SSR Mining Reports Second Quarter 2019 Results
News Release 19-18
August 8, 2019
SSR MINING REPORTS SECOND QUARTER 2019 RESULTS
VANCOUVER, B.C. - SSR Mining Inc. (NASDAQ: SSRM) (TSX: SSRM) (“SSR Mining”) reports consolidated financial results for the second quarter ended June 30, 2019.
Paul Benson, President and CEO said, "The operations continued to deliver with nearly 100,000 gold equivalent ounces produced in the quarter at slightly better all-in sustaining costs. Our exploration announcement last month highlighted the prospectivity at our key operating assets, as well as our ability to continue investing to extend mine life due to our strong balance sheet. This financial strength is allowing us to expand our land positions and maintain exposure to high grade development projects like Las Chispas, through our investment in SilverCrest. Our continued operational delivery positions us to achieve guidance and, coupled with our announcements, allows us to add shareholder value again in 2019."
Second Quarter 2019 Highlights:
(All figures are in U.S. dollars unless otherwise noted)
On track for higher annual gold equivalent production: Achieved quarterly consolidated production of 98,334 gold equivalent ounces at cash costs of $775 per payable ounce of gold sold.(1)
Improved financial performance: Reported positive income from mine operations at all three operations totaling $29.8 million, net income of $12.4 million and adjusted attributable net income of $17.8 million or $0.15 per share.(1)
Solid production at the Seabee Gold Operation: Produced 26,539 ounces of gold at cash costs of $526 per payable ounce of gold sold.(1)
Strong operating performance at the Marigold mine: Produced 54,922 ounces of gold at cash costs of $835 per payable ounce of gold sold, while placing 28% more ore on leach pads than the first quarter at lower unit mining costs and at higher gold grade.(1)
Increased sales at lower costs at Puna Operations: Produced 1.5 million ounces of silver at lower cash costs of $9.80 per payable ounce of silver sold and achieved silver sales of 2.7 million ounces.(1)
Maintained strong balance sheet and liquidity: Reported cash balance of $452 million and $75 million of undrawn credit facility.
Acquired 8,900 hectares contiguous to the Marigold mine: Attractive land package on trend with several zones of gold mineralization, net of a net smelter returns ("NSR") royalty. Consideration totaled $22 million in cash and assumption of long term environmental and reclamation obligations.
Published inaugural Sustainability Report: Report outlines our approach to sustainability and underscores our commitment to transparency with our stakeholders.
Increased production guidance: We expect to produce 400,000 gold equivalent ounces in 2019 due to strong production results at all three mines.
Subsequent to Second Quarter 2019:
Announced agreement to acquire remaining 25% interest in Puna Operations for aggregate consideration of $34 million: Provides near-term, low-risk silver production growth and simplifies management structure.
Exercised equity participation right in SilverCrest Metals financing: Maintained our exposure to the high grade, developable Las Chispas project through the purchase of additional common shares for total consideration of up to $3.5 million.
Exploration success at Red Dot deposit: We expect to extend the current Marigold life of mine plan into the early 2030's without the need for expansion capital with Red Dot phases 1, 2 and 3.
(1)
We report the non-GAAP financial measures of cash costs per payable ounce of gold and silver sold and adjusted attributable net income to manage and evaluate operating performance at the Marigold mine, the Seabee Gold Operation and Puna Operations. See “Cautionary Note Regarding Non-GAAP Measures”.
