EX-99.1 2 a2017q2fs.htm EXHIBIT 99.1 Exhibit



SSR Mining Inc. (formerly Silver Standard Resources Inc.)
Condensed Consolidated Interim Financial Statements
For the three and six months ended June 30, 2017 and 2016
(unaudited)







SSR Mining Inc. (formerly Silver Standard Resources Inc.)
Condensed Consolidated Interim Financial Statements for the three and six months ended
June 30, 2017

CONTENTS
 
Financial Statements
 
 
 
 
 
 
 
 
 
 
Notes to the Condensed Consolidated Interim Financial Statements
 
 
 
 
 
 
 
 
Statements of Financial Position
 
 
 
 
 
 
 
Statements of Income
 
 
 
 
Statements of Shareholders’ Equity
 
 
 
 
Additional Disclosures
 
 
 



 
 
2 | Page

SSR Mining Inc. (formerly Silver Standard Resources Inc.)
Condensed Consolidated Interim Statements of Financial Position
(expressed in thousands of United States dollars)
 
Note
June 30

December 31

 
 
2017

2016

 
 
$ 

$

Current assets
 
 
 
Cash and cash equivalents
 
353,530

327,127

Trade and other receivables
 
51,098

58,437

Marketable securities
 
174,587

148,944

Inventory
4
172,984

154,915

Held for sale
5
1,425

12,097

Other
 
2,146

2,720

 
 
755,770

704,240

Non-current assets
 
 
 
Property, plant and equipment
6
681,425

663,828

Deferred income tax assets
 
—

1,096

Goodwill
 
49,786

49,786

Other
 
27,586

19,738

Total assets
 
1,514,567

1,438,688

 
 
 
 
Current liabilities
 
 
 
Trade and other payables
 
58,986

61,500

Provisions
7
18,973

82,806

 
 
77,959

144,306

Non-current liabilities
 
 
 
Deferred income tax liabilities
 
119,020

116,887

Provisions
7
96,953

55,562

Debt
 
226,500

220,054

Total liabilities
 
520,432

536,809

 
 
 
 
Equity
 
 
 
Share capital
 
1,045,143

1,043,555

Other reserves
 
18,287

(1,014
)
Equity component of convertible notes
 
68,347

68,347

Deficit
 
(156,642
)
(209,009
)
Total equity attributable to SSR Mining shareholders
 
975,135

901,879

Non-controlling interest
 
19,000

—

Total liabilities and equity
 
1,514,567

1,438,688

 
 
 
 
 
 
 
 
The accompanying notes are an integral part of the condensed consolidated interim financial statements
Approved by the Board of Directors and authorized for issue on August 9, 2017
"Richard D. Paterson"
 
"Paul Benson"
Richard D. Paterson, Director
 
Paul Benson, Director

 
 
3 | Page

SSR Mining Inc. (formerly Silver Standard Resources Inc.)
Condensed Consolidated Interim Statements of Income
(expressed in thousands of United States dollars, except per share amounts)

 
Note
Three months ended June 30
 

Six months ended June 30
 
 
 
2017

2016


2017

2016

 
 
$

$


$

$

 
 
 
 
 
 
 
Revenue
 
116,982

118,775

 
234,887

220,288

Cost of sales
10
(87,520
)
(74,713
)
 
(165,336
)
(152,928
)
Income from mine operations
 
29,462

44,062

 
69,551

67,360

General and administrative expenses
 
(3,292
)
(12,466
)
 
(11,182
)
(16,623
)
Exploration, evaluation and reclamation expenses
 
(4,334
)
(3,431
)
 
(11,724
)
(7,958
)
Impairment reversal
6
24,357

—

 
24,357

—

Business acquisition costs
 
—

(3,928
)
 
—

(3,928
)
Operating income
 
46,193

24,237

 
71,002

38,851

Interest earned and other finance income
 
1,274

458

 
2,301

739

Interest expense and other finance costs
 
(9,576
)
(6,489
)
 
(16,222
)
(13,110
)
Foreign exchange gain (loss)
 
3,134

99

 
3,694

(3,287
)
Other
 
(1,017
)
(2,784
)
 
(2,299
)
(1,813
)
Income before income tax
 
40,008

15,521

 
58,476

21,380

Income tax expense
 
(2,261
)
(3,039
)
 
(5,681
)
(6,597
)
Net income

37,747

12,482


52,795

14,783

Attributable to:
 
 
 
 
 
 
Equity holders of SSR Mining
 
37,319

12,482

 
52,367

14,783

Non-controlling interests
 
428

—

 
428

—

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income per share attributable to equity holders of SSR Mining
 
 
 
Basic
8
$0.31
$0.13
 
$0.44
$0.17
Diluted
8
$0.31
$0.13
 
$0.43
$0.17


The accompanying notes are an integral part of the condensed consolidated interim financial statements


 
 
4 | Page
SSR Mining Inc. (formerly Silver Standard Resources Inc.)

