0001628280-18-010998.txt : 20180810 0001628280-18-010998.hdr.sgml : 20180810 20180810122905 ACCESSION NUMBER: 0001628280-18-010998 CONFORMED SUBMISSION TYPE: 6-K PUBLIC DOCUMENT COUNT: 8 CONFORMED PERIOD OF REPORT: 20180630 FILED AS OF DATE: 20180810 DATE AS OF CHANGE: 20180810 FILER: COMPANY DATA: COMPANY CONFORMED NAME: SSR MINING INC. CENTRAL INDEX KEY: 0000921638 STANDARD INDUSTRIAL CLASSIFICATION: MINERAL ROYALTY TRADERS [6795] IRS NUMBER: 000000000 STATE OF INCORPORATION: A1 FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 6-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-35455 FILM NUMBER: 181007929 BUSINESS ADDRESS: STREET 1: P.O. BOX 49088 STREET 2: SUITE 800 -- 1055 DUNSMUIR STREET CITY: VANCOUVER STATE: A1 ZIP: V7X 1G4 BUSINESS PHONE: 604-689-3846 MAIL ADDRESS: STREET 1: P.O. BOX 49088 STREET 2: SUITE 800 -- 1055 DUNSMUIR STREET CITY: VANCOUVER STATE: A1 ZIP: V7X 1G4 FORMER COMPANY: FORMER CONFORMED NAME: SILVER STANDARD RESOURCES INC DATE OF NAME CHANGE: 19950714 6-K 1 a2018q2form6-k.htm 6-K Document


UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 6-K

REPORT OF FOREIGN PRIVATE ISSUER PURSUANT TO RULE 13a-16 OR 15d-16
UNDER THE SECURITIES EXCHANGE ACT OF 1934
For August 9, 2018
Commission File Number: 000-26424
SSR MINING INC.
(Translation of registrant's name into English)

#800 - 1055 Dunsmuir Street
PO Box 49088, Bentall Postal Station
Vancouver, British Columbia
Canada V7X 1G4
(Address of principal executive offices)

Indicate by check mark whether the registrant files or will file annual reports under cover Form 20-F or Form 40-F.

[ ] Form 20-F   [x] Form 40-F

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): [      ]

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): [           ]

INCORPORATION BY REFERENCE

Exhibits 99.1 and 99.2 hereto are each hereby incorporated by reference into the registration statements on Form S-8 (File No. 333-185498, 333-196116 and 333-198092) of SSR Mining Inc.

DOCUMENTS FILED AS PART OF THIS FORM 6-K

See the Exhibit Index hereto.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 
SSR Mining Inc.
 
(Registrant)
 
 
 
Date: August 9, 2018
By:
Signed: “Gregory J. Martin
 
 
Gregory J. Martin
 
Title:
Chief Financial Officer








ssrmininglogonewa05.jpg

SUBMITTED HEREWITH

Exhibits





EX-99.1 2 a2018q2fs.htm EXHIBIT 99.1 Exhibit

ssrmininglogonewa04.jpg








CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2018 AND 2017
(unaudited)








Contents




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



SSR Mining Inc.
Interim Financial Statements Q2 2018 | 2



Condensed Consolidated Interim Statements of Financial Position
SSR Mining Inc.
(expressed in thousands of United States dollars)


 
Note
June 30

December 31

 
 
2018

2017

 
 

$

Current assets
 
 
 
Cash and cash equivalents
 
493,642

459,864

Trade and other receivables
 
37,605

38,052

Marketable securities
 
8,746

114,001

Inventory
3
216,036

182,581

Other
 
3,557

5,099

 
 
759,586

799,597

Non-current assets
 
 
 
Property, plant and equipment
 
666,539

658,629

Goodwill
 
49,786

49,786

Deferred income tax assets
 
2,721


Other
 
26,355

29,442

Total assets
 
1,504,987

1,537,454

 
 
 
 
Current liabilities
 
 
 
Trade and other payables
4
80,005

60,153

Provisions
5
7,614

11,313

 
 
87,619

71,466

Non-current liabilities
 
 
 
Deferred income tax liabilities
 
105,638

114,576

Provisions
5
78,366

94,304

Debt
 
240,234

233,180

Total liabilities
 
511,857

513,526

 
 
 
 
Shareholders' equity
 
 
 
Share capital
 
1,050,758

1,047,233

Other reserves
 
(13,568
)
24,998

Equity component of convertible notes
 
68,347

68,347

Deficit
 
(136,202
)
(139,693
)
Total equity attributable to SSR Mining shareholders
 
969,335

1,000,885

Non-controlling interest
 
23,795

23,043

Total equity
 
993,130

1,023,928

Total liabilities and equity
 
1,504,987

1,537,454

 
 
 
 
Events after the reporting date (Note 12)
 
 
 
The accompanying notes are an integral part of the Condensed Consolidated Interim Financial Statements

Approved by the Board of Directors and authorized for issue on August 9, 2018
"Richard D. Paterson"
 
"Paul Benson"
Richard D. Paterson, Director
 
Paul Benson, Director

SSR Mining Inc.
Interim Financial Statements Q2 2018 | 3



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



 
Note
Three months ended June 30,
 
Six months ended June 30,
 
 
 
2018

2017

2018

2017

 
 
