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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, 2023
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)
| | | | | | | | |
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 203,891,570 common shares outstanding on October 30, 2023.
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 2023 HIGHLIGHTS (dollars, except per share, per ounce and per pound amounts): (1)
•Operating performance: The Company reported third quarter 2023 production of 192,195 gold equivalent ounces at cost of sales of $1,095 per gold equivalent ounce and all-in sustaining costs (“AISC”) of $1,289 per gold-equivalent ounce. Year-to-date, the Company has delivered production of 495,668 gold equivalent ounces at cost of sales of $1,173 per gold equivalent ounce and AISC of $1,516 per gold-equivalent ounce.
•Financial results: Attributable net income in the third quarter of 2023 was $15.2 million, or $0.07 per diluted share, and adjusted attributable net income was $53.0 million, or $0.26 per diluted share. For the nine months ended September 30, 2023, attributable net income was $119.8 million, or $0.57 per diluted share, and adjusted attributable net income was $149.4 million, or $0.70 per diluted share. For the three months ended September 30, 2023, operating cash flow was $135.3 million and free cash flow was $87.8 million.
•Continued delivery of peer-leading capital returns: For the nine months ended September 30, 2023, the Company has returned $88.5 million to shareholders, including $43.2 million in dividends and $45.3 million in share repurchases through the cancellation of 3,026,993 shares. In addition, the Board declared a quarterly cash dividend of $0.07 per share payable on December 11, 2023.
•Balance sheet and financial strength: As of September 30, 2023, the Company had a cash and cash equivalents balance of $437.7 million, after returning $14.3 million to shareholders through quarterly dividends and making $35.8 million in debt repayments during the quarter to extinguish the remaining balance on its Term Loan. In connection to the repayment and termination of the Term Loan, $33.4 million of restricted cash was released. On August 15, 2023, the Company announced that its existing revolving credit facility (the “Second Amended Credit Agreement”) was refinanced and increased from $200.0 million to $400.0 million, with an additional accordion feature of $100.0 million. Under the terms of the Second Amended Credit Agreement, amounts that are borrowed will incur variable interest at the Secured Overnight Financing Rate plus an applicable margin. The margin will be determined based on the Company’s net leverage ratio and amounts drawn from the Facility and will range from 2.00% to 2.75%. The facility matures on August 15, 2027.
(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.
ITEM 1. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
SSR Mining Inc.
Condensed Consolidated Statements of Operations
(unaudited, in thousands except per share)
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| Three Months Ended September 30, | | Nine Months Ended September 30, |
| 2023 | | 2022 | | 2023 | | 2022 |
Revenue | $ | 385,390 | | | $ | 166,627 | | | $ | 1,001,030 | | | $ | 841,656 | |
Operating costs and expenses: | | | | | | | | | | | |
Cost of sales (1) | | 214,670 | | | | 106,452 | | | | 584,607 | | | | 424,900 | |
Depreciation, depletion and amortization | | 55,990 | | | | 21,555 | | | | 147,727 | | | | 134,145 | |
General and administrative expense | | 17,539 | | | | 12,714 | | | | 52,369 | | | | 48,421 | |
Exploration, evaluation, and reclamation costs | | 17,059 | | | | 18,320 | | | | 45,905 | | | | 39,422 | |
Care and maintenance | | — | | | | 41,800 | | | | — | | | | 41,800 | |
Other operating expenses, net | | 2,667 | | | | 1,479 | | | | 3,043 | | | | 2,696 | |
Gain on sale of assets | | — | | | | (629) | | | | — | | | | (629) | |
Operating income (loss) | | 77,465 | | | | (35,064) | | | | 167,379 | | | | 150,901 | |
Other income (expense): | | | | | | | | | | | |
Interest expense | | (4,080) | | | | (4,541) | | | | (14,099) | | | | (13,109) | |
Other income (expense) | | 11,378 | | | | 9,153 | | | | 36,799 | | | | 6,389 | |
Foreign exchange gain (loss) | | (22,997) | | | | (11,577) | | | | (57,358) | | | | (19,733) | |
Total other income (expense) | | (15,699) | | | | (6,965) | | | | (34,658) | | | | (26,453) | |
Income (loss) before income and mining taxes | | 61,766 | | | | (42,029) | | | | 132,721 | | | | 124,448 | |
Income and mining tax benefit (expense) | | (68,893) | | | | 13,808 | | | | 11,707 | | | | (8,775) | |
Equity income (loss) of affiliates | | (118) | | | | (151) | | | | (293) | | | | (422) | |
Net income (loss) | | (7,245) | | | | (28,372) | | | | 144,135 | | | | 115,251 | |
Net loss (income) attributable to non-controlling interest | | 22,404 | | | | 2,579 | | | | (24,297) | | | | (14,995) | |
Net income (loss) attributable to SSR Mining shareholders | $ | 15,159 | | | $ | (25,793) | | | $ | 119,838 | | | $ | 100,256 | |
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Net income (loss) per share attributable to SSR Mining shareholders | | | | | | | | | | | |
Basic | $ | 0.07 | | | $ | (0.12) | | | $ | 0.58 | | | $ | 0.48 | |
Diluted | $ | 0.07 | | | $ | (0.12) | | | $ | 0.57 | | | $ | 0.46 | |
(1) Excludes depreciation, depletion and amortization.
