SSR Mining Inc. | ||
(Registrant) | ||
Date: February 21, 2019 | By: | Signed: “Gregory Martin” |
Gregory Martin | ||
Title: | Chief Financial Officer |
SSR Mining Inc. | Financial Statements Year-End 2018 | 1 |
Financial Statements | |
Notes to the Consolidated Financial Statements | |
Statements of Financial Position | |
Statements of Shareholders’ Equity | |
Note 16 – Other reserves and non-controlling interest | |
Statements of Income | |
Additional Disclosures | |
SSR Mining Inc. | Financial Statements Year-End 2018 | 2 |
"Paul Benson" | "Gregory Martin" |
Paul Benson | Gregory Martin |
President and Chief Executive Officer | Senior Vice President and Chief Financial Officer |
February 21, 2019 |
SSR Mining Inc. | Financial Statements Year-End 2018 | 3 |
SSR Mining Inc. | Financial Statements Year-End 2018 | 4 |
SSR Mining Inc. | Financial Statements Year-End 2018 | 5 |
Note | December 31 | December 31 | |||
2018 | 2017 | ||||
$ | $ | ||||
Current assets | |||||
Cash and cash equivalents | 4 | 419,212 | 459,864 | ||
Trade and other receivables | 5 | 42,841 | 38,052 | ||
Marketable securities | 6 | 29,542 | 114,001 | ||
Inventory | 7 | 232,748 | 182,581 | ||
Other | 8 | 8,776 | 5,099 | ||
733,119 | 799,597 | ||||
Non-current assets | |||||
Property, plant and equipment | 9 | 701,175 | 658,629 | ||
Deferred income tax assets | 10 | 7,523 | — | ||
Goodwill | 3 | 49,786 | 49,786 | ||
Other | 8 | 29,535 | 29,442 | ||
Total assets | 1,521,138 | 1,537,454 | |||
Current liabilities | |||||
Trade and other payables | 12 | 78,466 | 60,153 | ||
Provisions | 13 | 4,788 | 11,313 | ||
83,254 | 71,466 | ||||
Non-current liabilities | |||||
Deferred income tax liabilities | 10 | 107,909 | 114,576 | ||
Provisions | 13 | 76,448 | 94,304 | ||
Debt | 14 | 247,551 | 233,180 | ||
Total liabilities | 515,162 | 513,526 | |||
Shareholders' equity | |||||
Share capital | 15 | 1,055,417 | 1,047,233 | ||
Other reserves | 16 | (16,303 | ) | 24,998 | |
Equity component of convertible notes | 14 | 68,347 | 68,347 | ||
Deficit | (133,314 | ) | (139,693 | ) | |
Total shareholders' equity attributable to SSR Mining shareholders | 974,147 | 1,000,885 | |||
Non-controlling interest | 16 | 31,829 | 23,043 | ||
Total equity | 1,005,976 | 1,023,928 | |||
Total liabilities and equity | 1,521,138 | 1,537,454 | |||
Commitments (notes 9 and 24(c)) |
"Richard D. Paterson" | "Paul Benson" | |
Richard D. Paterson, Director | Paul Benson, Director |
SSR Mining Inc. | Financial Statements Year-End 2018 | 6 |
Note | 2018 | 2017 | |||||
$ | $ | ||||||
Revenue | 17 | 420,675 | 448,773 | ||||
Cost of sales | 18 | (343,830 | ) | (335,510 | ) | ||
Income from mine operations | 76,845 | 113,263 | |||||
General and administrative expenses | 18 | (32,941 | ) | (20,307 | ) | ||
Exploration, evaluation and reclamation expenses | (14,009 | ) | (15,981 | ) | |||
Impairment reversal | 9 | — | 24,357 | ||||
Operating income | 29,895 | 101,332 | |||||
Interest earned and other finance income | 19 | 11,761 | 6,130 | ||||
Interest expense and other finance costs | 19 | (33,630 | ) | (34,870 | ) | ||
Other expenses | 20 | (9,149 | ) | (3,067 | ) | ||
Foreign exchange gain | 9,213 | 5,062 | |||||
Income before tax | 8,090 | 74,587 | |||||
Income tax expense | 10 | (8,121 | ) | (3,121 | ) | ||
Net (loss) income | (31 | ) | 71,466 | ||||
Attributable to: | |||||||
Equity holders of SSR Mining | 6,379 | 69,316 | |||||
Non-controlling interest | (6,410 | ) | 2,150 | ||||
Net income per share attributable to equity holders of SSR Mining | |||||||
Basic | 21 | $0.05 | $0.58 | ||||
Diluted | 21 | $0.05 | $0.57 |
SSR Mining Inc. | Financial Statements Year-End 2018 | 7 |
2018 | 2017 | ||||
$ | $ | ||||
Net (loss) income | (31 | ) | 71,466 | ||
Other comprehensive (loss) income | |||||
Items that will not be reclassified to net income: | |||||
(Loss) gain on marketable securities, at FVTOCI, net of tax $6,059 and ($4,729) | (37,686 | ) | 25,948 | ||
Items that may be subsequently reclassified to net income: | |||||
Unrealized (loss) gain on effective portion of derivative, net of tax $850 and ($246) | (2,907 | ) | 526 | ||
Total other comprehensive (loss) income | (40,593 | ) | 26,474 | ||
Total comprehensive (loss) income | (40,624 | ) | 97,940 | ||
Attributable to: | |||||
Equity holders of SSR Mining | (34,214 | ) | 95,790 | ||
Non-controlling interest | (6,410 | ) | 2,150 |
SSR Mining Inc. | Financial Statements Year-End 2018 | 8 |
Note | Common Shares | Other reserves (note 16) | Equity component of convertible notes | Total equity attributable to equity holders of SSR Mining | |||||||||||||
Shares | Amount | Deficit | Non-controlling interest | Total equity | |||||||||||||
000's | $ | $ | $ | $ | $ | $ | $ | ||||||||||
Balance, January 1, 2017 | 119,401 | 1,043,555 | (1,014 | ) | 68,347 | (209,009 | ) | 901,879 | — | 901,879 | |||||||
Exercise of stock options | 15 | 440 | 3,678 | (1,339 | ) | — | — | 2,339 | — | 2,339 | |||||||
Equity-settled share-based compensation | 15 | — | — | 2,219 | — | — | 2,219 | — | 2,219 | ||||||||
Recognition of joint venture | 3 | — | — | (1,342 | ) | — | — | (1,342 | ) | 18,573 | 17,231 | ||||||
Funding from non-controlling interest | 16 | — | — | — | — | — | — | 2,320 | 2,320 | ||||||||
Total comprehensive income for the year | — | — | 26,474 | — | 69,316 | 95,790 | 2,150 | 97,940 | |||||||||
Balance, December 31, 2017 | 119,841 | 1,047,233 | 24,998 | 68,347 | (139,693 | ) | 1,000,885 | 23,043 | 1,023,928 | ||||||||
Exercise of stock options | 15 | 899 | 8,184 | (2,864 | ) | — | — | 5,320 | — | 5,320 | |||||||
Equity-settled share-based compensation | 15 | — | — | 2,156 | — | — | 2,156 | — | 2,156 | ||||||||
Funding from non-controlling interest | 16 | — | — | — | — | — | — | 15,196 | 15,196 | ||||||||
Total comprehensive (loss) income for the year | — | — | (40,593 | ) | — | 6,379 | (34,214 | ) | (6,410 | ) | (40,624 | ) | |||||
Balance, December 31, 2018 | 120,740 | 1,055,417 | (16,303 | ) | 68,347 | (133,314 | ) | 974,147 | 31,829 | 1,005,976 |
SSR Mining Inc. | Financial Statements Year-End 2018 | 9 |
Note | 2018 | 2017 | |||
$ | $ | ||||
Cash flows from operating activities | |||||
Net (loss) income for the year | (31 | ) | 71,466 | ||
Adjustments for: | |||||
Depreciation, depletion and amortization | 100,479 | 102,482 | |||
Net finance expense | 20,564 | 26,467 | |||
Impairment reversal | — | (24,357 | ) | ||
Income tax expense | 8,121 | 3,121 | |||
Non-cash foreign exchange gain | (13,002 | ) | (4,373 | ) | |
Net changes in non-cash working capital items | 26 | (30,934 | ) | (4,886 | ) |
Other operating activities | 26 | 6,883 | 3,610 | ||
Cash generated from operating activities before interest and taxes | 92,080 | 173,530 | |||
Moratorium paid | (5,683 | ) | (9,270 | ) | |
Interest paid | (13,831 | ) | (15,235 | ) | |
Income taxes paid | (12,797 | ) | (4,300 | ) | |
Cash generated by operating activities | 59,769 | 144,725 | |||
Cash flows from investing activities | |||||
Purchase of property, plant and equipment | (67,747 | ) | (28,897 | ) | |
Capitalized stripping costs | (7,489 | ) | (22,863 | ) | |
Underground mine development costs | (9,074 | ) | (8,294 | ) | |
Capitalized exploration costs | (13,473 | ) | (5,368 | ) | |
Chinchillas project costs | (60,248 | ) | (11,432 | ) | |
Closing payment on formation of joint venture, net of cash acquired | — | (12,972 | ) | ||
Loan to joint venture partner | (8,032 | ) | — | ||
Investment in marketable securities | 6 | (23,057 | ) | — | |
Net proceeds from sale of marketable securities | 6 | 63,445 | 68,641 | ||
Interest received | 9,219 | 3,944 | |||
Other investing activities | 526 | 1,747 | |||
Cash used in investing activities | (115,930 | ) | (15,494 | ) | |
Cash flows from financing activities | |||||
Proceeds from exercise of stock options | 5,320 | 2,281 | |||
Funding from non-controlling interest | 15,196 | 2,320 | |||
Cash generated by financing activities | 20,516 | 4,601 | |||
Effect of foreign exchange rate changes on cash and cash equivalents | (5,007 | ) | (1,095 | ) | |
Increase (decrease) in cash and cash equivalents | (40,652 | ) | 132,737 | ||
Cash and cash equivalents, beginning of year | 459,864 | 327,127 | |||
Cash and cash equivalents, end of year | 419,212 | 459,864 |
SSR Mining Inc. | Financial Statements Year-End 2018 | 10 |
1. | NATURE OF OPERATIONS |
2. | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES |
a) | Basis of preparation |
b) | Accounting convention |
SSR Mining Inc. | Financial Statements Year-End 2018 | 11 |
2. | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) |
▪ | Has begun planned principal activities; |
▪ | Has employees, intellectual property and other inputs and processes that could be applied to those inputs; |
▪ | Is pursuing a plan to produce outputs; and |
▪ | Will be able to obtain access to customers that will purchase the outputs. |
SSR Mining Inc. | Financial Statements Year-End 2018 | 12 |
2. | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) |
• | the significant risks and rewards of ownership have passed to the customer; |
• | neither continuing managerial involvement, to the degree usually associated with ownership, nor effective control over the good sold, has been retained; |
• | the amount of revenue can be measured reliably; |
• | it is probable that economic benefits associated with the sale will flow to us; and |
• | the costs incurred or to be incurred in respect of the sale can be measured reliably. |
SSR Mining Inc. | Financial Statements Year-End 2018 | 13 |
2. | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) |
▪ | Costs of acquiring exploration and development stage properties in asset acquisitions, or the value attributed to properties acquired in a business combination; |
▪ | Economically recoverable exploration and evaluation expenses; |
▪ | Expenditures incurred to develop mining properties; |
▪ | Certain costs incurred during production; |
▪ | Estimates of close down and restoration costs; and |
▪ | Borrowing costs incurred that are attributable to qualifying mineral properties. |
SSR Mining Inc. | Financial Statements Year-End 2018 | 14 |
2. | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) |
SSR Mining Inc. | Financial Statements Year-End 2018 | 15 |
2. | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) |
SSR Mining Inc. | Financial Statements Year-End 2018 | 16 |
2. | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) |
Computer equipment | 3 - 7 years |
Furniture and fixtures | 7 years |
Vehicles | 2 - 5 years |
Mining equipment | 5 - 10 years |
Mobile equipment components | 2 - 9 years |
Buildings | LOM |
Mine plant equipment | LOM |
Underground infrastructure | LOM |
Leasehold improvements | Lease term |
SSR Mining Inc. | Financial Statements Year-End 2018 | 17 |
2. | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) |
SSR Mining Inc. | Financial Statements Year-End 2018 | 18 |
2. | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) |
SSR Mining Inc. | Financial Statements Year-End 2018 | 19 |
2. | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) |
q) | Income per share |
(i) | Classification |
▪ | Debt The classification of debt instruments is driven by our business model for managing the financial assets and their contractual cash flow characteristics. A debt instrument is measured at amortized cost if the objective of the business model is to hold the debt instrument for the collection of contractual cash flows, and the asset's contractual cash flows are comprised solely of payments of principal and interest. They are classified as current or non-current assets based on their maturity date. If the business model is not to hold the asset, it is classified as FVTPL. |
• | Equity Equity instruments that are held for trading are classified as FVTPL. For other equity instruments, on the day of acquisition we can make an irrevocable election (on an instrument-by-instrument basis) to designate them as at FVTOCI. |
(ii) | Measurement |
SSR Mining Inc. | Financial Statements Year-End 2018 | 20 |
2. | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) |
(iii) | Impairment of financial assets |
(iv) | Derecognition |
(v) | Fair value of financial instruments |
(vi) | Hedge accounting |
SSR Mining Inc. | Financial Statements Year-End 2018 | 21 |
2. | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) |
SSR Mining Inc. | Financial Statements Year-End 2018 | 22 |
2. | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) |
▪ | Review of non-current asset carrying values and impairment assessment; |
▪ | Determination of capitalized stripping activities; |
▪ | Determination of capitalization of underground development activities; |
▪ | Determination of useful lives of property, plant and equipment; |
▪ | Close down and restoration provision; |
▪ | Deferred tax assets and liabilities; |
▪ | Determination of commencement of commercial production; |
▪ | Functional currency; |
▪ | Contingencies; and |
▪ | Determination of the timing of derecognition of exploration and evaluation assets. |
▪ | Review of non-current asset carrying values and impairment assessment; |
▪ | Mineral Reserves and Mineral Resources estimates; |
▪ | Determination of useful lives of property, plant and equipment; |
▪ | Valuation of inventory; |
▪ | Valuation of goodwill (note 3); |
▪ | Close down and restoration provision; |
▪ | Determination of the fair values of share-based compensation; |
▪ | Valuation of financial instruments; |
▪ | Deferred tax assets and liabilities; and |
▪ | Contingencies. |
SSR Mining Inc. | Financial Statements Year-End 2018 | 23 |
2. | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) |
SSR Mining Inc. | Financial Statements Year-End 2018 | 24 |
2. | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) |
SSR Mining Inc. | Financial Statements Year-End 2018 | 25 |
2. | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) |
SSR Mining Inc. | Financial Statements Year-End 2018 | 26 |
2. | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) |
SSR Mining Inc. | Financial Statements Year-End 2018 | 27 |
2. | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) |
▪ | title to the asset has transferred; |
▪ | physical possession of the asset has transferred; |
▪ | we have a present right to payment for the asset; |
▪ | the customer has accepted the asset; and |
