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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-Q
(Mark One)
☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the Quarterly Period Ended September 30, 2022
or
☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from __________to__________
Commission File Number: 001-35455
SSR MINING INC.
(Exact name of registrant as specified in its charter)
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British Columbia (State or Other Jurisdiction of Incorporation or Organization) | | 98-0211014 (I.R.S. Employer Identification No.) |
Suite 1300 - 6900 E. Layton Ave, Denver, Colorado, 80237 |
(Address of Principal Executive Offices)
Registrant’s telephone number, including area code (303) 292-1299
Securities registered pursuant to Section 12(b) of the Act.
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Title of each class | Trading symbol | Name of each exchange on which registered |
Common shares without par value | SSRM | The Nasdaq Stock Market LLC |
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. ☒ Yes ☐ No
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). ☒ Yes ☐ No
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12-b2 of the Exchange Act.
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Large accelerated filer | ☒ | | Accelerated filer | ☐ |
Non-accelerated filer | ☐ | | Smaller reporting company | ☐ |
| | | Emerging growth company | ☐ |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12-b2 of the Exchange Act). ☐ Yes ☒ No
There were 206,607,962 common shares outstanding on October 31, 2022.
TABLE OF CONTENTS
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PART I - FINANCIAL INFORMATION |
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PART II - OTHER INFORMATION |
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PART I - FINANCIAL INFORMATION
THIRD QUARTER 2022 HIGHLIGHTS (dollars, except per share, per ounce and per pound amounts)
•Operating performance: Delivered third quarter production of 106,919 gold equivalent ounces, and year-to date production of 441,164 gold equivalent ounces. Third quarter production costs were $1,099 per gold equivalent ounce and AISC was $1,901 per gold-equivalent ounce, with year-to-date production costs of $955 per gold equivalent ounce and AISC of $1,331 per gold equivalent ounce. (1)
•Çöpler production restarted late September: At the end of the second quarter of 2022, Türkiye’s Ministry of Environment, Urbanization and Climate Change (“Ministry of Environment”) temporarily suspended operations at the Çöpler mine pending implementation of improvement initiatives requested as a result of a leak of leach solution on June 21, 2022. The Company completed these initiatives and received the required regulatory approvals from Türkiye’s Government authorities on September 22, 2022 and all operations were subsequently restarted at the Çöpler mine.
•Financial results: Attributable net loss in the third quarter was $25.8 million, or $0.12 per diluted share, and adjusted attributable net loss was $13.5 million, or $0.07 per diluted share. For the nine months ending September 30, 2022, operating cash flow was $42.8 million and free cash flow was $(73.4) million. (1)
•Capital returns: At the end of the third quarter, SSR Mining had returned $144.4 million to shareholders in 2022, including $44.4 million in dividends and $100.0 million in share repurchases through the cancellation of 6,053,126 shares. In addition, the Board declared a quarterly cash dividend of $0.07 per share to be payable on December 19, 2022.
•Balance sheet and financial strength: At the end of the third quarter, the Company had a cash and cash equivalents balance of $748.5 million, after $17.8 million in scheduled debt repayments, $85.4 million in share repurchases, and $14.3 million in dividends to shareholders during the quarter.
•Completed the sale of the Pitarrilla project: On July 6, 2022 the Company announced the closing of the sale of the Pitarrilla project to Endeavour Silver following receipt of all required regulatory approvals and satisfaction of customary closing conditions. As consideration for the sale, SSR Mining received $35.0 million in cash, $35.0 million(2) in common shares of Endeavour Silver, and a 1.25% net smelter return royalty on the Pitarrilla property. The sale was originally announced on January 13, 2022.
•Consolidated ownership of the Çöpler District: Subsequent to the quarter, the Company announced an agreement to acquire an additional 30% ownership interest in the Kartaltepe Mining Joint Venture at the Çöpler District from partner Lidya Mining for total consideration of $150.0 million in cash, streamlining operating, financial and exploration activities across the Ҫӧpler District while creating tangible synergies. The transaction is expected to be completed in the fourth quarter of 2022. Upon completion of the transaction, SSR Mining will own 80% of the entirety of the Çöpler District.
