SSR Mining Inc. — 2022 Form 10-K Summary
Business context and reporting period
Annual report for the fiscal year ended December 31, 2022, filed February 23, 2023. SSR Mining operates four producing assets: Çöpler in Türkiye, Marigold in the United States, Seabee in Canada, and Puna in Argentina. Gold accounted for 82% of revenue; Puna produces silver, lead, and zinc concentrates. This filing reports full-year results, not standalone fourth-quarter results.
Financial and operating results
| Metric | 2022 | 2021 | Change |
|---|---|---|---|
| Revenue | $1,148.0 million | $1,474.2 million | Down 22.1% |
| Operating income | $190.3 million | $444.4 million | Down 57.2% |
| Net income attributable to SSR shareholders | $194.1 million; $0.89 diluted EPS | $368.1 million; $1.63 diluted EPS | Down 47.3% |
| Adjusted attributable net income (non-GAAP) | $144.8 million; $0.67 diluted EPS | $401.8 million; $1.78 diluted EPS | Down 64.0% |
| Operating cash flow | $160.9 million | $609.0 million | Down 73.6% |
| Free cash flow (non-GAAP) | $23.4 million | $444.2 million | Down $420.8 million |
| Gold-equivalent production | 623,819 oz | 794,456 oz | Down 21.5% |
| Cost of sales / AISC per gold-equivalent ounce sold | $985 / $1,339 | $842 / $955 | AISC up 40.2% |
Revenue fell mainly because gold-equivalent ounces sold declined 22.6%. Çöpler sales were affected by its temporary suspension, Marigold by slower leaching, and Puna by lower silver prices. The average realized gold price rose 0.6% to $1,811/oz, while the average realized silver price fell 14.6% to $19.58/oz. Seabee gold production rose 14.5%; Çöpler fell 41.9% and Marigold fell 17.3%.
Cash and cash equivalents were $655.5 million at year-end, down from $1,017.6 million; restricted cash was an additional $33.7 million. Debt carrying value was $298.3 million, including $230 million principal on convertible notes and $70 million on the Term Loan. The $200 million revolving credit facility was undrawn, with $196.6 million available. The company reported compliance with debt covenants at year-end and stated its capital resources were expected to cover business requirements for at least 12 months.
Shareholder returns totaled $158.8 million: $58.8 million in dividends and $100.0 million in repurchases. The company paid $0.28 per share in 2022 and announced a $0.07 quarterly dividend payable in March 2023; future dividends remain at the board’s discretion.
Material changes and unusual items
- Çöpler operations were suspended from June until September 22, 2022 after a leak of leach solution containing a small amount of diluted cyanide. The shutdown reduced production and required $41.8 million of care-and-maintenance expense. The filing says remediation and required regulatory initiatives were completed before restart.
- SSR acquired an additional 30% of Kartaltepe for $150 million, raising its ownership from 50% to 80% and resulting in consolidation. The transaction generated an $81.9 million accounting gain, a material contributor to reported earnings; adjusted earnings exclude it.
- SSR acquired Taiga Gold for $24.8 million, including the Fisher property adjoining Seabee, and sold Pitarrilla for $35 million cash, Endeavour Silver shares valued at $25.6 million at closing, and a 1.25% royalty.
- Foreign-exchange loss was $32.5 million, versus a $3.6 million gain in 2021. Income and mining tax expense was $30.1 million, versus a $14.1 million benefit in 2021. The filing cites currency, withholding-tax, and uncertain-tax-position effects.
- Proven and probable gold reserves were 7.62 million attributable ounces versus 8.06 million in 2021; the filing attributes changes primarily to mining depletion and increased Kartaltepe ownership. Puna silver reserves declined to 39.9 million ounces from 46.0 million, mainly due to depletion.
Outlook, commentary, and risks
The filing does not provide a clear 2023 production, cost, or capital-expenditure guidance figure in the supplied text. Management said working capital and expected operating cash flows were sufficient to support commitments through 2023 and current resources were expected to meet business requirements for at least 12 months. The company plans continued portfolio exploration and states an ambition to establish an action plan for net-zero emissions by 2050.
- Key operating exposures include metal-price volatility, inflation and energy costs, foreign-exchange movements, water availability, supply-chain and transport disruptions, labor availability, permitting, and reserve-estimation uncertainty. The filing reports 2022 inflation of 94.8% in Argentina and 72% in Türkiye.
- The Çöpler suspension caused covenant non-compliance at September 30, 2022; lenders waived the event in the fourth quarter. SSR was compliant at year-end. The incident also led to community demonstrations and reputational concerns; the filing says there is no assurance perceptions will be reversed.
- A November 2022 ransomware attack on the Turkish subsidiary caused no serious operational disruption, according to the company.
- Reclamation liabilities were $164.0 million, up from $125.0 million. The company also had $117.4 million in surety bonds supporting environmental obligations. Management said ordinary-course legal proceedings were not expected to have a material effect; the company disclosed ongoing Turkish withholding-tax litigation.
- The $23.4 million free cash flow and $144.8 million adjusted attributable net income are non-GAAP measures. The filing provides reconciliations; they should be considered alongside U.S. GAAP results.
Important facts for investors to verify
- Progress on Çöpler remediation, regulatory approvals, operating performance, community relations, and any subsequent liabilities related to the leak.
- Whether production, costs, and cash generation recover after the Çöpler suspension and amid higher input costs, particularly at Marigold and Puna.
- The sustainability of operating cash flow and free cash flow, including the effects of working-capital movements and the noncash Kartaltepe acquisition gain.
- Debt repayment and refinancing needs, especially the scheduled $70 million Term Loan repayment in 2023 and the longer-dated convertible notes.
- Changes to reserves, reclamation estimates, and tax exposures, including the Turkish withholding-tax dispute and uncertain tax positions.
The financial statements received an unqualified audit opinion, and management and the auditor reported effective internal control over financial reporting as of December 31, 2022.