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.
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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 $3.5 million.
Exploration success at Red Dot deposit: We expect to extend the current Marigold life of
mine plan into the early 2030's without the need for expansion capital with Red Dot phases 1,
2 and 3.
(1) We report the non-GAAP financial measures of cash costs per payable ounce of gold and silver sold and adjusted attributable
net income to manage and evaluate operating performance at the Marigold mine, the Seabee Gold Operation and Puna Operations.
See “Cautionary Note Regarding Non-GAAP Measures”.
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Marigold mine, U.S.
Three months ended
Operating data
June 30
2019
March 31
2019
December 31
2018
September 30
2018
June 30
2018
Total material mined (kt) 19,254 17,295 17,039 21,284 15,958
Waste removed (kt) 12,185 11,767 11,361 14,411 8,083
Total ore stacked (kt) 7,070 5,528 5,679 6,873 7,875
Strip ratio 1.7 2.1 2.0 2.1 1.0
Mining cost ($/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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Mine operating costs
Cash costs and AISC per payable ounce of gold sold and realized gold prices 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 $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 $1,250 per
ounce. Red Dot is anticipated to extend the Marigold mine life into the early 2030’s, without requiring
expansion of the mining fleet or the associated expansion capital.
Also, at Marigold, infill drill results for the Mackay pit and the North and South Red Dot areas are
expected to add to existing Mineral Reserves and Mineral Resources at year-end 2019. Additional
information regarding such drilling was published in our news release dated July 30, 2019.
Exploration and permitting activities are scheduled through the second half of 2019 at the Mackay
pit, North and South Red Dot, Valmy, East Basalt, and the newly acquired Trenton Canyon areas,
aimed at extending known gold mineralization and discovery. We expect to commence the first phase
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of our exploration program at the Trenton Canyon property, which lies immediately south of Marigold,
in the third quarter of 2019.
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Seabee Gold Operation, Canada
Three months ended
Operating data
June 30
2019
March 31
2019
December 31
2018
September 30
2018
June 30
2018
Total ore milled (t) 88,424 90,756 86,447 88,273 84,010
Ore milled per day (t/day) 971 1,008 940 959 923
Gold mill feed grade (g/t) 9.83 8.59 10.20 9.52 7.95
Mining costs ($/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
(1) 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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Mine operating costs
Cash costs and AISC per payable ounce of gold sold and realized gold prices 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 $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
Operating data
June 30
2019
March 31
2019
December 31
2018
September 30
2018
June 30
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.