$

$

$

$

Revenue
6
104,028

116,982

201,930

234,887

Cost of sales
9
(82,825
)
(87,520
)
(163,496
)
(165,336
)
Income from mine operations
 
21,203

29,462

38,434

69,551

 
 
 
 
 
 
General and administrative expenses
 
(8,179
)
(3,292
)
(14,848
)
(11,182
)
Exploration, evaluation and reclamation expenses
 
(4,141
)
(4,334
)
(6,972
)
(11,724
)
Impairment reversal
 

24,357


24,357

Operating income
 
8,883

46,193

16,614

71,002

 
 
 
 
 
 
Interest earned and other finance income
 
3,029

1,274

5,333

2,301

Interest expense and other finance costs
 
(8,432
)
(9,576
)
(17,268
)
(16,222
)
Other expenses
 
(697
)
(1,017
)
(4,644
)
(2,299
)
Foreign exchange gain
 
7,040

3,134

8,982

3,694

Income before income tax
 
9,823

40,008

9,017

58,476

Income tax expense
4
(7,216
)
(2,261
)
(8,732
)
(5,681
)
Net income

2,607

37,747

285

52,795

Attributable to:
 
 
 
 
 
Equity holders of SSR Mining
 
5,117

37,319

3,491

52,367

Non-controlling interests
 
(2,510
)
428

(3,206
)
428

 
 
 
 
 
 
Net income per share attributable to equity holders of SSR Mining
 
 
Basic
7
$0.04
$0.31
$0.03
$0.44
Diluted
7
$0.04
$0.31
$0.03
$0.43
The accompanying notes are an integral part of the Condensed Consolidated Interim Financial Statements


SSR Mining Inc.
Interim Financial Statements Q2 2018 | 4



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



 
 
Three months ended June 30,
 
Six months ended June 30,
 
 
 
2018

2017

2018

2017

 
 
$

$

$

$

Net income

2,607

37,747

285

52,795

Other comprehensive income (loss)
 
 
 
 
 
Items that will not be reclassified to net income:
 
 
 
 
 
Gain (loss) on marketable securities at FVTOCI, net of tax of $400, $2,145, $5,932 and ($2,894)
 
484

(15,665
)
(37,843
)
19,981

Items that may be subsequently reclassified to net income:
 
 
 
 
Unrealized (loss) gain on effective portion of derivative, net of tax of $245, ($179), $390 and ($116)
 
(69
)
238

(406
)
123

Total other comprehensive income (loss)
 
415

(15,427
)
(38,249
)
20,104

Total comprehensive income (loss)
 
3,022

22,320

(37,964
)
72,899

Attributable to:
 
 
 
 
 
Equity holders of SSR Mining
 
5,532

21,892

(34,758
)
72,471

Non-controlling interests
 
(2,510
)
428

(3,206
)
428

The accompanying notes are an integral part of the Condensed Consolidated Interim Financial Statements


SSR Mining Inc.
Interim Financial Statements Q2 2018 | 5



Condensed Consolidated Interim Statements of Changes in Shareholders' Equity
SSR Mining Inc.
(expressed in thousands of United States dollars except for number of shares)



 
Note
Common Shares
Other reserves

Equity component of convertible notes

Deficit

Total equity attributable to equity holders of SSR Mining

Non-controlling interest

Total
equity

 
 
Shares

Amount

 
 
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
 
174

1,588

(644
)


944


944

Equity-settled share-based compensation
8


1,182



1,182


1,182

Recognition of non-controlling interest
 


(1,341
)


(1,341
)
18,572

17,231

Total comprehensive income for the period
 


20,104


52,367

72,471

428

72,899

Balance, June 30, 2017
 
119,575

1,045,143

18,287

68,347

(156,642
)
975,135

19,000

994,135

 
 
 
 
 
 
 
 
 
 
Balance, January 1, 2018
 
119,841

1,047,233

24,998

68,347

(139,693
)
1,000,885

23,043

1,023,928

Exercise of stock options
 
389

3,525

(1,319
)


2,206


2,206

Equity-settled share-based compensation
8


1,002



1,002


1,002

Funding from non-controlling interest
 






3,958

3,958

Total comprehensive (loss) income for the period
 


(38,249
)

3,491

(34,758
)
(3,206
)
(37,964
)
Balance, June 30, 2018
 
120,230

1,050,758

(13,568
)
68,347

(136,202
)
969,335

23,795

993,130

The accompanying notes are an integral part of the Condensed Consolidated Interim Financial Statements

SSR Mining Inc.
Interim Financial Statements Q2 2018 | 6



Condensed Consolidated Interim Statements of Cash Flows
SSR Mining Inc.
(expressed in thousands of United States dollars)



 
Note
Three months ended June 30,
 
Six months ended June 30,
 
 
 
2018

2017

2018

2017

 
 
$

$

$

$

Cash flows from operating activities
 
 

 

 
 
Net income for the period
 
2,607

37,747

285

52,795

Adjustments for:
 
 

 

 
 
Depreciation, depletion and amortization
 
23,303

24,687

48,703

48,705

Net finance expense
 
5,041

7,464

11,113

12,783

Impairment reversal
 

(24,357
)