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)
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| Nine Months Ended September 30, |
| 2023 | | 2022 |
Operating activities | | | | | |
Net income (loss) | $ | 144,135 | | | $ | 115,251 | |
Adjustments for: | | | | | |
Depreciation, depletion and amortization | | 147,727 | | | | 134,145 | |
Amortization of debt discount | | 747 | | | | 725 | |
Reclamation accretion expense | | 6,519 | | | | 4,436 | |
Deferred income taxes | | (32,233) | | | | (70,340) | |
Stock-based compensation | | 6,287 | | | | 3,354 | |
Equity (income) loss of affiliates | | 293 | | | | 422 | |
Unrealized loss (gain) on derivative instruments | | (479) | | | | 645 | |
Change in fair value of marketable securities | | (565) | | | | 3,836 | |
Non-cash fair value adjustment on acquired inventories | | 12,986 | | | | 8,283 | |
Write-down of leach pad inventory | | 6,305 | | | | — | |
Loss (gain) on sale of mineral properties, plant and equipment | | 1,610 | | | | 1,213 | |
Impairment of other assets | | 2,637 | | | | — | |
Change in fair value of deferred consideration | | 1,673 | | | | — | |
Loss (gain) on foreign exchange | | 39,842 | | | | — | |
Non-cash care and maintenance | | — | | | | 10,733 | |
Net change in operating assets and liabilities | | (118,918) | | | | (169,904) | |
Net cash provided by operating activities | | 218,566 | | | | 42,799 | |
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Investing activities | | | | | |
Acquisitions, net (1) | | (119,925) | | | | (24,838) | |
Additions to mineral properties, plant and equipment | | (164,633) | | | | (91,317) | |
Purchases of marketable securities | | (3,828) | | | | (7,989) | |
Net proceeds from sale of marketable securities | | 8,258 | | | | 10,736 | |
Proceeds from repayment of note receivable | | — | | | | 8,358 | |
Proceeds from sale of mineral properties, plant and equipment | | — | | | | 35,067 | |
Other investing activities | | (83) | | | | — | |
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Net cash used in investing activities | | (280,211) | | | | (69,983) | |
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Financing activities | | | | | |
Repayment of debt, principal | | (71,153) | | | | (53,359) | |
Advance from non-controlling interest | | 4,500 | | | | — | |
Repurchase of common shares | | (45,305) | | | | (100,040) | |
Proceeds from exercise of stock options | | 208 | | | | 2,628 | |
Principal payments on finance leases | | (2,889) | | | | (9,126) | |
Non-controlling interest dividend | | — | | | | (34,520) | |
Dividends paid | | (43,167) | | | | (44,411) | |
Other financing activities | | — | | | | 194 | |
Net cash used in financing activities | | (157,806) | | | | (238,634) | |
Effect of foreign exchange rate changes on cash and cash equivalents | | (31,880) | | | | (3,002) | |
Net increase (decrease) in cash, cash equivalents, and restricted cash | | (251,331) | | | | (268,820) | |
Cash, cash equivalents, and restricted cash beginning of period | | 689,106 | | | | 1,052,865 | |
Cash, cash equivalents, and restricted cash end of period | $ | 437,775 | | | $ | 784,045 | |
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SSR Mining Inc.
Condensed Consolidated Statements of Cash Flows
(unaudited, in thousands)
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| Nine Months Ended September 30, |
| 2023 | | 2022 |
Reconciliation of cash, cash equivalents, and restricted cash: | | | | | |
Cash and cash equivalents | $ | 437,675 | | | $ | 748,476 | |
Restricted cash (2) | | 100 | | | | 35,569 | |
Total cash, cash equivalents, and restricted cash | $ | 437,775 | | | $ | 784,045 | |
(1) Acquisitions, net for the nine months ended September 30, 2023 is comprised of $120.0 million cash paid in the acquisition of Hod Maden Project, net of cash and cash equivalents acquired. Acquisitions, net for the nine months ended September 30, 2022 is comprised of $24.8 million cash paid in the acquisition of Taiga Gold Corp., net of $4.7 million of cash and cash equivalents acquired.
(2) In connection to the repayment and termination of the Term Loan, $33.4 million of restricted cash was released.
The accompanying notes are an integral part of the Condensed Consolidated Financial Statements.
SSR Mining Inc.
