Ssr Mining Reports Second Quarter 2018 Results
News Release 18-13
August 9, 2018
SSR MINING REPORTS SECOND QUARTER 2018 RESULTS
VANCOUVER, B.C. - SSR Mining Inc. (NASDAQ: SSRM) (TSX: SSRM) (“SSR Mining”) reports
consolidated financial results for the second quarter ended June 30, 2018.
Paul Benson, President and CEO said, "We increased consolidated production in the second
quarter to over 85,000 gold equivalent ounces at lower cash costs, putting us on track to achieve
full year guidance. This achievement is also reflected in our improved financial performance, where
we increased earnings and operating cash flow, and added cash to the balance sheet for the
eleventh consecutive quarter. With these results and the Chinchillas project moving closer to
completion, we maintain positive momen tum towards our 2018 goals and near -term growth
outlook."
Second Quarter 2018 Highlights:
(All figures are in U.S. dollars unless otherwise noted)
▪ Improved financial performance: Cash generated from operating activities of $17.1 million
and adjusted attributable net income of $12.1 million or $0.10 per share.
▪ Increased production at lower costs: Consolidated quarterly production increased to 85,082
gold equivalent ounces while achieving lower cash costs of $758 per payable ounce of gold
sold.
▪ Strong performance at the Marigold mine: Produced 49,436 ounces of gold at cash costs of
$700 per payable ounce of gold sold, and stacked a record 7.9 million tonnes of ore.
▪ Delivered updated Marigold life of mine plan: Released updated plan outlining a 10 -year
reserve life, 30% growth in production through 2021, and robust economics.
▪ Performance in line with guidance at the Seabee Gold Operation: Produced 23,582 ounces
of gold at cash costs of $616 per payable ounce of gold sold, a solid result considering lower
quarterly mill throughput.
▪ Exceeded first half guidance at Puna Operations: Produced 1.0 million ounces of silver at
cash costs of $14.73 per payable ounce of silver sold, exceeding first half production guidance.
▪ Chinchillas project remains on track: Subsequent to quarter-end, trucked first ore to the
Pirquitas site in July 2018. The project remains on schedule for sustained ore delivery in the
fourth quarter of the year and on budget, with material advancements in construction and
development activities made during the quarter.
▪ Increased cash position: Quarter-end cash increased to $493.6 million, up $20.7 million.
SSR Mining Inc. PAGE 2
Marigold mine, U.S.
Three months ended
Operating data June 30
2018
March 31
2018
December 31
2017
September 30
2017
June 30
2017
Total material mined (kt) 15,958 16,150 13,979 20,311 17,985
Waste removed (kt) 8,083 9,052 8,136 13,149 11,075
Total ore stacked (kt) 7,875 7,099 5,843 7,162 6,910
Strip ratio 1.0 1.3 1.4 1.8 1.6
Mining costs ($/t mined) 1.92 1.80 1.98 1.52 1.67
Gold stacked grade (g/t) 0.42 0.37 0.37 0.31 0.31
Processing costs ($/t processed) 0.86 0.93 1.08 0.89 0.82
Gold recovery (%) 74.4 73.6 74.0 72.0 73.0
General and admin costs ($/t processed) 0.41 0.42 0.51 0.40 0.42
Gold produced (oz) 49,436 42,960 52,768 38,699 55,558
Gold sold (oz) 46,644 42,078 51,420 38,818 57,426
Realized gold price ($/oz) (1) 1,304 1,331 1,269 1,270 1,265
Cash costs ($/oz) (1) 700 720 699 684 632
AISC ($/oz) (1) 981 954 1,001 979 833
Financial data ($000s)
Revenue 60,752 55,880 65,217 49,395 72,451
Income from mine operations 14,670 12,312 12,777 11,189 21,373
Capital expenditures (2) 14,481 4,665 8,194 3,855 5,272
Capitalized stripping 850 2,902 5,712 6,056 4,350
Exploration expenditures (3) 3,243 1,914 1,208 1,130 1,538
(1) We report the non-GAAP financial measures of realized gold price, cash costs and all-in sustaining costs ("AISC") per
payable ounce of gold sold to manage and evaluate operating performance at the Marigold mine. For a better
understanding and a reconciliation of these measures to cost of sales, as shown in our Consolidated Statements of
Income (Loss), please refer to “Non-GAAP Financial Measures” in Section 9 of our Management's Discussion and
Analysis for the three and six months ended June 30, 2018 (“MD&A”) .
(2) Includes expansion capital expenditures of $5.9 million for the three months ended June 30, 2018 ($nil for the
previous four quarters).
(3) Includes capitalized and expensed exploration expenditures.
