SSRM

SSR Mining Inc. 10-Q Summary: Q3 2024

Business Context and Reporting Period

This report covers the quarterly period ended September 30, 2024. SSR Mining Inc. is a precious metals mining company with operations in Türkiye, the United States, Canada, and Argentina. The quarter was significantly impacted by the ongoing suspension of operations at the Çöpler mine in Türkiye following a heap leach pad failure in February 2024, and a temporary suspension of the Seabee mine in Canada due to forest fires in August 2024.

Key Financial Metrics

Note: Q3 2024 Operating Cash Flow is derived from the summary text; YTD figures are from the Statement of Cash Flows.

Material Changes vs. Prior Period

• Revenue Decline: Revenue decreased 33.2% in Q3 and 32.8% YTD compared to 2023. This was primarily driven by a 60.9% reduction in gold equivalent ounces sold due to the Çöpler suspension and Seabee fire, partially offset by an 18.5% increase in the average realized gold price.
• Cost Structure: Cost of sales decreased 35.6% in Q3 due to lower production volumes. However, All-In Sustaining Costs (AISC) per ounce increased significantly to $2,065 in Q3 (up 60.2% YoY) due to care and maintenance expenses and lower production volumes.
• Impairments and Remediation: The company recorded $114.6 million in impairment charges YTD, primarily related to the Çöpler heap leach pad inventory and facilities. Reclamation and remediation costs totaled $280.1 million YTD, compared to $6.5 million in the prior year.
• Profitability: While Q3 2024 reported a net income of $10.6 million, the YTD period resulted in a net loss of $266.8 million, largely due to the non-cash impairment charges and remediation accruals associated with the Çöpler incident.

Outlook, Risks, and Management Commentary

• Çöpler Incident Status: Operations remain suspended. Remediation is estimated to cost $250.0–$300.0 million and take 24–36 months. As of September 30, $103.3 million has been spent on remediation. The heap leach pad will be permanently closed. A local court cancelled the 2021 Environmental Impact Assessment (EIA), reverting operations to the 2014 EIA which prescribes lower throughput rates. Management cannot currently predict when operations will resume.
• Seabee Operations: Operations were suspended on August 21 due to forest fires and successfully restarted on October 11, 2024. Remote equipment was damaged, resulting in a $0.4 million impairment charge.
• Liquidity: Management believes current liquidity ($334.3 million cash plus $500 million credit facility) is sufficient to sustain operations at the three active mines and fund Çöpler remediation for the next 12 months without borrowing.
• Legal Proceedings: The company is facing securities class actions in the U.S. and Canada related to the Çöpler incident. No liability has been recorded as the outcome is not currently probable or estimable.
• Dividends and Buybacks: Dividends were suspended following the Çöpler incident. The share repurchase program (NCIB) expired in June 2024, and no new program has been authorized.

Investor Verification Checklist

• Remediation Timeline and Cost: Verify the progress of the Çöpler remediation against the $250–$300 million estimate and the 24–36 month timeline.
• Regulatory Approvals: Monitor the status of the appeal regarding the cancelled 2021 EIA and the potential impact of the 2014 EIA throughput limits on future production capacity.
• Liquidity Runway: Assess the sufficiency of the $834 million liquidity position given the ongoing cash burn from care and maintenance costs at Çöpler and Seabee.
• Legal Exposure: Track developments in the U.S. and Canadian securities class actions for potential financial impact.
• Production Recovery: Confirm the full operational status of the Seabee mine post-fire and the timeline for any potential restart of Çöpler sulfide plant operations.