(1) AISC, free cash flow, adjusted attributable net income (loss), and adjusted attributable net income (loss) per diluted share are non-GAAP financial measures. For explanations of these measures and reconciliations to the most comparable financial measure calculated under U.S. GAAP, please see the discussion under "Non-GAAP Financial Measures" in Part I, Item 2, Management’s Discussion and Analysis herein.
(2) The fair value of the common shares of Endeavour Silver on July 6, 2022 was $25.6 million. See Note 3 to the Condensed Consolidated Financial Statements for more information.
ITEM 1. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
SSR Mining Inc.
Condensed Consolidated Statements of Operations
(unaudited, in thousands except per share)
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Three Months Ended September 30, | | Nine Months Ended September 30, |
| 2022 | | 2021 | | 2022 | | 2021 |
Revenue | $ | 166,627 | | | $ | 322,846 | | | $ | 841,656 | | | $ | 1,066,280 | |
Operating Costs and Expenses: | | | | | | | | | | | |
Production costs | | 106,452 | | | | 154,521 | | | | 424,900 | | | | 483,330 | |
Depreciation, depletion, and amortization | | 21,555 | | | | 51,958 | | | | 134,145 | | | | 161,731 | |
General and administrative expense | | 12,714 | | | | 11,970 | | | | 48,421 | | | | 34,936 | |
Exploration, evaluation, and reclamation costs | | 18,320 | | | | 11,058 | | | | 39,422 | | | | 32,310 | |
Care and maintenance | | 41,800 | | | | — | | | | 41,800 | | | | — | |
Impairment of long-lived and other assets | | — | | | | 5 | | | | — | | | | 22,354 | |
Other operating expenses, net | | 1,479 | | | | 675 | | | | 2,696 | | | | 6,060 | |
Gain on sale of assets | | (629) | | | | — | | | | (629) | | | | — | |
Operating income (loss) | | (35,064) | | | | 92,659 | | | | 150,901 | | | | 325,559 | |
Other income (expense): | | | | | | | | | | | |
Interest expense | | (4,541) | | | | (4,732) | | | | (13,109) | | | | (14,567) | |
Other income (expense) | | 9,153 | | | | (6,853) | | | | 6,389 | | | | (8,646) | |
Foreign exchange gain (loss) | | (11,577) | | | | (1,595) | | | | (19,733) | | | | (2,904) | |
Total other income (expense) | | (6,965) | | | | (13,180) | | | | (26,453) | | | | (26,117) | |
Income (loss) before income and mining taxes | | (42,029) | | | | 79,479 | | | | 124,448 | | | | 299,442 | |
Income and mining tax benefit (expense) | | 13,808 | | | | (14,285) | | | | (8,775) | | | | (27,483) | |
Equity income (loss) of affiliates | | (151) | | | | (1,015) | | | | (422) | | | | (2,536) | |
Net income (loss) | | (28,372) | | | | 64,179 | | | | 115,251 | | | | 269,423 | |
Net loss (income) attributable to non-controlling interest | | 2,579 | | | | (7,119) | | | | (14,995) | | | | (28,782) | |
Net income (loss) attributable to SSR Mining shareholders | $ | (25,793) | | | $ | 57,060 | | | $ | 100,256 | | | $ | 240,641 | |
| | | | | | | | | | | |
Net income (loss) per share attributable to SSR Mining shareholders | | | | | | | | | | | |
Basic | $ | (0.12) | | | $ | 0.27 | | | $ | 0.48 | | | $ | 1.11 | |
Diluted | $ | (0.12) | | | $ | 0.26 | | | $ | 0.46 | | | $ | 1.06 | |
The accompanying notes are an integral part of the Condensed Consolidated Financial Statements.
SSR Mining Inc.