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Marigold mine, U.S.
| June 30 | March 31 December 31 September 30 | June 30 | |||
|---|---|---|---|---|---|
| Operating data | 2019 | 2019 | 2018 | 2018 | 2018 |
| Total material mined (kt) | 19,254 | 17,295 | 17,039 | 21,284 | 15,958 |
| Waste removed (kt) | 12,185 | 11,767 | 11,361 | 14,411 | 8,083 |
| Total ore stacked (kt) | 7,070 | 5,528 | 5,679 | 6,873 | 7,875 |
| Strip ratio | 1.7 | 2.1 | 2.0 | 2.1 | 1.0 |
| Mining cost ($/t mined) | 1.65 | 1.73 | 1.86 | 1.51 | 1.92 |
| Gold stacked grade (g/t) | 0.38 | 0.34 | 0.34 | 0.32 | 0.42 |
| Processing cost ($/t processed) | 1.01 | 1.20 | 1.27 | 1.12 | 0.86 |
| Gold recovery (%) | 75.0 | 73.0 | 72.9 | 72.3 | 74.4 |
| General and admin costs ($/t processed) | 0.47 | 0.54 | 0.51 | 0.50 | 0.41 |
| Gold produced (oz) | 54,922 | 53,151 | 54,306 | 58,459 | 49,436 |
| Gold sold (oz) | 59,702 | 55,517 | 50,550 | 59,612 | 46,644 |
| Realized gold price ($/oz)(1) | 1,309 | 1,303 | 1,227 | 1,207 | 1,304 |
| Cash costs ($/oz)(1) | 835 | 812 | 760 | 711 | 700 |
| AISC ($/oz)(1) | 1,008 | 984 | 995 | 965 | 981 |
Financial data ($000s)
| Revenue | 78,039 | 72,263 | 61,861 | 71,848 | 60,752 |
| Income from mine operations | 13,939 | 12,981 | 9,977 | 13,254 | 14,670 |
| Capital expenditures(2) | 6,924 | 3,167 | 8,328 | 25,461 | 14,481 |
| Capitalized stripping | 871 | 2,293 | 1,208 | 2,529 | 850 |
| Exploration expenditures(3) | 2,452 | 3,653 | 2,096 | 2,956 | 3,243 |
(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 second quarter of 2019, the Marigold mine produced 54,922 ounces of gold, a 3% increase over the first quarter, mainly due to higher gold grade and ore mined, which was stacked on lower areas of the leach pads. Gold sales for the second quarter totaled 59,702 ounces, 8% higher than the previous quarter as we sold a portion of accumulated bullion inventory.
During the quarter, 19.3 million tonnes of material were mined, an 11% increase compared to the first quarter of 2019, due to improved hauling efficiency and shorter haul distances.
Approximately 7.1 million tonnes of ore were delivered to the heap leach pads at a grade of 0.38 g/ t gold in the quarter. This compares to 5.5 million tonnes of ore delivered to the heap leach pads at a gold grade of 0.34 g/t in the first quarter of 2019. The strip ratio was 1.7:1 for the quarter, 19% lower than the prior quarter.
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Cash costs, which include all costs of inventory, refining costs and royalties, of $835 per payable ounce of gold sold in the second quarter of 2019 were 3% higher than the previous quarter. This was primarily due to higher opening cash costs of leach pad inventory combined with less mining costs being capitalized as stripping in the second quarter compared to the first quarter. Total mining costs of $1.65 per tonne in the second quarter of 2019 were 5% lower than in the previous quarter primarily due to 11% more tonnes mined. Processing and general administrative unit costs were 16% and 13% lower, respectively, in the second quarter than in the first quarter due to higher tonnes stacked while total related costs remained stable.
AISC per payable ounce of gold sold increased in the second quarter of 2019 to $1,008 from $984 in the first quarter due to higher cash costs with higher sustaining capital expenditures, offset by lower capitalized stripping and lower exploration expenditures.
Mine sales
A total of 59,702 ounces of gold were sold at an average realized gold price of $1,309 per ounce during the second quarter of 2019, an increase of 7.5% from the 55,517 ounces of gold sold at an average realized gold price of $1,303 per ounce during the first quarter of 2019. Sales were higher than production during the quarter as finished goods inventory was sold.