Condensed Consolidated Balance Sheets
(unaudited, in thousands)
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| September 30, 2023 | | December 31, 2022 |
ASSETS | | | | | |
Cash and cash equivalents | $ | 437,675 | | | $ | 655,453 | |
Marketable securities | | 29,207 | | | | 40,280 | |
Trade and other receivables | | 134,517 | | | | 117,675 | |
Inventories | | 532,631 | | | | 501,607 |
Restricted cash | | 100 | | | | 33,653 |
Prepaids and other current assets | | 23,849 | | | | 27,767 | |
Total current assets | | 1,157,979 | | | | 1,376,435 |
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Mineral properties, plant and equipment, net | | 4,245,016 | | | | 3,549,446 |
Inventories | | 215,761 | | | | 218,999 | |
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Goodwill | | 49,786 | | | | 49,786 |
Deferred income tax assets | | — | | | | 1,915 | |
Other non-current assets | | 81,118 | | | | 58,076 |
Total assets | $ | 5,749,660 | | | $ | 5,254,657 | |
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LIABILITIES | | | | | |
Accounts payable | $ | 53,407 | | | $ | 78,929 | |
Accrued liabilities and other | | 107,862 | | | | 124,654 | |
Finance lease liabilities | | 3,970 | | | | 3,872 | |
Current portion of debt | | 906 | | | | 71,797 | |
Total current liabilities | | 166,145 | | | | 279,252 | |
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Debt | | 227,257 | | | | 226,510 | |
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Finance lease liabilities | | 99,380 | | | | 102,434 | |
Reclamation liabilities | | 163,670 | | | | 153,972 | |
Deferred income tax liabilities | | 444,192 | | | | 342,401 | |
Other non-current liabilities | | 55,901 | | | | 23,889 | |
Total liabilities | | 1,156,545 | | | | 1,128,458 | |
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EQUITY | | | | | |
Common shares – unlimited authorized common shares with no par value; 203,888 and 206,653 shares issued and outstanding as of September 30, 2023 and December 31, 2022, respectively | | 3,017,854 | | | | 3,057,920 | |
Retained earnings (deficit) | | 597,623 | | | | 521,817 | |
SSR Mining’s shareholders’ equity | | 3,615,477 | | | | 3,579,737 | |
Non-controlling interest | | 977,638 | | | | 546,462 | |
Total equity | | 4,593,115 | | | | 4,126,199 | |
Total liabilities and equity | $ | 5,749,660 | | | $ | 5,254,657 | |
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)
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| Common shares | | | | | | | | | | | | |
| Number of shares | | Amount | | Retained earnings (accumulated deficit) | | Total equity attributable to SSR Mining shareholders | | Non-controlling interest | | Total equity |
Balance as of December 31, 2022 | 206,653 | | | $ | 3,057,920 | | | $ | 521,817 | | | $ | 3,579,737 | | | $ | 546,462 | | | $ | 4,126,199 | |
Repurchase of common shares | (348) | | | | (5,111) | | | | (86) | | | | (5,197) | | | | | | | (5,197) | |
Exercise of stock options | 17 | | | | 216 | | | | — | | | | 216 | | | | — | | | | 216 | |
Settlement of restricted share units (RSUs) | 198 | | | | — | | | | — | | | | — | | | | — | | | | — | |
Equity-settled stock-based compensation | — | | | | 2,037 | | | | — | | | | 2,037 | | | | — | | | | 2,037 | |
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Dividends paid to SSR Mining shareholders | — | | | | — | | | | (14,448) | | | | (14,448) | | | | — | | | | (14,448) | |
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Net income (loss) | — | | | | — | | | | 29,813 | | | | 29,813 | | | | (809) | | | | 29,004 | |
Balance as of March 31, 2023 | 206,520 | | | $ | 3,055,062 | | | $ | 537,096 | | | $ | 3,592,158 | | | $ | 545,653 | | | $ | 4,137,811 | |
Repurchase of common shares | (2,679) | | | | (39,329) | | | | (779) | | | | (40,108) | | | | — | | | | (40,108) | |
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Settlement of RSUs | 30 | | | | — | | | | — | | | | — | | | | — | | | | — | |
Equity-settled stock-based compensation | — | | | | 1,111 | | | | — | | | | 1,111 | | | | — | | | | 1,111 | |
Dividends paid to SSR Mining shareholders | — | | | | — | | | | (14,340) | | | | (14,340) | | | | — | | | | (14,340) | |
Acquisition of non-controlling interest | — | | | | — | | | | — | | | | — | | | | 404,878 | | | | 404,878 | |
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Net income (loss) | — | | | | — | | | | 74,866 | | | | 74,866 | | | | 47,510 | | | | 122,376 | |
Balance as of June 30, 2023 | 203,871 | | | $ | 3,016,844 | | | $ | 596,843 | | | $ | 3,613,687 | | | $ | 998,041 | | | $ | 4,611,728 | |
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Settlement of RSUs | 17 | | | | — | | | | — | | | | — | | | | — | | | | — | |
Equity-settled share-based compensation | — | | | | 1,010 | | | | — | | | | 1,010 | | | | — | | | | 1,010 | |
Dividends paid to SSR Mining shareholders | — | | | | — | | | | (14,379) | | | | (14,379) | | | | — | | | | (14,379) | |
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Contributions from non-controlling interest | — | | | | — | | | | — | | | | — | | | | 2,001 | | | | 2,001 | |
Net income (loss) | — | | | | — | | | | 15,159 | | | | 15,159 | | | | (22,404) | | | | (7,245) | |
Balance as of September 30, 2023 | 203,888 | | | $ | 3,017,854 | | | $ | 597,623 | | | $ | 3,615,477 | | | $ | 977,638 | | | $ | 4,593,115 | |
SSR Mining Inc.