Mine production
In the second quarter of 2018, the Marigold mine produced 49,436 ounces of gold, a 15% increase
over the first quarter.
During the quarter, 16.0 million tonnes of material were mined, similar to the first quarter primarily
due to longer haul distances associated with the increase in ore tonnes. We expect total material
mined to increase during the second half of 2018 due to shorter haul distances and as the four
additional haul trucks enter service. These factors, along with completion of the new leach pad, are
expected to increase gold production through the second half of the year.
Approximately 7.9 million tonnes of ore were delivered to the heap leach pads, a quarterly record.
Gold grade increased to 0.42 g/t. This compares to 7.1 million tonnes of ore delivered to the heap
SSR Mining Inc. PAGE 3
leach pads at a gold grade of 0.37 g/t in the first quarter of 2018. The strip ratio was 1.0:1 for the
quarter, 23% lower than the prior quarter.
Mine operating costs
Cash costs and AISC per payable ounce of gold sold are non-GAAP financial measures. Please
see “Cautionary Note Regarding Non-GAAP Measures”.
Cash costs, which include all costs of inventory, refining costs and royalties, of $700 per payable
ounce of gold sold in the second quarter of 2018 were 3% lower than the previous quarter. This was
primarily due to stacking 26% more recoverable ounces in the second quarter compared to the first
quarter, which lowered the cost per ounce of inventory. The in crease in recoverable ounces
stacked was a result of the increased ore tonnage and grade in the second quarter compared to the
first quarter. Total mining costs of $1.92 per tonne in the second quarter of 2018 were 7% higher
than in the previous quarter pr imarily due to a 25% increase in total fuel costs through a
combination of higher diesel price and increased consumption due to longer haul distances.
Processing and general administrative unit costs were 8% and 2% lower, respectively, in the second
quarter than in the first quarter due to higher tonnes processed while total costs remained stable.
AISC per payable ounce of gold sold increased in the second quarter of 2018 to $981 from $954 in
the first quarter due to higher sustaining capital expenditures as construction of the new leach pad
resumed, and due to higher planned exploration expenditures.
Mine sales
A total of 46,644 ounces of gold were sold at an average realized price of $1,304 per ounce during
the second quarter of 2018, an increase of 11% from the 42,078 ounces of gold sold at an average
realized price of $1,331 per ounce during the first quarter of 2018. Finished goods inventory
increased as sales were below production.
Exploration
The main focus of our 2018 exploration program is to conduct infill drilling of the Red Dot resource
area and to explore higher grade structural zones within phases of the Mackay pit. During the
second quarter, we completed a total of 75 reverse circulation drillholes for 27,886 meters at Red
Dot and within the Mackay pit.
Drilling of two east-west test sections were completed during the quarter within the Red Dot area.
Drill results met expectations confirming the geologic interpretation and are expected to increase
Mineral Resources at year-end 2018. In June, we decided to continue the program and complete
infill drilling of the Red Dot area. Our objective is to convert Inferred Mineral Resources to Indicated
Mineral Resources, and to upgrade existing Indicated Resources with the ultimate goal of declaring
a Mineral Reserve at Red Dot by mid-2019.
In June, we completed the acquisition of a parcel of land, and the associated mineral and surface
rights, that is proximal to the south-western margin of the Mackay pit. We anticipate that operating
synergies and exploration benefits will be realized from the incorporation of these lands into the
Marigold land package.
SSR Mining Inc. PAGE 4
During the third quarter of 2018, we will continue drilling for higher grade structures in the Mackay
Phase 5 area while advancing the Red Dot exploration program.
SSR Mining Inc. PAGE 5
Seabee Gold Operation, Canada
Three months ended
Operating data
June 30
2018
March 31
2018
December 31
2017
September 30
2017
June 30
2017
Total ore milled (t) 84,010 93,269 89,237 84,315 84,469
Ore milled per day (t/day) 923 1,036 970 916 928
Gold mill feed grade (g/t) 7.95 8.95 8.89 7.03 7.97
Mining costs ($/t mined) 60 59 66 74 60
Processing costs ($/t processed) 27 21 24 22 20
Gold recovery (%) 97.3 97.4 97.4 97.2 97.3
General and admin costs ($/t
processed) 62
53
61
53
50
Gold produced (oz) 23,582 23,717 24,227 18,058 20,690
Gold sold (oz) (1) 20,512 20,012 23,969 21,798 17,909
Realized gold price ($/oz) (2) 1,306 1,340 1,276 1,269 1,257
Cash costs ($/oz) (2) 616 481 605 634 592
AISC ($/oz) (2) 854 896 776 775 831
Financial data ($000s)
Revenue 26,706 26,789 30,571 27,652 22,502
Income from mine operations 5,703 6,672 2,923 3,643 4,083
Capital expenditures 1,035 4,426 920 799 711
Capitalized development 2,069 2,283 2,301 1,314 2,165
Exploration expenditures (3) 2,745 2,032 1,187 1,253 1,566
(1) Beginning with the first quarter of 2018, the holder of the 3% net smelter returns royalty elected to receive its royalty
in-kind and we will no longer report these ounces within gold sold.