Condensed Consolidated Interim Statements of Comprehensive Income (Loss)
(expressed in thousands of United States dollars)



 
 
Three months ended June 30

Six months ended June 30
 
 
2017

2016


2017

2016

 
 
$

$


$

$

 
 
 
 
 
 
 
Net income

37,747

12,482


52,795

14,783

Other comprehensive (loss) income:
 
 
 
 
 
 
 
Items that will not be reclassified to net income
 
 
 
Change in value of investments at FVTOCI, net of tax $2,145, ($13,297), ($2,894) and ($14,202), respectively
 
(15,665
)
89,118

 
19,981

95,364

 
 
 
 
 
 
 
Items that may be subsequently reclassified to net income:
 
 
 
Cash flow hedges, net of tax ($179), ($248), ($116) and ($253), respectively
 
238

462

 
123

470

Other comprehensive (loss) income
 
(15,427
)
89,580

 
20,104

95,834

Total comprehensive income
 
22,320

102,062

 
72,899

110,617

 
 
 
 
 
 
 
Attributable to:
 
 
 
 
 
 
Equity holders of SSR Mining
 
21,892

102,062

 
72,471

110,617

Non-controlling interests
 
428

—

 
428

—

 
 
 
 
 
 
 
The accompanying notes are an integral part of the condensed consolidated interim financial statements


 
 
5 | Page

SSR Mining Inc. (formerly Silver Standard Resources Inc.)
Condensed Consolidated Interim Statements of Changes in Shareholders’ Equity
(expressed in thousands of United States dollars)

 
 
 
 
Equity

 
 
Non-

 
 
 
Common Shares
Other

component of

 
Total

controlling

Total

 
 
Shares

Amount

reserves

convertible notes

Deficit

equity

interests

equity

 
 
000's

$

$

$

$

$

$

$

Balance, January 1, 2016
 
80,826

707,607

(54,805
)
68,347

(273,966
)
447,183

—

447,183

Shares and options issued pursuant to the acquisition of Seabee Gold Operation, net of share issuance costs
 
37,394

324,990

4,045

—

—

329,035

—

329,035

  Exercise of stock options
9
664

5,790

(2,025
)
—

—

3,765

—

3,765

Equity-settled share-based compensation
 
—

—

1,295

—

—

1,295

—

1,295

Total comprehensive income for the period
 
—

—

95,834

—

14,783

110,617

—

110,617

Balance, June 30, 2016
 
118,884

1,038,387

44,344

68,347

(259,183
)
891,895

—

891,895

 
 
 
 
 
 
 
 
 
 
Balance, January 1, 2017
 
119,401

1,043,555

(1,014
)
68,347

(209,009
)
901,879

—

901,879

Exercise of stock options
 
174

1,588

(644
)


—

944

—

944

Equity-settled share-based compensation
9
—

—

1,182

—

—

1,182

—

1,182

Recognition of joint venture
3
—

—

(1,341
)
—

—

(1,341
)
18,572

17,231

Total comprehensive income for the period
 
—

—

20,104

—

52,367

72,471

428

72,899

Balance, June 30, 2017
 
119,575

1,045,143

18,287

68,347

(156,642
)
975,135

19,000

994,135

The accompanying notes are an integral part of the condensed consolidated interim financial statements

 
 
6 | Page

SSR Mining Inc. (formerly Silver Standard Resources Inc.)

Condensed Consolidated Interim Statements of Cash Flows
(expressed in thousands of United States dollars)
 
Note
Three months ended June 30
 
 
Six months ended June 30
 
 
 
2017

2016

 
2017

2016

 
 
$

$

 
$

$

Cash flows from operating activities
 
 

 

 
 
 
Net income for the period
 
37,747

12,482

 
52,795

14,783

Adjustments for:
 
 

 

 
 
 
Depreciation, depletion and amortization
 
24,687

12,643

 
48,705

32,674

Share-based payments
 
596

738

 
1,182

1,295

Net non-cash finance expense
 
7,464

5,909

 
12,783

11,822

Impairment reversal
6
(24,357
)
—

 
(24,357
)
—

Export duties adjustment in cost of sales
7
—

—

 
(4,303
)
—

Revaluation of close down and restoration provision
7
—

—

 
3,577

—

Income tax expense
 
2,261

3,039

 
5,681

6,597

Non-cash foreign exchange loss (gain)
 
1,126

25

 
538

(1,261
)
Other
 
1,172

3,339

 
3,318

2,631

Net changes in non-cash working capital items
12
(3,563
)
(4,848
)
 
(14,902
)
(14,974
)
Cash generated by operating activities before interest and taxes (paid)
 
47,133

33,327

 
85,017

53,567

Tax moratorium (paid)
 
(1,983
)
—

 
(5,414
)
—

Interest (paid)
 
(2,792
)
(278
)
 