Condensed Consolidated Statement of Changes in Equity
(unaudited, in thousands)
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| Common shares | | | | | | | | | | | | | | | | |
| Number of shares | | Amount | | Retained earnings (accumulated deficit) | | Total equity attributable to SSR Mining shareholders | | 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 RSUs | 512 | | | | — | | | | — | | | | — | | | | — | | | | — | | | | | |
Equity-settled stock-based compensation | — | | | | 823 | | | | — | | | | 823 | | | | — | | | | 823 | | | | | |
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Dividends declared to SSR Mining shareholders | — | | | | — | | | | (15,015) | | | | (15,015) | | | | — | | | | (15,015) | | | | | |
Dividends paid to non-controlling interest | — | | | | — | | | | — | | | | — | | | | (30,773) | | | | (30,773) | | | | | |
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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 SSR Mining shareholders | — | | | | — | | | | (15,085) | | | | (15,085) | | | | — | | | | (15,085) | | | | | |
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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) | | | | | |
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Settlement of RSUs | 12 | | | | — | | | | — | | | | — | | | | — | | | | — | | | | | |
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Equity-settled share-based compensation | — | | | | 1,053 | | | | — | | | | 1,053 | | | | — | | | | 1,053 | | | | | |
Dividends paid to SSR Mining shareholders | — | | | | — | | | | (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 | | | | | |
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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 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 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.
SSR Mining 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."
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. In addition, the Company maintains cash balances at banking institutions in various jurisdictions which may or may not have deposit insurance. The Company mitigates potential cash risk by maintaining bank accounts with credit-worthy financial institutions. Any loss incurred or a lack of access to such funds could have a significant adverse impact on the Company's financial condition, results of operations, and cash flows.
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, 2022 filed on February 22, 2023, as amended on Form 10-K/A filed on March 17, 2023, solely to correct a typographical error related to the date of the audit opinion (together, “Form 10-K”). 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, 2023, are not necessarily indicative of the results that may be expected for the year ending December 31, 2023.
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.
Changes to operating segments
During the first quarter of 2023 the Company changed the way management internally reviews and evaluates operating performance and manages the business. The Company determined it has four reportable segments: Çöpler, Marigold, Seabee and Puna. The Company’s previous exploration, evaluation and development properties are now managed by the nearest or adjacent reportable segment except for greenfield standalone prospects, which are included in Corporate and other.
Prior period segment information has been recast to conform with current period presentation.
Recently Issued Accounting Pronouncements
In August 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2023-05 "Business Combinations - Joint Venture Formations (Subtopic 805-60): Recognition and Initial Measurement" ("ASU 2023-05"). ASU 2023-05 provides guidance requiring a joint venture to initially measure all contributions received upon its formation at fair value. The guidance is applicable prospectively to joint ventures with a formation date on or after January 1, 2025, with early adoption permitted. The Company is currently evaluating the impact on the consolidated financial statements.
3.ACQUISITIONS AND DIVESTITURES
Acquisitions
Acquisition of up to 40% ownership and operatorship in the Hod Maden Project
On May 8, 2023, the Company, through its wholly owned subsidiary Alacer Gold Corporation, reached an agreement to acquire from Lidya Madencilik Sanayi ve Ticaret A.Ş (“Lidya Mines”) an up to 40% interest in, and operational control of, the Hod Maden gold-copper development project, located in northeastern Türkiye (the "Transaction"). Hod Maden was owned by Artmin Madencilik Sanayi Ve Ticaret A.Ş (“Artmin”), a joint venture owned 70% by Lidya Mines and 30% by Horizon Copper Corp. (“Horizon”) prior to the closing of the Transaction. Upon closing of the Transaction, the Company made a $120.0 million cash payment to Lidya Mines to acquire a 10% interest in Artmin. The Company has the option to acquire an additional 30% interest in Artmin from Lidya Mines for $120.0 million in structured payments tied to the completion of project construction spending milestones. Additionally, the Company will make contingent payments to Lidya Mines including $30.0 million in milestone payments payable in accordance with an agreed upon schedule beginning at the start of construction and ending on the first anniversary of commercial production and $84.0 million payable upon the delineation of an additional 500,000 gold equivalent ounces of mineral reserves at the Hod Maden project in excess of the project’s current mineral reserves and mineral resources.
The acquisition date fair value of the consideration paid is as follows (in thousands):
| | | | | | | | |
Cash paid to Lidya Mines for 10% interest | $ | 120,000 | |
Contingent consideration tied to completion of operational milestones (1) | | 24,300 | |
Contingent consideration tied to delineation of new reserves (1) | | 4,300 | |
Total consideration | $ | 148,600 | |
(1) The fair value of the two elements of contingent consideration are based on a discounted cash flow model. The contingent consideration is considered a Level 3 fair value measurement due to certain assumptions that are not based on observable market data (refer to Note 10 for more information). The significant assumptions include estimates of timing of completion of project milestones, probability of delineation of additional reserves, and discount rates. The contingent consideration is included within Other non-current liabilities on the Condensed Consolidated Balance Sheets.
SSR Mining Inc.