Condensed Consolidated Statements of Cash Flows
(unaudited, in thousands)
| | | | | | | | | | | | | | | | | |
| Nine Months Ended September 30, |
| 2022 | | 2021 |
Operating activities | | | | | |
Net income | $ | 115,251 | | | $ | 269,423 | |
Adjustments for: | | | | | |
Depreciation, depletion, and amortization | | 134,145 | | | | 161,731 | |
Amortization of debt discount | | 725 | | | | 703 | |
Reclamation costs | | 4,436 | | | | 3,616 | |
Deferred income taxes | | (70,340) | | | | (34,410) | |
Stock-based compensation | | 3,354 | | | | 4,831 | |
Equity (income) loss of affiliates | | 422 | | | | 2,536 | |
Unrealized loss (gain) on derivative instruments | | 645 | | | | (4,936) | |
Change in fair value of marketable securities | | 3,836 | | | | 6,472 | |
Non-cash fair value adjustment on acquired inventories | | 8,283 | | | | 49,205 | |
Loss (gain) on sale of mineral properties, plant and equipment | | 1,213 | | | | (462) | |
Impairment of long-lived and other assets | | — | | | | 22,354 | |
Non-cash care and maintenance | | 10,733 | | | | — | |
Net change in operating assets and liabilities | | (169,904) | | | | (56,683) | |
Net cash provided by operating activities | | 42,799 | | | | 424,380 | |
| | | | | |
Investing activities | | | | | |
Additions to mineral properties, plant and equipment | | (116,155) | | | | (128,924) | |
Purchases of marketable securities | | (7,989) | | | | (8,013) | |
Proceeds from sale of marketable securities | | 10,736 | | | | 4,592 | |
Proceeds from repayment of note receivable | | 8,358 | | | | — | |
Proceeds from sale of mineral properties, plant and equipment | | 35,067 | | | | 2,500 | |
| | | | | |
Other investing activities | | — | | | | (654) | |
Net cash used in investing activities | | (69,983) | | | | (130,499) | |
| | | | | |
Financing activities | | | | | |
Repayment of debt, principal | | (53,359) | | | | (52,500) | |
Repurchase of common shares | | (100,040) | | | | (148,074) | |
Proceeds from exercise of stock options | | 2,628 | | | | 7,476 | |
Principal payments on finance leases | | (9,126) | | | | (7,677) | |
Non-controlling interest dividend | | (34,520) | | | | (55,464) | |
Dividends paid | | (44,411) | | | | (32,684) | |
Other financing activities | | 194 | | | | (1,466) | |
Net cash used in financing activities | | (238,634) | | | | (290,389) | |
Effect of foreign exchange rate changes on cash and cash equivalents | | (3,002) | | | | (1,102) | |
Net increase (decrease) in cash, cash equivalents, and restricted cash | | (268,820) | | | | 2,390 | |
Cash, cash equivalents, and restricted cash beginning of period | | 1,052,865 | | | | 895,921 | |
Cash, cash equivalents, and restricted cash end of period | $ | 784,045 | | | $ | 898,311 | |
| | | | | |
SSR Mining Inc.
Condensed Consolidated Statements of Cash Flows
(unaudited, in thousands)
| | | | | | | | | | | | | | | | | |
| | | | | |
| | | | | |
| Nine Months Ended September 30, |
| 2022 | | 2021 |
Reconciliation of cash, cash equivalents, and restricted cash: | | | | | |
Cash and cash equivalents | $ | 748,476 | | | $ | 863,016 | |
Restricted cash | | 35,569 | | | | 35,295 | |
Total cash, cash equivalents, and restricted cash | $ | 784,045 | | | $ | 898,311 | |
The accompanying notes are an integral part of the Condensed Consolidated Financial Statements.
SSR Mining Inc.