(6,601
)
(4,278
)
Income taxes (paid)
 
(3,744
)
(2,887
)
 
(3,744
)
(5,802
)
Cash generated by operating activities
 
38,614

30,162

 
69,258

43,487

Cash flows from and used in investing activities
 
 

 

 
 
 
Purchase of plant and equipment
 
(7,264
)
(14,096
)
 
(16,007
)
(19,169
)
Capitalized stripping costs
 
(4,350
)
(7,231
)
 
(11,096
)
(8,666
)
Underground mine development costs
 
(2,165
)
(803
)
 
(4,680
)
(803
)
Capitalized exploration costs
 
(1,806
)
(1,752
)
 
(2,918
)
(2,828
)
Proceeds from sale of assets previously held for sale
 
1,364

—

 
1,364

—

Closing payment on formation of joint venture, net of cash acquired
3
(12,972
)
—

 
(12,972
)
—

Proceeds from sale of marketable securities
 
—

3,909

 
—

4,422

Cash received from acquisition of Seabee Gold Operation, net of share exchange payment
 
—

16,908

 
—

16,908

Interest received
 
774

411

 
1,470

649

Other
 
108

(142
)
 
408

847

Cash (used) by investing activities
 
(26,311
)
(2,796
)
 
(44,431
)
(8,640
)
Cash flows from and used in financing activities
 
 

 

 
 
 
Proceeds from exercise of stock options
 
550

3,765

 
885

3,765

Repayment of bank loan
 
—

(2,175
)
 
—

(3,845
)
Repayment of Seabee Gold Operation credit facility
 
—

(13,707
)
 
—

(13,707
)
Share issuance fees on Seabee Gold Operation acquisition
 
—

(212
)
 
—

(212
)
Cash generated (used) by financing activities
 
550

(12,329
)
 
885

(13,999
)
Effect of foreign exchange rate changes on cash and cash equivalents
 
92

(52
)
 
691

(91
)
Increase in cash and cash equivalents
 
12,945

14,985

 
26,403

20,757

Cash and cash equivalents, beginning of period
 
340,585

217,634

 
327,127

211,862

Cash and cash equivalents, end of period
 
353,530

232,619

 
353,530

232,619

The accompanying notes are an integral part of the condensed consolidated interim financial statements

 
 
7 | Page
SSR Mining Inc. (formerly Silver Standard Resources Inc.)

Notes to the Condensed Consolidated Interim Financial Statements
For the three and six months ended June 30, 2017
(tabular amounts expressed in thousands of United States dollars unless otherwise stated)


1.
NATURE OF OPERATIONS

SSR Mining Inc. ("we", "us", "our" or "SSR"), formerly Silver Standard Resources Inc., is a company incorporated under the laws of the Province of British Columbia, Canada and our shares are publicly listed on the Toronto Stock Exchange in Canada and the NASDAQ Global Market in the United States. On May 4, 2017 the Company's shareholders approved a name change to SSR Mining Inc., with the name change becoming effective on August 1, 2017. Together with our subsidiaries, we (the “Group”) are principally engaged in the operation, acquisition, exploration and development of precious metal resource properties located in the Americas. We have three producing mines and a portfolio of precious metal dominant projects located throughout the Americas. SSR Mining Inc. is the ultimate parent of the Group.

Our address is Suite 800, 1055 Dunsmuir Street, PO Box 49088, Vancouver, British Columbia, V7X 1G4.

Our focus is on safe, profitable gold and silver production from our Marigold mine in Nevada, U.S., Seabee Gold Operation in Saskatchewan, Canada and our 75% owned Puna Operations joint venture in Jujuy, Argentina, and to advance, as market and project conditions permit, our other principal development projects towards development and commercial production.


2.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The principal accounting policies applied in the preparation of these condensed consolidated interim financial statements are set out below.

a)
Basis of preparation
These condensed consolidated interim financial statements should be read in conjunction with our audited consolidated financial statements for the year ended December 31, 2016.
These condensed consolidated interim financial statements have been prepared in accordance with International Financial Reporting Standards ("IFRS") as issued by the International Accounting Standards Board ("IASB") applicable to the preparation of interim financial statements, including IAS 34, Interim Financial Reporting. The comparative information has also been prepared on this basis.
These statements were authorized for issue by our Board of Directors on August 9, 2017.

b)
Significant accounting judgments and estimates
The preparation of financial statements in conformity with IFRS requires the use of judgments and/or estimates that affect the amounts reported and disclosed in the consolidated financial statements and related notes. These judgments and estimates are based on management’s best knowledge of the relevant facts and circumstances, having regard to previous experience, but actual results may differ materially from the amounts included in the financial statements. The critical judgments and estimates applied in the preparation of the unaudited condensed consolidated interim financial statements for the six months ended June 30, 2017 are consistent with those applied and disclosed in note 2(u) to our audited consolidated financial statements for the year ended December 31, 2016 other than those discussed below.