(24,357
)
Income tax expense
 
7,216

2,261

8,732

5,681

Non-cash foreign exchange (gain) loss
 
(9,677
)
1,126

(11,930
)
538

Net changes in non-cash working capital items
11
(4,402
)
(3,563
)
(16,270
)
(14,902
)
Other items impacting operating activities
11
1,080

1,768

5,403

3,774

Cash generated by operating activities before interest and taxes
 
25,168

47,133

46,036

85,017

Moratorium paid
 
(1,581
)
(1,983
)
(3,401
)
(5,414
)
Interest paid
 
(1,606
)
(2,792
)
(7,428
)
(6,601
)
Income taxes paid
 
(4,849
)
(3,744
)
(7,068
)
(3,744
)
Cash generated by operating activities
 
17,132

38,614

28,139

69,258

Cash flows from and used in investing activities
 
 

 

 
 
Purchase of plant and equipment
 
(11,380
)
(7,264
)
(20,155
)
(16,007
)
Capitalized stripping costs
 
(850
)
(4,350
)
(3,752
)
(11,096
)
Underground mine development costs
 
(2,069
)
(2,165
)
(4,352
)
(4,680
)
Chinchillas project costs
 
(16,105
)

(27,820
)

Capitalized exploration costs
 
(4,999
)
(1,806
)
(7,221
)
(2,918
)
Chinchillas option exercise payment, net of cash acquired
 

(12,972
)

(12,972
)
Net proceeds from sale of marketable securities
 
35,381

1,364

63,445

1,364

Interest received
 
2,393

774

4,037

1,470

Other
 
(640
)
108

(1,064
)
408

Cash generated by (used in) investing activities
 
1,731

(26,311
)
3,118

(44,431
)
Cash flows from and used in financing activities
 
 

 

 
 
Proceeds from exercise of stock options
 
1,745

550

2,206

885

Funding from non-controlling interests
 
2,503


3,958


Cash generated by financing activities
 
4,248

550

6,164

885

Effect of foreign exchange rate changes on cash and cash equivalents
 
(2,370
)
92

(3,643
)
691

Increase in cash and cash equivalents
 
20,741

12,945

33,778

26,403

Cash and cash equivalents, beginning of period
 
472,901

340,585

459,864

327,127

Cash and cash equivalents, end of period
 
493,642

353,530

493,642

353,530

The accompanying notes are an integral part of the Condensed Consolidated Interim Financial Statements

SSR Mining Inc.
Interim Financial Statements Q2 2018 | 7



Notes to the Condensed Consolidated Interim Financial Statements
SSR Mining Inc.
(tabular amounts expressed in thousands of United States dollars unless otherwise stated)


1.
NATURE OF OPERATIONS

SSR Mining Inc. ("we", "us", "our" or "SSR Mining") is a company incorporated under the laws of the Province of British Columbia, Canada and our shares are publicly listed on the Toronto Stock Exchange in Canada and the NASDAQ Global Market in the United States. Together with our subsidiaries, we (the “Group”) are principally engaged in the operation, acquisition, exploration and development of precious metal resource properties located in the Americas. We have three producing mines and a portfolio of precious metal dominant projects located throughout the Americas. SSR Mining Inc. is the ultimate parent of the Group.

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

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


2.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

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

a)
Basis of preparation
These condensed consolidated interim financial statements should be read in conjunction with our audited consolidated financial statements for the year ended December 31, 2017.

These condensed consolidated interim financial statements have been prepared in accordance with International Financial Reporting Standards ("IFRS") as issued by the International Accounting Standards Board ("IASB") applicable to the preparation of interim financial statements, including IAS 34, Interim Financial Reporting, and do not include all the information required for full annual financial statements. The comparative information has also been prepared on this basis.

These statements were authorized for issue by our Board of Directors on August 9, 2018.

b)
Change in accounting policies
We have adopted the requirements of IFRS 15 Revenue from Contracts with Customers (“IFRS 15”) as of January 1, 2018. IFRS 15 covers principles that an entity shall apply to report useful information to users of financial statements about the nature, amount, timing, and uncertainty of revenue and cash flows arising from a contract with a customer. We elected to apply IFRS 15 using a modified retrospective approach by recognizing the cumulative effect of initially adopting IFRS 15 as an adjustment to the opening balance sheet at January 1, 2018. Therefore, the comparative information has not been restated and continues to be reported under IAS 18 Revenue. The details of accounting policy changes and the quantitative impact of these changes are described below.

Gold doré and bullion sales

IFRS 15 requires that revenue from contracts with customers be recognized upon the transfer of control over goods or services to the customer. The recognition of revenue upon transfer of control to the customer is consistent with our revenue recognition policy as set out in Note 2(f) to our audited consolidated financial statements for the year ended December 31, 2017, as the condition is satisfied on gold doré and bullion sales when title transfers to the customer. Accordingly, upon adoption, this requirement under IFRS 15 resulted in no impact to our financial statements, as the timing of revenue recognition on our gold bullion sales is unchanged.


SSR Mining Inc.
Interim Financial Statements Q2 2018 | 8



Notes to the Condensed Consolidated Interim Financial Statements
SSR Mining Inc.
(tabular amounts expressed in thousands of United States dollars unless otherwise stated)

2.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Concentrate sales

We performed an assessment of our existing concentrate sales agreements and determined that there is no change in the timing of revenue recognition under IFRS 15. The point of transfer of risks and rewards and transfer of control for concentrate sales occur at the same time. IFRS 15 identifies that the shipping component associated with certain concentrate sales may be a separate performance obligation, which would require a portion of the revenue to be deferred and recognized as the obligation is fulfilled. We have determined that the deferred revenue would be insignificant and thus, have not accounted for the shipping component as a separate performance obligation.