Condensed Consolidated Balance Sheets
(unaudited, in thousands)
| | | | | | | | | | | | | | | | | |
| September 30, 2022 | | December 31, 2021 |
ASSETS | | | | | |
Cash and cash equivalents | $ | 748,476 | | | $ | 1,017,562 | |
Marketable securities | | 53,830 | | | | 40,431 | |
Trade and other receivables | | 136,820 | | | | 121,356 | |
Inventories | | 468,262 | | | | 389,416 |
Prepaids and other current assets | | 23,348 | | | | 31,549 | |
Total current assets | | 1,430,736 | | | | 1,600,314 |
| | | | | |
Mineral properties, plant and equipment, net | | 3,190,936 | | | | 3,249,764 |
Inventories | | 214,620 | | | | 221,617 | |
Restricted cash | | 35,569 | | | | 35,303 |
Equity method investments | | 4,496 | | | | 4,918 | |
Goodwill | | 49,786 | | | | 49,786 |
Deferred income tax assets | | 6,119 | | | | 8,501 | |
Other non-current assets | | 62,996 | | | | 41,235 |
Total assets | $ | 4,995,258 | | | $ | 5,211,438 | |
| | | | | |
LIABILITIES | | | | | |
Accounts payable | $ | 43,840 | | | $ | 34,844 | |
Accrued liabilities and other | | 110,162 | | | | 165,108 | |
Finance lease liabilities | | 3,828 | | | | 12,439 | |
Current portion of debt | | 89,251 | | | | 71,491 | |
Total current liabilities | | 247,081 | | | | 283,882 | |
| | | | | |
Debt | | 226,259 | | | | 295,493 | |
Finance lease liabilities | | 103,422 | | | | 105,965 | |
Reclamation liabilities | | 140,382 | | | | 122,660 | |
Deferred income tax liabilities | | 260,297 | | | | 338,788 | |
Other non-current liabilities | | 23,239 | | | | 12,133 | |
Total liabilities | | 1,000,680 | | | | 1,158,921 | |
| | | | | |
EQUITY | | | | | |
Common shares – unlimited authorized common shares with no par value; 206,599 and 211,879 shares issued and outstanding as of September 30, 2022 and December 31, 2021, respectively | | 3,056,924 | | | | 3,140,189 | |
Retained earnings (deficit) | | 442,323 | | | | 397,667 | |
SSR Mining’s shareholders’ equity | | 3,499,247 | | | | 3,537,856 | |
Non-controlling interest | | 495,331 | | | | 514,661 | |
Total equity | | 3,994,578 | | | | 4,052,517 | |
Total liabilities and equity | $ | 4,995,258 | | | $ | 5,211,438 | |
The accompanying notes are an integral part of the Condensed Consolidated Financial Statements.
SSR Mining Inc.
Condensed Consolidated Statement of Changes in Equity
(unaudited, in thousands)
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Common shares | | | | | | | | | | | | |
| Number of shares | | Amount | | Retained earnings (accumulated deficit) | | Total equity attributable to equity holders of SSR Mining | | Non-controlling interest | | Total equity |
Balance as of December 31, 2021 | 211,879 | | | $ | 3,140,189 | | | $ | 397,667 | | | $ | 3,537,856 | | | $ | 514,661 | | | $ | 4,052,517 | |
Exercise of stock options | 166 | | | | 2,433 | | | | — | | | | 2,433 | | | | — | | | | 2,433 | |
Settlement of restricted share units (RSUs) | 512 | | | | — | | | | — | | | | — | | | | — | | | | — | |
Equity-settled stock-based compensation | — | | | | 823 | | | | — | | | | 823 | | | | — | | | | 823 | |
Dividends declared to equity holders of SSR Mining | — | | | | — | | | | (15,015) | | | | (15,015) | | | | — | | | | (15,015) | |
Dividends paid to non-controlling interest | — | | | | — | | | | — | | | | — | | | | (30,773) | | | | (30,773) | |
Net income (loss) | — | | | | — | | | | 67,563 | | | | 67,563 | | | | 8,543 | | | | 76,106 | |
Balance as of March 31, 2022 | 212,557 | | | $ | 3,143,445 | | | $ | 450,215 | | | $ | 3,593,660 | | | $ | 492,431 | | | $ | 4,086,091 | |
Repurchase of common shares | (798) | | | | (11,711) | | | | (2,956) | | | | (14,667) | | | | — | | | | (14,667) | |
Exercise of stock options | 14 | | | | 242 | | | | — | | | | 242 | | | | — | | | | 242 | |
Settlement of RSUs | 69 | | | | — | | | | — | | | | — | | | | — | | | | — | |
Equity-settled stock-based compensation | — | | | | 1,033 | | | | — | | | | 1,033 | | | | — | | | | 1,033 | |
Dividends paid to equity holders of SSR Mining | — | | | | — | | | | (15,085) | | | | (15,085) | | | | — | | | | (15,085) | |
Net income (loss) | — | | | | — | | | | 58,488 | | | | 58,488 | | | | 9,031 | | | | 67,519 | |
Balance as of June 30, 2022 | 211,842 | | | $ | 3,133,009 | | | $ | 490,662 | | | $ | 3,623,671 | | | $ | 501,462 | | | $ | 4,125,133 | |
Repurchase of common shares | (5,255) | | | | (77,138) | | | | (8,235) | | | | (85,373) | | | | — | | | | (85,373) | |
Settlement of RSUs | 12 | | | | — | | | | — | | | | — | | | | — | | | | — | |
Equity-settled stock-based compensation | — | | | | 1,053 | | | | — | | | | 1,053 | | | | — | | | | 1,053 | |
Dividends paid to equity holders of SSR Mining | — | | | | — | | | | (14,311) | | | | (14,311) | | | | — | | | | (14,311) | |
Dividends paid to non-controlling interest | — | | | | — | | | | — | | | | — | | | | (3,747) | | | | (3,747) | |
Contributions from non-controlling interest | — | | | | — | | | | — | | | | — | | | | 195 | | | | 195 | |
Net income (loss) | — | | | | — | | | | (25,793) | | | | (25,793) | | | | (2,579) | | | | (28,372) | |
Balance as of September 30, 2022 | 206,599 | | | | 3,056,924 | | | | 442,323 | | | | 3,499,247 | | | | 495,331 | | | | 3,994,578 | |
SSR Mining Inc.