(i)
Export duties on Pirquitas mine
Following the resolution of the export duty claim (note 7), we have measured the resulting liability at net present value of estimated future cash outflows. This required an estimate of the most appropriate discount rate to use for such an Argentine peso ("ARS") liability.




 
 
8 | Page
SSR Mining Inc. (formerly Silver Standard Resources Inc.)

Notes to the Condensed Consolidated Interim Financial Statements
For the three and six months ended June 30, 2017
(tabular amounts expressed in thousands of United States dollars unless otherwise stated)

(ii)
Mine life extension of the Pirquitas mine
Following our exercise of the option to form the Puna Operations joint venture, and subsequent closure of the transaction (note 3), during the six months ended June 30, 2017 we have re-assessed our estimates for: (a) the carrying value of plant assets that were previously impaired; (b) depreciable lives of remaining plant assets; (c) value added tax collection; (d) inventory usage; and (e) timing of cash flows for our close down and restoration provision. The result of these changes in estimates was an impairment reversal of $24,357,000 (note 6) and a reduction to our close down and restoration provision of $5,377,000 (note 7).

(iii)
Recognition of Puna Operations joint venture
As a result of the formation of the Puna Operations joint venture we were required to recognize the acquired Chinchillas mineral property asset at fair value (note 3). The valuation required significant management judgment in determining an appropriate valuation approach, and furthermore significant estimation to determine appropriate assumptions for planned metal production and costs (operating and capital), metal prices, discount rates, VAT recoveries and other working capital movements.
3.
PUNA OPERATIONS JOINT VENTURE

On March 31, 2017, we exercised our option on the Chinchillas project and on May 31, 2017 formed a jointly owned company with Golden Arrow Resources Corporation ("Golden Arrow") called Puna Operations Inc. for the development of the property. The jointly owned company, holding the Pirquitas and Chinchillas properties, is owned 75% by SSR and we are the operator. This transaction is expected to extend the Puna Operations operating life by approximately eight years.

Under the terms of the arrangement we paid the option exercise payment to Golden Arrow of $12,972,000, net of cash acquired.

At May 31, 2017 we recognized an asset of $28,839,000 representing the fair value of the Chinchillas mineral property acquired. In addition, we recognized a non-controlling interest of $18,572,000. As we retain control of Puna Operations Inc., the difference between the carrying value of the assets acquired and liabilities assumed and the non-controlling interest, has been recognized in equity attributable to our shareholders; this totaled $1,341,000.


4.
INVENTORY
 
June 30, 2017

December 31, 2016

 
$ 

$

Current:
 
 
Finished goods
16,587

11,627

Stockpiled ore
19,872

30,574

Leach pad inventory
105,675

86,696

Materials and supplies
30,850

26,018

 
172,984

154,915

Non-current materials and supplies
1,660

1,811

 
174,644

156,726


The cost of inventory held at its net realizable value at June 30, 2017 was $6,282,000 (December 31, 2016 - $7,246,000).



 
 
9 | Page
SSR Mining Inc. (formerly Silver Standard Resources Inc.)

Notes to the Condensed Consolidated Interim Financial Statements
For the three and six months ended June 30, 2017
(tabular amounts expressed in thousands of United States dollars unless otherwise stated)

5.
ASSETS HELD FOR SALE

On May 2, 2017, we completed the sale of our 100% interest in the Berenguela project in Peru to Valor Resources Limited ("Valor") for consideration in deferred payments and a 9.9% equity interest in Valor.

The carrying value of the asset was reclassified from an asset held for sale of $8,098,000 to marketable securities received of $1,098,000, and deferred consideration of $7,246,000. A gain on sale of $246,000 was recorded in other income.

In addition, during the period we also sold one ball mill that had been classified as held for sale, and wrote down the carrying value of a second mill to reflect its fair value based upon sales proceeds received for the first mill.

6.
PROPERTY, PLANT AND EQUIPMENT


 
June 30, 2017
 
Plant and equipment (1)

Mineral properties subject to depreciation

Mineral properties not yet subject to depreciation

Exploration and evaluation assets (2)

Total

 
$

$

$

$

$

Cost
 
 
 
 
 
Balance, January 1, 2017
509,008

306,277

89,288

136,992

1,041,565

Additions
16,030

20,942

29,463

301

66,736

Disposals
(2,460
)
—

—

(1,000
)
(3,460
)
Impairment reversal
24,357

—

—

—

24,357

Property write downs
—

(747
)
—

(899
)
(1,646
)
Change in estimate of close down and restoration provision
(8,954
)
(227
)
—

—

(9,181
)
Balance, end of period
537,981

326,245

118,751

135,394

1,118,371

 
 
 
 
 
 
Accumulated depreciation
 
 
 
 
 
Balance, January 1, 2017
(276,170
)
(101,567
)
—

—

(377,737
)
Charge for the year
(26,048
)
(35,377
)
—

—

(61,425
)
Disposals
2,216

—

—

—

2,216

Balance, end of period
(300,002
)
(136,944
)
—

—

(436,946
)
 
 
 
 
 
 
Net book value at June 30, 2017
237,979

189,301

118,751

135,394

681,425

Net book value at December 31, 2016
232,838

204,710

89,288

136,992

663,828


(1) Includes assets under construction of $14,995,000 at June 30, 2017 (December 31, 2016 - $6,113,000).

