SSR Mining Inc. (NASDAQ/TSX: SSRM, ASX: SSR) ("SSR Mining" or the “Company") reports consolidated financial results for the second quarter ended June 30, 2023. In addition, the Board of Directors declared a quarterly cash dividend of $0.07 per common share payable on September 11, 2023 to holders of record at the close of business on August 14, 2023. This dividend qualifies as an 'eligible dividend' for Canadian tax purposes.
Rod Antal, Executive Chairman of SSR Mining, said, “As we close the first half of 2023, our consolidated operating and financial results have generally been well aligned to our initial expectations with output from Çöpler, Marigold and Puna partially offsetting the slower start to the year at Seabee. In the second half of the year, we expect all four of our operations to deliver improved consolidated production of approximately four hundred thousand gold equivalent ounces at reduced costs, resulting in strong free cash flow generation. While we are tracking to the lower end of our consolidated production guidance as a result of Seabee’s year-to-date performance, it is pleasing to see the mine positioned for an improved second half, particularly as production levels and grades improved in July.
Given our expectations for a strong second half of 2023, we have been very active with our capital returns program, repurchasing over $45 million of our shares in the first half of the year. Combined with our base dividend, we are on track to exceed $100 million in capital returns in 2023, or a 3.4% yield.
From a growth perspective, we continue to advance technical work to support anticipated updated life of mine plans at Çöpler and Marigold. In addition, we initiated waste stripping activities at Çakmaktepe Extension and remain on track for first gold production from the project within the year. Finally, at Hod Maden, initial site preparation activities are currently underway and we continue to expect an updated technical report and construction decision for the project in 2024. Overall, SSR Mining remains in a position of strength, supported by a significant cash position, key growth catalysts and the tailwind of improving production and free cash flow into the end of 2023.”
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(1) The Company reports non-GAAP financial measures including adjusted attributable net income, adjusted attributable net income per share, cash generated by operating activities before working capital adjustments, free cash flow, free cash flow before changes in working capital, total cash, net cash (debt), cash costs and AISC per ounce sold (a common measure in the mining industry), to manage and evaluate its operating performance at its mines. See "Cautionary Note Regarding Non-GAAP Financial Measures" for an explanation of these financial measures and a reconciliation of these financial measures to the most comparable GAAP financial measures. |
Second Quarter 2023 Highlights: (1)
(All figures are in U.S. dollars unless otherwise noted)
- Operating performance tracking well against full-year guidance: The Company delivered second quarter 2023 production of 156,625 gold equivalent ounces at cost of sales of $1,155 per gold equivalent ounce and all-in sustaining costs (“AISC”) of $1,633 per gold equivalent ounce. Year-to-date production is 303,518 gold equivalent ounces at cost of sales of $1,224 per gold equivalent ounce and AISC of $1,663 per gold equivalent ounce. In the second half of 2023, the Company expects production to be evenly distributed over the balance of the year. The Company’s consolidated 2023 production guidance of 700 to 780 thousand gold equivalent ounces at cost of sales of $1,055 to $1,115 per gold equivalent ounce and AISC of $1,365 to $1,425 per gold equivalent ounce remains unchanged.
- Strong financial results: Attributable net income in the second quarter of 2023 was $74.9 million, or $0.35 per diluted share, and adjusted attributable net income was $75.1 million, or $0.35 per diluted share. An approximately $25.1 million gain was included in the second quarter 2023 attributable and adjusted attributable net income, representing the net impact of foreign exchange losses and the deferred tax benefit resulting from currency devaluation, namely the Turkish Lira. For the six months ended June 30, 2023, attributable net income was $104.7 million, or $0.49 per diluted share, and adjusted attributable net income was $96.4 million, or $0.45 per diluted share. In the second quarter of 2023, operating cash flow was $80.3 million, or $104.3 million before working capital adjustments, and free cash flow was $22.4 million, or $46.3 million before working capital adjustments. Free cash flow remains strongly weighted to the second half of 2023, in line with previously stated guidance, and is expected to be relatively evenly split between the third and fourth quarters.
- Continued delivery of peer-leading capital returns: During the second quarter of 2023, the Board declared a quarterly cash dividend of $0.07 per share and the Company repurchased a total of 2,678,822 of its outstanding common shares at an average share price of $14.97 per share. Combined, the Company returned $54.5 million to shareholders during the second quarter of 2023 including the $14.3 million in quarterly dividend payments and $40.1 million in share repurchases. The Company is on track to return a minimum of $102.6 million in capital returns in 2023, or a 3.4% yield, which includes a total of 3,026,993 shares repurchased in the first half of 2023 for $45.3 million. On June 16, 2023, the Company announced a new Normal Course Issuer Bid (“NCIB”) enabling SSR Mining to purchase for cancellation up to 10,200,000 common shares of the Company representing approximately 5.0% of SSR Mining’s total issued and outstanding common shares.