Condensed Consolidated Statement of Changes in Equity
(unaudited, in thousands)
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Common shares | | | | | | | | | | | | | | | | |
| Number of shares | | Amount | | Retained earnings (accumulated deficit) | | Total equity attributable to equity holders of SSR Mining | | Non-controlling interest | | Total equity | | | Contingently redeemable shares |
Balance as of December 31, 2020 | 219,607 | | | $ | 3,242,821 | | | $ | 92,077 | | | $ | 3,334,898 | | | $ | 512,279 | | | $ | 3,847,177 | | | | $ | 3,311 | |
Exercise of stock options | 364 | | | | 2,750 | | | | — | | | | 2,750 | | | | — | | | | 2,750 | | | | | — | |
Settlement of RSUs and PSUs | 92 | | | | 89 | | | | — | | | | 89 | | | | — | | | | 89 | | | | | — | |
Equity-settled stock-based compensation | — | | | | 1,037 | | | | — | | | | 1,037 | | | | — | | | | 1,037 | | | | | — | |
Transfer of cash-settled RSUs | — | | | | 8,802 | | | | — | | | | 8,802 | | | | — | | | | 8,802 | | | | | — | |
Reclassification of contingently redeemable shares | — | | | | 3,311 | | | | — | | | | 3,311 | | | | — | | | | 3,311 | | | | | (3,311) | |
Dividends paid to equity holders of SSR Mining | — | | | | — | | | | (10,992) | | | | (10,992) | | | | — | | | | (10,992) | | | | | — | |
Dividends paid to non-controlling interest | — | | | | — | | | | — | | | | — | | | | (38,084) | | | | (38,084) | | | | | — | |
Other | — | | | | — | | | | (18) | | | | (18) | | | | — | | | | (18) | | | | | — | |
Net income (loss) | — | | | | — | | | | 108,861 | | | | 108,861 | | | | 18,590 | | | | 127,451 | | | | | — | |
Balance as of March 31, 2021 | 220,063 | | | $ | 3,258,810 | | | $ | 189,928 | | | $ | 3,448,738 | | | $ | 492,785 | | | $ | 3,941,523 | | | | $ | — | |
Repurchase of common shares | (4,000) | | | | (58,654) | | | | (11,600) | | | | (70,254) | | | | — | | | | (70,254) | | | | | — | |
Exercise of stock options | 79 | | | | 850 | | | | — | | | | 850 | | | | — | | | | 850 | | | | | — | |
Settlement of RSUs | 157 | | | | 406 | | | | — | | | | 406 | | | | — | | | | 406 | | | | | — | |
Equity-settled stock-based compensation | — | | | | 1,594 | | | | — | | | | 1,594 | | | | — | | | | 1,594 | | | | | — | |
Dividends paid to equity holders of SSR Mining | — | | | | — | | | | (10,974) | | | | (10,974) | | | | — | | | | (10,974) | | | | | — | |
Other | — | | | | — | | | | (204) | | | | (204) | | | | — | | | | (204) | | | | | — | |
Net income (loss) | — | | | | — | | | | 74,719 | | | | 74,719 | | | | 3,073 | | | | 77,792 | | | | | — | |
Balance as of June 30, 2021 | 216,299 | | | $ | 3,203,006 | | | $ | 241,869 | | | $ | 3,444,875 | | | $ | 495,858 | | | $ | 3,940,733 | | | | $ | — | |
Repurchase of common shares | (4,801) | | | | (70,398) | | | | (7,422) | | | | (77,820) | | | | — | | | | (77,820) | | | | | — | |
Exercise of stock options | 309 | | | | 3,877 | | | | — | | | | 3,877 | | | | — | | | | 3,877 | | | | | — | |
Settlement of RSUs and PSUs | — | | | | (78) | | | | — | | | | (78) | | | | — | | | | (78) | | | | | — | |
Transfer of equity-settled RSUs | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | | — | |
SSR Mining Inc.