Exploration
The main focus of our 2019 exploration program has been to increase Red Dot Mineral Reserves, through completion of geotechnical and QA/QC core drilling to provide sufficient data for detailed mine planning. Ancillary to this has been continued exploration drilling for additional mineral resources north and south of Red Dot, in the Mackay pit and at Valmy and East Basalt areas. During the second quarter, we completed a total of 66 reverse circulation drill holes for 25,167 meters on these targets.
In the first half of 2019, our Red Dot exploration program focused on geotechnical drilling and engineering with the goal of declaring additional Mineral Reserves at Red Dot. We completed preliminary pit designs and related economic evaluations referred to as the Marigold Equipment Replacement Study. These evaluations were completed with strict economic return and investment thresholds and were based on prevailing assumptions, which include a gold price of $1,250 per ounce. Red Dot is anticipated to extend the Marigold mine life into the early 2030’s, without requiring expansion of the mining fleet or the associated expansion capital.
Also, at Marigold, infill drill results for the Mackay pit and the North and South Red Dot areas are expected to add to existing Mineral Reserves and Mineral Resources at year-end 2019. Additional information regarding such drilling was published in our news release dated July 30, 2019.
Exploration and permitting activities are scheduled through the second half of 2019 at the Mackay pit, North and South Red Dot, Valmy, East Basalt, and the newly acquired Trenton Canyon areas, aimed at extending known gold mineralization and discovery. We expect to commence the first phase
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of our exploration program at the Trenton Canyon property, which lies immediately south of Marigold, in the third quarter of 2019.
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Seabee Gold Operation, Canada
| June 30 | March 31 December 31 September 30 | June 30 | |||
|---|---|---|---|---|---|
| Operating data | 2019 | 2019 | 2018 | 2018 | 2018 |
| Total ore milled (t) | 88,424 | 90,756 | 86,447 | 88,273 | 84,010 |
| Ore milled per day (t/day) | 971 | 1,008 | 940 | 959 | 923 |
| Gold mill feed grade (g/t) | 9.83 | 8.59 | 10.20 | 9.52 | 7.95 |
| Mining costs ($/t mined) | 53 | 52 | 57 | 48 | 60 |
| Processing costs ($/t milled) | 35 | 28 | 26 | 26 | 27 |
| Gold recovery (%) | 98.4 | 97.2 | 97.6 | 97.1 | 97.3 |
| General and admin costs ($/t milled) | 50 | 53 | 63 | 47 | 62 |
| Gold produced (oz) | 26,539 | 31,183 | 20,473 | 27,831 | 23,582 |
| Gold sold (oz) | 24,276 | 27,999 | 21,711 | 29,175 | 20,512 |
| Realized gold price ($/oz)(1) | 1,329 | 1,302 | 1,236 | 1,210 | 1,306 |
| Cash costs ($/oz)(1) | 526 | 467 | 502 | 447 | 616 |
| AISC ($/oz)(1) | 871 | 973 | 743 | 596 | 854 |
Financial data ($000s)
| Revenue | 32,237 | 36,431 | 26,890 | 35,270 | 26,706 |
| Income from mine operations | 11,762 | 13,672 | 7,347 | 11,061 | 5,703 |
| Capital expenditures | 3,358 | 8,772 | 625 | 968 | 1,035 |
| Capitalized development | 3,345 | 3,379 | 2,910 | 1,812 | 2,069 |
| Exploration expenditures(2) | 2,257 | 3,172 | 1,661 | 2,860 | 2,745 |
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”. (2)
Includes capitalized and expensed exploration expenditures.
Mine production
Seabee Gold Operation produced 26,539 ounces of gold in the second quarter, a 15% decrease from the first quarter mainly due to timing of gold pours at year-end 2018 that led to higher gold production in the first quarter of 2019. Gold sales totaled 24,276 ounces for the second quarter, a decrease of 13% from the first quarter.