▪ | the customer has the significant risks and rewards of ownership of the asset |
SSR Mining Inc. | Financial Statements Year-End 2018 | 28 |
2. | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) |
• | electing to not recognize leases for which the underlying asset is of low value or considered to be a short-term lease. |
3. | ACQUISITIONS AND CHANGE IN INTEREST ON MINERAL PROPERTIES |
SSR Mining Inc. | Financial Statements Year-End 2018 | 29 |
3. | ACQUISITIONS AND CHANGE IN INTEREST ON MINERAL PROPERTIES (Continued) |
4. | CASH AND CASH EQUIVALENTS |
December 31, 2018 | December 31, 2017 | |||
$ | $ | |||
Cash | 209,518 | 131,589 | ||
Short-term investments | 209,694 | 328,275 | ||
419,212 | 459,864 |
5. | TRADE AND OTHER RECEIVABLES |
December 31, 2018 | December 31, 2017 | |||
$ | $ | |||
Trade receivables | 11,287 | 14,848 | ||
Value added tax receivables (note 11) | 12,811 | 7,004 | ||
Prepayments and deposits | 10,880 | 8,875 | ||
Income tax receivable | 2,947 | 1,213 | ||
Other taxes receivable | 4,274 | 4,824 | ||
Other receivables | 642 | 1,288 | ||
42,841 | 38,052 |
SSR Mining Inc. | Financial Statements Year-End 2018 | 30 |
6. | MARKETABLE SECURITIES |
December 31, 2018 | December 31, 2017 | |||
$ | $ | |||
Balance, beginning of year | 114,001 | 148,944 | ||
Additions | 22,674 | 5,295 | ||
Disposals | (63,445 | ) | (72,132 | ) |
Fair value adjustments | (43,688 | ) | 31,894 | |
Balance, end of year | 29,542 | 114,001 |
7. | INVENTORY |
December 31, 2018 | December 31, 2017 | |||
$ | $ | |||
Current: | ||||
Finished goods | 23,433 | 19,262 | ||
Stockpiled ore | 18,195 | 6,806 | ||
Leach pad inventory | 162,335 | 128,783 | ||
Materials and supplies | 28,785 | 27,730 | ||
232,748 | 182,581 | |||
Non-current materials and supplies (note 8) | 2,006 | 3,973 | ||
234,754 | 186,554 |
SSR Mining Inc. | Financial Statements Year-End 2018 | 31 |
8. | OTHER ASSETS |
December 31, 2018 | December 31, 2017 | |||||||
Current | Non-current | Current | Non-current | |||||
$ | $ | $ | $ | |||||
Financial assets: | ||||||||
Restricted cash (1) | — | 2,035 | — | 3,079 | ||||
Deferred consideration (2, 3) | 7,345 | 11,289 | 2,394 | 15,639 | ||||
Derivative asset | — | — | 1,287 | — | ||||
Loan receivable from JV Partner (4) | — | 8,214 | — | — | ||||
Non-financial assets: | ||||||||
Non-current value added tax receivable (note 11) | — | 5,991 | — | 6,751 | ||||
Non-current inventory (note 7) | — | 2,006 | — | 3,973 | ||||
Held for sale | 1,431 | — | 1,418 | — | ||||
8,776 | 29,535 | 5,099 | 29,442 |
(1) | We have cash and security deposits in relation to our close down and restoration provisions of $1,934,000 (December 31, 2017 - $1,895,000). |
(2) | On November 1, 2016, we sold our Diablillos and M-18 properties in Argentina to AbraPlata Resource Corp ("AbraPlata") (formerly Huayra Minerals Corporation) for consideration of: |
• | 19.9% equity stake in Abra Plata, with free carried interest until the completion of a financing of $5,000,000 or more, valued at $2,887,000. By December 31, 2018, the financing had been completed; |
• | Cash payments of $14,100,000 over the following five years ($1,350,000 received by December 31, 2018), valued initially at $7,452,000 using a discount rate of 20%; and |
• | We have retained a 1.0% net smelter returns royalty on production from each of the projects. |
(3) | On May 2, 2017, we sold our Berenguela project in Peru to Valor Resources Limited ("Valor") for consideration of: |
▪ | 145,881,177 shares of Valor, valued at $1,098,000; |
▪ | Additional shares from financing received in 2018, valued initially at $520,000; |
▪ | Cash payment of $12,000,000 over the next 5 years ($550,000 received by December 31, 2018), originally valued at $6,726,000 using a discount rate of 15%; and |
• | We have retained a 1.0% net smelter returns royalty on production from the project. |
(4) | As of July 6, 2018, we entered into a credit agreement with Golden Arrow (the "Credit Agreement") for a non-revolving term loan (the "Loan") in an aggregate principal amount equal to $10,000,000. The Loan matures on July 22, 2020. |
SSR Mining Inc. | Financial Statements Year-End 2018 | 32 |
9. | PROPERTY, PLANT AND EQUIPMENT |
December 31, 2018 | ||||||||||
Plant and equipment (1) | Mineral properties subject to depletion (3) | Mineral properties not yet subject to depletion (2)(3)(5) | Exploration and evaluation assets | Total | ||||||
$ | $ | $ | $ | $ | ||||||
Cost | ||||||||||
Balance, beginning of year | 545,090 | 393,273 | 121,854 | 91,579 | 1,151,796 | |||||
Additions | 102,275 | 33,371 | 13,771 | 956 | 150,373 | |||||
Disposals | (15,485 | ) | — | — | (1,307 | ) | (16,792 | ) | ||
Costs written off | (9,998 | ) | — | — | — | (9,998 | ) | |||
Change in estimate of close down and restoration provision | — | 3,269 | — | — | 3,269 | |||||
Transfers | — | 33,635 | (33,635 | ) | — | — | ||||
Balance, end of year | 621,882 | 463,548 | 101,990 | 91,228 | 1,278,648 | |||||
Accumulated depreciation | ||||||||||
Balance, beginning of year | (315,261 | ) | (177,906 | ) | — | — | (493,167 | ) | ||
Charge for the year | (44,772 | ) | (61,414 | ) | — | — | (106,186 | ) | ||
Disposals | 12,728 | 12,728 | ||||||||
Write off | 9,152 | — | — | — | 9,152 | |||||
Balance, end of year | (338,153 | ) | (239,320 | ) | — | — | (577,473 | ) | ||
Net book value at December 31, 2018 | 283,729 | 224,228 | 101,990 | 91,228 | 701,175 |
SSR Mining Inc. | Financial Statements Year-End 2018 | 33 |
9. | PROPERTY, PLANT AND EQUIPMENT (Continued) |
December 31, 2017 | ||||||||||
Plant and equipment (1) | Mineral properties subject to depletion(3) | Mineral properties not yet subject to depletion(2)(3)(5) | Exploration and evaluation assets(4) | Total | ||||||
$ | $ | $ | $ | $ | ||||||
Cost | ||||||||||
Balance, beginning of year | 509,008 | 306,277 | 133,560 | 92,720 | 1,041,565 | |||||
Additions | 33,738 | 43,118 | 33,589 | 758 | 111,203 | |||||
Disposals | (13,555 | ) | — | — | (1,000 | ) | (14,555 | ) | ||
Impairment reversal | 24,357 | — | — | — | 24,357 | |||||
Property write downs | — | (747 | ) | — | (899 | ) | (1,646 | ) | ||
Change in estimate of close down and restoration provision | (8,458 | ) | (670 | ) | — | — | (9,128 | ) | ||
Transfers | — | 45,295 | (45,295 | ) | — | — | ||||
Balance, end of year | 545,090 | 393,273 | 121,854 | 91,579 | 1,151,796 | |||||
Accumulated depreciation | ||||||||||
Balance, beginning of year | (276,170 | ) | (101,567 | ) | — | — | (377,737 | ) | ||
Charge for the year | (50,915 | ) | (76,339 | ) | — | — | (127,254 | ) | ||
Disposals | 11,824 | — | — | — | 11,824 | |||||
Balance, end of year | (315,261 | ) | (177,906 | ) | — | — | (493,167 | ) | ||
Net book value at December 31, 2017 | 229,829 | 215,367 | 121,854 | 91,579 | 658,629 |
(1) | Includes assets under construction of $44,858,000 at December 31, 2018 (December 31, 2017 - $17,307,000). |
(2) | Includes assets under construction of $Nil at December 31, 2018 (December 31, 2017 - $3,715,000). |
(3) | We converted Inferred Mineral Resources to Mineral Reserves at our Seabee Gold Operation and correspondingly have transferred $33,635,000 (December 31, 2017 - $45,295,000) from mineral properties not yet subject to depletion to being subject to depletion. |
(4) | 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 has three years to evaluate the Candelaria project. On January 19, 2019, we received the third installment of $1,000,000 worth of Silver One shares. |
(5) | We have changed the presentation of the Pitarrilla project in all periods presented in the tables above from exploration and evaluation assets to mineral properties not yet subject to depletion. |
SSR Mining Inc. | Financial Statements Year-End 2018 | 34 |
9. | PROPERTY, PLANT AND EQUIPMENT (Continued) |
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 |
10. | CURRENT AND DEFERRED INCOME TAX |
Years ended December 31 | 2018 | 2017 | ||
$ | $ | |||
Income before taxes | 8,090 | 74,587 | ||
Statutory tax rate | 27.00 | % | 26.00 | % |
Expected income tax | 2,184 | 19,392 | ||
Decrease resulting from: | ||||
Permanent differences | 25,408 | (17,048 | ) | |
Foreign exchange | (13,714 | ) | 4,806 | |
Differences in foreign and future tax rates | (1,086 | ) | 48,167 | |
Mining & overseas withholding tax | 4,955 | 5,134 | ||
Expired losses | 2,928 | 3,658 | ||
Restructure | 114,100 | — | ||
Change in estimates in respect of prior years | 1,501 | (484 | ) | |
Movement in deferred tax not recognized | (128,066 | ) | (60,540 | ) |
Other | (89 | ) | 36 | |
Total income tax expense | 8,121 | 3,121 | ||
Current tax expense | 8,043 | 3,094 | ||
Deferred tax expense | 78 | 27 | ||
Total income tax expense | 8,121 | 3,121 |
SSR Mining Inc. | Financial Statements Year-End 2018 | 35 |
10. | CURRENT AND DEFERRED INCOME TAX (Continued) |
Balance as at December 31, 2018 | |||||||||||||||
Net balance at beginning of year | Recognized in statement of income | Recognized in OCI | AMT refund | Net | Deferred tax assets | Deferred tax liabilities | |||||||||
$ | $ | $ | $ | $ | $ | $ | |||||||||
Marketable securities | (13,205 | ) | 376 | 13,867 | — | 1,038 | 1,038 | — | |||||||
Inventory | (7,244 | ) | 3,733 | — | — | (3,511 | ) | — | (3,511 | ) | |||||
Property, plant and equipment | (81,294 | ) | (10,452 | ) | — | — | (91,746 | ) | 940 | (92,686 | ) | ||||
Close down and restoration provision | 1,787 | 1,567 | — | — | 3,354 | 3,354 | — | ||||||||
Convertible notes | (4,056 | ) | 1,820 | — | — | (2,236 | ) | — | (2,236 | ) | |||||
Carry forward tax loss and tax credits | 21,830 | (6,469 | ) | — | — | 15,361 | 15,361 | — | |||||||
Mining and foreign withholding tax | (39,227 | ) | (1,916 | ) | — | — | (41,143 | ) | — | (41,143 | ) | ||||
Executive compensation plans | 2,065 | 1,918 | — | — | 3,983 | 3,983 | — | ||||||||
Deductibility of other taxes | 9,021 | 424 | — | — | 9,445 | 9,445 | — | ||||||||
Other | (4,253 | ) | 8,921 | 850 | (449 | ) | 5,069 | 5,200 | (131 | ) | |||||
Net deferred tax (liabilities) assets before set-off | (114,576 | ) | (78 | ) | 14,717 | (449 | ) | (100,386 | ) | 39,321 | (139,707 | ) | |||
Offset tax | — | — | — | — | — | (31,798 | ) | 31,798 | |||||||
Net deferred tax (liabilities) assets | (114,576 | ) | (78 | ) | 14,717 | (449 | ) | (100,386 | ) | 7,523 | (107,909 | ) |
SSR Mining Inc. | Financial Statements Year-End 2018 | 36 |
10. | CURRENT AND DEFERRED INCOME TAX (Continued) |
Balance as at December 31, 2017 | |||||||||||||
Net balance at beginning of year | Recognized in statement of income | Recognized in OCI | Net | Deferred tax assets | Deferred tax liabilities | ||||||||
$ | $ | $ | $ | $ | $ | ||||||||
Marketable securities | (16,949 | ) | — | 3,744 | (13,205 | ) | — | (13,205 | ) | ||||
Inventory | (1,984 | ) | (5,260 | ) | — | (7,244 | ) | — | (7,244 | ) | |||
Property, plant and equipment | (96,614 | ) | 15,320 | — | (81,294 | ) | 1,016 | (82,310 | ) | ||||
Close down and restoration provision | 3,917 | (2,130 | ) | — | 1,787 | 1,787 | — | ||||||
Convertible notes | (5,497 | ) | 1,441 | — | (4,056 | ) | (4,056 | ) | |||||
Carry forward tax loss and tax credits | 20,682 | 3,404 | (2,256 | ) | 21,830 | 21,830 | — | ||||||
Mining and foreign withholding tax | (37,151 | ) | (2,076 | ) | — | (39,227 | ) | — | (39,227 | ) | |||
Executive compensation plans | 2,582 | (517 | ) | — | 2,065 | 2,065 | — | ||||||
Deductibility of other taxes | 9,459 | (438 | ) | — | 9,021 | 9,021 | — | ||||||
Other | 5,764 | (9,771 | ) | (246 | ) | (4,253 | ) | 2,895 | (7,148 | ) | |||
Net deferred tax (liabilities) assets before set-off | (115,791 | ) | (27 | ) | 1,242 | (114,576 | ) | 38,614 | (153,190 | ) | |||
Offset tax | — | — | — | — | (38,614 | ) | 38,614 | ||||||
Net deferred tax (liabilities) assets | (115,791 | ) | (27 | ) | 1,242 | (114,576 | ) | — | (114,576 | ) |
Years ended December 31 | 2018 | 2017 | ||
$ | $ | |||
Inventory | — | 11,237 | ||
Property, plant and equipment | 3,330 | 79,336 | ||
Close down and restoration provision | 30,677 | 38,027 | ||
Carry forward tax loss and tax credits | 7,962 | 396,830 | ||
Mineral and foreign withholding tax | 567 | — | ||
Other items | 3,883 | 75,327 | ||
Unrecognized deductible temporary differences | 46,419 | 600,757 |
SSR Mining Inc. | Financial Statements Year-End 2018 | 37 |
10. | CURRENT AND DEFERRED INCOME TAX (Continued) |
As at December 31, 2018 | $ | |
Argentina | 17,324 | |
Mexico | 41,601 | |
Peru | 71 | |
Canada | 4,256 | |
U.S.A. | 9,482 | |
Tax operating losses | 72,734 |
11. | VALUE ADDED TAX RECEIVABLE |
December 31, 2018 | December 31, 2017 | |||
$ | $ | |||
Current (note 5) | 12,811 | 7,004 | ||
Non-current (note 8) | 5,991 | 6,751 | ||
18,802 | 13,755 |
SSR Mining Inc. | Financial Statements Year-End 2018 | 38 |
12. | TRADE AND OTHER PAYABLES |
December 31, 2018 | December 31, 2017 | |||
$ | $ | |||
Trade payables | 15,896 | 16,740 | ||
Accrued liabilities | 43,589 | 29,574 | ||
Accrued royalties | 4,542 | 6,276 | ||
Derivative liabilities | 2,798 | — | ||
Income taxes payable | 8,463 | 4,385 | ||
Accrued interest on convertible notes (note 14(a)) | 3,178 | 3,178 | ||
78,466 | 60,153 |
13. | PROVISIONS |
December 31, 2018 | December 31, 2017 | |||||||
Current | Non-current | Current | Non-current | |||||
$ | $ | $ | $ | |||||
Moratorium (1) | 4,570 | 14,487 | 9,085 | 36,952 | ||||
Close down and restoration provision (2) | 211 | 61,961 | 978 | 57,352 | ||||
Other provisions | 7 | — | 1,250 | — | ||||
4,788 | 76,448 | 11,313 | 94,304 |
(1) | We entered into a fiscal stability agreement with the Federal Government of Argentina in 1998 for production from the Puna Operations. 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 had asserted that the Puna Operations was subject to this duty. We had previously challenged the legality of the export duty applied to silver concentrate. |
(2) | Our close down and restoration provision relates to the restoration and closure of our mining operations and exploration and evaluation assets (note 9). |
SSR Mining Inc. | Financial Statements Year-End 2018 | 39 |
13. | PROVISIONS (Continued) |
December 31, 2018 | December 31, 2017 | |||
$ | $ | |||
Balance, beginning of year | 58,330 | 63,909 | ||
Settled during the year | (852 | ) | (926 | ) |
Accretion expense | 3,459 | 3,380 | ||
Foreign exchange gain (loss) | (504 | ) | 396 | |