IFRS 15 does not consider changes in the fair value of the concentrate receivable measured at fair value through profit and loss as revenue from contracts with customers. Accordingly, we have separately presented the changes as Other revenue in Note 6.

c)
Significant accounting judgments and estimates
The preparation of financial statements requires the use of assumptions, judgments and/or estimates that affect the amounts reported and disclosed in the consolidated financial statements and related notes. These assumptions, judgments and estimates are based on management’s best knowledge of the relevant facts and circumstances, having regard to previous experience, but actual results may differ materially from the amounts included in the financial statements. The significant judgments and estimates applied in the preparation of the unaudited condensed consolidated interim financial statements for the three and six months ended June 30, 2018 are consistent with those applied and disclosed in Note 2(u) to our audited consolidated financial statements for the year ended December 31, 2017.


3.
INVENTORY

 
June 30, 2018

December 31, 2017

 

$

Current:
 
 
Finished goods
20,038

19,262

Stockpiled ore
3,283

6,806

Leach pad inventory
157,217

128,783

Materials and supplies
35,498

27,730

 
216,036

182,581

Non-current materials and supplies
1,999

3,973

 
218,035

186,554


As at June 30, 2018, we have total provisions of $4,623,000 (December 31, 2017 - $7,250,000) for supplies inventory that we no longer expect to utilize.









SSR Mining Inc.
Interim Financial Statements Q2 2018 | 9



Notes to the Condensed Consolidated Interim Financial Statements
SSR Mining Inc.
(tabular amounts expressed in thousands of United States dollars unless otherwise stated)

4.
TRADE AND OTHER PAYABLES

 
June 30, 2018

December 31, 2017

 
$

$

Trade payables
25,807

16,740

Accrued liabilities
32,847

29,574

Accrued royalties
4,717

6,276

Income taxes payable (1)
13,487

4,385

Accrued interest on convertible notes
3,147

3,178

 
80,005

60,153


(1) 
Income taxes payable at June 30, 2018 included $5,084,000 tax payable due to a re-organization of our Argentine business units. This is a reduction from the recognized income tax expense of $5,778,000 relating to the same matter due to foreign exchange. As a result of the re-organization, there has been a reduction in the net deferred income tax asset in Argentina; however, the net deferred tax asset remains unrecognized.


5.
PROVISIONS

 
June 30, 2018
 
December 31, 2017
 
 
Current

Non-current

Current

Non-current

 
$

$

$

$

Moratorium (1)
6,339

21,117

9,085

36,952

Close down and restoration provision
496

57,249

978

57,352

Other provisions
779


1,250


 
7,614

78,366

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' Pirquitas mine. In December 2007, the National Customs Authority of Argentina (Dirección Nacional de Aduanas) ("Customs") levied an export duty of approximately 10% from concentrate for projects with fiscal stability agreements pre-dating 2002 and Customs had asserted that Puna Operations was subject to this duty. We had previously challenged the legality of the export duty applied to silver concentrate.

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

With our entry into the tax moratorium for resolution of our export duty dispute, we are no longer challenging the legality of the application of the export duty other than with respect to our right for reimbursement of the $6,646,000 of export duty that we paid.


6.
REVENUE

 
Three months ended June 30,
 
Six months ended June 30,
 
 
2018

2017

2018

2017

Gold doré and bullion sales
87,471

94,971

170,140

186,342

Concentrate sales
16,017

29,672

32,170

51,265

Other revenue
540

(7,661
)
(380
)
(2,720
)
 
104,028

116,982

201,930

234,887



SSR Mining Inc.
Interim Financial Statements Q2 2018 | 10



Notes to the Condensed Consolidated Interim Financial Statements
SSR Mining Inc.
(tabular amounts expressed in thousands of United States dollars unless otherwise stated)

7.
INCOME PER SHARE

The calculations of basic and diluted income per share are based on the following:
 
Three months ended June 30,
 
Six months ended June 30,
 
 
2018

2017

2018

2017

Net income
2,607

37,747

285

52,795

Net (loss) income attributable to non-controlling interests
(2,510
)
428

(3,206
)
428

Net income attributable to equity holders of SSR Mining
5,117

37,319

3,491

52,367

 
 
 
 
 
Adjustment for dilutive instruments:
 
 
 
 
Interest saving on convertible notes, net of tax

3,808



Net income used in the calculation of diluted net income per share
5,117

41,127

3,491

52,367

 
 
 
 
 
Weighted average number of common shares issued (thousands)
120,075

119,519

119,979

119,472

Adjustments for dilutive instruments:
 
 
 
 
Stock options (thousands)
920

1,275

806

1,267
Convertible notes (thousands)

13,250



Weighted average number of common shares for diluted income per share (thousands)
120,995

134,044

120,785

120,739

 
 
 
 
 
Basic net income per share attributable to equity holders of SSR Mining
$0.04
$0.31
$0.03
$0.44
Diluted net income per share attributable to equity holders of SSR Mining
$0.04
$0.31
$0.03
$0.43