The four new pieces of underground equipment, delivered over the ice road in the first quarter, were commissioned at the beginning of the second quarter and are operating at the Santoy mining complex. The mill achieved an average throughput of 971 tonnes per day over the second quarter, a 4% decline compared to the previous quarter largely due to planned modifications to the electrical distribution system as part of the tailings expansion project. Gold mill feed grade was 9.83 g/t, 14% higher compared to the first quarter and in line with plan. Gold recovery for the second quarter was 98.4%, a 1.2% increase over the first quarter. Mill throughput is expected to increase through the second half of the year relative to the second quarter.
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Cash costs per payable ounce of gold sold, which include all costs of inventory and refining costs, were $526 in the second quarter of 2019, higher than the $467 in the first quarter of 2019. Higher cash costs per payable ounce sold were primarily the result of incurring similar total operating costs while producing fewer ounces due to lower tonnes at higher grade. Total mining costs were $53 per tonne in the second quarter of 2019, in line with the previous quarter. Processing unit costs increased by 25% in the second quarter of 2019 compared to the first quarter of 2019, due to lower tonnes milled impacted by planned maintenance and expenses related to the seasonal operation of the water treatment facility. General and administrative costs per tonne decreased by 6% in the second quarter of 2019 compared to the first quarter of 2019, due to the annual incentives paid in the first quarter.
AISC per payable ounce of gold sold were $871 in the second quarter of 2019, 10% lower than the $973 in the first quarter of 2019. This decrease was primarily due to the seasonal nature of our sustaining capital expenditures as equipment and materials are purchased primarily in the first quarter of each year for delivery on the ice road.
Mine sales
A total of 24,276 ounces of gold were sold at an average realized gold price of $1,329 per ounce during the second quarter of 2019, compared to the 27,999 ounces of gold sold in the first quarter of 2019, at an average realized gold price of $1,302 per ounce of gold. Gold sales for the second quarter were 13% lower than the first quarter primarily due to lower production.
Exploration
In 2019, the Seabee Gold Operation plans 45,000 meters of underground drilling and 15,000 meters of surface drilling with the objective to increase and convert Mineral Resources into Mineral Reserves near the Santoy mine. During the second quarter of 2019, close to the Santoy mine area, we completed 20,379 meters of surface and underground drilling in 49 holes. Our surface and underground drill activities focused mostly on Santoy Gap hanging wall ("Gap HW") with a smaller number of holes completed on Santoy Gap and Santoy 8A zones. Additional information regarding such drilling was published in our news release dated July 30, 2019. We anticipate that Gap HW will make a positive contribution to Mineral Resources when estimated and reported at year-end 2019.
Greenfields exploration at the Seabee Gold Operation and Fisher property intersected new mineralized zones at the Batman Lake and Mac targets, respectively, where we are targeting new gold discoveries.
In addition, exploration activities outside the Santoy mine area began in June and are focused on mineral resource discovery at the Seabee Gold Operation and the Fisher project. This work comprises field programs of soil geochemistry, prospecting, trenching, and geologic mapping that are conducted from fly-in camps located at strategic points along the Santoy shear. Prospecting work has already located anomalous gold mineralization in bedrock 500 metres north of the Mac area drill intercept previously reported in the first quarter of 2019.