Revisions and new estimated cash flows | 1,739 | (8,429 | ) | |
Balance, end of year | 62,172 | 58,330 | ||
Less: current portion | (211 | ) | (978 | ) |
Non-current close down and restoration provision | 61,961 | 57,352 |
▪ | Discount interest rates: Marigold mine 2.8% (2017 - 2.6%), Puna Operations 9.9% (2017 - 9.9%), Seabee Gold Operation 2.3% (2017 - 2.3%). |
▪ | Settlement of obligations are expected to occur over the next 20 years at the Marigold mine, 15 years at the Puna Operations and 11 years at the Seabee Gold Operation. |
▪ | A 1% change in the discount rate would increase or decrease the provision on a consolidated basis by approximately $5,559,000, while holding other assumptions consistent. |
14. | DEBT AND CREDIT FACILITY |
a) | Debt |
SSR Mining Inc. | Financial Statements Year-End 2018 | 40 |
14. | DEBT AND CREDIT FACILITY (Continued) |
December 31, 2018 | December 31, 2017 | |||
$ | $ | |||
Balance, beginning of year | 236,358 | 223,211 | ||
Accretion of discount | 14,371 | 13,147 | ||
Interest accrued in period | 7,619 | 7,619 | ||
Interest paid | (7,619 | ) | (7,619 | ) |
Balance, end of year | 250,729 | 236,358 | ||
Accrued interest outstanding (note 12) | (3,178 | ) | (3,178 | ) |
Non-current portion of Notes outstanding | 247,551 | 233,180 |
15. | SHARE CAPITAL AND SHARE-BASED PAYMENTS |
SSR Mining Inc. | Financial Statements Year-End 2018 | 41 |
15. | SHARE CAPITAL AND SHARE-BASED PAYMENTS (Continued) |
2018 | 2017 | |||||||
Number of stock options | Weighted average exercise price (C$/option) | Number of stock options | Weighted average exercise price (C$/option) | |||||
Outstanding, beginning of year | 2,976,360 | 9.35 | 3,038,707 | 8.52 | ||||
Granted | 668,664 | 11.84 | 489,305 | 12.50 | ||||
Exercised | (899,050 | ) | (7.79 | ) | (440,317 | ) | (6.60 | ) |
Expired | (56,700 | ) | (14.15 | ) | — | — | ||
Forfeited | (50,525 | ) | (12.70 | ) | (111,335 | ) | (11.25 | ) |
Outstanding, end of year | 2,638,749 | 10.35 | 2,976,360 | 9.35 |
Years ended December 31 | 2018 | 2017 |
Forfeiture rate (%) | 3.0 | 3.0 |
Dividend yield (%) | — | — |
Average risk-free interest rate (%) | 1.88 | 1.00 |
Expected life (years) | 4.2 | 4.2 |
Volatility (%) | 55.8 | 60.9 |
SSR Mining Inc. | Financial Statements Year-End 2018 | 42 |
15. | SHARE CAPITAL AND SHARE-BASED PAYMENTS (Continued) |
Stock options outstanding | Stock options exercisable | |||||||
Exercise prices (C$) | Stock options outstanding | Weighted average remaining contractual life (years) | Stock options exercisable | Weighted average exercise price (C$/option) | ||||
3.30 - 7.02 | 321,592 | 2.5 | 321,592 | 5.83 | ||||
7.03 - 7.36 | 630,045 | 3.4 | 401,717 | 7.19 | ||||
7.37 - 11.95 | 700,836 | 4.3 | 324,536 | 9.05 | ||||
11.96 - 24.41 | 986,276 | 3.7 | 443,859 | 15.56 | ||||
2,638,749 | 3.6 | 1,491,704 | 9.79 |
Years ended December 31 | 2018 | 2017 | ||
Number of DSUs | Number of DSUs | |||
Outstanding, beginning of year | 608,763 | 535,579 | ||
Granted | 107,318 | 73,184 | ||
Redeemed | (182,383 | ) | — | |
Outstanding, end of year | 533,698 | 608,763 |
SSR Mining Inc. | Financial Statements Year-End 2018 | 43 |
15. | SHARE CAPITAL AND SHARE-BASED PAYMENTS (Continued) |
Years ended December 31 | 2018 | 2017 | ||
Number of RSUs | Number of RSUs | |||
Outstanding, beginning of year | 541,006 | 704,055 | ||
Granted | 322,935 | 242,565 | ||
Settled | (276,983 | ) | (313,003 | ) |
Forfeited | (161,863 | ) | (92,611 | ) |
Outstanding, end of year | 425,095 | 541,006 |
Years ended December 31 | 2018 | 2017 | ||
Number of PSUs | Number of PSUs | |||
Outstanding, beginning of year | 391,432 | 524,550 | ||
Granted | 174,900 | 159,850 | ||
Settled | (255,232 | ) | (190,000 | ) |
Forfeited | — | (102,968 | ) | |
Outstanding, end of year | 311,100 | 391,432 |
SSR Mining Inc. | Financial Statements Year-End 2018 | 44 |
15. | SHARE CAPITAL AND SHARE-BASED PAYMENTS (Continued) |
Years ended December 31 | 2018 | 2017 | ||
$ | $ | |||
Equity-settled | ||||
Cost of inventory | 160 | 190 | ||
General and administrative expense | 1,958 | 1,988 | ||
Exploration, evaluation and reclamation expenses | 39 | 41 | ||
Cash-settled | ||||
Cost of inventory | 1,024 | 1,639 | ||
General and administrative expense | 11,412 | 2,237 | ||
Exploration, evaluation and reclamation expenses | 125 | — | ||
Total | 14,718 | 6,095 |
16. | OTHER RESERVES AND NON-CONTROLLING INTEREST |
a) | Reserves |
2018 | 2017 | |||
$ | $ | |||
Foreign currency translation reserve | ||||
At beginning of year | 781 | 781 | ||
At end of year | 781 | 781 | ||
Revaluation reserves | ||||
At beginning of year | 3,353 | (23,121 | ) | |
Gain on marketable securities at FVTOCI, net of tax | (37,686 | ) | 25,948 | |
Unrealized gain on effective portion of derivative, net of tax | (2,907 | ) | 526 | |
At end of year | (37,240 | ) | 3,353 | |
Share-based compensation reserve | ||||
At beginning of year | 50,404 | 49,524 | ||
Stock options exercised | (2,864 | ) | (1,339 | ) |
Share-based compensation | 2,156 | 2,219 | ||
At end of year | 49,696 | 50,404 | ||
Other | ||||
At beginning of year | (29,540 | ) | (28,198 | ) |
Recognition of joint venture | — | (1,342 | ) | |
At end of year | (29,540 | ) | (29,540 | ) |
Total other reserves at December 31 | (16,303 | ) | 24,998 |
SSR Mining Inc. | Financial Statements Year-End 2018 | 45 |
16. | OTHER RESERVES AND NON-CONTROLLING INTEREST (Continued) |
b) | Non-controlling Interest |
2018 | 2017 | |||
$ | $ | |||
At beginning of year | 23,043 | — | ||
Recognition of non-controlling interest | — | 18,573 | ||
Funding from non-controlling interest | 15,196 | 2,320 | ||
Total comprehensive (loss) income for the year attributable to non-controlling interest | (6,410 | ) | 2,150 | |
Total non-controlling interest at December 31 | 31,829 | 23,043 |
17. | REVENUE |
Years ended December 31 | 2018 | 2017 | ||
$ | $ | |||
Gold doré and bullion sales | 365,996 | 358,790 | ||
Concentrate sales | 57,461 | 88,823 | ||
Other revenue | (2,782 | ) | 1,160 | |
420,675 | 448,773 |
18. | OPERATING COSTS BY NATURE |
Years ended December 31 | 2018 | 2017 | ||
$ | $ | |||
Cost of inventory | 245,111 | 242,998 | ||
Depletion, depreciation and amortization | 98,719 | 102,416 | ||
Moratorium (settlement) (note 13) | — | (4,303 | ) | |
(Recovery) of inventory provision (note 7) | — | (5,710 | ) | |
Restructuring costs | — | 109 | ||
343,830 | 335,510 |
SSR Mining Inc. | Financial Statements Year-End 2018 | 46 |
18. | OPERATING COSTS BY NATURE (Continued) |
Years ended December 31 | 2018 | 2017 | ||
$ | $ | |||
Salaries and benefits | 12,157 | 9,029 | ||
Share-based compensation | 13,371 | 4,225 | ||
Consulting and professional fees | 3,036 | 2,288 | ||
Travel expense | 1,044 | 562 | ||
Rent expense | 842 | 703 | ||
Insurance expense | 676 | 569 | ||
Computer expenses | 668 | 789 | ||
Depreciation and amortization | 194 | 202 | ||
Shareholder and investor relations | 99 | 323 | ||
Listing and filing fees | 249 | 251 | ||
Directors fees and expenses | 347 | 227 | ||
Other expenses | 258 | 1,139 | ||
32,941 | 20,307 |
19. | FINANCE INCOME AND EXPENSES |
Years ended December 31 | 2018 | 2017 | ||
$ | $ | |||
Interest earned | 9,219 | 4,132 | ||
Accretion income on deferred consideration | 2,542 | 1,998 | ||
Total interest earned and other finance income | 11,761 | 6,130 |
Years ended December 31 | 2018 | 2017 | ||
$ | $ | |||
Interest expense on convertible notes (note 14) | (7,619 | ) | (7,619 | ) |
Accretion expense on convertible notes (note 14) | (14,371 | ) | (13,147 | ) |
Accretion of close down and restoration provision (note 13) | (3,459 | ) | (3,380 | ) |
Interest on moratorium | (6,212 | ) | (7,616 | ) |
Other finance expenses | (1,969 | ) | (3,108 | ) |
Total interest expense and other finance expenses | (33,630 | ) | (34,870 | ) |
SSR Mining Inc. | Financial Statements Year-End 2018 | 47 |
20. | OTHER (EXPENSES) INCOME |
Years ended December 31 | 2018 | 2017 | ||
$ | $ | |||
Loss on disposal of plant and equipment | (5,344 | ) | (3,068 | ) |
Expense related to the premium paid for shares over the prevailing market price | (2,782 | ) | — | |
Write-down of mineral properties | — | (906 | ) | |
Royalty income | — | 1,417 | ||
Other | (1,023 | ) | (510 | ) |
(9,149 | ) | (3,067 | ) |
21. | INCOME PER SHARE |
Years ended December 31 | 2018 | 2017 | ||||
$ | $ | |||||
(Loss) Income for the year | (31 | ) | 71,466 | |||
Non-controlling interest | (6,410 | ) | 2,150 | |||
Income attributable to equity holders of SSR Mining used in the calculation of income per share | 6,379 | 69,316 | ||||
Weighted average number of common shares issued (thousands) | 120,137 | 119,593 | ||||
Adjustments for dilutive instruments: | ||||||
Stock options (thousands) | 1,217 | 1,088 | ||||
Weighted average number of common shares for diluted income per share (thousands) | 121,354 | 120,681 | ||||
Basic income per share | $0.05 | $0.58 | ||||
Diluted income per share | $0.05 | $0.57 |
SSR Mining Inc. | Financial Statements Year-End 2018 | 48 |
22. | OPERATING SEGMENTS |
▪ | that engages in business activities from which it may earn revenues and incur expenses; |
▪ | whose operating results are reviewed regularly by the entity’s chief operating decision maker; and |
▪ | for which discrete financial information is available. |
SSR Mining Inc. | Financial Statements Year-End 2018 | 49 |
Year ended and at December 31, 2018 | Marigold mine | Seabee Gold Operation | Puna Operations (1) | Exploration, evaluation and development properties | Other reconciling items (2) | Total | ||||||
$ | $ | $ | $ | $ | $ | |||||||
Revenue | 250,341 | 115,655 | 54,679 | — | — | 420,675 | ||||||
Cost of inventory | (143,380 | ) | (46,054 | ) | (55,677 | ) | — | — | (245,111 | ) | ||
Depletion, depreciation and amortization | (56,748 | ) | (38,818 | ) | (3,153 | ) | — | — | (98,719 | ) | ||
Cost of sales | (200,128 | ) | (84,872 | ) | (58,830 | ) | — | — | (343,830 | ) | ||
Income from mine operations | 50,213 | 30,783 | (4,151 | ) | — | — | 76,845 | |||||
Exploration, evaluation and reclamation expenses | (769 | ) | (7,703 | ) | 919 | (2,857 | ) | (3,599 | ) | (14,009 | ) | |
Operating income (loss) | 43,399 | 20,657 | (8,457 | ) | (2,801 | ) | (22,903 | ) | 29,895 | |||
Income (loss) before income tax | 26,239 | 20,204 | (9,066 | ) | (2,751 | ) | (26,536 | ) | 8,090 | |||
Total assets | 478,187 | 448,891 | 185,298 | 71,830 | 336,932 | 1,521,138 | ||||||
Non-current assets | 235,242 | 321,802 | 121,890 | 69,263 | 26,498 | 774,695 | ||||||
Total liabilities | (79,210 | ) | (93,017 | ) | (62,243 | ) | (6,330 | ) | (274,362 | ) | (515,162 | ) |
Year ended and at December 31, 2017 | Marigold mine | Seabee Gold Operation | Puna Operations (1) | Exploration, evaluation and development properties | Other reconciling items (2) | Total | ||||||
$ | $ | $ | $ | $ | $ | |||||||
Revenue | 250,825 | 108,334 | 89,614 | — | — | 448,773 | ||||||
Cost of inventory | (129,176 | ) | (51,683 | ) | (62,139 | ) | — | — | (242,998 | ) | ||
Depletion, depreciation and amortization | (54,983 | ) | (40,375 | ) | (7,058 | ) | — | — | (102,416 | ) | ||
Export duties reversal (note 13) | — | — | 4,303 | — | — | 4,303 | ||||||
Restructuring costs (note 18) | — | — | (109 | ) | — | — | (109 | ) | ||||
Inventory (provision) reversal (note 7) | — | (632 | ) | 6,342 | — | — | 5,710 | |||||
Cost of sales | (184,159 | ) | (92,690 | ) | (58,661 | ) | — | — | (335,510 | ) | ||
Income from mine operations | 66,666 | 15,644 | 30,953 | — | — | 113,263 | ||||||
Exploration, evaluation and reclamation expenses | (1,875 | ) | (5,050 | ) | (324 | ) | (8,357 | ) | (375 | ) | (15,981 | ) |
Impairment reversal (note 9) | — | — | 24,357 | — | — | 24,357 | ||||||
Operating income (loss) | 64,935 | 10,594 | 52,788 | (8,360 | ) | (18,625 | ) | 101,332 | ||||
Income (loss) before income tax | 63,959 | 10,126 | 46,379 | (14,840 | ) | (31,037 | ) | 74,587 | ||||
Total assets | 436,815 | 418,210 | 200,590 | 72,825 | 409,014 | 1,537,454 | ||||||
Non-current assets | 222,800 | 346,647 | 77,112 | 71,782 | 798 | 719,139 | ||||||
Total liabilities | (73,526 | ) | (92,050 | ) | (77,850 | ) | (6,496 | ) | (263,604 | ) | (513,526 | ) |
(1) | Following the formation of the Puna Operations joint venture in 2017, the Pirquitas property was combined with the Chinchillas project into the Puna Operations operating segment and the segment has been amended accordingly. We consolidate Puna Operations which includes non-controlling interest portion of revenues, and income (loss) from mine operations for the year ended December 31, 2018 of $13,077,000 and $(1,243,000), respectively, (2017: $12,361,000 and $4,039,000) |
(2) | Other reconciling items refer to items that are not reported as part of segment performance as they are managed on a corporate basis. |
SSR Mining Inc. | Financial Statements Year-End 2018 | 50 |
22. | OPERATING SEGMENTS (Continued) |
Years ended December 31 | 2018 | 2017 |
% | % | |
Gold | 87 | 80 |
Silver | 12 | 20 |
Zinc | 1 | — |
Lead | — | — |
December 31, 2018 | December 31, 2017 | |||
$ | $ | |||
Canada | 357,783 | 348,455 | ||
United States | 236,054 | 224,612 | ||
Argentina | 113,534 | 79,250 | ||
Mexico | 66,749 | 66,131 | ||
Other | 575 | 691 | ||
Total | 774,695 | 719,139 |
SSR Mining Inc. | Financial Statements Year-End 2018 | 51 |
23. | FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS |
At December 31, 2018 | Amortized cost | FVTPL | FVTOCI | Total | ||||
$ | $ | $ | $ | |||||
Financial assets | ||||||||
Cash and cash equivalents (note 4) | — | 419,212 | — | 419,212 | ||||
Trade receivables (1) (note 5) | — | 11,287 | — | 11,287 | ||||
Marketable securities (note 6) | — | — | 29,542 | 29,542 | ||||
Other financial assets (note 8) | 25,172 | 3,711 | — | 28,883 | ||||
Total financial assets | 25,172 | 434,210 | 29,542 | 488,924 | ||||
Financial liabilities | ||||||||
Trade and other payables | 54,118 | 15,885 | — | 70,003 | ||||
Non-current portion of debt (note 14(a)) | 247,551 | — | — | 247,551 | ||||
Total financial liabilities | 301,669 | 15,885 | — | 317,554 |
At December 31, 2017 | Amortized cost | FVTPL | FVTOCI | Total | ||||
$ | $ | $ | $ | |||||
Financial assets | ||||||||
Cash and cash equivalents (note 4) | — | 459,864 | — | 459,864 | ||||
Trade receivables (1) (note 5) | — | 14,848 | — | 14,848 | ||||
Marketable securities (note 6) | — | — | 114,001 | 114,001 | ||||
