SSRM

SSR Mining Inc. 2024 Q2 Filing Summary

Business Context and Reporting Period

This Form 10-Q covers the quarterly period ended June 30, 2024. SSR Mining Inc. is a precious metals mining company with operations in the United States, Türkiye, Canada, and Argentina. The reporting period is defined by the suspension of all operations at the Çöpler Gold Mine in Türkiye following a significant heap leach pad slip (the "Çöpler Incident") on February 13, 2024. While the Company's other three mines (Marigold, Seabee, and Puna) continued operations, the Çöpler suspension significantly impacted consolidated production and financial results.

Key Financial Metrics

Production Metrics (Q2 2024): 76,102 gold equivalent ounces produced. All-in sustaining costs (AISC) were $2,116 per payable ounce. Cost of sales was $1,357 per payable ounce.

Material Changes vs. Prior Period

• Revenue Decline: Revenue decreased 38.6% in Q2 and 32.6% YTD compared to 2023, primarily due to a 67.6% reduction in gold ounces sold resulting from the Çöpler suspension.
• Significant One-Time Charges: YTD 2024 results include $277.7 million in reclamation and remediation costs and $114.2 million in impairment charges related to the Çöpler Incident. These charges drove a net loss of $277.4 million attributable to shareholders for the six-month period.
• Cash Flow Reversal: Operating cash flow turned negative, utilizing $53.5 million YTD compared to generating $83.3 million in the prior year period, driven by remediation expenditures and care and maintenance costs.
• Divestiture: The Company completed the sale of the non-core San Luis project in Peru for $5.0 million in cash and up to $37.5 million in contingent payments, recognizing a $6.7 million gain.

Outlook, Risks, and Management Commentary

• Çöpler Remediation: The heap leach pad at Çöpler will be permanently closed. Remediation is expected to take 24 to 36 months and cost between $250.0 million and $300.0 million. The Company expects to complete the removal of displaced material from the Sabırlı Valley by the end of Q3 2024.
• Restart Uncertainty: The Company cannot predict when or under what conditions Çöpler will resume operations. Restart depends on regulatory approvals, including the reinstatement of the 2021 Environmental Impact Assessment (EIA), which is currently under legal challenge. If the 2021 EIA is cancelled, operations may revert to the 2014 EIA parameters, which prescribe a lower throughput rate.
• Liquidity: Management believes current liquidity ($358.3 million cash + $399.6 million credit facility) is sufficient to sustain the three operating mines and fund Çöpler remediation for the next 12 months without borrowing.
• Capital Actions: Dividends have been suspended. The share repurchase program (NCIB) was terminated effective March 1, 2024, and expired on June 19, 2024.
• Legal Risks: The Company is a defendant in six securities class actions related to the Çöpler Incident. Additionally, new Turkish corporate minimum tax legislation (10% domestic, 15% global) was enacted in July 2024, with potential exposure being assessed.

Investor Verification Checklist

• Remediation Cost Accuracy: Verify the $250M–$300M remediation cost estimate and the timeline for completing material removal from the Sabırlı Valley.
• Regulatory Status: Monitor the status of the legal challenge to the 2021 EIA and the likelihood of operating under the more restrictive 2014 EIA parameters.
• Liquidity Runway: Confirm that cash reserves and the credit facility remain sufficient to cover care and maintenance costs and remediation expenses without triggering covenant breaches.
• Legal Exposure: Track developments in the six securities class actions and potential liability from the new Turkish minimum tax laws.
• Production Guidance: Assess the impact of the Çöpler suspension on full-year 2024 production guidance and the ability of Marigold, Seabee, and Puna to offset the volume loss.