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Puna Operations, Argentina (75% interest)
(amounts presented on 100% basis unless otherwise stated)
Three months ended
| June 30 | March 31 December 31 September 30 | June 30 | |||
|---|---|---|---|---|---|
| Operating data | 2019 | 2019 | 2018 | 2018 | 2018 |
| Total material mined (kt)(1) | 3,304 | 2,618 | 897 | — | — |
| Waste removed (kt)(1) | 3,114 | 2,469 | 696 | — | — |
| Strip ratio(1) | 16.3 | 16.5 | 3.5 | — | — |
| Mining costs ($/t mined)(1) | 2.33 | 2.74 | 2.61 | — | — |
| Ore milled (kt) | 313 | 345 | 342 | 308 | 396 |
| Silver mill feed grade (g/t) | 160 | 235 | 133 | 96 | 110 |
| Lead mill feed grade (%)(1) | 0.71 | 1.07 | 0.92 | — | — |
| Zinc mill feed grade (%) | 0.46 | 0.46 | 1.14 | 1.25 | 0.71 |
| Processing costs ($/t milled) | 32.57 | 29.62 | 22.18 | 20.87 | 17.26 |
| Silver recovery (%) | 92.4 | 91.7 | 81.5 | 69.9 | 68.1 |
| Lead recovery (%)(1) | 79.4 | 83.6 | 83.1 | — | — |
| Zinc recovery (%) | 48.1 | 47.3 | 49.5 | 38.1 | 31.5 |
| General and admin costs ($/t milled) | 8.27 | 8.02 | 8.16 | 7.98 | 7.07 |
| Silver produced ('000 oz) | 1,486 | 2,392 | 1,189 | 666 | 954 |
| Silver sold ('000 oz) | 2,679 | 927 | 932 | 623 | 1,142 |
| Lead produced ('000 lb)(2) | 3,879 | 6,789 | 2,735 | 372 | — |
| Lead sold ('000 lb)(2) | 7,652 | 2,977 | 1,059 | — | — |
| Zinc produced ('000 lb)(3) | 1,539 | 1,640 | 4,014 | 3,241 | 1,520 |
| Zinc sold ('000 lb)(3) | 5,757 | 3,218 | 1,983 | 382 | — |
| Realized silver price ($/oz)(4) | 14.92 | 15.35 | 14.42 | 15.45 | 16.49 |
| Cash costs ($/oz)(4) | 9.80 | 9.94 | 15.02 | 17.41 | 14.73 |
| AISC ($/oz)(4) | 14.28 | 19.76 | 20.45 | 22.39 | 17.66 |
Financial Data ($000s)
| Revenue | 44,873 | 17,556 | 14,961 | 7,915 | 16,570 | |
| Income (loss) from mine operations | 4,126 | 3,584 | (788) | (2,440) | 830 | |
| Capital expenditures(5) | 3,119 | 1,543 | 3,849 | 2,390 | 2,652 | |
| Capitalized stripping | 7,302 | 6,191 | — | — | — | |
| Exploration expenditures(5) | 65 | 1 | 21 | 6 | 429 |
(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 lead production and sales relate only to lead in lead 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. See “Cautionary Note Regarding Non-GAAP Measures”.
(5)
Does not include exploration or development of the Chinchillas project.
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Mine production
Puna Operations produced 1.5 million ounces of silver for the second quarter of 2019, 38% lower than the first quarter, mainly due to lower silver grades, consistent with plan, and processing less ore. Silver sales totaled 2.7 million ounces as we began to deliver silver/lead and zinc concentrates into annual contracts with the aim of aligning quarterly production and sales. On an attributable basis, silver production and sales for the second quarter totaled 1.1 million ounces and 2.0 million ounces, respectively.
During the second quarter, ore was milled at an average rate of 3,436 tonnes per day, an 11% decrease compared to the previous quarter, mainly due to maintenance of control systems and continued de-bottlenecking of the new tailings pumping system that is expected to continue through the third quarter of 2019. Processed ore in the second quarter of 2019 contained an average silver grade of 160 g/t, a 32% decrease compared to the first quarter, consistent with the mine plan and average silver reserve grade. The strip ratio during the second quarter was 16:1 as mining of the next phase at the Chinchillas pit continues as planned.
Mine operating costs
Cash costs and AISC per payable ounce of silver sold and realized silver prices 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 and export duties and by-product credits, were $9.80 per payable ounce of silver sold in the second quarter of 2019, a decline from the $9.94 per payable ounce of silver sold in the first quarter of 2019 principally due to lower mining costs and an increase in by-product revenue. This benefit was partly offset by an increase in processing and general and administrative unit costs by 10% and 3%, respectively, when compared to the previous quarter.