Other financial assets (note 8) | 14,773 | 7,626 | — | 22,399 | ||||
Total financial assets | 14,773 | 482,338 | 114,001 | 611,112 | ||||
Financial liabilities | ||||||||
Trade and other payables | 45,759 | 10,009 | — | 55,768 | ||||
Non-current portion of debt (note 14(a)) | 233,180 | — | — | 233,180 | ||||
Total financial liabilities | 278,939 | 10,009 | — | 288,948 |
(1) | Certain trade receivables are classified as FVTPL due to the derivative identified through provisional pricing arrangements discussed in note 2(f). |
SSR Mining Inc. | Financial Statements Year-End 2018 | 52 |
23. | FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS (Continued) |
December 31, 2018 | December 31, 2017 | |||||||
Carrying value | Fair value | Carrying value | Fair value | |||||
$ | $ | $ | $ | |||||
Trade receivables | 11,287 | 11,287 | 14,848 | 14,848 | ||||
Marketable securities (note 6) | 29,542 | 29,542 | 114,001 | 114,001 | ||||
Other financial assets (note 8) | 28,883 | 28,883 | 22,399 | 22,399 | ||||
Non-current portion of debt (note 14(a)) (1) | (247,551 | ) | (263,675 | ) | (233,180 | ) | (259,578 | ) |
(177,839 | ) | (193,963 | ) | (81,932 | ) | (108,330 | ) |
Fair value at December 31, 2018 | ||||||||
Quoted prices in active market (1) | Significant other observable inputs (2) | Significant unobservable inputs (3) | Total | |||||
$ | $ | $ | $ | |||||
Recurring measurements | ||||||||
Trade receivables | — | 11,287 | — | 11,287 | ||||
Marketable securities (note 6) | 29,542 | — | — | 29,542 | ||||
Other financial assets | — | — | 3,711 | 3,711 | ||||
Accrued liabilities | — | (16,649 | ) | — | (16,649 | ) | ||
29,542 | (5,362 | ) | 3,711 | 27,891 | ||||
Fair values disclosed | ||||||||
Convertible notes | (263,675 | ) | — | — | (263,675 | ) | ||
(263,675 | ) | — | — | (263,675 | ) |
SSR Mining Inc. | Financial Statements Year-End 2018 | 53 |
23. | FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS (Continued) |
Fair value at December 31, 2017 | ||||||||
Quoted prices in active market (1) | Significant other observable inputs (2) | Significant unobservable inputs (3) | Total | |||||
$ | $ | $ | $ | |||||
Recurring measurements | ||||||||
Trade receivables | — | 14,848 | — | 14,848 | ||||
Marketable securities (note 6) | 114,001 | — | — | 114,001 | ||||
Other financial assets | — | — | 6,338 | 6,338 | ||||
Derivative assets | — | 1,287 | — | 1,287 | ||||
Accrued liabilities | — | (10,009 | ) | — | (10,009 | ) | ||
114,001 | 6,126 | 6,338 | 126,465 | |||||
Non-recurring measurement | ||||||||
Deferred consideration | — | — | 7,399 | 7,399 | ||||
— | — | 7,399 | 7,399 | |||||
Fair values disclosed | ||||||||
Convertible notes | (259,578 | ) | — | — | (259,578 | ) | ||
(259,578 | ) | — | — | (259,578 | ) |
24. | FINANCIAL RISK MANAGEMENT |
SSR Mining Inc. | Financial Statements Year-End 2018 | 54 |
24. | FINANCIAL RISK MANAGEMENT (Continued) |
▪ | global or regional consumption patterns; |
▪ | the supply of, and demand for, these commodities; |
▪ | speculative activities; |
▪ | the availability and costs of substitutes; |
▪ | inflation; and |
▪ | political and economic conditions, including interest rates and currency values. |
SSR Mining Inc. | Financial Statements Year-End 2018 | 55 |
24. | FINANCIAL RISK MANAGEMENT (Continued) |
2019 | 2020 | |||
Gallons hedged (in thousands) | 5,364 | 3,600 | ||
Estimated usage | 52.6 | % | 35.3 | % |
Floor price ($/gallon) | 1.70 | 1.75 | ||
Cap price ($/gallon) | 2.34 | 2.36 |
2019 | 2020 | |||
Litres hedged (in thousands) | 3,188 | — | ||
Estimated usage | 75 | % | — | |
Floor price ($/litre) | 0.46 | — | ||
Cap price ($/litre) | 0.55 | — |
SSR Mining Inc. | Financial Statements Year-End 2018 | 56 |
24. | FINANCIAL RISK MANAGEMENT (Continued) |
December 31, 2018 | ||||
Canadian dollar | Argentine peso | |||
Cash | 7,982 | 1,604 | ||
Value added tax receivable | 145 | 17,039 | ||
Trade and other payables (excluding VAT and income taxes) | (22,974 | ) | (9,908 | ) |
Provisions | — | (19,056 | ) | |
Total | (14,847 | ) | (10,321 | ) |
December 31, 2017 | ||||
Canadian dollar | Argentine peso | |||
Cash | 5,342 | 17,223 | ||
Value added tax receivable | 206 | 12,242 | ||
Other financial assets | 200 | 884 | ||
Trade and other payables (excluding VAT and income taxes) | (17,017 | ) | (5,021 | ) |
Provisions | — | (47,287 | ) | |
Total | (11,269 | ) | (21,959 | ) |
SSR Mining Inc. | Financial Statements Year-End 2018 | 57 |
24. | FINANCIAL RISK MANAGEMENT (Continued) |
2019 | 2020 | |||
Notional amount (in thousands of Canadian dollars) | 54,140 | 30,000 | ||
Estimated usage | 71.2 | % | 40.3 | % |
Floor level (Canadian dollars per $1 U.S. dollar) | 1.2500 | 1.2614 | ||
Cap level (Canadian dollars per $1 U.S. dollar) | 1.3348 | 1.3710 |
Years ended December 31 | 2018 | 2017 | ||
$ | $ | |||
Canadian dollar | 1,084 | 701 | ||
Argentine peso | 715 | 1,460 |
SSR Mining Inc. | Financial Statements Year-End 2018 | 58 |
24. | FINANCIAL RISK MANAGEMENT (Continued) |
December 31, 2018 | December 31, 2017 | |||
$ | $ | |||
Cash and cash equivalents | 419,212 | 459,864 | ||
Value added tax receivable | 18,802 | 13,755 | ||
Trade receivables and other assets | 11,287 | 14,848 | ||
Other financial assets | 28,883 | 22,399 | ||
478,184 | 510,866 |
SSR Mining Inc. | Financial Statements Year-End 2018 | 59 |
24. | FINANCIAL RISK MANAGEMENT (Continued) |
Payments due by period (as at December 31, 2018) | At December 31, 2017 | |||||||||||
Less than one year | 1 - 3 years | 4-5 years | After 5 years | Total | Total | |||||||
$ | $ | $ | $ | $ | $ | |||||||
Trade and other payables | 70,003 | — | — | — | 70,003 | 52,590 | ||||||
Moratorium | 4,570 | 14,487 | — | — | 19,057 | 46,037 | ||||||
Notes (i) | — | 265,000 | — | — | 265,000 | 265,000 | ||||||
Interest on convertible notes (i) | 7,619 | 3,809 | — | — | 11,428 | 19,047 | ||||||
Total contractual obligations | 82,192 | 283,296 | — | — | 365,488 | 382,674 |
(i) | The Notes mature in 2033 but are redeemable in part or in full at the option of the holder on February 1 at each of 2020, 2023, and 2028, or upon fundamental corporate changes. They are also redeemable by us in part or in full on and after February 1, 2018 (note 14). |
▪ | to safeguard our ability to continue as a going concern in order to develop and operate our current projects and pursue strategic growth initiatives; and |
▪ | to maintain a flexible capital structure which lowers the cost of capital. |
SSR Mining Inc. | Financial Statements Year-End 2018 | 60 |
25. | RELATED PARTY TRANSACTIONS |
Years ended December 31 | 2018 | 2017 | ||
$ | $ | |||
Salaries and other short-term employee benefits | 2,589 | 2,240 | ||
Post-employment benefits | 83 | 30 | ||
Termination benefits | 1,379 | — | ||
Share-based compensation (i) | 10,819 | 3,176 | ||
Total compensation | 14,870 | 5,446 |
(i) | Share-based compensation includes mark-to-market adjustments on cumulative DSU and PSU positions as reported in the consolidated statements of (loss) income. |
Subsidiary | Location | Ownership | Principal project or purpose |
Marigold Mining Company | USA | 100% | Marigold |
SGO Mining Inc. (formerly Claude Resources Inc.) | Canada | 100% | Seabee Gold Operation |
Puna Operations Inc. | Canada | 75% | Puna Operations |
SSR Durango, S.A. de C.V. | Mexico | 100% | Pitarrilla |
Intertrade Metals Limited Partnership | Canada | 100% | Sales and marketing |
26. | SUPPLEMENTAL CASH FLOW INFORMATION |
Years ended December 31 | 2018 | 2017 | ||
$ | $ | |||
Trade and other receivables | (4,234 | ) | 23,232 | |
Inventory | (40,144 | ) | (10,973 | ) |
Trade and other payables | 18,753 | (10,117 | ) | |
Provisions | (5,309 | ) | (7,028 | ) |
(30,934 | ) | (4,886 | ) |
SSR Mining Inc. | Financial Statements Year-End 2018 | 61 |
26. | SUPPLEMENTAL CASH FLOW INFORMATION (Continued) |
Years ended December 31 | 2018 | 2017 | ||
$ | $ | |||
Share-based payments | 2,157 | 2,219 | ||
Export duty adjustment in cost of sales | — | (4,303 | ) | |
Change in estimate of close down and restoration provision | 1,580 | 141 | ||
Write down of fixed assets | 2,771 | 1,719 | ||
Other | 375 | 3,834 | ||
6,883 | 3,610 |
Years ended December 31 | 2018 | 2017 | ||
$ | $ | |||
Marketable securities received for sale of exploration and evaluation assets (note 6) | 1,751 | 992 | ||
Transfer of share-based payment reserve upon exercise of stock options | (2,864 | ) | (1,339 | ) |
Acquisition of Chinchillas mineral property (note 3) | — | 28,839 |
SSR Mining Inc. | Financial Statements Year-End 2018 | 62 |
SSR Mining Inc. | MD&A Year-End 2018 | 1 |
CONTENTS | ||
1 | ||
2 | ||
3 | ||
4 | ||
5 | ||
6 | ||
7 | ||
8 | ||
9 | ||
10 | ||
11 | ||
12 | ||
13 |
SSR Mining Inc. | MD&A Year-End 2018 | 2 |
▪ | Achieved annual production and cost guidance: Achieved initial guidance for the seventh consecutive year by delivering gold equivalent production of over 345,000 ounces at cash costs of $736 per payable gold equivalent ounce sold. |
▪ | Continued our track record of Mineral Reserves growth: Successful exploration activities in 2018 increased gold Mineral Reserves at the Marigold mine to 3.3 million ounces and at the Seabee Gold Operation to 608,000 ounces. |
▪ | Delivered record annual gold production at Seabee: The operation achieved its fifth consecutive annual production record, producing 95,602 ounces of gold, exceeding the top end of our upwardly revised annual guidance. Annual cash costs were $505 per payable ounce of gold sold. |
▪ | Strong operating performance at Marigold: Delivered quarterly gold production of 54,306 ounces, resulting in annual production of 205,161 ounces of gold. Reported annual cash costs of $723 per payable ounce of gold sold, at the lower end of our improved guidance. |
▪ | Delivered updated Marigold life of mine plan: Released updated plan on June 18, 2018, outlining a ten-year mine life, 30% growth in production through 2021, and robust economics. |
▪ | Declared commercial production at Chinchillas: The mine achieved commercial production on December 1, 2018, marking a major milestone as we reached sustainable ore delivery from the Chinchillas mine to the Pirquitas plant. In December 2018, the Pirquitas mill operated at 3,605 tpd, processing exclusively Chinchillas ore. |
▪ | Investment in high-grade Las Chispas project: In the fourth quarter we purchased 9.7% of the issued and outstanding common shares of SilverCrest Metals Inc. for $23 million. SilverCrest's Las Chispas project represents exposure to an exciting high-grade development project with exploration upside in a favourable mining jurisdiction and compelling near-term development catalysts. |
▪ | Balance sheet remains strong: Cash and marketable securities totaled $449 million at year-end 2018 after project development and investments for 2019 growth and beyond. |
SSR Mining Inc. | MD&A Year-End 2018 | 3 |
Operating Guidance | Marigold mine | Seabee Gold Operation | Puna Operations (75% interest) (4) | ||||
Gold Production | oz | 200,000 - 220,000 | 95,000 - 110,000 | — | |||
Silver Production (Attributable) | Moz | — | — | 6.0 - 7.0 (4.5 - 5.3) | |||
Lead Production (Attributable) | Mlb | — | — | 20.0 - 26.0 (15.0 - 19.5) | |||
Zinc Production (Attributable) | Mlb | — | — | 15.0 - 20.0 (11.3 - 15.0) | |||
Cash Costs per Payable Ounce Sold (1) | $/oz | 750 - 790 | 525 - 555 | 8.00 - 10.00 | |||
Sustaining Capital Expenditures (2) | $M | 35 | 25 | 12 | |||
Capitalized Stripping / Capitalized Development | $M | 20 | 12 | 20 | |||
Exploration Expenditures (3) | $M | 7.5 | 6 | 1 | |||
(1) | We report the non-GAAP financial measure of cash costs per payable ounce of gold and silver sold to manage and evaluate operating performance at the Marigold mine, the Seabee Gold Operation and Puna Operations. See “Non-GAAP Financial Measures” in Section 10. |
(2) | Sustaining capital expenditures for Puna Operations exclude initial capital expenditures related to the development of the Chinchillas project. |
(3) | Includes capitalized and expensed exploration expenditures. |
(4) | Shown on a 100% basis unless otherwise indicated by "attributable" which is shown on a 75% basis. |
SSR Mining Inc. | MD&A Year-End 2018 | 4 |
SSR Mining Inc. | MD&A Year-End 2018 | 5 |
SSR Mining Inc. | MD&A Year-End 2018 | 6 |
Selected Financial Data (1) | Three Months Ended December 31 | Year Ended December 31 | ||||||
2018 | 2017 | 2018 | 2017 | |||||
$ | $ | $ | $ | |||||
Revenue | 103,712 | 107,881 | 420,675 | 448,773 | ||||
Income from mine operations (1) | 16,536 | 21,190 | 76,845 | 113,263 | ||||
Gross margin (%) | 16 | 20 | 18 | 25 | ||||
Operating income (1) | 3,061 | 19,937 | 29,895 | 101,332 | ||||
Net (loss) income | (2,544 | ) | 16,850 | (31 | ) | 71,466 | ||
Basic attributable (loss) income per share | (0.03 | ) | 0.14 | 0.05 | 0.58 | |||
Adjusted attributable income before tax (1) | (345 | ) | 3,542 | 28,586 | 46,281 | |||
Adjusted attributable net income (1) | 4,369 | 2,862 | 27,961 | 40,074 | ||||
Adjusted basic attributable income per share (1) | 0.04 | 0.02 | 0.23 | 0.34 | ||||
Cash (used in) generated by operating activities | (3,744 | ) | 45,175 | 59,769 | 144,725 | |||
Cash used in investing activities | (63,028 | ) | (9,633 | ) | (115,930 | ) | (15,494 | ) |
Cash generated by financing activities | 11,903 | 1,942 | 20,516 | 4,601 | ||||
Financial Position | December 31, 2018 | December 31, 2017 | ||||||
Cash and cash equivalents | 419,212 | 459,864 | ||||||
Marketable securities | 29,542 | 114,001 | ||||||
Current assets | 733,119 | 799,597 | ||||||
Current liabilities | 83,254 | 71,466 | ||||||
Working capital (1) | 649,865 | 728,131 | ||||||
Total assets | 1,521,138 | 1,537,454 |
(1) | We report non-GAAP financial measures including income from mine operations, operating income, adjusted attributable income before tax, adjusted attributable net income, adjusted basic attributable income per share, to manage and evaluate our operating performance. See "Non-GAAP Financial Measures" in Section 10. |
SSR Mining Inc. | MD&A Year-End 2018 | 7 |
SSR Mining Inc. | MD&A Year-End 2018 | 8 |
SSR Mining Inc. | MD&A Year-End 2018 | 9 |
Three months ended | Total | |||||||||||||
Operating data | December 31, 2018 | September 30, 2018 | June 30, 2018 | March 31, 2018 | December 31, 2017 | 2018 | 2017 | |||||||