8.
SHARE-BASED COMPENSATION

Total share-based compensation, including all equity and cash-settled arrangements, for the three and six months ended June 30, 2018 and 2017 has been recognized in the condensed consolidated interim financial statements as follows:
 
Three months ended June 30,
 
Six months ended June 30,
 
 
2018

2017

2018

2017

 
$

$

$

$

Equity-settled
 
 


Cost of inventory
35

50

89

83

General and administrative expenses
490

536

893

1,080

Exploration, evaluation and reclamation expenses
9

10

20

19

Cash-settled
 
 


Cost of inventory
243

(1,806
)
536

(1,506
)
General and administrative expenses
1,243

(95
)
3,711

3,289

Exploration, evaluation and reclamation expenses
4

(100
)
28

(46
)
 
2,024

(1,405
)
5,277

2,919



SSR Mining Inc.
Interim Financial Statements Q2 2018 | 11



Notes to the Condensed Consolidated Interim Financial Statements
SSR Mining Inc.
(tabular amounts expressed in thousands of United States dollars unless otherwise stated)

9.
OPERATING SEGMENTS

The following is a summary of the reported amounts of income or loss, and the carrying amounts of assets and liabilities by operating segment:
Three months ended June 30, 2018
Marigold mine

Seabee Gold Operation

Puna Operations (i)

Exploration and evaluation properties

Other reconciling items (ii)

Total

 


$

$

$

$

Revenue
60,752

26,706

16,570



104,028

Cost of inventory
(32,543
)
(12,592
)
(14,870
)


(60,005
)
Depletion, depreciation and amortization
(13,539
)
(8,411
)
(870
)


(22,820
)
Income from mine operations
14,670

5,703

830



21,203

 



 
 
 
Exploration, evaluation and reclamation expenses
(182
)
(2,124
)
(566
)
(1,062
)
(207
)
(4,141
)
Operating income (loss)
13,068

3,098

(2,268
)
(1,064
)
(3,951
)
8,883

Income (loss) before income tax
8,894

3,776

2,562

(1,168
)
(4,241
)
9,823

 
 
 
 
 
 
 
As at June 30, 2018
 
 
 
 
 
 
Total assets
465,478

431,226

133,147

71,844

403,292

1,504,987

Non-current assets
215,800

335,278

94,076

68,419

13,193

726,766

Total liabilities
(79,063
)
(91,786
)
(73,119
)
(6,463
)
(261,426
)
(511,857
)

Three months ended June 30, 2017
Marigold
mine

Seabee Gold Operation

Puna Operations (i)

Exploration and evaluation properties

Other reconciling items (ii)

Total

 
$

$

$

$

$

$

Revenue
72,451

22,502

22,029



116,982

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


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


(24,595
)
Restructuring costs


(138
)


(138
)
Income from mine operations
21,373

4,083

4,006



29,462

 



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

(2,408
)

(4,334
)
Impairment reversal


24,357



24,357

Operating income (loss)
20,608

2,874

27,941

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

Income (loss) before income tax
20,355

2,791

28,359

583

(12,080
)
40,008

 
 
 
 
 
 
 
As at June 30, 2017
 
 
 
 
 


Total assets
418,936

422,470

154,773

73,781

444,607

1,514,567

Non-current assets
236,342

362,569

68,511

71,855

900

740,177

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






SSR Mining Inc.
Interim Financial Statements Q2 2018 | 12



Notes to the Condensed Consolidated Interim Financial Statements
SSR Mining Inc.
(tabular amounts expressed in thousands of United States dollars unless otherwise stated)

9.
OPERATING SEGMENTS (Continued)
Six months ended June 30, 2018
Marigold mine

Seabee Gold Operation

Puna Operations (i)

Exploration and evaluation properties

Other reconciling items (ii)

Total

 
$

$

$

$

$

$

Revenue
116,632

53,495

31,803



201,930

Cost of inventory
(62,739
)
(22,196
)
(30,803
)


(115,738
)
Depletion, depreciation and amortization
(26,911
)
(18,924
)
(1,923
)


(47,758
)
Income (loss) from mine operations
26,982

12,375

(923
)


38,434

 
23.1
%
23.1
%
(2.9
)%
 
 
 
Exploration, evaluation and reclamation expenses
(283
)
(3,938
)
(636
)
(1,704
)
(411
)
(6,972
)
Operating income (loss)
24,121

7,419

(4,829
)
(1,705
)
(8,392
)
16,614

Income (loss) before income tax
15,716

5,591

(1,420
)
(1,720
)
(9,150
)
9,017


Six months ended June 30, 2017
Marigold
mine

Seabee Gold Operation

Puna Operations (i)

Exploration and evaluation properties

Other reconciling items (ii)

Total

 
$

$

$

$

$

$

Revenue
136,213

50,111

48,563



234,887

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


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


(48,532
)
Export duty


4,303



4,303

Restructuring costs


(535
)


(535
)
Income from mine operations
42,700

9,078

17,773



69,551

 
31.3
%
18.1
%
36.6
%
 
 
 
Exploration, evaluation and reclamation expenses
(1,005
)
(2,820
)
(3,577
)
(4,034
)
(288
)
(11,724
)
Impairment reversal