(2) On January 16, 2017, we entered into an option agreement with Silver One Resources Inc. ("Silver One") in respect of our Candelaria project in the United States for consideration consisting of $1,000,000 worth of Silver One shares issued on January 20, 2017, and three annual installments of $1,000,000 worth of Silver One shares. Under the terms of this agreement, Silver One will have three years to evaluate the Candelaria project.






 
 
10 | Page
SSR Mining Inc. (formerly Silver Standard Resources Inc.)

Notes to the Condensed Consolidated Interim Financial Statements
For the three and six months ended June 30, 2017
(tabular amounts expressed in thousands of United States dollars unless otherwise stated)

Impairment reversal of non-current assets

On May 31, 2017 we formed the Puna Operations joint venture (note 3), which is estimated to have an operating life of approximately eight years. As a result of this transaction the operating life extension was considered to be an indicator of reversal of previous impairments that had been recognized against Pirquitas plant assets.

The maximum impairment reversal that is permitted is to return the asset balance to the carrying value at which it would have been had no previous impairments been recorded, which was $24,357,000 higher than the existing carrying value.

We determined that the fair value less cost to dispose of the cash generating unit significantly exceeded the maximum permitted impairment reversal. A discounted cash flow analysis was performed using a discount rate of 10% and the following consensus metal prices;

 
2017
2018
2019
2020
LT
Silver / oz
$17.93
$18.72
$19.14
$19.53
$19.65
Lead / lb
$1.01
$1.03
$1.02
$0.99
$0.94
Zinc / lb
$1.27
$1.31
$1.24
$1.18
$1.06

As a result we recognized an impairment reversal of $24,357,000 in the three and six months ended June 30, 2017.
7.
PROVISIONS
 
June 30, 2017
December 31, 2016
 
Current

Non-current

Current

Non-current

 
$

$

$

$

Moratorium (1)
9,449

45,781

67,130

—

Restructuring provision (2)
1,189

—

7,329

 
Close down and restoration provision (3)
8,335

51,172

8,347

55,562

 
18,973

96,953

82,806

55,562


(1) 
We entered into a fiscal stability agreement with the Federal Government of Argentina in 1998 for production from the Pirquitas mine. In December 2007, the National Customs Authority of Argentina (Dirección Nacional de Aduanas) ("Customs") levied an export duty of approximately 10% from concentrate for projects with fiscal stability agreements pre-dating 2002 and Customs has asserted that the Pirquitas mine is subject to this duty. We had previously challenged the legality of the export duty applied to silver concentrate.

On March 31, 2017, we entered into the tax moratorium system in Argentina to resolve the export duty dispute. Under the conditions of the moratorium, which converts the export duty liability to ARS, we have agreed to pay ARS 1,057,444,000 ($68,621,000 undiscounted) with 5% down payment initially and the balance in installments over 60 months. Outstanding ARS amounts are subject to interest at a minimum rate of 1.5% per month.

With our entry into the tax moratorium for resolution of our export duty dispute, we are no longer challenging the legality of the application of the export duty other than with respect to our right for reimbursement of the $6,646,000 of export duty that we paid. Export duties were removed effective February 12, 2016. At December 31, 2016 we had accrued a provision for $67,130,000 for unpaid duties but had not accrued for potential interest and penalties.

Entering the tax moratorium resolves the existing liability, and we have recognized the new ARS liability at estimated net present value of future cash outflows by discounting expected future payments using a discount rate of 20% per annum over the 60 month period. We paid 5%, or $3,431,000, when entering the moratorium on March 31, 2017 and have recognized the reduction in the liability of $4,303,000 within cost of sales. We subsequently paid principal and interest of $4,775,000 under the moratorium and recognized interest expense of $3,046,000 in the period to June 30, 2017.


 
 
11 | Page
SSR Mining Inc. (formerly Silver Standard Resources Inc.)

Notes to the Condensed Consolidated Interim Financial Statements
For the three and six months ended June 30, 2017
(tabular amounts expressed in thousands of United States dollars unless otherwise stated)

(2) 
As at June 30, 2017, we have provided for various employee termination benefits as a result of anticipated mine and associated employee reductions at the Pirquitas mine in 2017.