AISC per payable ounce of silver sold in the second quarter of 2019 was $14.28, 28% lower than $19.76 in the first quarter of 2019. The decrease in AISC was primarily due to an increase in silver ounces sold during the period.
Mine sales
Silver sales totaled 2.7 million ounces and attributable sales were 2.0 million ounces in the second quarter of 2019, each a 189% increase from the first quarter of 2019. Lead sales totaled 7.7 million pounds and attributable sales were 5.7 million pounds in the second quarter of 2019, each a 157% increase from the first quarter of 2019. Zinc sales totaled 5.8 million pounds and attributable sales were 4.3 million pounds in the second quarter of 2019, each a 79% increase from the first quarter of 2019.
Chinchillas project, Argentina
Construction advanced with the completion of the in-pit tailings pumping system that was commissioned in the first quarter of 2019. Optimization of the operating efficiency and reliability of the system is ongoing.
The power generation was permanently connected to the medium voltage line to the Chinchillas mine during the second quarter.
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Infrastructure works at the Chinchillas site saw significant progress with the completion of the effluent treatment plant, external services, external illumination, dining room, change house, offices, warehouse and fuel plant. Work continues on the nitrate storage and diesel fueling station. At the Chinchillas truck shop, installation of the equipment doors, special installations and bridge crane is expected to be completed in the third quarter. The project remains on budget.
Outlook
This section of the news release provides management's production, cost, capital, exploration and development expenditure estimates for 2019. Please see “Cautionary Note Regarding Forward- Looking Statements.”
Due to strong asset operating performance in the first half of 2019 combined with continued positive momentum at our operations, we are revising certain guidance metrics as follows:
Seabee Gold Puna
| Revised Operating Guidance | Marigold mine | Operation | Operations(4) | ||
|---|---|---|---|---|---|
| Gold Production | oz 205,000 - 220,000 | 100,000 - 110,000 | — | ||
| Silver Production | Moz | — | — | 6.5 - 7.5 | |
| Lead Production | Mlb | — | — | 20.0 - 22.0 | |
| Zinc Production | Mlb | — | — | 7.0 - 9.0 | |
| Cash Cost per Payable Ounce Sold(1) | $/oz | 780 - 800 | 475 - 505 | 9.75 - 11.25 | |
| Sustaining Capital Expenditures(2) | $M | 35 | 25 | 15 | |
| Capitalized Stripping / Capitalized Development | $M | 15 | 12 | 24 | |
| Exploration Expenditures(3) | $M | 9 | 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)
Figures shown on a 100% basis. We own 75% of Puna Operations.
Marigold mine production guidance is increased to between 205,000 and 220,000 ounce of gold reflecting the higher ounces stacked on the leach pads earlier in 2019 due to pit optimization. Our cash cost guidance range is narrowed and raised to between $780 and $800 per payable ounce of gold sold. Sequencing of waste mining to optimize pit values has reduced capitalized stripping costs, increasing the amount remaining in cost of inventory. Guidance for capitalized stripping has been commensurately reduced from $20 million to $15 million. In addition, higher gold prices will impact reported cash costs at Marigold which include an approximate aggregate 10% NSR royalty and, therefore, every $100 increase in gold price increases cash costs by approximately $10 per payable ounce of gold sold.
Similarly, Seabee Gold Operation guidance range is improved with the production range increased to between 100,000 and 110,000 ounces due to higher mined grades. As a result of such higher mined grades, cash cost guidance is reduced to between $475 and $505 per payable ounce of gold sold, further demonstrating its position as a high margin operation.
With the start-up of commercial operations at the Chinchillas mine on December 1, 2018, actual operating performance is reflected in revised Puna Operations guidance. Zinc recovery from the Chinchillas ore has been lower than projected, reflecting both our focus on increasing silver recovery
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above pre-feasibility study estimates, and lower than expected performance of the zinc circuit to date.