Notes to Condensed Consolidated Financial Statements
(unaudited)
The Company determined that Artmin is a variable interest entity (“VIE”) for which it is the primary beneficiary and is consolidated under ASC 810 as the Company has the power to direct the significant activities and the right to receive benefits and obligation to absorb losses of Artmin. The assets of Artmin can only be used to settle the obligations of Artmin and not the obligations of the Company. The creditors of Artmin do not have recourse to the assets or general credit of the Company to satisfy its liabilities. The Company concluded that Artmin was not a business based on its assessment under ASC 805 and accounted for the acquisition as an initial consolidation of a VIE that is not a business under ASC 810. There was no gain or loss recognized upon initial consolidation of the VIE as the sum of the fair value of the consideration paid and non-controlling interest equaled the fair value of the net assets on the acquisition date. The Company incurred transaction costs of approximately $0.4 million in connection with the Transaction included in Other operating expenses, net in the Condensed Consolidated Statements of Operations.
The Company retained a third-party appraiser to determine the fair value of the consideration paid, assets acquired, liabilities assumed, and non-controlling interest as of the acquisition date. The fair value estimates were based on income and market valuation methods. The following table summarizes the fair value of the assets acquired and liabilities assumed on the acquisition date (in thousands):
| | | | | | | | |
ASSETS | | |
Cash and cash equivalents | $ | 11 | |
Trade and other receivables | | 36 | |
Inventories | | 3 | |
Prepaids and other current assets | | 24 | |
Mineral properties, plant and equipment, net (1) | | 688,611 | |
Other non-current assets | | 1,690 | |
Total assets acquired | $ | 690,375 | |
| | |
LIABILITIES | | |
Accounts payable | $ | 315 | |
Accrued liabilities and other | | 643 | |
Deferred income tax liabilities (2) | | 135,939 | |
Total liabilities assumed | | 136,897 | |
Net assets acquired and liabilities assumed | | 553,478 | |
Non-controlling interest | | (404,878) | |
| $ | 148,600 | |
(1) The fair value of mineral properties, plant and equipment is based on applying the income and market valuation methods. The significant assumptions include future metal prices, estimated quantities of mineral reserves and mineral resources, future capital and operating expenditures, and discount rates.
(2) Deferred income tax liabilities represent the future tax expense associated with the differences between the fair value allocated to assets and liabilities and the historical carryover tax basis of these assets and liabilities.
The assets acquired are included in the Corporate and other operating segment. The non-controlling interest is representative of Lidya Mines and Horizon’s combined 90% interest and is inclusive of the 30% redeemable interest. As the redemption features are solely within the control of the Company, the redeemable non-controlling interest in Artmin is classified within permanent equity under ASC 480.
In connection with the acquisition of the Hod Maden project, Horizon advanced Artmin $4.5 million to help fund working capital. The loan is unsecured, bears interest at the credit default swap premium of Türkiye plus a fixed spread of 4.0% and matures on June 28, 2028. As of September 30, 2023, no repayments have been made on the loan. The liability is included in Other non-current liabilities in the Condensed Consolidated Balance Sheets.
SSR Mining Inc.
Notes to Condensed Consolidated Financial Statements
(unaudited)
Acquisition of Taiga Gold Corp.
On April 14, 2022, the Company completed the purchase of all the issued and outstanding common shares of Taiga Gold Corp. (“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 $24.8 million, exploration and evaluation assets of $27.8 million, and a related deferred tax liability of $7.5 million. The assets are included in the Seabee mine operating segment.
Divestitures
On July 6, 2022, the Company completed the sale of the Pitarrilla project in Durango, Mexico, included in the Corporate and other 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.
4.OPERATING SEGMENTS
The Company currently has four producing mines which represent the Company’s reportable and operating segments. The results of operating segments are reviewed by management 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):
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Three Months Ended September 30, 2023 |
| Çöpler | | Marigold | | Seabee | | Puna | | Corporate and other (1) | | Total |
Revenue | $ | 114,462 | | | $ | 158,620 | | | $ | 36,625 | | | $ | 75,683 | | | $ | — | | | $ | 385,390 | |
Cost of sales (2) | $ | 69,830 | | | $ | 81,464 | | | $ | 19,939 | | | $ | 43,437 | | | $ | — | | | $ | 214,670 | |
Depreciation, depletion and amortization | $ | 25,600 | | | $ | 13,505 | | | $ | 9,015 | | | $ | 7,870 | | | $ | — | | | $ | 55,990 | |
Exploration, evaluation, and reclamation costs | $ | 1,725 | | | $ | 4,187 | | | $ | 4,908 | | | $ | 4,655 | | | $ | 1,584 | | | $ | 17,059 | |
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
Operating income (loss) | $ | 15,274 | | | $ | 59,463 | | | $ | 2,763 | | | $ | 17,040 | | | $ | (17,075) | | | $ | 77,465 | |
Capital expenditures | $ | 26,979 | | | $ | 13,259 | | | $ | 8,579 | | | $ | 5,422 | | | $ | — | | | $ | 54,239 | |
Total assets as of September 30, 2023 | $ | 3,258,055 | | | $ | 775,957 | | | $ | 526,813 | | | $ | 314,901 | | | $ | 873,934 | | | $ | 5,749,660 | |
(1) Corporate and other consists of business activities that are not included within the reportable segments and provided for reconciliation purposes.