Condensed Consolidated Statement of Changes in Equity
(unaudited, in thousands)
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Equity-settled share-based compensation | — | | | | 1,610 | | | | — | | | | 1,610 | | | | — | | | | 1,610 | | | | | — | |
Dividends paid to equity holders of SSR Mining | — | | | | — | | | | (10,718) | | | | (10,718) | | | | — | | | | (10,718) | | | | | — | |
Dividends paid to non-controlling interest | — | | | | — | | | | — | | | | — | | | | (17,380) | | | | (17,380) | | | | | — | |
Other | — | | | | — | | | | (192) | | | | (192) | | | | 180 | | | | (12) | | | | | — | |
Net income (loss) | — | | | | — | | | | 57,060 | | | | 57,060 | | | | 7,119 | | | | 64,179 | | | | | — | |
Balance as of September 30, 2021 | 211,807 | | | | 3,138,017 | | | | 280,597 | | | | 3,418,614 | | | | 485,777 | | | | 3,904,391 | | | | | — | |
The accompanying notes are an integral part of the Condensed Consolidated Financial Statements.
SSR Mining Inc.
Notes to Condensed Consolidated Financial Statements
(unaudited)
1.THE COMPANY
SSR Mining Inc. and its subsidiaries (collectively, "SSR Mining," or the "Company”) is incorporated under the laws of the Province of British Columbia, Canada. The Company's common shares are listed on the Toronto Stock Exchange (TSX) in Canada and the Nasdaq Global Select Market (Nasdaq) in the U.S. under the symbol "SSRM" and the Australian Securities Exchange (ASX) in Australia under the symbol "SSR."
SSR Mining is a precious metals mining company with four producing assets located in the United States, Türkiye, Canada and Argentina. The Company is principally engaged in the operation, acquisition, exploration and development of precious metal resource properties located in Türkiye and the Americas. The Company produces gold doré as well as copper, silver, lead and zinc concentrates. The Company’s diversified asset portfolio is comprised of high-margin, long-life assets located in some of the world's most prolific metal districts.The Company’s focus is on safe, profitable gold and silver production from its Çöpler Gold Mine ("Çöpler") in Erzincan, Türkiye, Marigold mine ("Marigold") in Nevada, USA, Seabee Gold Operation ("Seabee") in Saskatchewan, Canada, and Puna Operations ("Puna") in Jujuy, Argentina, and to advance, as market and project conditions permit, its principal development projects and commercial production.
In December 2021, Türkiye began the move to change its internationally recognized official name in English from Turkey to Türkiye. In June 2022, the United Nations announced it would recognize the new name. The Company is pleased to adopt the new name.
At the end of the second quarter of 2022, Türkiye’s Ministry of Environment, Urbanization and Climate Change (“Ministry of Environment”) temporarily suspended operations at the Çöpler mine pending implementation of improvement initiatives requested as a result of a leak of leach solution on June 21, 2022. The Company completed these initiatives and received the required regulatory approvals from Türkiye’s Government authorities on September 22, 2022 and all operations were subsequently restarted at the Çöpler mine. During the temporary suspension, Care and maintenance expense was recorded in the Statements of Operations which represents direct costs and depreciation incurred at Çöpler.