24,357



24,357

Operating income (loss)
41,648

6,258

37,955

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

Income (loss) before income tax
41,374

6,145

36,442

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


(i) Following the formation of the joint venture with Golden Arrow Resources Corporation ("Golden Arrow") on May 31, 2017, the Pirquitas property was combined with the Chinchillas project into the Puna Operations operating segment. We fully consolidate Puna Operations, which includes non-controlling interest portion of revenues, and (loss) from mine operations for the three months ended June 30, 2018 of $3,778,000 and $(52,000), respectively (June 30, 2017: $2,446,000 and $653,000, respectively), and the six months ended June 30, 2018 of $7,493,000 and $(472,000), respectively (June 30, 2017: $2,446,000 and $653,000, respectively)

(ii) 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.
Interim Financial Statements Q2 2018 | 13



Notes to the Condensed Consolidated Interim Financial Statements
SSR Mining Inc.
(tabular amounts expressed in thousands of United States dollars unless otherwise stated)

10.
FAIR VALUE MEASUREMENTS

Assets and liabilities that are held at fair value are categorized based on a valuation hierarchy as follows:
 
Fair value at June 30, 2018
Fair value at December 31, 2017
 
Level 1

Level 2

Level 3

Total

Level 1

Level 2

Level 3

Total

 

$

$

$


$

$

$

Recurring measurements
 
 
 
 
 
 
 
 
Trade receivables

11,659


11,659


14,848


14,848

Marketable securities
8,746



8,746

114,001



114,001

Derivative assets

401


401


1,287


1,287

Other financial assets


4,734

4,734



6,338

6,338

Accrued liabilities

(11,033
)

(11,033
)

(10,009
)

(10,009
)
 
8,746

1,027

4,734

14,507

114,001

6,126

6,338

126,465

 
 
 
 
 
 
 
 
 
Non-recurring measurements
 
 
 
 
 
 
 
 
Deferred consideration






7,399

7,399

 






7,399

7,399

 
 
 
 
 
 
 
 
 
Fair values disclosed
 
 
 
 
 
 
 
 
Convertible notes
(261,523
)


(261,523
)
(259,578
)


(259,578
)
 
(261,523
)


(261,523
)
(259,578
)


(259,578
)

There were no transfers between Level 1 and Level 2 fair value measurements. During the six months ended June 30, 2018, there were no transfers into or out of Level 3 fair value measures.


11.
SUPPLEMENTAL CASH FLOW INFORMATION

Changes in working capital items during the three and six months ended June 30, 2018 and 2017 are as follows:
 
Three months ended June 30,
 
Six months ended June 30,
 
 
2018

2017

2018

2017

 

$

$

$

Trade and other receivables
(4,408
)
4,171

1,173

9,479

Inventory
(6,513
)
272

(24,986
)
(8,375
)
Trade and other payables
6,879

(6,426
)
8,366

(8,816
)
Provisions
(360
)
(1,580
)
(823
)
(7,190
)
 
(4,402
)
(3,563
)
(16,270
)
(14,902
)


SSR Mining Inc.
Interim Financial Statements Q2 2018 | 14



Notes to the Condensed Consolidated Interim Financial Statements
SSR Mining Inc.
(tabular amounts expressed in thousands of United States dollars unless otherwise stated)

11.
SUPPLEMENTAL CASH FLOW INFORMATION (Continued)

Adjustments for non-cash other operating activities during the three and six months ended June 30, 2018 and 2017 are as follows:
 
Three months ended June 30,
 
Six months ended June 30,
 
 
2018

2017

2018

2017

 

$

$

$

Share-based payments
534

596

1,002

1,182

Export duty adjustment in cost of sales



(4,303
)
Change in estimate of close down and restoration provision



3,578

Write down of fixed assets
22

648

2,771

843

Other
524

524

1,630

2,474

 
1,080

1,768

5,403

3,774



Non-cash investing and financing transactions conducted during the three and six months ended June 30, 2018 and 2017 are as follows:
 
Three months ended June 30,
 
Six months ended June 30,
 
 
2018

2017

2018

2017

 

$

$

$

Transfer of share-based payment reserve upon exercise of stock options
(1,075
)
(225
)
(1,319
)
(644
)
Shares received from sale of mineral properties
243

669

1,546

1,669

 
(832
)
444

227

1,025



12.
SUBSEQUENT EVENT

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 the date which is the earlier of: (a) the date which is 24 months from the first delivery of ore from Puna Operations' Chinchillas property to the Pirquitas mill; and (b) December 31, 2020.

The proceeds borrowed under the Credit Agreement are required to be used by Golden Arrow to fund its contributions under the shareholders' agreement we entered into with Golden Arrow on May 31, 2017, as the sole shareholders of Puna Operations. The Loan is secured by Golden Arrow's ownership and equity interests in Puna Operations.

The Loan will bear interest (computed on the basis of the actual number of days elapsed over a year of 365 days and compounded monthly) at a rate per annum equal to the US Base Rate (as such term is defined in the Credit Agreement) plus 10%. Interest on the loan shall accrue from and including the date of each borrowing under the Credit Agreement, compounded monthly, and shall be capitalized and payable on the maturity date.