(2) Excludes depreciation, depletion and amortization.
SSR Mining Inc.
Notes to Condensed Consolidated Financial Statements
(unaudited)
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Three Months Ended September 30, 2022 |
| Çöpler | | Marigold | | Seabee | | Puna | | Corporate and other (1) | | Total |
Revenue | $ | 4,245 | | | $ | 84,216 | | | $ | 33,346 | | | $ | 44,820 | | | $ | — | | | $ | 166,627 | |
Cost of sales (2) | $ | 306 | | | $ | 53,684 | | | $ | 17,894 | | | $ | 34,568 | | | $ | — | | | $ | 106,452 | |
Depreciation, depletion and amortization | $ | 242 | | | $ | 8,794 | | | $ | 9,187 | | | $ | 3,332 | | | $ | — | | | $ | 21,555 | |
Exploration, evaluation, and reclamation costs | $ | 1,215 | | | $ | 5,765 | | | $ | 4,535 | | | $ | 3,825 | | | $ | 2,980 | | | $ | 18,320 | |
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
Care and maintenance (3) | $ | 41,800 | | | $ | — | | | $ | — | | | $ | — | | | $ | — | | | $ | 41,800 | |
Operating income (loss) | $ | (39,792) | | | $ | 15,973 | | | $ | 1,730 | | | $ | 3,023 | | | $ | (15,998) | | | $ | (35,064) | |
Capital expenditures | $ | 4,663 | | | $ | 16,974 | | | $ | 10,131 | | | $ | 3,445 | | | $ | — | | | $ | 35,213 | |
Total assets as of September 30, 2022 | $ | 2,963,851 | | | $ | 610,497 | | | $ | 564,508 | | | $ | 305,058 | | | $ | 551,344 | | | $ | 4,995,258 | |
(1) Corporate and other consists of business activities that are not included within the reportable segments and provided for reconciliation purposes. During the first quarter of 2023, the Company determined it has four reportable segments: Çöpler, Marigold, Seabee and Puna. The exploration, evaluation and development properties are no longer considered a reportable segment and the portfolio of prospective exploration tenures, near or adjacent to the existing operations (near-mine) are included in the respective reportable segment and the greenfield standalone prospects are included in Corporate and other.
(2) Excludes depreciation, depletion and amortization.
(3) Care and maintenance expense represents direct costs and depreciation incurred at Çöpler during the temporary suspension of operations.
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Nine Months Ended September 30, 2023 | |
| Çöpler | | Marigold | | Seabee | | Puna | | Corporate and other (1) | | | Total |
Revenue | $ | 322,831 | | | $ | 374,594 | | | $ | 98,776 | | | $ | 204,829 | | | $ | — | | | $ | 1,001,030 | | |
Cost of sales (2) | $ | 199,425 | | | $ | 199,970 | | | $ | 61,476 | | | $ | 123,736 | | | $ | — | | | $ | 584,607 | | |
Depreciation, depletion and amortization | $ | 68,350 | | | $ | 32,062 | | | $ | 26,362 | | | $ | 20,953 | | | $ | — | | | $ | 147,727 | | |
Exploration, evaluation, and reclamation costs | $ | 4,447 | | | $ | 11,762 | | | $ | 14,632 | | | $ | 9,556 | | | $ | 5,508 | | | $ | 45,905 | | |
| | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | |
Operating income (loss) | $ | 46,514 | | | $ | 130,800 | | | $ | (3,694) | | | $ | 47,815 | | | $ | (54,056) | | | $ | 167,379 | | |
Capital expenditures | $ | 50,767 | | | $ | 76,528 | | | $ | 29,051 | | | $ | 9,900 | | | $ | — | | | $ | 166,246 | | |
Total assets as of September 30, 2023 | $ | 3,258,055 | | | $ | 775,957 | | | $ | 526,813 | | | $ | 314,901 | | | $ | 873,934 | | | $ | 5,749,660 | | |
(1) Corporate and other consists of business activities that are not included within the reportable segments and provided for reconciliation purposes.
(2) Excludes depreciation, depletion and amortization.
SSR Mining Inc.
Notes to Condensed Consolidated Financial Statements
(unaudited)
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Nine Months Ended September 30, 2022 |
| Çöpler | | Marigold | | Seabee | | Puna | | Corporate and other (1) | | Total |
Revenue | $ | 250,395 | | | $ | 238,534 | | | $ | 203,313 | | | $ | 149,414 | | | $ | — | | | $ | 841,656 | |
Cost of sales (2) | $ | 125,985 | | | $ | 142,841 | | | $ | 53,319 | | | $ | 102,755 | | | $ | — | | | $ | 424,900 | |
Depreciation, depletion and amortization | $ | 57,836 | | | $ | 24,077 | | | $ | 38,936 | | | $ | 13,296 | | | $ | — | | | $ | 134,145 | |
Exploration, evaluation, and reclamation costs | $ | 3,052 | | | $ | 13,652 | | | $ | 9,881 | | | $ | 6,437 | | | $ | 6,400 | | | $ | 39,422 | |
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
Care and maintenance (3) | $ | 41,800 | | | $ | — | | | $ | — | | | $ | — | | | $ | — | | | $ | 41,800 | |
Operating income (loss) | $ | 19,793 | | | $ | 57,963 | | | $ | 101,166 | | | $ | 26,693 | | | $ | (54,714) | | | $ | 150,901 | |
Capital expenditures | $ | 15,449 | | | $ | 50,540 | | | $ | 31,897 | | | $ | 7,920 | | | $ | — | | | $ | 105,806 | |
Total assets as of September 30, 2022 | $ | 2,963,851 | | | $ | 610,497 | | | $ | 564,508 | | | $ | 305,058 | | | $ | 551,344 | | | $ | 4,995,258 | |
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
(1) Corporate and other consists of business activities that are not included within the reportable segments and provided for reconciliation purposes. During the first quarter of 2023, the Company determined it has four reportable segments: Çöpler, Marigold, Seabee and Puna. The exploration, evaluation and development properties are no longer considered a reportable segment and the portfolio of prospective exploration tenures, near or adjacent to the existing operations (near-mine) are included in the respective reportable segment and the greenfield standalone prospects are included in Corporate and other.