- Balance sheet continues to support growth initiatives: As of June 30, 2023, SSR Mining had a total cash balance of $412.8 million, reflecting the $120 million upfront cash payment as part of the previously announced Hod Maden transaction and the aforementioned capital returns in the second quarter of 2023. SSR Mining’s strong balance sheet, including non-GAAP net cash of $147.3 million and total available liquidity of $712.8 million, supports the Company’s long-term capital commitments and the continuation of the Company’s dynamic shareholder returns strategy.
- Acquired an up to 40% ownership interest and operatorship in the Hod Maden Gold-Copper project: In the second quarter of 2023, the Company announced the acquisition of an up to 40% interest and immediate operational control in the Hod Maden gold-copper development project (“Hod Maden”) in northeastern Türkiye from Lidya Mines. Aggregate acquisition consideration totals $270 million, which included a $120 million upfront cash payment to acquire a 10% interest in Hod Maden, followed by $150 million in earn-in structured milestone payments to acquire an additional 30% interest, payable between the start of construction and the first anniversary of commercial production. The acquisition of Hod Maden adds one of the highest margin and lowest capital intensity development projects globally to SSR Mining’s robust portfolio of high-return growth projects and leverages SSR Mining’s significant experience in Türkiye.
- Çöpler sulfide plant continues to deliver solid performance; Çakmaktepe Extension on track for first production in 2023: Gold production was 52,031 ounces in the second quarter of 2023 at cost of sales of $1,117 per ounce and AISC of $1,384 per ounce. The sulfide plant delivered another strong quarter, with an average throughput rate of nearly 7,500 tonnes per day. Planned maintenance in the Çöpler sulfide plant will be completed in the third quarter of 2023, and no further planned maintenance is expected until 2024. The Çakmaktepe Extension project remains on track to deliver first gold production in 2023, with initial waste stripping activity underway. In the second half of 2023, Çöpler’s production profile is expected to be 50 to 55% weighted to the fourth quarter reflecting the maintenance shutdown in the third quarter.
- Strong quarterly production at Marigold: Gold production was 60,443 ounces in the second quarter of 2023 at cost of sales of $1,059 per ounce and AISC of $1,656 per ounce. The $64 million in sustaining capital spent year-to-date was primarily allocated to the purchase of four new haul trucks that will be used to support waste stripping activities. Marigold remains on track for its $81 million full-year sustaining capital guidance.
- Production improves at Seabee: Gold production was 16,428 ounces in the second quarter of 2023 at cost of sales of $1,192 per ounce and AISC of $1,690 per ounce. Underground mining rates rebounded in the second quarter, averaging more than 1,300 tonnes per day reflecting the ongoing success of continuous improvement initiatives at the site. Processed grades improved in July, positioning Seabee for a stronger second half of 2023.
- Puna continues to deliver strong performance: Silver production was 2.3 million ounces in the second quarter of 2023 at cost of sales of $18.02 per ounce of silver and AISC of $17.41 per ounce of silver. Puna again delivered solid process plant performance, with throughput averaging more than 4,600 tonnes per day during the second quarter.
- ESG and Sustainability Report: On April 14, 2023, the Company published its fifth annual ESG and Sustainability Report. The report provided a comprehensive overview of how SSR Mining manages sustainability across its business, detailed specific achievements from 2022 as well as outlined the commitments the Company made for 2023.
