mine Safety and Health Administration (“MSHA”) is conducting an investigation. MSHA has now removed restrictions allowing the restart of operations. After management site reviews, open pit operations have resumed and are in sequential ramp up as crews return to the mine and complete incident and operational briefings. Mine operations were fully or partially suspended for six days and the mine is expected to resume full operations over the next several days.
Puna Operations (75% interest) (3)
Revised Operating Guidance Marigold mine Seabee Gold Operation
oz 195,000 - 205,000 75,000 - 85,000 — Gold Production Moz — — 5.0 - 6.0 Silver Production $/oz 640 - 670 575 - 625 12.50 - 14.00 Cash Costs per Payable Ounce Sold (1)
$M 30 8 5 Capital Expenditures
Capitalized Stripping / Capitalized $M 20 11 — Development $M 5 5 — Exploration Expenditures (2)
(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) Includes capitalized and expensed exploration expenses.
(3) Shown on a 100% basis.
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Consolidated Financial Summary
Selected Financial Data (1)
Three months ended September 30 Nine months ended September 30
| 2017 | 2016 | 2017 | 2016 | |
| $ | $ | $ | $ | |
| Revenue | 106,005 | 143,381 | 340,892 | 363,669 |
| Income from mine operations | 22,522 | 59,190 | 92,073 | 126,550 |
| Operating income | 10,393 | 50,248 | 81,395 | 89,099 |
| Net income | 1,821 | 38,042 | 54,616 | 52,825 |
| Basic attributable income per share | 0.01 | 0.32 | 0.45 | 0.54 |
Adjusted attributable income before 4,252 45,168 42,739 83,996 tax (2)
Adjusted attributable net income (2) 4,387 37,214 37,213 69,405 Adjusted basic attributable income 0.04 0.31 0.31 0.71 per share (2)
Cash generated by operating 30,292 53,066 99,550 96,554 activities Cash generated by (used in)
38,570 (10,581 ) (5,861) (19,222 ) investing activities Cash generated by (used in)
1,774 2,599 2,659 (11,400 ) financing activities
Financial Position September 30, December 31, 2017 2016 Cash and cash equivalents 424,025 327,127 Marketable securities 109,721 148,944 Current assets (including cash and 756,731 704,240 cash equivalents)
| Current liabilities | 72,654 | 144,306 |
| Working capital(2) | 684,077 | 559,934 |
| Total assets | 1,499,220 | 1,438,688 |
(1) All values are presented in thousands of U.S. dollars, except per share amounts.
(2) We report non-GAAP measures including adjusted attributable income before- and after-tax, adjusted basic attributable income per share attributable to our shareholders and working capital to manage and evaluate our operating performance. Please see "Cautionary Note Regarding Non-GAAP Measures".
Quarterly financial summary
As a result of lower sales and lower average prices for both gold and silver, consolidated quarterly revenue decreased by 26% relative to the comparative quarter. We sold 18% less payable ounces of gold from the Marigold mine compared to the same quarter of 2016 as Marigold production declined as expected due to lower grades of the pit phases mined through the third quarter of 2017. Seabee Gold Operation production was impacted by forest fires in the third quarter of 2017 which caused intermittent power and mine operations interruptions. Despite this, sales were unchanged compared to the same quarter of 2016 due to selling down of inventories. Due to the planned lower production from processing stockpiles at Puna Operations, 30% less ounces of silver were sold relative to the comparative period in 2016.
Income from mine operations in the third quarter of 2017 generated a gross margin of 21%, lower than the 41% margin in the third quarter of 2016. This was due to higher cost of sales at Puna Operations where we are processing stockpiles, and due to higher unit costs at both the Marigold
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mine and the Seabee Gold Operation, as a result of lower grades and higher depreciation and depletion, respectively, in addition to lower realized prices per ounce of gold and silver sold. Net income for the third quarter of 2017 of $1.8 million was lower than the comparative quarter due to lower income from mine operations and higher general and administrative and exploration expenses.
Cash generated by operating activities decreased to $30.3 million compared to $53.1 million in the third quarter of 2016. Lower production at the Marigold mine and Puna Operations resulted in lower volumes of gold and silver sold at higher unit costs, which generated lower cash from operating activities. We generated $38.6 million from investing activities in the third quarter of 2017 compared to $10.6 million used in the third quarter of 2016, mainly due to the sale of common shares of Pretium Resources Inc. ("Pretium"). In the third quarter of 2017, our investment in property, plant and equipment was $16.2 million, compared to $28.0 million in the comparative quarter of 2016. The $11.8 million reduction was principally due to $7.7 million lower capitalized stripping at Marigold and $3.2 million lower investment in plant and equipment, partially offset by $0.8 million lower investment in underground development at the Seabee Gold Operation.
Year-to-date financial summary
The 6% decrease in revenue compared to the nine months of 2016 was due to 39% lower ounces of silver sold, as a result of planned processing of lower grade stockpiles at Puna Operations, at comparable realized prices, partially offset by a 20% increase in gold ounces sold, although at 2% lower prices. The increase in gold ounces sold was largely due to sales from the Seabee Gold Operation, which we acquired in May 2016.
Income from mine operations in the nine months ended September 30, 2017, generated a gross margin of 27%, lower than the 35% margin in the nine months ended September 30, 2016, as lower precious metals prices, lower sales of silver, and higher cost of sales at the Marigold mine were only partially offset by lower cost of sales at Puna Operations and the addition of the Seabee Gold Operation. In the nine months ended September 30, 2017, the resolution of our export duty claim in Argentina resulted in a $4.3 million reduction to cost of sales. Net income for the first nine months of 2017 was also positively impacted by an impairment reversal of the Pirquitas plant of $24.4 million resulting from its operating life extension following the formation of Puna Operations.
Cash generated by operating activities was $99.6 million, compared to $96.6 million in the nine months ended September 30, 2016. Higher volumes of gold sold, albeit at slightly higher unit costs, generated higher cash from operating activities before interest and taxes. In the nine months ended September 30, 2017, we paid $12.6 million of principal and interest under the terms of the tax moratorium system in Argentina into which we entered on March 31, 2017. We used $5.9 million in investing activities in the nine months ended September 30, 2017, compared to $19.2 million in the comparative period of 2016. This was mainly due to the proceeds of $54.2 million from disposal of a portion of our common shares of Pretium, which was offset by the Chinchillas project option exercise payment of $13.0 million in the current period compared to the receipt of $16.9 million of cash as part of the acquisition of the Seabee Gold Operation in the prior period. Investment in plant and equipment was lower by $6.4 million and we invested less in capitalized stripping at the Marigold mine by $5.3 million but more in underground development at the Seabee Gold Operation by $3.1 million in the year to date than in the comparative period of 2016. In the nine months ended September 30, 2016, we also repaid $17.6 million of bank loans.
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