Consolidated production and sales: | ||||||||||||||
Gold produced (oz) | 74,779 | 86,290 | 73,018 | 66,676 | 76,995 | 300,763 | 286,238 | |||||||
Silver produced ('000 oz) | 1,189 | 666 | 954 | 938 | 1,169 | 3,747 | 6,177 | |||||||
Silver produced (attributable) ('000 oz) (1) | 892 | 500 | 716 | 704 | 877 | 2,812 | 5,330 | |||||||
Zinc produced ('000 lb) (2) | 4,014 | 3,241 | 1,520 | — | — | 8,775 | — | |||||||
Lead produced ('000 lb) (3) | 2,735 | 372 | — | — | — | 3,107 | — | |||||||
Gold sold (oz) | 72,261 | 88,787 | 67,156 | 62,090 | 75,389 | 290,294 | 286,279 | |||||||
Silver sold ('000 oz) | 932 | 623 | 1,142 | 1,064 | 820 | 3,761 | 5,994 | |||||||
Silver sold (attributable) ('000 oz) (1) | 699 | 467 | 857 | 798 | 615 | 2,821 | 5,088 | |||||||
Zinc sold ('000 lb) (2) | 1,983 | 382 | — | — | — | 2,365 | — | |||||||
Lead sold ('000 lb) (3) | 1,059 | — | — | — | — | 1,059 | — | |||||||
Cash costs ($/oz) - payable gold from Marigold mine (4) | 760 | 711 | 700 | 720 | 699 | 723 | 647 | |||||||
Cash costs ($/oz) - payable gold from Seabee Gold Operation (4) | 502 | 447 | 616 | 481 | 605 | 505 | 602 | |||||||
Cash costs ($/oz) - payable silver from Puna Operations (4) | 15.02 | 17.41 | 14.73 | 17.07 | 16.36 | 15.91 | 13.07 | |||||||
Gold equivalent production (oz) (5) | 88,718 | 94,808 | 85,082 | 78,482 | 92,594 | 347,090 | 393,325 | |||||||
Gold equivalent production (attributable) (oz) (1,5) | 85,236 | 92,685 | 82,072 | 75,537 | 88,698 | 336,208 | 358,862 | |||||||
Realized gold price ($/oz) (4) | 1,230 | 1,208 | 1,304 | 1,334 | 1,271 | 1,263 | 1,255 | |||||||
Realized silver price ($/oz) (4) | 14.42 | 15.45 | 16.49 | 16.79 | 16.96 | 15.92 | 17.10 | |||||||
Consolidated costs: | ||||||||||||||
Cash Costs per equivalent gold ounce sold ($/oz) (4,5) | 757 | 682 | 758 | 766 | 737 | 736 | 703 | |||||||
AISC per equivalent gold ounce sold ($/oz) (4,5) | 1,168 | 978 | 1,121 | 1,115 | 1,008 | 1,088 | 972 | |||||||
Financial data ($000s) | ||||||||||||||
Revenue | 103,712 | 115,033 | 104,028 | 97,902 | 107,881 | 420,675 | 448,773 | |||||||
Income from mine operations | 16,536 | 21,875 | 21,203 | 17,231 | 21,190 | 76,845 | 113,263 |
(1) | Figures are on a 75% basis for attributable production and sales at Puna Operations. |
(2) | Data for zinc production and sales relate only to zinc in zinc concentrate. |
(3) | Data for lead production and sales relate only to lead in lead concentrate. |
(4) | We report the non-GAAP financial measures of realized metal price, cash costs, and all-in sustaining costs ("AISC") per payable ounce of precious metals sold to manage and evaluate operating performance at our mines. For a better understanding and a reconciliation of these measures to cost of sales, as shown in our Consolidated Statements of Comprehensive (Loss) Income, please refer to “Non-GAAP Financial Measures” in Section 10. |
(5) | Gold equivalent ounces have been established using the realized metal prices per payable ounce of precious metals sold in the period and applied to the recovered silver metal content produced by the mines. Zinc and lead production are not included in gold equivalent ounces produced. |
SSR Mining Inc. | MD&A Year-End 2018 | 10 |
Three months ended | Total | |||||||||||
Operating data | December 31, 2018 | September 30, 2018 | June 30, 2018 | March 31, 2018 | 2018 | 2017 | ||||||
Total material mined (kt) | 17,039 | 21,284 | 15,958 | 16,150 | 70,431 | 69,011 | ||||||
Waste removed (kt) | 11,361 | 14,411 | 8,083 | 9,052 | 42,907 | 43,422 | ||||||
Total ore stacked (kt) | 5,679 | 6,873 | 7,875 | 7,099 | 27,526 | 25,589 | ||||||
Strip ratio | 2.0 | 2.1 | 1.0 | 1.3 | 1.6 | 1.7 | ||||||
Mining cost ($/t mined) | 1.86 | 1.51 | 1.92 | 1.80 | 1.76 | 1.68 | ||||||
Gold stacked grade (g/t) | 0.34 | 0.32 | 0.42 | 0.37 | 0.37 | 0.35 | ||||||
Processing cost ($/t processed) | 1.27 | 1.12 | 0.86 | 0.93 | 1.03 | 0.92 | ||||||
Gold recovery (%) | 72.9 | 72.3 | 74.4 | 73.6 | 73.5 | 73.0 | ||||||
General and admin costs ($/t processed) | 0.51 | 0.50 | 0.41 | 0.42 | 0.45 | 0.46 | ||||||
Gold produced (oz) | 54,306 | 58,459 | 49,436 | 42,960 | 205,161 | 202,240 | ||||||
Gold sold (oz) | 50,550 | 59,612 | 46,644 | 42,078 | 198,884 | 200,192 | ||||||
Realized gold price ($/oz) (1) | 1,227 | 1,207 | 1,304 | 1,331 | 1,261 | 1,254 | ||||||
Cash costs ($/oz) (1) | 760 | 711 | 700 | 720 | 723 | 647 | ||||||
AISC ($/oz) (1) | 995 | 965 | 981 | 954 | 974 | 896 | ||||||
Financial data ($000s) | ||||||||||||
Revenue | 61,861 | 71,848 | 60,752 | 55,880 | 250,341 | 250,825 | ||||||
Income from mine operations | 9,977 | 13,254 | 14,670 | 12,312 | 50,213 | 66,666 | ||||||
Capital expenditures (2) | 8,328 | 25,461 | 14,481 | 4,665 | 52,935 | 20,364 | ||||||
Capitalized stripping | 1,208 | 2,529 | 850 | 2,902 | 7,489 | 22,863 | ||||||
Exploration expenditures (3) | 2,096 | 2,956 | 3,243 | 1,914 | 10,209 | 4,900 |
(1) | We report the non-GAAP financial measures of realized gold price, cash costs and AISC per payable ounce of gold sold to manage and evaluate operating performance at the Marigold mine. For a better understanding and a reconciliation of these measures to cost of sales, as shown in our Consolidated Statements of (Loss) Income, please refer to “Non-GAAP Financial Measures” in Section 10. |
(2) | Includes expansion capital expenditure of $22 million for the twelve months ended December 31, 2018. |
(3) | Includes capitalized and expensed exploration expenditures. |
SSR Mining Inc. | MD&A Year-End 2018 | 11 |
SSR Mining Inc. | MD&A Year-End 2018 | 12 |
Three months ended | Total | |||||||||||
Operating data | December 31, 2018 | September 30, 2018 | June 30, 2018 | March 31, 2018 | 2018 | 2017 | ||||||
Total ore milled (t) | 86,447 | 88,273 | 84,010 | 93,269 | 351,999 | 330,415 | ||||||
Ore milled per day (t/day) | 940 | 959 | 923 | 1,036 | 964 | 905 | ||||||
Gold mill feed grade (g/t) | 10.20 | 9.52 | 7.95 | 8.95 | 9.16 | 8.25 | ||||||
Mining cost ($/t mined) | 57 | 48 | 60 | 59 | 56 | 68 | ||||||
Processing cost ($/t processed) | 26 | 26 | 27 | 21 | 25 | 23 | ||||||
Gold recovery (%) | 97.6 | 97.1 | 97.3 | 97.4 | 97.4 | 97.4 | ||||||
General and admin cost ($/t processed) | 63 | 47 | 62 | 53 | 56 | 54 | ||||||
Gold produced (oz) | 20,473 | 27,831 | 23,582 | 23,716 | 95,602 | 83,998 | ||||||
Gold sold (oz) (1) | 21,711 | 29,175 | 20,512 | 20,012 | 91,410 | 86,087 | ||||||
Realized gold price ($/oz) (2) | 1,236 | 1,210 | 1,306 | 1,340 | 1,267 | 1,259 | ||||||
Cash costs ($/oz) (2) | 502 | 447 | 616 | 481 | 505 | 602 | ||||||
AISC ($/oz) (2) | 743 | 596 | 854 | 896 | 755 | 843 | ||||||
Financial data ($000s) | ||||||||||||
Revenue | 26,890 | 35,270 | 26,706 | 26,789 | 115,655 | 108,334 | ||||||
Income from mine operations | 7,347 | 11,061 | 5,703 | 6,672 | 30,783 | 15,644 | ||||||
Capital expenditures | 625 | 968 | 1,035 | 4,426 | 7,054 | 7,190 | ||||||
Capitalized development | 2,910 | 1,812 | 2,069 | 2,283 | 9,074 | 8,294 | ||||||
Exploration expenditures (3) | 1,661 | 2,860 | 2,745 | 2,032 | 9,298 | 5,959 |
(1) | Beginning with the first quarter of 2018, the holder of the 3% net smelter return royalty elected to receive its royalty in-kind and we will no longer report these ounces within gold sold. |
(2) | We report the non-GAAP financial measures of realized gold price, cash costs and AISC per payable ounce of gold sold to manage and evaluate operating performance at the Seabee Gold Operation. For a better understanding and a reconciliation of these measures to cost of sales, as shown in our Consolidated Statements of Comprehensive (Loss) Income, please refer to “Non-GAAP Financial Measures” in Section 10. |
(3) | Includes capitalized and expensed exploration expenditures. |
SSR Mining Inc. | MD&A Year-End 2018 | 13 |
SSR Mining Inc. | MD&A Year-End 2018 | 14 |
Three months ended | Total | |||||||||||
Operating data | December 31, 2018 | September 30, 2018 | June 30, 2018 | March 31, 2018 | 2018 | 2017 | ||||||
Total material mined (kt) (1) | 897 | — | — | — | 897 | — | ||||||
Waste removed (kt) (1) | 696 | — | — | — | 696 | — | ||||||
Strip ratio (1) | 3.5 | — | — | — | 3.5 | — | ||||||
Mining cost ($/t mined) (1) | 2.61 | — | — | — | 2.61 | — | ||||||
Ore milled (kt) | 342 | 308 | 396 | 374 | 1,420 | 1,798 | ||||||
Silver mill feed grade (g/t) | 133 | 96 | 110 | 115 | 114 | 152 | ||||||
Zinc mill feed grade (%) | 1.14 | 1.25 | 0.71 | — | 0.84 | — | ||||||
Lead mill feed grade (%) (1) | 0.92 | — | — | — | 0.92 | — | ||||||
Processing cost ($/t milled) | 22.18 | 20.87 | 17.26 | 15.34 | 18.72 | 13.00 | ||||||
Silver recovery (%) | 81.5 | 69.9 | 68.1 | 67.7 | 72.1 | 70.3 | ||||||
Zinc recovery (%) | 49.5 | 38.1 | 31.5 | — | 39.3 | — | ||||||
Lead recovery (%) (1) | 83.1 | — | — | — | 83.1 | — | ||||||
General and admin cost ($/t milled) | 8.16 | 7.98 | 7.07 | 6.33 | 7.34 | 5.19 | ||||||
Silver produced ('000 oz) | 1,189 | 666 | 954 | 938 | 3,747 | 6,177 | ||||||
Silver sold ('000 oz) | 932 | 623 | 1,142 | 1,064 | 3,761 | 5,994 | ||||||
Zinc produced ('000 lb) (2) | 4,014 | 3,241 | 1,520 | — | 8,775 | — | ||||||
Zinc sold ('000 lb) (2) | 1,983 | 382 | — | — | 2,365 | — | ||||||
Lead produced ('000 lb) (3) | 2,735 | 372 | — | — | 3,107 | — | ||||||
Lead sold ('000 lb) (3) | 1,059 | — | — | — | 1,059 | — | ||||||
Realized silver price ($/oz) (4) | 14.42 | 15.45 | 16.49 | 16.79 | 15.92 | 17.10 | ||||||
Cash costs ($/oz) (4,5) | 15.02 | 17.41 | 14.73 | 17.07 | 15.91 | 13.07 | ||||||
AISC ($/oz) (4,5) | 20.45 | 22.39 | 17.66 | 18.37 | 19.33 | 14.30 | ||||||
Financial Data ($000s) | ||||||||||||
Revenue | 14,961 | 7,915 | 16,570 | 15,233 | 54,679 | 89,614 | ||||||
(Loss) Income from mine operations | (788 | ) | (2,440 | ) | 830 | (1,753 | ) | (4,151 | ) | 30,953 | ||
Capital expenditures | 3,849 | 2,390 | 2,652 | 789 | 9,680 | 4,604 | ||||||
Deferred stripping | — | — | — | — | — | — | ||||||
Exploration expenditures (6) | 21 | 6 | 429 | 6 | 462 | — |
(1) | Data is for the period subsequent to December 1, 2018, the date upon which commercial production was declared at the Chinchillas mine. |
(2) | Data for zinc production and sales relate only to zinc in zinc concentrate. |
(3) | Data for lead production and sales relate only to lead in lead concentrate. |
(4) | We report the non-GAAP financial measures of realized metal prices, cash costs and AISC per payable ounce of precious metal sold to manage and evaluate operating performance at Puna Operations. For a better understanding and a reconciliation of these measures to cost of sales, as shown in our Consolidated Statements of (Loss) Income, please refer to “Non-GAAP Financial Measures” in Section 10 of our MD&A. |
(5) | Cash costs and AISC per payable ounce of silver sold include stockpile inventory costs previously incurred of $5.30 for the three months ended December 31, 2017 (September 31, 2017 - $5.20, June 30, 2017 - $3.30, March 31, 2017 - $2.00) and $3.90 for the year ended December 31, 2017. |
(6) | Includes capitalized and expensed exploration expenditures. |
SSR Mining Inc. | MD&A Year-End 2018 | 15 |
SSR Mining Inc. | MD&A Year-End 2018 | 16 |
SSR Mining Inc. | MD&A Year-End 2018 | 17 |
Years ended December 31 | |||||||||
2018 | 2017 | 2016 (1) | |||||||
$ | $ | $ | |||||||
Revenue | 420,675 | 448,773 | 490,986 | ||||||
Cost of sales | (343,830 | ) | (335,510 | ) | (336,980 | ) | |||
Income from mine operations | 76,845 | 113,263 | 154,006 | ||||||
Impairment reversal | — | 24,357 | — | ||||||
Operating income | 29,895 | 101,332 | 112,605 | ||||||
Net (loss) income | (31 | ) | 71,466 | 64,957 | |||||
Basic income per share attributable to equity holders of SSR Mining | 0.05 | 0.58 | 0.63 | ||||||
Diluted income per share attributable to equity holders of SSR Mining | 0.05 | 0.57 | 0.62 |
SSR Mining Inc. | MD&A Year-End 2018 | 18 |
▪ | At the Marigold mine, we sold 198,780 payable ounces of gold at an average realized price of $1,261 per ounce, generating total revenue of $250.3 million in 2018 compared to sales of 200,094 payable ounces of gold at an average realized price of $1,254 per ounce, generating total revenue of $250.8 million in 2017. |
▪ | At the Seabee Gold Operation, we recognized revenues of $115.7 million in 2018, from the sale of 91,360 payable ounces of gold, at an average realized price of $1,267 per ounce, compared to revenues of $108.3 million from the sale of 86,050 payable ounces of gold at an average realized price of $1,259 per ounce, in 2017 . |
▪ | At Puna Operations we recognized revenues of $54.7 million in 2018 from the sale of 3.6 million payable ounces of silver at an average realized price of $15.92 per ounce compared to revenue of $89.6 million recognized in 2017 from the sale of 5.8 million payable ounces of silver at an average realized price of $17.10 per ounce. At December 31, 2018, sales contracts containing 0.8 million ounces of silver were subject to final price settlement over the next four months. |
▪ | At the Marigold mine, cost of sales for 2018 was $200.1 million, generating income from mine operations of $50.2 million compared to cost of sales in 2017 of $184.2 million, generating income from mine operations of $66.7 million. Cost of sales were higher at similar sales volumes due to higher inventory costs. |
▪ | At the Seabee Gold Operation, cost of sales in 2018, was $84.9 million, generating income from mine operations of $30.8 million compared to cost of sales in 2017 of $92.7 million, generating income from mine operations of $15.6 million. Cost of sales were lower despite the increase in sales volumes due to lower inventory costs from higher grades processed and lower depreciation. |
▪ | At Puna Operations, cost of sales for 2018 was $58.8 million, compared to $58.7 million in 2017, with a resulting loss from mine operations of $4.2 million in 2018, compared to income of $31.0 million in 2017. Low grade Pirquitas stockpiles were processed through 2018 prior to the Chinchillas project reaching commercial completion on December 1, 2018. Cost of sales in 2017 was positively impacted by $6.3 million of non-cash reversal of inventory provision and a positive non-cash impact of $4.3 million of export duties following the resolution of our export duty claim. |
SSR Mining Inc. | MD&A Year-End 2018 | 19 |
As at December 31 | |||||||||
2018 | 2017 | 2016 | |||||||
Cash and cash equivalents | 419,212 | 459,864 | 327,127 | ||||||