Due to these factors, silver production guidance has been increased to between 6.5 and 7.5 million ounces with zinc production decreased to between 7 and 9 million pounds. Lead production has been adjusted marginally to between 20 and 22 million pounds. The resulting lower base metal by-product credits combined with actual unit cost performance result in cash cost guidance increasing to between $9.75 and $11.25 per payable ounce of silver sold. The mine remains on an aggressive stripping schedule for the balance of 2019 with capitalized stripping increasing by $4 million to $24 million.
We now expect to produce in 2019, on a consolidated basis, 400,000 gold equivalent ounces at gold equivalent cash costs of between $710 and $760 per payable ounce sold.
Gold equivalent figures for our 2019 operating guidance are based on a gold-to-silver ratio of 85:1. Cash costs and capital expenditures guidance is based on an oil price of $65 per barrel and exchange rate of 1.25 Canadian dollars to one U.S. dollar.
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Consolidated Financial Summary
(presented in thousands of U.S. dollars, except for per share value)
Selected Financial Data (1)
Three months ended June 30, Six months ended June 30,
| 2019 | 2018 | 2019 | 2018 | |
| $ | $ | $ | $ | |
| Revenue | 155,149 | 104,028 | 281,399 | 201,930 |
| Income from mine operations | 29,827 | 21,203 | 60,064 | 38,434 |
| Gross margin (%) | 19 | 20 | 21 | 19 |
| Operating income | 19,591 | 8,883 | 39,219 | 16,614 |
| Net income | 12,414 | 2,607 | 18,146 | 285 |
| Basic attributable income per share | 0.09 | 0.04 | 0.14 | 0.03 |
| Adjusted attributable income before tax | 18,426 | 13,051 | 38,988 | 19,787 |
| Adjusted attributable net income | 17,788 | 12,080 | 34,004 | 17,742 |
| Adjusted basic attributable income per share | 0.15 | 0.10 | 0.28 | 0.15 |
| Cash generated by operating activities | 33,367 | 17,132 | 33,064 | 28,139 |
| Cash generated by (used in) investing activities | (44,955) | 1,731 | (78,717) | 3,118 |
| Cash generated by financing activities | 791 | 4,248 | 78,232 | 6,164 |
| Financial Position | June 30, 2019 | December 31, 2018 | ||
| Cash and cash equivalents | 452,160 | 419,212 | ||
| Marketable securities | 37,712 | 29,542 | ||
| Current assets | 798,010 | 733,119 | ||
| Current liabilities | 198,325 | 83,254 | ||
| Working capital | 599,685 | 649,865 | ||
| Total assets | 1,650,222 | 1,521,138 |
We report non-GAAP financial measures including income from mine operations, operating income, adjusted attributable income before tax, adjusted attributable net income, adjusted basic attributable income per share, and working capital to manage and evaluate our operating performance. Please see “Cautionary Note Regarding Non-GAAP Measures”.
Quarterly financial summary
Revenue in the second quarter of 2019 increased 49% relative to the comparative quarter of 2018 due to an increase in sales at Puna Operations, as we began to deliver silver/lead and zinc concentrates into annual contracts, as well as an increase in gold sales at the Marigold mine and Seabee Gold Operation due to an increase in gold production.
Income from mine operations in the second quarter of 2019 generated a gross margin of 19%, in line with the 20% gross margin generated in the second quarter of 2018. Relative to the prior quarter, income from mine operations generated by the Seabee Gold Operation and Puna Operations were higher, while the Marigold mine generated a lower gross margin due to higher cost of sales, offset partially by a slightly higher realized gold price.
In the second quarter of 2019, we generated net income of $12.4 million, an increase compared to net income of $2.6 million in the second quarter of 2018.
Cash generated from operating activities in the quarter increased to $33.4 million compared to $17.1 million generated in the second 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
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