Release Date: May 08, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- SSR Mining Inc (SSRM, Financial) reported first quarter 2024 production of 102,000 gold equivalent ounces, with operations in line with expectations for a back half weighted production profile.
- The company has a strong liquidity position with a total cash position of $467 million and an additional undrawn revolving credit facility, well-positioning it to manage remediation costs and reinvestment needs.
- Marigold, Seabee, and Puna operations are on track to meet full year production and cost guidance, demonstrating operational resilience and effective management.
- SSR Mining Inc (SSRM) has advanced engineering and project execution planning at Hod Maden, despite reduced planned activities for 2024.
- The company has successfully managed workforce and operational efficiency at Marigold, maintaining turnover at historic levels and achieving a successful winter program on the ice road.
Negative Points
- SSR Mining Inc (SSRM) recorded an attributable net loss of $1.42 per share in the first quarter, significantly impacted by the Copler incident.
- The Copler incident has necessitated a costly remediation plan estimated between $250 million to $300 million, in addition to the $25 million already spent since the incident.
- The company faces uncertainty regarding the restart of the Copler mine, pending the reinstatement of environmental impact assessment and operating permits.
- First quarter financial results included substantial charges totaling $288 million related to the Copler incident, including future remediation costs and legal contingencies.
- Free cash flow was negative $9 million in the quarter, reflecting the financial strain from the Copler incident and ongoing remediation efforts.
Q & A Highlights
Q: Just regarding the remediation costs at Copler of $250 million to $300 million, does this amount include any sort of care and maintenance cost throughout the 2 to 3 years that's going to take you to complete the remediation?
A: Rodney P. Antal, President, CEO & Executive Chairman of SSR Mining Inc., clarified that the estimated remediation costs do not include care and maintenance costs. These are projected separately, with around $17 million already spent in the first quarter.
Q: Will you look to apply for the environmental permits while the remediation is ongoing? Or once the remediation is complete, is there a possibility that the sulfide plant could start before the remediations are complete?
A: Rodney P. Antal mentioned that the focus has been on recovery and remediation planning, and it's too early to provide a definitive timeline or method for applying for environmental permits or restarting operations.
Q: Historically, you've always had a big working capital outflow in the first quarter with the inventory build at Seabee on the ice road. Did you get everything to the site that you were hoping for?
A: Rodney P. Antal responded that the winter program was very successful, avoiding the usual delays and inefficiencies associated with the ice road, leading to a more efficient outcome than in previous years.
Q: In terms of the remediation work estimated to cost $250 million to $300 million, are those plans concrete and approved by the government? Or is it a work in progress?
A: Rodney P. Antal explained that the remediation cost estimates are based on detailed engineering designs and discussions to date, indicating that the plans are well advanced.
Q: What's your experience with the labor market in Nevada, especially concerning Marigold? Are turnover rates elevated or more in line with historical norms?
A: William MacNevin, EVP of Operations & Sustainability at SSR Mining Inc., noted that turnover rates at Marigold are at historic levels, with efforts ongoing to reduce them further, indicating no significant impact from the labor market conditions.
Q: If you are able to restart the plant with stockpiles only, do you have a sense of what the cash costs of that would be?
A: Rodney P. Antal stated that it is too early to discuss specific cash costs associated with restarting the plant using only stockpiles, as plans and timelines are still being determined.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