Working capital (1) | 649,865 | 728,131 | 559,934 | ||||||
Total assets | 1,521,138 | 1,537,454 | 1,438,688 | ||||||
Non-current financial liabilities | 247,551 | 233,180 | 220,054 | ||||||
Cash generated by operating activities | 59,769 | 144,725 | 170.684 | ||||||
Cash (used in) investing activities | (115,930 | ) | (15,494 | ) | (43,264 | ) | |||
Cash generated by (used in) financing activities | 20,516 | 4,601 | (11,064 | ) |
SSR Mining Inc. | MD&A Year-End 2018 | 20 |
▪ | safeguard our ability to continue as a going concern in order to operate and optimize our current projects and pursue strategic growth initiatives; and |
▪ | maintain a flexible capital structure which lowers our cost of capital. |
Number of shares | Exercise price | Remaining life | ||
C$ | (years) | |||
Capital stock | 121,115,824 | |||
Stock options | 2,595,835 | 4.00 - 24.41 | 0.05 - 6.86 | |
Other share-based compensation awards | 815,805 | 0.11 - 9.86 | ||
Fully diluted | 124,527,464 |
SSR Mining Inc. | MD&A Year-End 2018 | 21 |
2018 | 2017 | |||||||||||||||
31-Dec | 30-Sep | 30-Jun | 31-Mar | 31-Dec | 30-Sep | 30-Jun | 31-Mar | |||||||||
$000s | $000s | $000s | $000s | $000s | $000s | $000s | $000s | |||||||||
Revenue | 103,712 | 115,033 | 104,028 | 97,902 | 107,881 | 106,005 | 116,982 | 117,905 | ||||||||
Gold equivalent payable ounces sold | 82,439 | 96,337 | 80,937 | 74,922 | 85,883 | 86,930 | 97,039 | 94,576 | ||||||||
Realized gold price ($/oz) (1) | 1,230 | 1,208 | 1,304 | 1,334 | 1,271 | 1,270 | 1,263 | 1,220 | ||||||||
Realized silver price ($/oz) (1) | 14.42 | 15.45 | 16.49 | 16.79 | 16.96 | 16.77 | 17.31 | 17.35 | ||||||||
Income from mine operations | 16,536 | 21,875 | 21,203 | 17,231 | 21,190 | 22,522 | 29,462 | 40,089 | ||||||||
(Loss) income before tax | (7,559 | ) | 6,632 | 9,823 | (806 | ) | 13,936 | 2,175 | 40,008 | 18,467 | ||||||
Net (loss) income | (2,544 | ) | 2,228 | 2,607 | (2,322 | ) | 16,850 | 1,821 | 37,747 | 15,047 | ||||||
Attributable (loss) income to equity holders of SSR Mining | (3,486 | ) | 6,374 | 5,117 | (1,626 | ) | 15,883 | 1,067 | 37,319 | 15,047 | ||||||
Basic attributable (loss) income per share | (0.03 | ) | 0.05 | 0.04 | (0.01 | ) | 0.14 | 0.01 | 0.31 | 0.13 | ||||||
Diluted attributable (loss) income per share | (0.03 | ) | 0.05 | 0.04 | (0.01 | ) | 0.14 | 0.01 | 0.31 | 0.12 | ||||||
Cash and cash equivalents | 419,212 | 474,511 | 493,642 | 472,901 | 459,864 | 424,025 | 353,530 | 340,585 | ||||||||
Total assets | 1,521,138 | 1,503,717 | 1,504,987 | 1,490,123 | 1,537,454 | 1,499,220 | 1,514,567 | 1,484,224 | ||||||||
Working capital (1) | 649,865 | 649,448 | 671,967 | 685,731 | 728,131 | 684,077 | 677,811 | 688,237 | ||||||||
Non-current financial liabilities | 247,551 | 243,858 | 240,234 | 236,685 | 233,180 | 229,810 | 226,500 | 223,258 |
SSR Mining Inc. | MD&A Year-End 2018 | 22 |
Three months ended December 31 | ||||
2018 | 2017 | |||
$ | $ | |||
Revenue | 103,712 | 107,881 | ||
Cost of sales | (87,176 | ) | (86,691 | ) |
Income from mining operations | 16,536 | 21,190 | ||
General and administrative expenses | (12,108 | ) | (2,082 | ) |
Exploration, evaluation and reclamation (expenses) recovery | (1,367 | ) | 829 | |
Operating income | 3,061 | 19,937 | ||
Interest earned and other finance income | 3,202 | 2,165 | ||
Interest expense and other finance expenses | (8,205 | ) | (9,220 | ) |
Other expense | (3,675 | ) | (185 | ) |
Foreign exchange (loss) gain | (1,942 | ) | 1,239 | |
(Loss) income before tax | (7,559 | ) | 13,936 | |
Income tax recovery | 5,015 | 2,914 | ||
Net (loss) income | (2,544 | ) | 16,850 | |
▪ | At the Marigold mine, we recognized revenues of $61.9 million in the fourth quarter of 2018 from the sale of 50,524 payable ounces of gold, at an average realized gold price of $1,227 per payable ounce sold. In the fourth quarter of 2017, revenues were $65.2 million from the sale of 51,399 payable ounces of gold at an average realized gold price of $1,269 per payable ounce sold. Lower revenues in the fourth quarter of 2018 compared to the same period in 2017 were due to lower sales resulting from lower production and realized gold price. |
▪ | At the Seabee Gold Operation, we recognized revenues of $26.9 million in the fourth quarter of 2018 from the sale of 21,700 payable ounces of gold, at an average realized gold price of $1,236 per payable ounce |
SSR Mining Inc. | MD&A Year-End 2018 | 23 |
▪ | At Puna Operations, we recognized revenues of $15.0 million in the fourth quarter of 2018, higher than the $12.1 million in the same period in 2017. Sales volumes were higher as commercial production of Chinchillas ore processing commenced on December 1, 2018. We sold 0.9 million payable ounces of silver in the fourth quarter of 2018, higher than the 0.8 million payable ounces sold in the comparative period. Realized silver prices were lower in the fourth quarter of 2018, which averaged $14.42 per ounce, excluding the impact of period-end price adjustments, compared to $16.96 per ounce in the same period in 2017. Higher sales also assisted with a positive mark-to-market impact of $1.3 million in the fourth quarter of 2018, compared to a positive impact of $0.2 million in the fourth quarter of 2017. At December 31, 2018, sales contracts containing 0.8 million ounces of silver were subject to final price settlement over the next four months. |
▪ | At the Marigold mine, cost of sales in the fourth quarter of 2018 was $51.9 million, generating income from mine operations of $10.0 million for a gross margin of 16%. This compares to cost of sales of $52.4 million in the fourth quarter of 2017, generating income from mine operations of $12.8 million, equal to a gross margin of 20%. The lower margin is due to lower gold prices, higher unit costs of inventory, higher depreciation and depletion per gold ounce sold. |
▪ | At the Seabee Gold Operation, cost of sales in the fourth quarter was $19.5 million, generating income from mine operations of $7.3 million, equal to a gross margin of 27%. In the comparative period of 2017, cost of sales was $27.6 million, generating income from mine operations of $2.9 million, equal to a gross margin of 10% . The higher margin is mainly due to lower unit cost of inventory and lower depreciation more than offsetting lower gold prices. |
▪ | At Puna Operations, cost of sales in the fourth quarter of 2018 was $15.7 million, resulting in loss from mine operation of $0.8 million, equal to a negative gross margin of 5.3%. This compares to cost of sales of $6.6 million in the fourth quarter of 2017, generating income from mine operations of $5.5 million, equal to a gross margin of 45%. The lower margin is mainly due to higher unit costs of inventory and a lower realized silver price in the current period, whereas the fourth quarter of 2017 was positively impacted by $6.3 million of non-cash reversal of inventory provision. |
SSR Mining Inc. | MD&A Year-End 2018 | 24 |
SSR Mining Inc. | MD&A Year-End 2018 | 25 |
Three months ended December 31 | ||||
2018 | 2017 | |||
Cash flows from operating activities | ||||
Net (loss) income for the period | (2,544 | ) | 16,850 | |
Adjustments for: | ||||
Depreciation, depletion and amortization | 22,650 | 29,571 | ||
Net finance expense | 4,915 | 6,564 | ||
Income tax recovery | (5,015 | ) | (2,914 | ) |
Non-cash foreign exchange loss (gain) | 1,802 | (5,369 | ) | |
Net changes in non-cash working capital items | (22,285 | ) | 4,037 | |
Other operating activities | 181 | (1,322 | ) | |
Cash (used in) generated by operating activities before interest and income taxes paid | (296 | ) | 47,417 | |
Interest paid | (1,514 | ) | (2,340 | ) |
Moratorium paid | (1,120 | ) | (1,947 | ) |
Income taxes (paid) recovered | (814 | ) | 2,045 | |
Cash (used in) generated by operating activities | (3,744 | ) | 45,175 | |
Cash flows from investing activities | ||||
Purchase of plant and equipment | (10,597 | ) | (4,026 | ) |
Capitalized stripping costs | (1,208 | ) | (5,711 | ) |
Underground mine development costs | (2,910 | ) | (2,300 | ) |
Capitalized exploration costs | (2,571 | ) | (1,239 | ) |
Chinchillas project costs | (18,862 | ) | (11,432 | ) |
Loan to joint venture partner | (8,033 | ) | — | |
Investment in marketable securities | (23,057 | ) | — | |
Proceeds from sale of marketable securities and other investments | — | 14,244 | ||
Interest received | 2,601 | 1,393 | ||
Other | 1,609 | (562 | ) | |
Cash used in investing activities | (63,028 | ) | (9,633 | ) |
Cash flows from financing activities | ||||
Proceeds from exercise of stock options | 3,103 | 788 | ||
Funding from non-controlling interest | 8,800 | 1,154 | ||
Cash generated by financing activities | 11,903 | 1,942 | ||
Effect of foreign exchange rate changes on cash and cash equivalents | (431 | ) | (1,645 | ) |
(Decrease) Increase in cash and cash equivalents | (55,300 | ) | 35,839 | |
Cash and cash equivalents, beginning of period | 474,511 | 424,025 | ||
Cash and cash equivalents, end of period | 419,211 | 459,864 |
SSR Mining Inc. | MD&A Year-End 2018 | 26 |
SSR Mining Inc. | MD&A Year-End 2018 | 27 |
2019 | 2020 | |||
Gallons hedged (in thousands) | 5,364 | 3,600 | ||
Estimated usage | 52.6 | % | 35.3 | % |
Floor price ($/gallon) | 1.70 | 1.75 | ||
Cap price ($/gallon) | 2.34 | 2.36 |
2019 | 2020 | |||
Litres hedged (in thousands) | 3,188 | — | ||
Estimated usage | 75 | % | — | |
Floor price ($/litre) | 0.46 | — | ||
Cap price ($/litre) | 0.55 | — |
SSR Mining Inc. | MD&A Year-End 2018 | 28 |
December 31, 2018 | ||||
Canadian dollar | Argentine peso | |||
Cash | 7,982 | 1,604 | ||
Value added tax receivable | 145 | 17,039 | ||
Trade and other payables (excluding VAT and income taxes) | (22,974 | ) | (9,908 | ) |
Provisions | — | (19,056 | ) | |
Total | (14,847 | ) | (10,321 | ) |
December 31, 2017 | ||||
Canadian dollar | Argentine peso | |||
Cash | 5,342 | 17,223 | ||
Value added tax receivable | 206 | 12,242 | ||
Other financial assets | 200 | 884 | ||
Trade and other payables (excluding VAT and income taxes) | (17,017 | ) | (5,021 | ) |
Provisions | — | (47,287 | ) | |
Total | (11,269 | ) | (21,959 | ) |
2019 | 2020 | |||
Notional amount (in thousands of Canadian dollars) | 54,140 | 30,000 | ||
Estimated usage | 71.2 | % | 40.3 | % |
Floor level (Canadian dollars per $1 U.S. dollar) | 1.2500 | 1.2614 | ||
Cap level (Canadian dollars per $1 U.S. dollar) | 1.3348 | 1.3710 |
SSR Mining Inc. | MD&A Year-End 2018 | 29 |
2018 | 2017 | |||
$000s | $000s | |||
Canadian dollar | 1,084 | 701 | ||
Argentine peso | 715 | 1,460 |
a) | Credit Risk |
SSR Mining Inc. | MD&A Year-End 2018 | 30 |
December 31, 2018 | December 31, 2017 | |||
$000s | $000s | |||
Cash and cash equivalents | 419,212 | 459,864 | ||
Value added tax receivable | 18,802 | 13,755 | ||
Trade and other receivables | 11,287 | 14,848 | ||
Other financial assets | 37,097 | 22,399 | ||
486,398 | 510,866 |
b) | Liquidity Risk |
10. | NON-GAAP FINANCIAL MEASURES |
SSR Mining Inc. | MD&A Year-End 2018 | 31 |
SSR Mining Inc. | MD&A Year-End 2018 | 32 |
Q4 | Q3 | Q2 | Q1 | Total | Total | |||||||
2018 | 2018 | 2018 | 2018 | 2018 | 2017 | |||||||
$000s | $000s | $000s | $000s | $000s | $000s | |||||||
Marigold mine | ||||||||||||
Cost of sales (A) | 51,884 | 58,594 | 46,082 | 43,568 | 200,128 | 184,159 | ||||||
Add: Treatment and refining costs | 78 | 58 | 122 | 114 | 372 | 347 | ||||||
Less: By-product revenue | (11 | ) | (13 | ) | (24 | ) | (16 | ) | (64 | ) | (50 | ) |
Less: Depreciation, depletion and amortization | (13,571 | ) | (16,266 | ) | (13,539 | ) | (13,372 | ) | (56,748 | ) | (54,983 | ) |
Cash costs | 38,380 | 42,373 | 32,641 | 30,294 | 143,688 | 129,473 | ||||||
Sustaining capital expenditure | 8,328 | 9,343 | 8,626 | 4,665 | 30,962 | 20,364 | ||||||
Exploration and evaluation costs (sustaining) | 2,096 | 2,956 | 3,243 | 1,914 | 10,209 | 4,917 | ||||||
Reclamation cost | 253 | 309 | 376 | 358 | 1,296 | 1,604 | ||||||
Capitalized stripping costs | 1,208 | 2,529 | 850 | 2,902 | 7,489 | 22,863 | ||||||
AISC | 50,265 | 57,510 | 45,736 | 40,133 | 193,644 | 179,221 | ||||||
Seabee Gold Operation | ||||||||||||
Cost of sales (B) | 19,544 | 24,208 | 21,003 | 20,117 | 84,872 | 92,690 | ||||||
Add: Treatment and refining costs | 46 | 40 | 41 | 39 | 166 | 131 | ||||||
Less: By-product revenue | (10 | ) | (12 | ) | (8 | ) | (16 | ) | (46 | ) | (39 | ) |
Less: Inventory provision | — | — | — | — | — | (632 | ) | |||||
Less: Depreciation, depletion and amortization | (8,678 | ) | (11,216 | ) | (8,411 | ) | (10,513 | ) | (38,818 | ) | (40,375 | ) |
Cash costs | 10,902 | 13,020 | 12,625 | 9,627 | 46,174 | 51,775 | ||||||
Sustaining capital expenditure | 624 | 968 | 1,035 | 4,426 | 7,053 | 7,190 | ||||||
Capitalized development | 2,910 | 1,812 | 2,069 | 2,283 | 9,074 | 8,295 | ||||||
Exploration and evaluation costs (sustaining) | 1,646 | 1,557 | 1,749 | 1,551 | 6,503 | 5,071 | ||||||
Reclamation cost | 34 | 33 | 34 | 34 | 135 | 200 | ||||||
AISC | 16,116 | 17,390 | 17,512 | 17,921 | 68,939 | 72,531 | ||||||
Puna Operations (1) | ||||||||||||
Cost of sales (C) | 15,749 | 10,355 | 15,740 | 16,986 | 58,830 | 58,661 | ||||||
Add: Treatment and refining costs | 807 | 820 | 1,228 | 1,522 | 4,377 | 13,092 | ||||||
Add: Gain on moratorium settlement | — | — | — | — | 4,303 | |||||||
Less: By-product revenue | (2,719 | ) | (360 | ) | — | — | (3,079 | ) | (56 | ) | ||
Add: Inventory reversal | — | — | — | — | — | 6,342 | ||||||
Less: Restructuring costs | — | — | — | — | — | (109 | ) | |||||
Less: Depreciation, depletion and amortization | (752 | ) | (478 | ) | (870 | ) | (1,053 | ) | (3,153 | ) | (7,058 | ) |
Cash costs | 13,085 | 10,337 | 16,098 | 17,455 | 56,975 | 75,175 | ||||||
Sustaining capital expenditure | 3,849 | 2,390 | 2,652 | 789 | 9,680 | 4,604 | ||||||
Reclamation cost | 888 | 567 | 553 | 540 | 2,548 | 2,489 | ||||||
AISC | 17,822 | 13,294 | 19,303 | 18,784 | 69,203 | 82,268 | ||||||
Cost of sales, per consolidated statement of (loss) income (A+B+C) | 87,177 | 93,157 | 82,825 | 80,671 | 343,830 | 335,510 | ||||||
AISC (total for all mines) | 84,203 | 88,194 | 82,551 | 76,838 | 331,786 | 334,020 | ||||||
General and administrative costs | 12,108 | 5,985 | 8,179 | 6,669 | 32,941 | 20,307 | ||||||
Consolidated AISC | 96,311 | 94,179 | 90,730 | 83,507 | 364,727 | 354,327 | ||||||