SSR Mining Inc.
Interim Financial Statements Q2 2018 | 15

EX-99.2 3 a2018q2mda.htm EXHIBIT 99.2 Exhibit







ssrmininglogonewa04.jpg






MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2018







SSR Mining Inc.
MD&A Q2 2018 |  2



MANAGEMENT'S DISCUSSION AND ANALYSIS OF THE FINANCIAL POSITION AND RESULTS OF OPERATIONS FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2018


This Management's Discussion and Analysis ("MD&A") is intended to supplement the unaudited condensed consolidated interim financial statements of SSR Mining Inc., ("we", "us", "our" or "SSR Mining") for the three and six months ended June 30, 2018, and the related notes thereto, which have been prepared in accordance with International Financial Reporting Standards ("IFRS"), as issued by the International Accounting Standards Board ("IASB"), applicable to the preparation of interim financial statements, including IAS 34, Interim Financial Reporting.

All figures are expressed in U.S. dollars except where otherwise indicated. References to CAD refer to Canadian dollars, and ARS to Argentine pesos. This MD&A has been prepared as of August 9, 2018, and should be read in conjunction with the unaudited condensed consolidated interim financial statements for the three and six months ended June 30, 2018.

Additional information, including our Annual Information Form and Annual Report on Form 40-F for the year ended December 31, 2017, is available on SEDAR at www.sedar.com, and on the EDGAR section of the U.S. Securities and Exchange Commission ("SEC") website at www.sec.gov.

This MD&A contains "forward-looking statements" that are subject to risk factors set out in a cautionary note contained in Section 12 herein. We use certain non-GAAP financial measures in this MD&A; for a description of each of these measures, please see the discussion under "Non-GAAP Financial Measures" in Section 9 of this MD&A.


1.SECOND QUARTER 2018 HIGHLIGHTS


Improved financial performance: Cash generated from operating activities of $17.1 million and adjusted attributable net income of $12.1 million or $0.10 per share.

Increased production at lower costs: Consolidated quarterly production increased to 85,082 gold equivalent ounces while achieving lower cash costs of $758 per payable ounce of gold sold.

Strong performance at the Marigold mine: Produced 49,436 ounces of gold at cash costs of $700 per payable ounce of gold sold, and stacked a record 7.9 million tonnes of ore.

Delivered updated Marigold life of mine plan: Released updated plan outlining a 10-year reserve life, 30% growth in production through 2021, and robust economics.

Performance in line with guidance at the Seabee Gold Operation: Produced 23,582 ounces of gold at cash costs of $616 per payable ounce of gold sold, a solid result considering lower quarterly mill throughput.

Exceeded first half guidance at Puna Operations: Produced 1.0 million ounces of silver at cash costs of $14.73 per payable ounce of silver sold, exceeding first half production guidance.

Chinchillas project remains on track: Subsequent to quarter-end, trucked first ore to the Pirquitas site in July 2018. The project remains on schedule for sustained ore delivery in the fourth quarter of the year and on budget, with material advancements in construction and development activities made during the quarter.

Increased cash position: Quarter-end cash increased to $493.6 million, up $20.7 million.






SSR Mining Inc.
MD&A Q2 2018 |  3



2.
OUTLOOK

This section of the MD&A provides management's production, cost, capital, exploration and development expenditure estimates for 2018. These are “forward-looking statements” and subject to the cautionary note regarding the risks associated with forward-looking statements contained in Section 12. Cash costs per payable ounce of gold and silver sold are non-GAAP financial measures. Please see the discussion under "Non-GAAP Financial Measures" in Section 9.
Due to positive operating performance through the first half of 2018 and a continued positive operating outlook for the second half of 2018, we are improving certain cost guidance metrics. 
 
At the Marigold mine, annual cash cost guidance improves to between $725 and $750 per payable ounce of gold sold, a $25 per ounce reduction to the top end of guidance due to higher grades mined more than offsetting higher energy costs. Gold production at Marigold is expected to be between 40,000 and 50,000 ounces in the third quarter, with fourth quarter production of approximately 60,000 ounces as the new leach pad is put into service.

Seabee Gold Operation annual cash cost guidance also improves to between $560 and $585 per payable ounce of gold sold, a $25 per ounce reduction to the top end of guidance largely due to strong first quarter operating performance and favourable exchange rate impact.

Remaining operating guidance is unchanged.

For the full year 2018, we now expect:
Operating Guidance
 
Marigold mine

Seabee Gold Operation

Puna Operations (75% interest)(4)

Gold Production
oz
190,000 - 210,000

85,000 - 92,000


Silver Production
Moz


3.0 - 4.4

Silver Production (attributable)
Moz


2.3 - 3.3

Lead Production
Mlb


7.0 - 12.5

Lead Production (attributable)
Mlb


5.3 - 9.4

Zinc Production
Mlb


5.5 - 7.5

Zinc Production (attributable)
Mlb


4.1 - 5.6

Cash Cost per Payable Ounce Sold (1)
$/oz
725 - 750

560 - 585

12.5 - 15.00

Sustaining Capital Expenditures (2)
$M
35

10

10

Capitalized Stripping / Capitalized Development
$M
15

9

10

Exploration Expenditures (3)
$M
9

9

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 9.
(2) 
Sustaining capital expenditures for the Marigold mine exclude $22 million for four additional haul trucks as announced in our news release dated February 22, 2018, and 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.