(3) 
Following notice of our intent to exercise our option on the Chinchillas project (note 3), we re-assessed the estimated timing of reclamation cash flows for the Pirquitas property. The extension of the life of the Pirquitas plant has resulted in cash flows related to decommissioning the plant, being delayed by approximately eight years. The impact was a net reduction of our close down and restoration provision of $5,377,000, of which there was a reduction recorded against the carrying value of the plant of $8,954,000, and an increase in other costs of reclamation due to inflation in our cost estimates of $3,577,000.

8.
NET INCOME PER SHARE

The calculations of basic and diluted earnings per share are based on the following:
 
Three months ended June 30
 
 
Six months ended June 30
 
 
2017

2016

 
2017

2016

 
 
 
 
 
 
Net income
$37,747
$12,482
 
$52,795
$14,783
Net income attributable to non-controlling interests
$428
—

 
$428
—

Net income attributable to equity holders of SSR Mining
$37,319
$12,482
 
$52,367
$14,783
 
 
 
 
 
 
Adjustment for dilutive instruments:
 
 
 
 
 
Interest saving on convertible notes, net of tax
3,808

—

 
—

—

Net income used in the calculation of diluted net income per share
41,127
12,482

 
52,367
14,783
 
 
 
 
 
 
Weighted average number of common shares issued (thousands)
119,519
93,329
 
119,472
87,078
Adjustments for dilutive instruments:
 
 
 
 
 
Stock options (thousands)
1,275
1,541

 
1,267
1,054
Convertible notes (thousands)
13,250

—

 
—

—

Weighted average number of common shares for diluted net income per share (thousands)
134,044
94,870
 
120,739
88,132
 
 
 
 
 
 
Basic net income per share attributable to equity holders of SSR Mining
$0.31
$0.13
 
$0.44
$0.17
Diluted net income per share attributable to equity holders of SSR Mining
$0.31
$0.13
 
$0.43
$0.17



 
 
12 | Page
SSR Mining Inc. (formerly Silver Standard Resources Inc.)

Notes to the Condensed Consolidated Interim Financial Statements
For the three and six months ended June 30, 2017
(tabular amounts expressed in thousands of United States dollars unless otherwise stated)


9.
SHARE-BASED COMPENSATION

Total share-based compensation, including all equity and cash-settled arrangements, for the three and six months ended June 30, 2017 and 2016 has been recognized in the condensed consolidated interim financial statements as follows:
 
Three months ended June 30
 
 
Six months ended June 30
 
 
2017

2016

 
2017

2016

 
$

$

 
$

$

Equity-settled plans
 
 
 


Cost of inventory
50

34

 
83

31

General and administrative expenses
536

693

 
1,080

1,245

Exploration, evaluation and reclamation expenses
10

11

 
19

19

Cash-settled plans
 
 
 


Cost of inventory
(1,806
)
1,255

 
(1,506
)
1,531

General and administrative expenses
(95
)
8,193

 
3,289

8,085

Exploration, evaluation and reclamation expenses
(100
)
68

 
(46
)
72

 
(1,405
)
10,254

 
2,919

10,983



 
 
13 | Page
SSR Mining Inc. (formerly Silver Standard Resources Inc.)

Notes to the Condensed Consolidated Interim Financial Statements
For the three and six months ended June 30, 2017
(tabular amounts expressed in thousands of United States dollars unless otherwise stated)

10.
OPERATING SEGMENTS

Following the formation of the joint venture with Golden Arrow (note 3) the Pirquitas property was combined with the Chinchillas project into the Puna Operations operating segment and the segment has been amended accordingly. The following is a summary of the reported amounts of income or loss, and the carrying amounts of assets and liabilities by operating segment:
Three months ended June 30, 2017
Marigold mine

Seabee Gold Operation

Puna Operations (i)

Exploration and evaluation properties

Other reconciling items (ii)

Total

 
$ 

$ 

$

$

$

$

Revenue
72,451

22,502

22,029

—

—

116,982

Cost of inventory
(36,217
)
(10,580
)
(15,990
)
—

—

(62,787
)
Depletion, depreciation and amortization
(14,861
)
(7,839
)
(1,895
)
—

—

(24,595
)
Restructuring costs
—

—

(138
)
—

—

(138
)
Cost of sales
(51,078
)
(18,419
)
(18,023
)
—

—

(87,520
)
Income from mine operations
21,373

4,083

4,006

—

—

29,462

 
 
 
 
 
 
 
Exploration, evaluation and reclamation expenses
(718
)
(1,208
)
—

(2,408
)
—

(4,334
)
Impairment reversal (note 6)
—

—

24,357

—

—

24,357

Operating income (loss)
20,608

2,874

27,941

(2,807
)
(2,423
)
46,193

Income (loss) before income tax
20,355

2,791

28,359

583

(12,080
)
40,008

 
 
 
 
 
 
 
Interest expense and other finance costs
(382
)
(28
)
(3,779
)
—

(5,387
)
(9,576
)
Income tax (expense) recovery
(3,442
)
868

(17
)
(128
)
458

(2,261
)
 
 
 
 
 
 
 
As at June 30, 2017
 
 
 
 
 
 
Total assets
418,936

422,470

154,773

73,781

444,607

1,514,567

Non-current assets
236,342

362,569

68,511

71,855

900

740,177

Total liabilities
(76,061
)
(89,990
)
(90,119
)
(11,015
)
(253,247
)
(520,432
)


 
 
14 | Page
SSR Mining Inc. (formerly Silver Standard Resources Inc.)