(2) We report the non-GAAP financial measures of realized gold 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 Income (Loss), please
refer to “Non-GAAP Financial Measures” in Section 9 of our MD&A.
(3) Includes capitalized and expensed exploration expenditures.
Mine production
Seabee Gold Operation produced 23,582 ounces of gold in the second quarter, in line with
production in the previous quarter.
The mill achieved an average throughput of 923 tonnes per day, an 11% decrease from the first
quarter. Production during the second quarter was impacted by planned maintenance, the transition
of mining activities to the high-grade Santoy mine, and a forest fire. Mill throughput is expected to
increase through the second half of the year relative to the second quarter. Gold recovery for the
quarter remained consistent at 97.3%.
SSR Mining Inc. PAGE 6
Mine operating costs
Cash costs and AISC per payable ounce of gold sold are non-GAAP financial measures. Please
see “Cautionary Note Regarding Non-GAAP Measures”.
Cash costs per payable ounce of gold sold, which include all costs of inventory and refining costs,
were $616 in the second quarter of 2018, higher than the $481 in the first quarter of 2018. Higher
cash costs per payable ounce sold were primarily the result of lower tonnes milled at lower grades
while incurring similar total operating costs compared to the prior quarter. Costs per tonne mined
were $60 in the second quarter of 2018, in line with the previous quarter. Processing and general
and administrative unit costs increased by 29% and 17%, respectively, in the second quarter of
2018 compared to the first quarter of 2018, due to lo wer tonnes milled impacted by planned
maintenance and the forest fire.
AISC per payable ounce of gold sold were $854 in the second quarter of 2018, lower than the $896
in the first quarter of 2018. This decrease was 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 20,512 ounces were sold at an average realized price of $1,306 per ounce during the
second quarter of 2018, comparable to the 20,012 ounces of gold sold in the first quarter of 2018,
at an average realized price of $1,340 per ounce of gold. Finished goods inventory increased as
sales were below production.
Exploration
For 2018, the Seabee Go ld Operation plans 45,000 meters of underground drilling and 20,000
meters of surface drilling with the objective to increase and convert Mineral Resources into Mineral
Reserves near the Santoy mine. In the second quarter of 2018, close to the Santoy mine area, we
completed 12,157 meters of underground drilling and 6,840 meters of surface drilling in 40 and 12
drillholes, respectively. Our underground drill program for the second quarter of 2018 focused on
three targets, including Santoy Gap, Santoy 8A zone and Santoy Gap hanging wall.
Surface exploration drilling in the second quarter of 2018 outside the Santoy mine area, focused on
three areas including CRJ, Santoy 3 and Fisher with 12,052 meters being completed in 23
drillholes. Current activities are focused on testing first pass targets on the Fisher property identified
along the length of the Santoy shear zone extension. Holes completed during the quarter partially
tested the Santoy shear zone extension and have intersected favourable lithologies, alteration and
mineralization. Analytical results are pending and we continue to be encouraged by the potential of
this early stage property.
Activities in the third quarter will focus on continuing the conversion drilling from underground on
the Santoy Gap, Santoy Gap hanging wall and Santoy 8A targets, and completing our planned
surface field and drill programs on Fisher.