SSR Mining Inc. | MD&A Year-End 2018 | 33 |
Q4 | Q3 | Q2 | Q1 | Total | Total | |||||||
2018 | 2018 | 2018 | 2018 | 2018 | 2017 | |||||||
$000s | $000s | $000s | $000s | $000s | $000s | |||||||
Marigold mine | ||||||||||||
Payable ounces of gold sold (oz) | 50,524 | 59,583 | 46,618 | 42,055 | 198,780 | 200,094 | ||||||
Cash costs per gold ounce sold ($/oz) | 760 | 711 | 700 | 720 | 723 | 647 | ||||||
AISC per gold ounce sold ($/oz) | 995 | 965 | 981 | 954 | 974 | 896 | ||||||
Seabee Gold Operation | ||||||||||||
Payable ounces of gold sold (oz) | 21,700 | 29,160 | 20,500 | 20,000 | 91,360 | 86,050 | ||||||
Cash costs per gold ounce sold ($/oz) | 502 | 447 | 616 | 481 | 505 | 602 | ||||||
AISC per gold ounce sold ($/oz) | 743 | 596 | 854 | 896 | 755 | 843 | ||||||
Puna Operations (1) | ||||||||||||
Payable ounces of silver sold (oz) | 871,303 | 593,739 | 1,092,778 | 1,022,275 | 3,580,095 | 5,753,459 | ||||||
Cash costs per silver ounce sold ($/oz) | 15.02 | 17.41 | 14.73 | 17.07 | 15.91 | 13.07 | ||||||
AISC per silver ounce sold ($/oz) | 20.45 | 22.39 | 17.66 | 18.37 | 19.33 | 14.30 | ||||||
Realized gold price ($/oz) | 1,230 | 1,208 | 1,304 | 1,334 | 1,263 | 1,255 | ||||||
Realized silver price ($/oz) | 14.42 | 15.45 | 16.49 | 16.79 | 15.92 | 17.10 | ||||||
Precious metals equivalency | ||||||||||||
Total cash costs (for all metals) | 62,367 | 65,730 | 61,364 | 57,376 | 246,837 | 256,423 | ||||||
Equivalent payable gold ounces sold (2) | 82,439 | 96,337 | 80,937 | 74,922 | 335,267 | 364,538 | ||||||
Cash costs per equivalent gold ounce sold ($/oz) | 757 | 682 | 758 | 766 | 736 | 703 | ||||||
Consolidated AISC per equivalent gold ounce sold ($/oz) | 1,168 | 978 | 1,121 | 1,115 | 1,088 | 972 | ||||||
SSR Mining Inc. | MD&A Year-End 2018 | 34 |
Year ended December 31, | ||||
2018 | 2017 | |||
$000's | $000's | |||
Income before tax per consolidated statements of (loss) income | 8,090 | 74,587 | ||
Non-controlling interest | 6,410 | (2,150 | ) | |
Income before tax attributable to our shareholders | 14,500 | 72,437 | ||
Adjusted for: | ||||
Non-cash finance income and expense | 15,252 | 15,666 | ||
Write down of fixed assets | 2,749 | — | ||
Expense related to the premium paid for shares of SilverCrest over the prevailing market price | 2,782 | — | ||
Non-cash foreign exchange gain | (11,862 | ) | (9,327 | ) |
Adjustment to CDRP provision | (1,580 | ) | — | |
Write-down (reversal) of VAT and inventory to NRV | — | (5,710 | ) | |
Impairment reversal | — | (24,357 | ) | |
Effect of resolution of export duty settlement | — | (4,303 | ) | |
Restructuring costs | — | 109 | ||
Other items | 6,745 | 1,766 | ||
Adjusted attributable income before tax | 28,586 | 46,281 | ||
Income tax (expense), per consolidated statement of (loss) income | (8,121 | ) | (3,121 | ) |
Initial recognition of deferred tax in Argentina | 2,649 | — | ||
Tax impact of SilverCrest acquisition | (376 | ) | — | |
Deferred tax on sale of mineral properties | — | 811 | ||
Change in prior period adjustments | 662 | 712 | ||
Change in tax rate | (127 | ) | (5,689 | ) |
Argentina restructuring | 4,712 | — | ||
Other items | (24 | ) | 1,080 | |
Adjusted attributable income tax expense | (625 | ) | (6,207 | ) |
Adjusted attributable net income | 27,961 | 40,074 | ||
Weighted average shares outstanding (000's) | 120,137 | 119,593 | ||
Adjusted basic attributable income per share ($) | 0.23 | 0.34 |
SSR Mining Inc. | MD&A Year-End 2018 | 35 |
Three months ended December 31, | ||||
2,018 | 2,017 | |||
$000's | $000's | |||
(Loss) Income before tax per consolidated statements of (loss) income | (7,559 | ) | 13,936 | |
Non-controlling interest | (942 | ) | (968 | ) |
Income before tax attributable to our shareholders | (8,501 | ) | 12,968 | |
Adjusted for: | ||||
Non-cash finance income and expense | 3,745 | 4,303 | ||
Expense related to the premium paid for shares of SilverCrest over the prevailing market price | 2,782 | — | ||
Adjustment to CDRP provision | (1,580 | ) | — | |
Non-cash foreign exchange (gain) loss | 745 | (2,967 | ) | |
Restructuring costs | — | 695 | ||
Reversal (write-down) of VAT and inventory to NRV | — | (5,710 | ) | |
Effect of revaluation of reclamation provision | — | (3,437 | ) | |
Other items | 2,464 | (2,310 | ) | |
Adjusted attributable income before tax | (345 | ) | 3,542 | |
Income tax recovery | 5,015 | 2,914 | ||
Tax impact of SilverCrest acquisition | (376 | ) | — | |
Deferred tax on sale of mineral properties | — | (1,096 | ) | |
Change in prior period estimates | 116 | 352 | ||
Change in tax rate | — | (3,647 | ) | |
Argentina restructuring | (16 | ) | — | |
Other items | (25 | ) | 797 | |
Adjusted attributable income tax recovery (expense) | 4,714 | (680 | ) | |
Adjusted attributable net income | 4,369 | 2,862 | ||
Weighted average shares outstanding (000's) | 120,351 | 119,832 | ||
Adjusted basic attributable income per share ($) | 0.04 | 0.02 |
11. | CRITICAL ACCOUNTING POLICIES AND ESTIMATES |
SSR Mining Inc. | MD&A Year-End 2018 | 36 |
12. | INTERNAL CONTROL OVER FINANCIAL REPORTING AND DISCLOSURE CONTROLS AND PROCEDURES |
• | pertain to maintenance of records that accurately and fairly reflect, in reasonable detail, the transactions and dispositions of assets; |
• | provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with IFRS and that our receipts and expenditures are made only in accordance with authorizations of management and our Board of Directors; and |
• | provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of our assets that could have a material effect on our consolidated financial statements. |
SSR Mining Inc. | MD&A Year-End 2018 | 37 |
13. | CAUTIONARY NOTES REGARDING FORWARD-LOOKING STATEMENTS AND MINERAL RESERVE AND MINERAL RESOURCE ESTIMATES |
SSR Mining Inc. | MD&A Year-End 2018 | 38 |
SSR Mining Inc. | MD&A Year-End 2018 | 39 |
SSR Mining Inc. | MD&A Year-End 2018 | 40 |
News Release 19-03 |
▪ | Achieved annual production and cost guidance: Achieved initial guidance for the seventh consecutive year by delivering gold equivalent production of over 345,000 ounces at cash costs of $736 per payable gold equivalent ounce sold. |
▪ | Continued our track record of Mineral Reserves growth: Successful exploration activities in 2018 increased gold Mineral Reserves at the Marigold mine to 3.3 million ounces and at the Seabee Gold Operation to 608,000 ounces. |
▪ | Delivered record annual gold production at Seabee: The operation achieved its fifth consecutive annual production record, producing 95,602 ounces of gold, exceeding the top end of our upwardly revised annual guidance. Annual cash costs were $505 per payable ounce of gold sold. |
▪ | Strong operating performance at Marigold: Delivered quarterly gold production of 54,306 ounces, resulting in annual production of 205,161 ounces of gold. Reported annual cash costs of $723 per payable ounce of gold sold, at the lower end of our improved guidance. |
SSR Mining Inc. | PHONE +1 604.689.3846 | Suite 800 - 1055 Dunsmuir Street |
www.ssrmining.com | TOLL FREE +1 888.338.0046 | PO Box 49088 |
Vancouver, BC, Canada V7X 1G4 |
▪ | Delivered updated Marigold life of mine plan: Released updated plan on June 18, 2018, outlining a ten-year mine life, 30% growth in production through 2021, and robust economics. |
▪ | Declared commercial production at Chinchillas: The mine achieved commercial production on December 1, 2018, marking a major milestone as we reached sustainable ore delivery from the Chinchillas mine to the Pirquitas plant. In December 2018, the Pirquitas mill operated at 3,605 tpd, processing exclusively Chinchillas ore. |
▪ | Investment in high-grade Las Chispas project: In the fourth quarter we purchased 9.7% of the issued and outstanding common shares of SilverCrest Metals Inc. for $23 million. SilverCrest's Las Chispas project represents exposure to an exciting high-grade development project with exploration upside in a favourable mining jurisdiction and compelling near-term development catalysts. |
▪ | Balance sheet remains strong: Cash and marketable securities totaled $449 million at year-end 2018 after project development and investments for 2019 growth and beyond. |
SSR Mining Inc. | PAGE 2 |
Three months ended | Total | |||||||||||
Operating data | December 31, 2018 | September 30, 2018 | June 30, 2018 | March 31, 2018 | 2018 | 2017 | ||||||
Total material mined (kt) | 17,039 | 21,284 | 15,958 | 16,150 | 70,431 | 69,011 | ||||||
Waste removed (kt) | 11,361 | 14,411 | 8,083 | 9,052 | 42,907 | 43,422 | ||||||
Total ore stacked (kt) | 5,679 | 6,873 | 7,875 | 7,099 | 27,526 | 25,589 | ||||||
Strip ratio | 2.0 | 2.1 | 1.0 | 1.3 | 1.6 | 1.7 | ||||||
Mining cost ($/t mined) | 1.86 | 1.51 | 1.92 | 1.80 | 1.76 | 1.68 | ||||||
Gold stacked grade (g/t) | 0.34 | 0.32 | 0.42 | 0.37 | 0.37 | 0.35 | ||||||
Processing cost ($/t processed) | 1.27 | 1.12 | 0.86 | 0.93 | 1.03 | 0.92 | ||||||
Gold recovery (%) | 72.9 | 72.3 | 74.4 | 73.6 | 73.5 | 73.0 | ||||||
General and admin cost ($/t processed) | 0.51 | 0.50 | 0.41 | 0.42 | 0.45 | 0.46 | ||||||
Gold produced (oz) | 54,306 | 58,459 | 49,436 | 42,960 | 205,161 | 202,240 | ||||||
Gold sold (oz) | 50,550 | 59,612 | 46,644 | 42,078 | 198,884 | 200,192 | ||||||
Realized gold price ($/oz) (1) | 1,227 | 1,207 | 1,304 | 1,331 | 1,261 | 1,254 | ||||||
Cash costs ($/oz) (1) | 760 | 711 | 700 | 720 | 723 | 647 | ||||||
AISC ($/oz) (1) | 995 | 965 | 981 | 954 | 974 | 896 | ||||||
Financial data ($000s) | ||||||||||||
Revenue | 61,861 | 71,848 | 60,752 | 55,880 | 250,341 | 250,825 | ||||||
Income from mine operations | 9,977 | 13,254 | 14,670 | 12,312 | 50,213 | 66,666 | ||||||
Capital expenditures (2) | 8,328 | 25,461 | 14,481 | 4,665 | 52,935 | 20,364 | ||||||
Capitalized stripping | 1,208 | 2,529 | 850 | 2,902 | 7,489 | 22,863 | ||||||
Exploration expenditures (3) | 2,096 | 2,956 | 3,243 | 1,914 | 10,209 | 4,900 |
(1) | We report the non-GAAP financial measures of realized gold price, cash costs and all-in sustaining costs ("AISC") per payable ounce of gold sold to manage and evaluate operating performance at the Marigold mine. See “Cautionary Note Regarding Non-GAAP Measures”. |
(2) | Includes expansion capital expenditure of $22 million for the twelve months ended December 31, 2018. |
(3) | Includes capitalized and expensed exploration expenditures. |
SSR Mining Inc. | PAGE 3 |
SSR Mining Inc. | PAGE 4 |
SSR Mining Inc. | PAGE 5 |
Three months ended | Total | 2017 | ||||||||||
Operating data | December 31, 2018 | September 30, 2018 | June 30, 2018 | March 31, 2018 | 2018 | |||||||
Total ore milled (t) | 86,447 | 88,273 | 84,010 | 93,269 | 351,999 | 330,415 | ||||||
Ore milled per day (t/day) | 940 | 959 | 923 | 1,036 | 964 | 905 | ||||||
Gold mill feed grade (g/t) | 10.20 | 9.52 | 7.95 | 8.95 | 9.16 | 8.25 | ||||||
Mining cost ($/t mined) | 57 | 48 | 60 | 59 | 56 | 68 | ||||||
Processing cost ($/t processed) | 26 | 26 | 27 | 21 | 25 | 23 | ||||||
Gold recovery (%) | 97.6 | 97.1 | 97.3 | 97.4 | 97.4 | 97.4 | ||||||
General and admin cost ($/t processed) | 63 | 47 | 62 | 53 | 56 | 54 | ||||||
Gold produced (oz) | 20,473 | 27,831 | 23,582 | 23,716 | 95,602 | 83,998 | ||||||
Gold sold (oz) (1) | 21,711 | 29,175 | 20,512 | 20,012 | 91,410 | 86,087 | ||||||
Realized gold price ($/oz) (2) | 1,236 | 1,210 | 1,306 | 1,340 | 1,267 | 1,259 | ||||||
Cash costs ($/oz) (2) | 502 | 447 | 616 | 481 | 505 | 602 | ||||||
AISC ($/oz) (2) | 743 | 596 | 854 | 896 | 755 | 843 | ||||||
Financial data ($000s) | ||||||||||||
Revenue | 26,890 | 35,270 | 26,706 | 26,789 | 115,655 | 108,334 | ||||||
Income from mine operations | 7,347 | 11,061 | 5,703 | 6,672 | 30,783 | 15,644 | ||||||
Capital expenditures | 625 | 968 | 1,035 | 4,426 | 7,054 | 7,190 | ||||||
Capitalized development | 2,910 | 1,812 | 2,069 | 2,283 | 9,074 | 8,294 | ||||||
Exploration expenditures (3) | 1,661 | 2,860 | 2,745 | 2,032 | 9,298 | 5,959 |
(1) | Beginning with the first quarter of 2018, the holder of the 3% net smelter return royalty elected to receive its royalty in-kind and we will no longer report these ounces within gold sold. |
(2) | We report the non-GAAP financial measures of realized gold price, cash costs and AISC per payable ounce of gold sold to manage and evaluate operating performance at the Seabee Gold Operation. See “Cautionary Note Regarding Non-GAAP Measures”. |
(3) | Includes capitalized and expensed exploration expenditures. |
SSR Mining Inc. | PAGE 6 |
SSR Mining Inc. | PAGE 7 |
SSR Mining Inc. | PAGE 8 |
Three months ended | Total | |||||||||||
Operating data | December 31, 2018 | September 30, 2018 | June 30, 2018 | March 31, 2018 | 2018 | 2017 | ||||||
Total material mined (kt) (1) | 897 | — | — | — | 897 | — | ||||||
Waste removed (kt) (1) | 696 | — | — | — | 696 | — | ||||||
Strip ratio (1) | 3.5 | — | — | — | 3.5 | — | ||||||
Mining cost ($/t mined) (1) | 2.61 | — | — | — | 2.61 | — | ||||||
Ore milled (kt) | 342 | 308 | 396 | 374 | 1,420 | 1,798 | ||||||
Silver mill feed grade (g/t) | 133 | 96 | 110 | 115 | 114 | 152 | ||||||
Zinc mill feed grade (%) | 1.14 | 1.25 | 0.71 | — | 0.84 | — | ||||||
Lead mill feed grade (%) (1) | 0.92 | — | — | — | 0.92 | — | ||||||
Processing cost ($/t milled) | 22.18 | 20.87 | 17.26 | 15.34 | 18.72 | 13.00 | ||||||
Silver recovery (%) | 81.5 | 69.9 | 68.1 | 67.7 | 72.1 | 70.3 | ||||||
Zinc recovery (%) | 49.5 | 38.1 | 31.5 | — | 39.3 | — | ||||||
Lead recovery (%) (1) | 83.1 | — | — | — | 83.1 | — | ||||||
General and admin cost ($/t milled) | 8.16 | 7.98 | 7.07 | 6.33 | 7.34 | 5.19 | ||||||
Silver produced ('000 oz) | 1,189 | 666 | 954 | 938 | 3,747 | 6,177 | ||||||
Silver sold ('000 oz) | 932 | 623 | 1,142 | 1,064 | 3,761 | 5,994 | ||||||
Zinc produced ('000 lb) (2) | 4,014 | 3,241 | 1,520 | — | 8,775 | — | ||||||
Zinc sold ('000 lb) (2) | 1,983 | 382 | — | — | 2,365 | — | ||||||
Lead produced ('000 lb) (3) | 2,735 | 372 | — | — | 3,107 | — | ||||||
Lead sold ('000 lb) (3) | 1,059 | — | — | — | 1,059 | — | ||||||
Realized silver price ($/oz) (4) | 14.42 | 15.45 | 16.49 | 16.79 | 15.92 | 17.10 | ||||||
Cash costs ($/oz) (4, 5) | 15.02 | 17.41 | 14.73 | 17.07 | 15.91 | 13.07 | ||||||
AISC ($/oz) (4, 5) | 20.45 | 22.39 | 17.66 | 18.37 | 19.33 | 14.30 | ||||||
Financial Data ($000s) | ||||||||||||
Revenue | 14,961 | 7,915 | 16,570 | 15,233 | 54,679 | 89,614 | ||||||