2.SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Risks and Uncertainties
As a mining company, the revenue, profitability and future rate of growth of the Company are substantially dependent on the prevailing prices for gold, silver, lead and zinc. The prices of these metals are volatile and affected by many factors beyond the Company’s control, and there can be no assurance that commodity prices will not be subject to wide fluctuations in the future. A substantial or extended decline in commodity prices could have a material adverse effect on the Company’s financial position, results of operations, cash flows, access to capital and the quantities of reserves that the Company can economically produce. The carrying value of the Company’s Mineral properties, plant and equipment; Inventories; Deferred income tax assets; and Goodwill are sensitive to the outlook for commodity prices. A decline in the Company’s price outlook could result in material impairment charges related to these assets.
Basis of Presentation
The Condensed Consolidated Financial Statements have been prepared in accordance with the instructions to Form 10-Q and do not include all information and disclosures required by generally accepted accounting principles in the United States. Therefore, this information should be read in conjunction with SSR Mining Inc.’s Consolidated Financial Statements in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021 filed on February 23, 2022. The information furnished herein reflects all adjustments that are, in the opinion of management, necessary for a fair statement of the results for the interim periods reported. All such adjustments are, in the opinion of management, of a normal recurring nature. The results for the nine month period ended September 30, 2022, are not necessarily indicative of the results that may be expected for the year ending December 31, 2022.
SSR Mining Inc.
Notes to Condensed Consolidated Financial Statements
(unaudited)
Reclassifications
Certain amounts and disclosures in prior years have been reclassified to conform to the current year presentation.
Recently Issued Accounting Pronouncements
In September 2022, the Financial Accounting Standards Board (“FASB”) issued ASU 2022-04, “Liabilities - Supplier Finance Programs: Disclosure of Supplier Finance Program Obligations,” which makes changes to add certain disclosure requirements for a buyer in a supplier finance program. The amendments require a buyer that uses supplier finance programs to make annual disclosures about the program’s key terms, the balance sheet presentation of related amounts, the confirmed amount outstanding at the end of the period, and associated rollforward information. Only the amount outstanding at the end of the period must be disclosed in interim periods. The amendments are effective for all entities for fiscal years beginning after December 15, 2022 on a retrospective basis, including interim periods within those fiscal years, except for the requirement to disclose rollforward information, which is effective prospectively for fiscal years beginning after December 15, 2023. Early adoption is permitted upon issuance of the update. The provisions of this new pronouncement are being reviewed, but it is not expected this guidance will have a material impact on the Consolidated Financial Statements.
3.ACQUISITIONS AND DIVESTITURES
Acquisitions
On April 14, 2022, the Company completed the purchase of all the issued and outstanding common shares of Taiga Gold Corporation (“Taiga Gold”), which holds the exploration and evaluation stage resources in Saskatchewan, Canada in proximity to the Company’s Seabee mine and Fisher project. The transaction was accounted for as an asset acquisition for total consideration of $24.8 million. The total consideration was allocated to the assets acquired and liabilities assumed based on their estimated fair values on the acquisition date, which consisted primarily of cash and cash equivalents of $4.7 million, exploration and evaluation assets of $27.8 million, and a related deferred tax liability of $7.5 million.
Divestitures
On July 6, 2022, the Company completed the sale of the Pitarrilla project in Durango, Mexico, included in the Exploration, evaluation and development properties segment, to Endeavour Silver Corp. ("Endeavour Silver"). The consideration received included cash of $35.0 million, Endeavour Silver common shares with a fair value on the closing date of $25.6 million (8,577,380 shares at $2.99 per share), and 1.25% net smelter returns royalty on the Pitarrilla property. A gain of $0.6 million was recognized, included in Gain on sale of assets in the Consolidated Statements of Operations, calculated as the difference between the consideration received and carrying amount of the net assets.
SSR Mining Inc.
Notes to Condensed Consolidated Financial Statements
(unaudited)
4.OPERATING SEGMENTS
The Company currently has four producing mines and a portfolio of precious and base metal dominant projects. Each individual operating mine site and the Company's exploration, evaluation and development properties are considered reportable segments. Operating results of operating segments are reviewed by the Company's chief operating decision maker ("CODM") to make decisions about resources to be allocated to the segments and to assess their performance.