Financial and Operating Highlights
A summary of the Company's consolidated financial and operating results for the three and six months ended June 30, 2023 and June 30, 2022 are presented below:
Three Months Ended | Six Months Ended | |||||||||||||||
(in thousands of US dollars, except per share data) | June 30, | June 30, | ||||||||||||||
2023 | 2022 | 2023 | 2022 | |||||||||||||
Financial Results | ||||||||||||||||
Revenue | $ | 301,026 | $ | 319,583 | $ | 615,640 | $ | 675,029 | ||||||||
Cost of sales | $ | 170,640 | $ | 164,928 | $ | 369,937 | $ | 318,448 | ||||||||
Operating income | $ | 52,929 | $ | 70,095 | $ | 89,914 | $ | 185,965 | ||||||||
Net income | $ | 122,376 | $ | 67,519 | $ | 151,380 | $ | 143,625 | ||||||||
Net income attributable to SSR Mining shareholders | $ | 74,866 | $ | 58,488 | $ | 104,679 | $ | 126,051 | ||||||||
Basic net income per share attributable to SSR Mining shareholders | $ | 0.37 | $ | 0.28 | $ | 0.51 | $ | 0.59 | ||||||||
Diluted net income per share attributable to SSR Mining shareholders | $ | 0.35 | $ | 0.27 | $ | 0.49 | $ | 0.57 | ||||||||
Adjusted attributable net income (2) | $ | 75,103 | $ | 66,800 | $ | 96,376 | $ | 132,742 | ||||||||
Adjusted basic attributable net income per share (2) | $ | 0.37 | $ | 0.31 | $ | 0.47 | $ | 0.62 | ||||||||
Adjusted diluted attributable net income per share (2) | $ | 0.35 | $ | 0.30 | $ | 0.45 | $ | 0.60 | ||||||||
Cash generated by operating activities before changes in working capital (2) | $ | 104,265 | $ | 105,602 | $ | 195,134 | $ | 236,369 | ||||||||
Cash generated by operating activities | $ | 80,343 | $ | 32,838 | $ | 83,310 | $ | 95,025 | ||||||||
Cash used in investing activities | $ | (179,860) | $ | (29,860) | $ | (231,741) | $ | (57,745) | ||||||||
Cash used in financing activities | $ | (72,945) | $ | (63,234) | $ | (111,134) | $ | (116,683) | ||||||||
Operating Results | ||||||||||||||||
Gold produced (oz) | 128,902 | 135,500 | 251,723 | 292,510 | ||||||||||||
Gold sold (oz) | 124,916 | 146,329 | 251,027 | 303,508 | ||||||||||||
Silver produced ('000 oz) | 2,269 | 1,967 | 4,284 | 3,270 | ||||||||||||
Silver sold ('000 oz) | 1,857 | 1,771 | 4,238 | 3,532 | ||||||||||||
Lead produced ('000 lb) (3) | 10,193 | 8,889 | 21,554 | 16,192 | ||||||||||||
Lead sold ('000 lb) (3) | 9,805 | 8,874 | 23,175 | 19,087 | ||||||||||||
Zinc produced ('000 lb) (3) | 1,748 | 1,507 | 4,227 | 3,350 | ||||||||||||
Zinc sold ('000 lb) (3) | 1,033 | 1,367 | 4,720 | 4,495 | ||||||||||||
Gold equivalent produced (oz) (3) | 156,625 | 159,262 | 303,518 | 333,201 | ||||||||||||
Gold equivalent sold (oz) (3) | 147,705 | 167,201 | 302,262 | 346,893 | ||||||||||||
Average realized gold price ($/oz sold) | $ | 1,963 | $ | 1,861 | $ | 1,932 | $ | 1,870 | ||||||||
Average realized silver price ($/oz sold) | $ | 24.61 | $ | 19.64 | $ | 23.92 | $ | 21.75 | ||||||||
Cost of sales per gold equivalent ounce sold (4) | $ | 1,155 | $ | 986 | $ | 1,224 | $ | 918 | ||||||||
Cash cost per gold equivalent ounce sold (2, 4) | $ | 1,108 | $ | 933 | $ | 1,157 | $ | 851 | ||||||||
AISC per gold equivalent ounce sold (2, 4) | $ | 1,633 | $ | 1,267 | $ | 1,663 | $ | 1,177 | ||||||||
Financial Position | June 30, 2023 | December 31, 2022 | ||||||||||||||
Cash and cash equivalents | $ | 379,243 | $ | 655,453 | ||||||||||||
Current assets | $ | 1,155,380 | $ | 1,376,435 | ||||||||||||
Total assets | $ | 5,739,479 | $ | 5,254,657 | ||||||||||||
Current liabilities | $ | 203,677 | $ | 279,252 | ||||||||||||
Total liabilities | $ | 1,127,751 | $ | 1,128,458 | ||||||||||||
Working capital (5) | $ | 951,703 | $ | 1,097,183 | ||||||||||||
(2) The Company reports non-GAAP financial measures including adjusted attributable net income, adjusted attributable net income per share, cash generated by operating activities before changes in working capital, cash costs and AISC per ounce sold to manage and evaluate its operating performance at its mines. See “Non-GAAP Financial Measures” at the end of this press release for an explanation of these financial measures and a reconciliation of these financial measures to net income, cost of sales, and cash generated by operating activities, which are the most comparable GAAP financial measures. Cost of sales excludes depreciation, depletion, and amortization. | ||||||||||||||||
(3) Data for lead production and sales relate only to lead in lead concentrate. Data for zinc production and sales relate only to zinc in zinc concentrate. | ||||||||||||||||
(4) Gold equivalent ounces are calculated multiplying the silver ounces by the ratio of the silver price to the gold price, using the average London Bullion Market Association (“LBMA”) prices for the period. The Company does not include by-products in the gold equivalent ounce calculations. | ||||||||||||||||
(5) Working capital is defined as current assets less current liabilities. | ||||||||||||||||
Çöpler, Türkiye | ||||||||||||
(amounts presented on 100% basis) | ||||||||||||
Three Months Ended | Six Months Ended | |||||||||||
June 30, | June 30, | |||||||||||
Operating Data | ||||||||||||