Income from mine operations | (788 | ) | (2,440 | ) | 830 | (1,753 | ) | (4,151 | ) | 30,953 | ||
Capital expenditures | 3,849 | 2,390 | 2,652 | 789 | 9,680 | 4,604 | ||||||
Deferred stripping | — | — | — | — | — | — | ||||||
Exploration expenditures (6) | 21 | 6 | 429 | 6 | 462 | — |
(1) | Data is for the period subsequent to December 1, 2018, the date upon which commercial production was declared at the Chinchillas mine. |
(2) | Data for zinc production and sales relate only to zinc in zinc concentrate. |
(3) | Data for lead production and sales relate only to lead in lead concentrate. |
(4) | We report the non-GAAP financial measures of realized metal prices, cash costs and AISC per payable ounce of precious metal sold to manage and evaluate operating performance at Puna Operations. See “Cautionary Note Regarding Non-GAAP Measures”. |
(5) | Cash costs and AISC per payable ounce of silver sold include stockpile inventory costs previously incurred of $5.30 for the three months ended December 31, 2017 (September 31, 2017 - $5.20, June 30, 2017 - $3.30, March 31, 2017 - $2.00) and $3.90 for the year ended December 31, 2017. |
(6) | Includes capitalized and expensed exploration expenditures. |
SSR Mining Inc. | PAGE 9 |
SSR Mining Inc. | PAGE 10 |
SSR Mining Inc. | PAGE 11 |
Operating Guidance | Marigold mine | Seabee Gold Operation | Puna Operations (75% interest)(4) | ||||
Gold Production | oz | 200,000 - 220,000 | 95,000 - 110,000 | — | |||
Silver Production (Attributable) | Moz | — | — | 6.0 - 7.0 (4.5 - 5.3) | |||
Lead Production (Attributable) | Mlb | — | — | 20.0 - 26.0 (15.0 - 19.5) | |||
Zinc Production (Attributable) | Mlb | — | — | 15.0 - 20.0 (11.3 - 15.0) | |||
Cash Costs per Payable Ounce Sold (1) | $/oz | 750 - 790 | 525 - 555 | 8.00 - 10.00 | |||
Sustaining Capital Expenditures (2) | $M | 35 | 25 | 12 | |||
Capitalized Stripping / Capitalized Development | $M | 20 | 12 | 20 | |||
Exploration Expenditures (3) | $M | 7.5 | 6 | 1 |
(1) | We report the non-GAAP financial measure of cash costs per payable ounce of gold and silver sold to manage and evaluate operating performance at the Marigold mine, the Seabee Gold Operation and Puna Operations. See “Cautionary Note Regarding Non-GAAP Measures”. |
(2) | Sustaining capital expenditures for Puna Operations exclude initial capital expenditures related to the development of the Chinchillas project. |
(3) | Includes capitalized and expensed exploration expenditures. |
(4) | Shown on a 100% basis unless otherwise indicated by "attributable" which is shown on a 75% basis. |
SSR Mining Inc. | PAGE 12 |
SSR Mining Inc. | PAGE 13 |
Selected Financial Data (1) | ||||||||
Three Months Ended December 31 | Year Ended December 31 | |||||||
2018 | 2017 | 2018 | 2017 | |||||
$ | $ | $ | $ | |||||
Revenue | 103,712 | 107,881 | 420,675 | 448,773 | ||||
Income from mine operations (1) | 16,536 | 21,190 | 76,845 | 113,263 | ||||
Gross margin | 16 | % | 20 | % | 18 | % | 25 | % |
Operating income (1) | 3,061 | 19,937 | 29,895 | 101,332 | ||||
Net (loss) income | (2,544 | ) | 16,850 | (31 | ) | 71,466 | ||
Basic attributable (loss) income per share | (0.03 | ) | 0.14 | 0.05 | 0.58 | |||
Adjusted attributable income before tax (1) | (345 | ) | 3,542 | 28,586 | 46,281 | |||
Adjusted attributable net income (1) | 4,369 | 2,862 | 27,961 | 40,074 | ||||
Adjusted basic attributable income per share (1) | 0.04 | 0.02 | 0.23 | 0.34 | ||||
Cash (used in) generated by operating activities | (3,744 | ) | 45,175 | 59,769 | 144,725 | |||
Cash used in investing activities | (63,028 | ) | (9,633 | ) | (115,930 | ) | (15,494 | ) |
Cash generated by financing activities | 11,903 | 1,942 | 20,516 | 4,601 | ||||
Financial Position | December 31, 2018 | December 31, 2017 | ||||||
Cash and cash equivalents | 419,212 | 459,864 | ||||||
Marketable securities | 29,542 | 114,001 | ||||||
Current assets | 733,119 | 799,597 | ||||||
Current liabilities | 83,254 | 71,466 | ||||||
Working capital (1) | 649,865 | 728,131 | ||||||
Total assets | 1,521,138 | 1,537,454 |
(1) | We report non-GAAP financial measures including income from mine operations, operating income, adjusted attributable income before tax, adjusted attributable net income, adjusted basic attributable income per share, to manage and evaluate our operating performance. Please see “Cautionary Note Regarding Non-GAAP Measures”. |
SSR Mining Inc. | PAGE 14 |
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SSR Mining Inc. | PAGE 19 |
SSRM Interest | SSRM Interest | ||||||||
Location | Tonnes | Silver | Gold | Lead | Zinc | SSRM | Silver | Gold | |
millions | g/t | g/t | % | % | % Interest | million oz | million oz | ||
MINERAL RESERVES: | |||||||||
Proven Mineral Reserves | |||||||||
Seabee | Canada | 0.33 | 9.00 | 100 | 0.09 | ||||
Chinchillas | Argentina | 0.94 | 196 | 0.67 | 0.33 | 75 | 4.5 | ||
Total | 4.5 | 0.09 | |||||||
Probable Mineral Reserves | |||||||||
Marigold | U.S. | 201.50 | 0.47 | 100 | 3.06 | ||||
Marigold Leach Pad Inventory | U.S. | 100 | 0.24 | ||||||
Seabee | Canada | 1.73 | 9.24 | 100 | 0.51 | ||||
Chinchillas | Argentina | 7.91 | 161 | 1.35 | 0.47 | 75 | 30.7 | ||
Chinchillas Stockpiles | Argentina | 0.60 | 157 | 0.96 | 0.68 | 75 | 2.3 | ||
Pirquitas Stockpiles | Argentina | 0.87 | 64 | 1.43 | 75 | 1.3 | |||
Total | 34.3 | 3.81 | |||||||
Proven and Probable Mineral Reserves | |||||||||
Marigold | U.S. | 201.50 | 0.47 | 100 | 3.06 | ||||
Marigold Leach Pad Inventory | U.S. | 100 | 0.24 | ||||||
Seabee | Canada | 2.05 | 9.20 | 100 | 0.61 | ||||
Chinchillas | Argentina | 8.85 | 165 | 1.28 | 0.46 | 75 | 35.1 | ||
Chinchillas Stockpiles | Argentina | 0.60 | 157 | 0.96 | 0.68 | 75 | 2.3 | ||
Pirquitas Stockpiles | Argentina | 0.87 | 64 | 1.43 | 75 | 1.3 | |||
Total Proven and Probable | 38.7 | 3.91 | |||||||
SSR Mining Inc. | PAGE 20 |
SSRM Interest | SSRM Interest | ||||||||
Location | Tonnes | Silver | Gold | Lead | Zinc | SSRM | Silver | Gold | |
millions | g/t | g/t | % | % | % Interest | million oz | million oz | ||
MINERAL RESOURCES: | |||||||||
Measured Mineral Resource (inclusive of Proven Mineral Reserves) | |||||||||
Seabee | Canada | 0.45 | 11.76 | 100 | 0.17 | ||||
Chinchillas | Argentina | 2.11 | 130 | 0.52 | 0.39 | 75 | 6.6 | ||
Pitarrilla | Mexico | 12.35 | 90 | 0.70 | 1.22 | 100 | 35.7 | ||
Total | 42.4 | 0.17 | |||||||
Indicated Mineral Resources (inclusive of Probable Mineral Reserves) | |||||||||
Marigold | U.S. | 354.50 | 0.47 | 100 | 5.32 | ||||
Marigold Leach Pad Inventory | U.S. | 100 | 0.24 | ||||||
Seabee | Canada | 1.85 | 11.56 | 100 | 0.69 | ||||
Chinchillas | Argentina | 26.01 | 100 | 0.94 | 0.62 | 75 | 62.5 | ||
Pirquitas UG | Argentina | 2.63 | 292 | 4.46 | 75 | 18.6 | |||
Pirquitas Stockpiles | Argentina | 0.87 | 64 | 1.43 | 75 | 1.3 | |||
Pitarrilla | Mexico | 147.02 | 97 | 0.32 | 0.87 | 100 | 460.7 | ||
Pitarrilla UG | Mexico | 5.43 | 165 | 0.68 | 1.34 | 100 | 28.8 | ||
San Luis | Peru | 0.48 | 578 | 22.40 | 100 | 9.0 | 0.35 | ||
Amisk | Canada | 30.15 | 6 | 0.85 | 100 | 6.0 | 0.83 | ||
Total | 586.9 | 7.42 | |||||||
Measured and Indicated Mineral Resources (inclusive of Mineral Reserves) | |||||||||
Marigold | U.S. | 354.50 | 0.47 | 100 | 5.32 | ||||
Marigold Leach Pad Inventory | U.S. | 100 | 0.24 | ||||||
Seabee | Canada | 2.29 | 11.60 | 100 | 0.86 | ||||
Chinchillas | Argentina | 28.13 | 102 | 0.91 | 0.60 | 75 | 69.1 | ||
Pirquitas UG | Argentina | 2.63 | 292 | 4.46 | 75 | 18.6 | |||
Pirquitas Stockpiles | Argentina | 0.87 | 64 | 1.43 | 75 | 1.3 | |||
Pitarrilla | Mexico | 159.36 | 97 | 0.35 | 0.89 | 100 | 496.5 | ||
Pitarrilla UG | Mexico | 5.43 | 165 | 0.68 | 1.34 | 100 | 28.8 | ||
San Luis | Peru | 0.48 | 578 | 22.40 | 100 | 9.0 | 0.35 | ||
Amisk | Canada | 30.15 | 6 | 0.85 | 100 | 6.0 | 0.83 | ||
Total Measured and Indicated | 629.3 | 7.59 | |||||||
Inferred Mineral Resources | |||||||||
Marigold | U.S. | 33.60 | 0.37 | 100 | 0.40 | ||||
Seabee | Canada | 1.70 | 8.82 | 100 | 0.48 | ||||
Chinchillas | Argentina | 21.29 | 50 | 0.54 | 0.81 | 75 | 25.7 | ||
Pirquitas UG | Argentina | 1.08 | 207 | 7.45 | 75 | 5.4 | |||
Pitarrilla | Mexico | 8.52 | 77 | 0.18 | 0.58 | 100 | 21.2 | ||
Pitarrilla UG | Mexico | 1.23 | 138 | 0.89 | 1.25 | 100 | 5.5 | ||
San Luis | Peru | 0.02 | 270 | 5.60 | 100 | 0.2 | 0.00 | ||
Amisk | Canada | 28.65 | 4 | 0.64 | 100 | 3.7 | 0.59 | ||
Total Inferred | 61.6 | 1.48 |
SSR Mining Inc. | PAGE 21 |
▪ | Except for updates to cost parameters, all other key assumptions, parameters and methods used to estimate Mineral Reserves and Mineral Resources and the data verification procedures followed are set out in the Marigold Technical Report. For additional information about the Marigold mine, readers are encouraged to review the Marigold Technical Report. |
▪ | Mineral Reserves estimate was prepared under the supervision of James Frost, P.E., a qualified person and our Technical Services Superintendent at the Marigold mine, and is reported at a cut-off grade of 0.065 g/t payable gold. |
▪ | Mineral Resources estimate was prepared under the supervision of James N. Carver, SME Registered Member, our Chief Geologist at the Marigold mine, and Karthik Rathnam, MAusIMM (CP), our Resource Manager, Corporate, each of whom is a qualified person. Mineral Resources estimate is reported based on an optimized pit shell at a cut-off grade of 0.065 g/t payable gold, and includes an estimate of Mineral Resources for mineralized stockpiles using Inverse Distance cubed. |
▪ | Except for updates to cost parameters, mill recovery and dilution to include recent operating results, and resource modeling techniques based on recommendations set forth in the Seabee Gold Operation Technical Report, all other key assumptions, parameters and methods used to estimate Mineral Reserves and Mineral Resources and the data verification procedures followed are set out in the Seabee Gold Operation Technical Report. For additional information about the Seabee Gold Operation, readers are encouraged to review the Seabee Gold Operation Technical Report. |
▪ | Mineral Reserves estimate was prepared under the supervision of Kevin Fitzpatrick, P.Eng., a qualified person and our Engineering Supervisor at the Seabee Gold Operation. Mineral Reserves estimate for the Santoy mine is reported at a cut-off grade of 3.31 g/t gold. |
SSR Mining Inc. | PAGE 22 |
▪ | Mineral Resources estimate was prepared under the supervision of Jeffrey Kulas, P.Geo., a qualified person and our Manager Geology, Mining Operations at the Seabee Gold Operation. |
▪ | Block modeling techniques were used for Mineral Resources and Mineral Reserves evaluation for the Santoy mine and Porky West deposits. |
▪ | The preliminary economic assessment set forth in the Seabee Gold Operation Technical Report is preliminary in nature, and it includes Inferred Mineral Resources that are considered too speculative geologically to have the economic considerations applied to them that would enable them to be categorized as Mineral Reserves, and there is no certainty that the preliminary economic assessment will be realized. |
▪ | Chinchillas Mineral Reserves estimate is reported at a cut-off grade of $37.80 per tonne net smelter return (“NSR”). For additional information on the key assumptions, parameters and methods used to estimate Chinchillas Mineral Reserves and the data verification procedures followed, readers are encouraged to review the Chinchillas Technical Report. |
▪ | Chinchillas Mineral Resources estimate is reported at a base case cut-off grade, which reflects the transport to and processing of ore at the Pirquitas plant, of 60.00 grams per tonne silver equivalent based on projected operating costs and using metal price assumptions of $22.50 per ounce of silver, $1.00 per pound of lead and $1.10 per pound of zinc. For additional information on the key assumptions, parameters and methods used to estimate Chinchillas Mineral Resources and the data verification procedures followed, readers are encouraged to review the Chinchillas Technical Report. |
▪ | Pirquitas underground Mineral Resources (Pirquitas UG) estimate is reported below the completed open pit shell; Mineral Resources estimate for the Mining Area (which includes San Miguel, Chocaya, Oploca and Potosí zones) is reported at a cut-off grade of $100.00 per tonne NSR for San Miguel, Oploca and Potosi, and $90.00 per tonne NSR for Cortaderas. |
▪ | Pirquitas Mineral Reserves and Pirquitas Mineral Resources estimates in surface stockpiles are reported at a cut-off grade of $20.00 per tonne NSR, respectively, and were determined based on grade, rehandling costs and recovery estimates from metallurgical testing. |
▪ | Mineral Resources estimate is reported at a cut-off grade of 6.0 g/t gold equivalent, using metal price assumptions of $600 per ounce of gold and $9.25 per ounce of silver. |
▪ | Mineral Resources estimate for the open pit is reported at a cut-off grade of $16.38 per tonne NSR for direct leach material, and $16.40 per tonne NSR for flotation/leach material. |
▪ | Underground Mineral Resources (Pitarrilla UG) estimate is reported below the constrained open pit resource shell above a cut-off grade of $80.00 per tonne NSR, using grade shells that have been trimmed to exclude distal and lone blocks that would not support development costs. |
▪ | Mineral Resources estimate was prepared by Sebastien Bernier, P.Geo., a qualified person. Mineral Resources estimate is reported at a cut-off grade of 0.40 grams of gold equivalent per tonne using metal price assumptions of $1,100 per ounce of gold and $16.00 per ounce of silver inside conceptual pit shells optimized using metallurgical and process recovery of 87%, overall ore mining and processing costs of $15.00 per tonne and overall pit slope of fifty-five degrees. |
SSR Mining Inc. | PAGE 23 |
▪ | Conference call and webcast: Friday, February 22, 2019, at 11:00 a.m. EST. |
Toll-free in U.S. and Canada: | +1 (800) 319-4610 | |
All other callers: | +1 (416) 915-3239 | |
Webcast: | http://ir.ssrmining.com/investors/events |
▪ | The conference call will be archived and available on our website. |
Toll-free in U.S. and Canada: | +1 (855) 669-9658, replay code 2861 | |
All other callers: | +1 (412) 317-0088, replay code 2861 |
SSR Mining Inc. | PAGE 24 |
SSR Mining Inc. | PAGE 25 |
SSR Mining Inc. | PAGE 26 |
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