Notes to the Condensed Consolidated Interim Financial Statements
For the three and six months ended June 30, 2017
(tabular amounts expressed in thousands of United States dollars unless otherwise stated)

Three months ended June 30, 2016
Marigold mine

Seabee Gold Operation

Puna Operations (i)

Exploration and evaluation properties

Other reconciling items (ii)

Total

 
$

$

$

$

$

$

Revenue
59,197

14,437

45,141

—

—

118,775

Cost of inventory
(31,235
)
(13,221
)
(17,866
)
—

—

(62,322
)
Depletion, depreciation and amortization
(10,321
)
—

(2,070
)
—

—

(12,391
)
Cost of sales
(41,556
)
(13,221
)
(19,936
)
—

—

(74,713
)
Income from mine operations
17,641

1,216

25,205

—

—

44,062

 
 
 
 
 
 
 
Exploration, evaluation and reclamation expenses
(118
)
(51
)
(389
)
(2,873
)
—

(3,431
)
Operating income (loss)
17,552

1,132

24,427

(2,893
)
(15,981
)
24,237

Income (loss) before income tax
14,416

1,356

23,276

(3,813
)
(19,714
)
15,521

 
 
 
 
 
 
 
Interest expense and other finance costs
(557
)
(16
)
(918
)
(21
)
(4,977
)
(6,489
)
Income tax (expense)
(3,481
)
38

—

(7
)
411

(3,039
)
 
 
 
 
 
 
 
As at December 31, 2016
 
 
 
 
 
 
Total assets
394,963

420,796

130,466

77,138

415,325

1,438,688

Non-current assets
253,373

370,141

26,007

71,441

994

721,956

Total liabilities
(75,101
)
(91,627
)
(117,091
)
(7,146
)
(245,844
)
(536,809
)

 
 
15 | Page
SSR Mining Inc. (formerly Silver Standard Resources Inc.)

Notes to the Condensed Consolidated Interim Financial Statements
For the three and six months ended June 30, 2017
(tabular amounts expressed in thousands of United States dollars unless otherwise stated)

10.
OPERATING SEGMENTS (Cont'd)

Six months ended June 30, 2017
Marigold mine

Seabee Gold Operation

Puna Operations (i)

Exploration and evaluation properties

Other reconciling items (ii)

Total

 
$ 

$ 

$

$

$

$

Revenue
136,213

50,111

48,563

—

—

234,887

Cost of inventory
(66,916
)
(23,419
)
(30,237
)
—

—

(120,572
)
Depletion, depreciation and amortization
(26,597
)
(17,614
)
(4,321
)
—

—

(48,532
)
Export duty (note 7)
—

—

4,303

—

—

4,303

Restructuring costs
—

—

(535
)
—

—

(535
)
Cost of sales
(93,513
)
(41,033
)
(30,790
)
—

—

(165,336
)
Income from mine operations
42,700

9,078

17,773

—

—

69,551

 
 
 
 
 
 
 
Exploration, evaluation and reclamation expenses
(1,005
)
(2,820
)
(3,577
)
(4,034
)
(288
)
(11,724
)
Impairment reversal (note 6)
—

—

24,357

—

—

24,357

Operating income (loss)
41,648

6,258

37,955

(4,452
)
(10,407
)
71,002

Income (loss) before income tax
41,374

6,145

36,442

(4,362
)
(21,123
)
58,476

 
 
 
 
 
 
 
Interest expense and other finance costs
(765
)
(106
)
(4,614
)
(12
)
(10,725
)
(16,222
)
Income tax (expense) recovery
(7,257
)
1,739

(17
)
96

(242
)
(5,681
)

Six months ended June 30, 2016
Marigold mine

Seabee Gold Operation

Puna Operations (i)


Exploration and evaluation properties

Other reconciling items (ii)

Total

 
$

$

$

$

$

$

Revenue
116,939

14,437

88,912

—

—

220,288

Cost of inventory
(66,063
)
(13,221
)
(39,889
)
—

—

(119,173
)
Depletion, depreciation and amortization
(22,008
)
—

(10,235
)
—

—

(32,243
)
Export duties
—

—

(1,512
)
—

—

(1,512
)
Cost of sales
(88,071
)
(13,221
)
(51,636
)
—

—

(152,928
)
Income from mine operations
28,868

1,216

37,276

—

—

67,360

 
 
 
 
 
 
 
Exploration, evaluation and reclamation expenses
(240
)
(51
)
(514
)
(6,375
)
(778
)
(7,958
)
Operating income (loss)
28,657