SSR Mining Inc. PAGE 7
Puna Operations, Argentina (75% interest)
(amounts presented on 100% basis unless otherwise stated)
Three months ended
Operating data
June 30
2018
March 31
2018
December 31
2017
September 30
2017
June 30
2017
Ore milled (kt) 396 373 442 461 446
Silver mill feed grade (g/t) 110 115 125 153 185
Zinc mill feed grade (%) (2) 0.71 — — — —
Processing costs ($/t milled) 17.26 15.34 13.53 11.92 12.94
Silver recovery (%) 68.1 67.7 66.0 67.8 73.5
Zinc recovery (%) (2) 31.5 — — — —
General and admin costs ($/t milled) 7.07 6.33 5.74 4.81 5.00
Silver produced ('000 oz) 954 938 1,169 1,541 1,947
Silver produced (attributable) ('000 oz) (1) 716 704 877 1,156 1,777
Zinc produced ('000 lb) (2) 1,521 — — — —
Zinc produced (attributable) ('000 lb) (1,2) 1,141 — — — —
Silver sold ('000 oz) 1,142 1,064 820 2,076 1,655
Silver sold (attributable) ('000 oz) (1) 857 798 615 1,557 1,473
Zinc sold ('000 lb) (2) — — — — —
Zinc sold (attributable) ('000 lb) (1,2) — — — — —
Realized silver price ($/oz) (3) 16.49 16.79 16.96 16.77 17.31
Cash costs ($/oz) (3,4) 14.73 17.07 16.36 12.76 12.15
AISC ($/oz) (3,4) 17.66 18.37 18.30 13.56 12.78
Financial Data ($000s)
Revenue 16,570 15,233 12,093 28,958 22,029
Income (loss) from mine operations 830 (1,753 ) 5,490 7,690 4,006
Capital expenditures (5) 2,652 789 917 1,006 420
Exploration expenditures (5) 429 6 — — —
(1) Attributable production and sales for the second quarter of 2017 represent 100% for April and May and 75% for June
2017. Attributable production and sales for all subsequent quarters represent 75%.
(2) Data for zinc production and sales relate only to zinc in zinc concentrate.
(3) We report the non-GAAP financial measures of cash costs per payable ounce of silver sold, realized silver prices and
AISC per payable ounce of silver sold to manage and evaluate operating performance at Puna Operations. For a
better understanding and a rec onciliation of these measures to cost of sales, as shown in our Consolidated
Statements of Income (Loss), please refer to “Non-GAAP Financial Measures” in Section 9 of our MD&A.
(4) Cash costs and AISC per payable ounce of silver sold include stockpile inventory costs previously incurred of $nil for
the three months ended June 30, 2018 (March 31, 2018 - $5.75, December 31, 2017 - $5.30, September 30, 2017 -
$5.20, June 30, 2017 - $3.30).
(5) Does not include exploration or development of the Chinchillas project.
Mine production
During the second quarter of 2018, the operation produced 1.0 million ounces of silver, for a total of
1.9 million ounces produced in the first half of 2018, exceeding our silver production guidance of 1.6
million ounces. Our attributable share of silver production in the second quarter was approximately
716,000 ounces.
SSR Mining Inc. PAGE 8
Ore was sourced exclusively from residual surface stockpiles and milled at an average rate of 4,353
tonnes per day in the second quarter, 5% above the previous quarter. Ore milled in the second
quarter contained an average silver grade of 110 g/t, 4% lower than the 115 g/t reported in the first
quarter, consistent with processing of increasingly lower grade stockpiles. The average recovery of
silver in the silver concentrate in the second quarter was 63.4%, 6% lower than the previous quarter
consistent with increasing metallurgical complexity of the residual stockpiled material.
We commenced production of zinc concentrate from stockpiled ore near the end of the second
quarter, and produced approximately 1.5 million pounds of zinc. Approximately 70,000 ounces of
silver were recovered in zinc concentrate over the quarter, for a total silver recovery of 68.1%.
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 and provincial royalties
were $14.73 per payable ounce of silver sold in the second quarter of 2018, a decline from the
$17.07 per payable ounce of silver sold in the first quarter of 2018 principally due to processing
stockpiles with no inventory value. This benefit was partly offset by an increase in processing and
general and administrative unit costs by 13% and 12%, respectively, when compared to the
previous quarter.
AISC per payable ounce of silver sold in the second quarter of 2018 were $17.66, 4% lower than
$18.37 in the first quarter of 2018.
Mine sales
Silver sales totaled 1.1 million ounces and attributable sales were 0.9 million ounces in the second
quarter of 2018, each a 7% increase from the first quarter of 2018. No zinc sales occurred during
the quarter.
Exploration
During the first quarter of 2018, we commenced a 2,400 meter surface drill program at Pirquitas
targeting mineralization that would augment the Cortaderas underground Mineral Resources.
During the second quarter of 2018, twelve drillholes were completed for 1,587 meters. All drillholes
intersected high-grade silver-zinc mineralization from the Potosi structure having the form of two
narrow, but vertically and laterally continuous veins. Results will be evaluated when finalized.
Chinchillas project, Argentina
The second quarter saw increased activities in both pre -stripping and construction with the
completion of recruitment of new mine personnel and mobilization of contractors at both Pirquitas
and Chinchillas.
Material movement related to Chinchillas pre-stripping ramped up over the quarter with the hiring of
the new mine operations team. The workforce was employed exclusively out of the local
communities and a major mine fleet operations and maintenance training program was initiated late