SSR Mining Inc. — Q1 2024 Form 10-Q
Reporting period: Three months ended March 31, 2024. SSR Mining is a precious-metals producer with operations in Türkiye, the United States, Canada and Argentina. Results were materially affected by the February 13 heap-leach pad incident at Çöpler, which led to suspension of all operations there.
Financial and operating results
| Metric | Q1 2024 | Q1 2023 | Change / context |
|---|---|---|---|
| Revenue | $230.2 million | $314.6 million | Down 26.8% |
| Operating income (loss) | $(376.4) million | $37.0 million | Driven chiefly by Çöpler incident charges |
| Net income (loss) attributable to SSR Mining shareholders | $(287.1) million; $(1.42) per diluted share | $29.8 million; $0.14 per diluted share | GAAP |
| Adjusted attributable net income | $22.5 million; $0.11 per diluted share | $21.3 million; $0.10 per diluted share | Non-GAAP |
| Operating cash flow | $24.6 million | $3.0 million | Improved, partly reflecting working-capital changes |
| Free cash flow | $(9.4) million | $(56.3) million | Non-GAAP; after capital spending |
| Gold-equivalent production | 101,873 ounces | 146,894 ounces | Down 30.6% |
| AISC per gold-equivalent ounce sold | $1,569 | $1,693 | Down 7.3%; non-GAAP |
Q1 production included 21,827 gold ounces at Çöpler before its suspension, 34,680 gold ounces at Marigold, 23,773 at Seabee and 1.9 million silver ounces at Puna. Site AISC was $1,430 per gold ounce at Marigold, $1,416 at Seabee and $15.61 per silver ounce at Puna. The company reported a $20.2 million income and mining tax benefit, compared with $2.8 million of expense a year earlier.
Cash and cash equivalents were $467.0 million at March 31, down from $492.4 million at December 31, 2023. The company had $399.1 million of available revolver capacity, no revolver borrowings and was in covenant compliance. Total debt carrying value was $228.7 million, primarily the $227.8 million carrying value of 2.50% convertible notes due 2039. Total liabilities were $1.31 billion, including newly recorded reclamation and remediation liabilities.
Material changes versus Q1 2023
- Revenue fell $84.4 million, mainly due to fewer gold ounces sold after the Çöpler suspension and lower silver sales; the average realized gold price rose 8.4% to $2,061 per ounce.
- Reclamation and remediation expense rose to $275.3 million from $2.2 million. The company also recorded $114.2 million of non-cash impairment charges and $15.3 million of incident-related contingencies.
- Gold-equivalent sales decreased 30.1%. Seabee production rose 50.8% on higher mill-feed grade; Marigold production fell 33.3%, and Puna silver production fell 5.0%.
- Investing cash outflow decreased to $36.8 million from $51.9 million, mainly due to lower capital expenditures. Financing cash outflow declined to $10.8 million from $38.2 million; the prior-year period included debt repayment and dividends.
Incident, outlook and risks
- Çöpler operations remain suspended; the heap-leach pad will be permanently closed and will not be used for further processing. SSR Mining cannot estimate when, or under what conditions, operations could resume; reinstatement of the environmental impact assessment and operating permits is required.
- The company accrued approximately $250.4 million for future incident-related reclamation and remediation, the low end of its preliminary $250 million–$300 million estimate. It separately reported approximately $25 million of remediation costs incurred to date. The broader remediation program is expected to take 24–36 months.
- Recovery efforts for five missing colleagues and containment work continue. SSR Mining expected to complete removal of displaced material into temporary storage by the end of Q3 2024. A remediation plan, including a permanent facility for an estimated 18–20 million tonnes of material, was expected to be submitted for government approval in Q2 2024.
- Management said liquidity was sufficient for the next 12 months to support the other three mines and Çöpler care, monitoring and remediation, without drawing the revolver, based on its estimates. Actual costs, legal obligations and operating cash flows could change that assessment.
- Following the incident, the board suspended dividends and share repurchases; the company did not know when either might resume. Six putative securities class actions had been filed; no liability was recorded because the company said losses were not then considered probable and reasonably estimable.
- Other risks include commodity-price volatility, inflation, foreign-exchange movements, permitting and regulatory outcomes, and potential further incident-related costs. Management cautioned that forward-looking statements are subject to risks and uncertainties.
Important facts for investors to verify
- Government approvals, remediation milestones, final project costs and progress toward recovery of the missing colleagues.
- Any changes to Çöpler restart prospects, permits, heap-leach closure obligations or incident-related liabilities and contingencies.
- Liquidity, covenant headroom and cash generation from Marigold, Seabee and Puna as Çöpler remains offline.
- Whether suspended dividends or repurchases resume, and developments in the securities lawsuits.
- Reconciliations and definitions for adjusted earnings, AISC and free cash flow, which are non-GAAP measures.