1,132

36,269

(6,398
)
(20,809
)
38,851

Income (loss) before income tax
24,670

1,356

29,323

(6,072
)
(27,897
)
21,380

 
 
 
 
 
 
 
Interest expense and other finance costs
(715
)
(16
)
(2,001
)
(54
)
(10,324
)
(13,110
)
Income tax (expense)
(6,021
)
38

—

(92
)
(522
)
(6,597
)

(i) We consolidate 100% which includes non-controlling interest portion of revenues, income from mine operations for the three months ended June 30, 2017 of $2,446,000 and $653,000 (2016: $nil and $nil) and the six months ended June 30, 2017 of $2,446,000 and $653,000 (2016: $nil and $nil)
(ii) Other reconciling items refer to items that are not reported as part of segment performance as they are managed on a corporate basis.

 
 
16 | Page
SSR Mining Inc. (formerly Silver Standard Resources Inc.)

Notes to the Condensed Consolidated Interim Financial Statements
For the three and six months ended June 30, 2017
(tabular amounts expressed in thousands of United States dollars unless otherwise stated)

11.
FAIR VALUE MEASUREMENTS

Assets and liabilities that are held at fair value are categorized based on a valuation hierarchy which is determined by the following valuation methodology utilized:
 
Fair value at June 30, 2017
Fair value at December 31, 2016
 
Level 1

Level 2

Level 3

Total

Level 1

Level 2

Level 3

Total

 
$ 

$

$

$

$ 

$

$

$

Recurring measurements
 
 
 
 
 
 
 
 
Trade receivables
—

26,638

—

26,638

—

35,590

—

35,590

Marketable securities
174,587

—

—

174,587

146,887

—

2,057

148,944

Other financial assets
—

—

17,196

17,196

—

—

5,873

5,873

Accrued liabilities
—

10,774

—

10,774

—

12,170

—

12,170

 
174,587

37,412

17,196

229,195

146,887

47,760

7,930

202,577

 
 
 
 
 
 
 
 
 
Fair values disclosed
 
 
 
 
 
 
 
 
Convertible notes
259,925

—

—

259,925

245,515

—

—

245,515

 
259,925

—

—

259,925

245,515

—

—

245,515


There were no transfers between Level 1 and Level 2 fair value measurements. During the three and six months ended June 30, 2017 we transferred $2,057,000 from Level 3 to Level 1 following the reverse take over ("RTO") of Huayra Minerals Corporation ("HMC") as discussed below; the shares of a previously private company that we classified as Level 3 became publicly traded and the fair value is now based upon observable market data. There were no reclassifications during 2016.

Reverse takeover of Huayra Minerals Corporation
On April 24, 2017, HMC completed a RTO with AbraPlata Resource Corp. ("AbraPlata"). As a result of the RTO, our shares in HMC were exchanged on an one-for-one basis for 11,295,000 common shares of AbraPlata, representing 19.9% of the total issued and outstanding common shares of AbraPlata as of April 24, 2017. We also received a cash installment of $500,000 on April 30, 2017.


12.
SUPPLEMENTAL CASH FLOW INFORMATION

Changes in working capital items during the three and six months ended June 30, 2017 and 2016 are as follows:
 
Three months ended June 30
 
 
Six months ended June 30
 
 
2017

2016

 
2017

2016

 
$ 

$

 
$

$

Trade and other receivables
4,171

(16,793
)
 
9,479

(23,415
)
Inventory
272

1,614

 
(8,375
)
5,852

Trade and other payables
(6,426
)
10,384

 
(8,816
)
1,788

Provisions
(1,580
)
(53
)
 
(7,190
)
801

 
(3,563
)
(4,848
)
 
(14,902
)
(14,974
)


 
 
17 | Page
SSR Mining Inc. (formerly Silver Standard Resources Inc.)

Notes to the Condensed Consolidated Interim Financial Statements
For the three and six months ended June 30, 2017
(tabular amounts expressed in thousands of United States dollars unless otherwise stated)

During the three and six months ended June 30, 2017 and 2016 we conducted the following non-cash investing transactions:
 
Three months ended June 30
 
 
Six months ended June 30
 
 
2017

2016

 
2017

2016

 
$ 

$

 
$

$

Common shares issued pursuant to the acquisition of Seabee Gold Operation
—

(325,202
)
 
—

(325,202
)
Options issued pursuant to the acquisition of Seabee Gold Operation
—

(4,045
)
 
—

(4,045
)
Transfer of share-based payment reserve upon exercise of stock options
(225
)
(2,025
)
 
(644
)
(2,025
)
Marketable securities provided as consideration for exploration and evaluation expenses
—

(388
)
 
—

(388
)
Shares received from sale of mineral properties
669

—

 
1,669

—

 
 
 
 
 
 
 
444

(331,660
)
 
1,025

(331,660
)



 
 
18 | Page