(2) Excludes depreciation, depletion and amortization.
(3) Care and maintenance expense represents direct costs and depreciation incurred at Çöpler during the temporary suspension of operations.
Geographic Area
The following are non-current assets, excluding Goodwill, Restricted cash and Deferred income taxes, by location as of September 30, 2023 and December 31, 2022 (in thousands):
| | | | | | | | | | | | | | | | | |
| September 30, 2023 | | December 31, 2022 |
Türkiye | $ | 3,733,255 | | | $ | 3,064,482 | |
Canada | | 333,150 | | | | 311,937 | |
United States | | 361,142 | | | | 321,423 | |
Argentina | | 113,381 | | | | 127,661 | |
Mexico | | 489 | | | | 536 | |
Peru | | 478 | | | | 482 | |
Total | $ | 4,541,895 | | | $ | 3,826,521 | |
SSR Mining Inc.
Notes to Condensed Consolidated Financial Statements
(unaudited)
The following is revenue information by geographic area based on the location for the three and nine months ended September 30 (in thousands):
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Three Months Ended September 30, | | Nine Months Ended September 30, |
| 2023 | | 2022 | | 2023 | | 2022 |
Türkiye | $ | 114,462 | | | $ | 4,245 | | | $ | 322,831 | | | $ | 250,395 | |
Canada | | 36,625 | | | | 33,346 | | | | 98,776 | | | | 203,313 | |
United States | | 158,620 | | | | 84,216 | | | | 374,594 | | | | 238,534 | |
Argentina | | 75,683 | | | | 44,820 | | | | 204,829 | | | | 149,414 | |
Total | $ | 385,390 | | | $ | 166,627 | | | $ | 1,001,030 | | | $ | 841,656 | |
5.REVENUE
The following table represents revenues by product (in thousands):
| | | | | | | | | | | | | | | | | |
| Three Months Ended September 30, |
| 2023 | | 2022 |
Gold doré sales | | | | | |
Çöpler | $ | 113,156 | | | $ | 4,250 | |
Marigold | | 158,594 | | | | 84,183 | |
Seabee | | 36,608 | | | | 33,326 | |
Concentrate sales | | | | | |
Puna | | 75,373 | | | | 48,698 | |
Other (1) | | | | | |
Çöpler | | 1,306 | | | | (5) | |
Marigold | | 26 | | | | 33 | |
Seabee | | 17 | | | | 20 | |
Puna | | 310 | | | | (3,878) | |
Total | $ | 385,390 | | | $ | 166,627 | |
(1) Other revenue includes changes in the fair value of concentrate trade receivables due to changes in silver and base metal prices; and silver and copper by-product revenue arising from the production and sale of gold doré.
| | | | | | | | | | | | | | | | | |
| Nine Months Ended September 30, |
| 2023 | | 2022 |
Gold doré sales | | | | | |
Çöpler | $ | 320,157 | | | $ | 248,193 | |
Marigold | | 374,495 | | | | 238,438 | |
Seabee | | 98,735 | | | | 203,216 | |
Concentrate sales | | | | | |
Puna | | 192,932 | | | | 149,884 | |
Other (1) | | | | | |
Çöpler | | 2,674 | | | | 2,202 | |
Marigold | | 99 | | | | 96 | |
Seabee | | 41 | | | | 97 | |
Puna | | 11,897 | | | | (470) | |
Total | $ | 1,001,030 | | | $ | 841,656 | |
(1) Other revenue includes changes in the fair value of concentrate trade receivables due to changes in silver and base metal prices; and silver and copper by-product revenue arising from the production and sale of gold doré.
SSR Mining Inc.