The following tables provide a summary of financial information related to the Company's segments (in thousands):
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| Three Months Ended September 30, 2022 |
| Çöpler | | Marigold | | Seabee | | Puna | | Exploration, evaluation and development properties | | Corporate and other (1) | | Total |
Revenue | $ | 4,245 | | $ | 84,216 | | $ | 33,346 | | $ | 44,820 | | $ | — | | $ | — | | $ | 166,627 | |
Production costs | $ | 306 | | $ | 53,684 | | $ | 17,894 | | $ | 34,568 | | $ | — | | $ | — | | $ | 106,452 | |
Depletion, depreciation, and amortization | $ | 242 | | $ | 8,794 | | $ | 9,187 | | $ | 3,332 | | $ | — | | $ | — | | $ | 21,555 | |
Exploration, evaluation, and reclamation costs | $ | 1,142 | | $ | 958 | | $ | 4,535 | | $ | 3,825 | | $ | 6,718 | | $ | 1,142 | | $ | 18,320 | |
Care and maintenance expense (2) | | 41,800 | | | — | | | — | | | — | | | — | | | — | | | 41,800 | |
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
Operating income | $ | (39,461) | | | 20,780 | | | 1,731 | | | 3,024 | | | (6,090) | | | (15,048) | | | (35,064) | |
Capital expenditures | $ | 4,663 | | | 16,974 | | | 10,131 | | | 3,445 | | | — | | | — | | | 35,213 | |
Total assets as of September 30, 2022 | $ | 2,061,425 | | | 574,230 | | | 564,508 | | | 305,057 | | | 867,563 | | | 622,475 | | | 4,995,258 | |
(1) Corporate and other consists of business activities that are not included within the reportable segments and provided for reconciliation purposes.
(2) Care and maintenance expense represents direct costs and depreciation incurred at Çöpler during the temporary suspension of operations.
SSR Mining Inc.
Notes to Condensed Consolidated Financial Statements
(unaudited)
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| Three Months Ended September 30, 2021 |
| Çöpler | | Marigold | | Seabee | | Puna | | Exploration, evaluation and development properties | | Corporate and other (1) | | Total |
Revenue | $ | 145,217 | | $ | 95,607 | | $ | 40,966 | | $ | 41,056 | | $ | — | | $ | — | | $ | 322,846 | |
Production costs | $ | 65,773 | | $ | 50,281 | | $ | 15,077 | | $ | 23,390 | | $ | — | | $ | — | | $ | 154,521 | |
Depletion, depreciation, and amortization | $ | 29,442 | | $ | 8,023 | | $ | 10,023 | | $ | 4,470 | | $ | — | | $ | — | | $ | 51,958 | |
Exploration, evaluation, and reclamation costs | $ | 2,575 | | $ | 569 | | $ | 3,621 | | $ | 442 | | $ | 3,476 | | $ | 375 | | $ | 11,058 | |
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
Impairment of long-lived and other assets | $ | — | | $ | — | | $ | — | | $ | — | | $ | 5 | | $ | — | | $ | 5 | |
Operating income | $ | 46,880 | | $ | 36,734 | | $ | 12,253 | | $ | 12,599 | | $ | (3,481) | | $ | (12,326) | | $ | 92,659 | |
Capital expenditures | $ | 7,875 | | $ | 8,126 | | $ | 10,926 | | $ | 2,385 | | $ | — | | $ | — | | $ | 29,312 | |
Total assets as of September 30, 2021 | $ | 2,246,665 | | $ | 526,179 | | $ | 470,978 | | $ | 275,240 | | $ | 1,009,938 | | $ | 581,167 | | $ | 5,110,167 | |
(1) Corporate and other consists of business activities that are not included within the reportable segments and provided for reconciliation purposes.
SSR Mining Inc.
Notes to Condensed Consolidated Financial Statements
(unaudited)
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| Nine Months Ended September 30, 2022 |
| Çöpler | | Marigold | | Seabee | | Puna | | Exploration, evaluation and development properties | | Corporate and other (1) | | Total |
Revenue | $ | 250,395 | | $ | 238,534 | | $ | 203,313 | | $ | 149,414 | | $ | — | | $ | — | | $ | 841,656 | |
Production costs | $ | 125,985 | | $ | 142,841 | | $ | 53,319 | | $ | 102,755 | | $ | — | | $ | — | | $ | 424,900 | |
Depletion, depreciation, and amortization | $ | 57,836 | | $ | 24,077 | | $ | |