Notes to Condensed Consolidated Financial Statements
(unaudited)
Revenue by metal
Revenue by metal type for the three and nine months ended September 30 are as follows (in thousands):
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Three Months Ended September 30, | | Nine Months Ended September 30, |
| 2023 | | 2022 | | 2023 | | 2022 |
Gold | $ | 308,358 | | | $ | 121,759 | | | $ | 793,387 | | | $ | 689,847 | |
Silver | | 62,705 | | | | 39,340 | | | | 152,752 | | | | 112,043 | |
Lead | | 11,400 | | | | 8,365 | | | | 33,431 | | | | 28,393 | |
Zinc | | 1,268 | | | | 993 | | | | 6,749 | | | | 9,448 | |
Other (1) | | 1,659 | | | | (3,830) | | | | 14,711 | | | | 1,925 | |
Total | $ | 385,390 | | | $ | 166,627 | | | $ | 1,001,030 | | | $ | 841,656 | |
(1) Other revenue includes changes in the fair value of concentrate trade receivables due to fluctuations in silver and base metal prices; and silver and copper by-product revenue arising from the production and sale of gold doré.
Provisional metal sales
For the three months ended September 30, 2023 and 2022, the change in the fair value of the Company's embedded derivatives relating to provisional concentrate metal sales was an increase of $0.3 million and $1.3 million, respectively, and for the nine months ended September 30, 2023 and 2022, was an increase of $11.9 million and $2.6 million, respectively. The changes in fair value have been recorded in Revenue.
At September 30, 2023, the Company had silver sales of 4.48 million ounces at an average price of $22.48 per ounce, lead sales of 20.02 million pounds at an average price of $0.98 per pound, and zinc sales of 1.75 million pounds at an average price of $1.11 per pound, subject to normal course final pricing over the next several months.
6.INCOME AND MINING TAXES
The Company’s consolidated effective income tax rate was (8.8)% for the first nine months of 2023 compared to 7.1% for the first nine months of 2022. The primary drivers of the change in the effective rate were due to foreign currency fluctuations, particularly with the devaluation of the Turkish Lira relative to the USD, partially offset by the effects of the corporate tax rate increase in Türkiye.
In July 2023, the Republic of Türkiye enacted an increase in the corporate income tax rate. The corporate income tax rate of 20% increased to 25% for 2023 and subsequent years. The increase is effective on July 15, 2023 with retroactive application to January 1, 2023. As a result of the rate increase, the Company incurred deferred income tax expense of approximately $68.9 million.
The Company’s statutory tax rate for the period is 27.0%. The effective rate differs from the statutory rate primarily due to foreign currency fluctuations, particularly with the devaluation of the Turkish Lira relative to the USD, partially offset by the effects of the corporate tax rate in Türkiye.
Unrecognized Tax Benefits
The Company records uncertain tax positions on the basis of a two-step process in which (1) the Company determines whether it is more likely than not that the tax positions will be sustained on the basis of the technical merits of the position and (2) for those tax positions meeting the “more-likely-than-not” recognition threshold, the Company recognizes the largest amount of tax benefit that is more than 50% likely to be realized upon ultimate settlement with the related tax authority.
A reconciliation of the beginning and ending amount of gross unrecognized tax benefits, inclusive of interest and penalties, is as follows (in thousands):
SSR Mining Inc.
Notes to Condensed Consolidated Financial Statements
(unaudited)
| | | | | | | | | | | | | | | | | | | | |
| | Nine Months Ended September 30, |
| | 2023 | | 2022 |
Balance as of January 1 | | $ | 8,574 | | | $ | — | |
Increase associated with tax positions taken during the current year | | | — | | | | — | |
Increase (decrease) associated with tax positions taken during a prior year (1) | | | (7,218) | | | | 9,200 | |
Settlements | | | (1,356) | | | | — | |
Decrease associated with lapses in statutes of limitation | | | — | | | | — | |
Balance as of September 30 (1) | | $ | — | | | $ | 9,200 | |
(1) Of the gross unrecognized tax benefits, nil were recognized as current liabilities in Condensed Consolidated Balance Sheet as of September 30, 2023.As of September 30, 2023 and December 31, 2022, nil and $8.6 million, respectively, represent the amount of unrecognized tax benefits, inclusive of interest and penalties that, if recognized, would impact the Company’s effective income tax rate. As of September 30, 2023 and December 31, 2022, the total amount of accrued income-tax-related interest and penalties included in the Condensed Consolidated Balance Sheets were nil and $5.2 million.
On March 12, 2023, Türkiye enacted Tax Amnesty legislation, which allows taxpayers to voluntarily pay tax on uncertain tax positions and waives assessed interest, penalties up to 50.0% of tax and risk of audit if paid in accordance with the process outlined in the legislation. As a result, during the nine months ended September 30, 2023, the Company released $7.2 million of tax, interest, and penalties in Income and mining tax benefit (expense) in the Condensed Consolidated Statements of Operations. During the third quarter of 2023, the Company paid $1.4 million in a cash settlement in accordance with its Tax Amnesty agreement.
7.OTHER OPERATING EXPENSES, NET
The following table includes the components of Other operating expense, net:
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Three Months Ended September 30, | | Nine Months Ended September 30, |
| 2023 | | 2022 | | 2023 | | 2022 |
Artmin transaction and integration costs | $ | 30 | | | $ | — | | | $ | 406 | | | $ | — | |
Pitarrilla transaction costs | | — | | | | 1,561 | | | | — | | | | 1,561 | |
SEC conversion costs | | — | | | | — | | | | — | | | | 1,255 | |
Impairment of other assets (1) | | 2,637 | | | | — | | | | 2,637 | | | | — | |
Other | | — | | | | |