On a consolidated basis, at the mid-point of guidance, we expect to produce approximately 340,000 gold equivalent ounces in 2018 at gold equivalent cash costs of between $715 and $760 per payable ounce sold. On an attributable basis, we expect to produce approximately 325,000 gold equivalent ounces in 2018 at gold equivalent cash costs of between $705 and $750 per payable ounce sold.

Gold equivalent figures for our 2018 operating guidance are based on gold-to-silver ratio of 79:1. Cash costs and capital expenditures guidance is based on actual performance to June 30, 2018 and a second half 2018 oil price of $70 per barrel and exchange rate of 1.25 CAD dollar to U.S. dollar.


SSR Mining Inc.
MD&A Q2 2018 |  4



3.
BUSINESS OVERVIEW

Strategy

We are a resource company focused on the operation, acquisition, exploration and development of precious metal resource properties located in the Americas. We have three producing mines and a portfolio of precious metal dominant projects located throughout the Americas. Our focus is on safe, profitable gold and silver production from our Marigold mine in Nevada, U.S., our Seabee Gold Operation in Saskatchewan, Canada, and our 75% owned Puna Operations in Jujuy, Argentina.

Corporate summary

SSR Mining has an experienced management team of mine-builders and operators with proven capabilities. We have an enviable balance sheet with $493.6 million in cash and cash equivalents as at June 30, 2018. We are committed to delivering safe production through relentless emphasis on Operational Excellence. We are also focused on growing production and Mineral Reserves through the exploration and acquisition of assets for accretive growth, while maintaining financial strength.

On May 3, 2018, we announced the appointment of Kevin O'Kane as Chief Operating Officer effective June 4, 2018, replacing Alan Pangbourne who retired at the end of May 2018.

During the six months ended June 30, 2018, we sold our remaining position of 9.0 million Pretium Resources Inc. ("Pretium") common shares for pre-tax cash proceeds of approximately $63.4 million.

As of July 6, 2018, we entered into a credit agreement (the "Credit Agreement") with Golden Arrow Resources Corporation ("Golden Arrow"), pursuant to which we provided Golden Arrow with a non-revolving term loan (the "Loan") in an aggregate principal amount equal to $10.0 million. The Loan matures on the date which is the earlier of: (a) the date which is 24 months from the first delivery of ore from Puna Operations' Chinchillas property to the Pirquitas mill; and (b) December 31, 2020.

The proceeds to Golden Arrow under the Credit Agreement are required to be used by Golden Arrow to fund its contributions under the shareholders' agreement we entered into with Golden Arrow on May 31, 2017, as the sole shareholders of Puna Operations. The Loan is secured by Golden Arrow's ownership and equity interests in Puna Operations.

The Loan will bear interest (computed on the basis of the actual number of days elapsed over a year of 365 days and compounded monthly) at a rate per annum equal to the US Base Rate (as such term is defined in the Credit Agreement) plus 10%. Interest on the Loan shall accrue from and including the date of each borrowing under the Credit Agreement, compounded monthly, and shall be capitalized and payable on the maturity date.

Market overview

Metal prices

Precious metals prices are an important driver of our profitability. In the second quarter of 2018, the average gold and silver prices remained at comparable levels with the first quarter of 2018, with gold averaging $1,306 per ounce and silver averaging $16.53 per ounce. Gold and silver prices trended downward during the quarter and closed at $1,251 per ounce and $16.03 per ounce, respectively, on June 30, 2018. Our realized gold and silver prices in the second quarter declined by 2% compared to the first quarter.

The principal factor that impacted precious metals prices in the second quarter was a strengthening U.S. dollar. The US dollar strengthened against gold and most currencies as stronger than forecast economic growth increased expectations of more rapid interest rate increases. Additionally, the imposition of tariffs and threat of an emerging trade war weighed generally on commodities and added to U.S. dollar strength.





SSR Mining Inc.
MD&A Q2 2018 |  5



Currency and commodity markets

During the second quarter, the CAD averaged approximately 1.29 CAD per 1 USD, comparable with the first quarter of 2018, and closed at 1.32 CAD per 1 USD on June 30, 2018. Our exposure to the CAD is significant due to our Seabee Gold Operation and we have continued our risk management hedging program to protect a portion of its CAD operating costs through 2019.

The ARS weakened by 42% in the second quarter of 2018, closing at 28.85 ARS per 1 USD on June 30, 2018. The significant decline in the value of the ARS was triggered by higher ongoing inflation, local interest rate reductions combined with increases in U.S. interest rate in the first half of 2018 and concerns of Argentina’s ability to re-finance expiring debt obligations. While a weaker currency is positive for our Argentine operating costs, we expect the high inflation rates in Argentina to somewhat offset the benefits of the devaluation of the currency. The weakening ARS also has a positive impact on our outstanding moratorium liability which is denominated in ARS, but such positive impact is partially offset by the negative impact it has on our value added tax receivable ("VAT") balances.

West Texas Intermediate oil prices were 12% higher in the second quarter of 2018 than in the first quarter of 2018, with an average price of $67.80 per barrel and quarter end closing price of $72.46 per barrel. Oil prices were supported by higher global economic growth, on-going OPEC production quotas and renewed sanctions placed on Iran by the US government. Diesel, a product of oil, is a significant consumable at our operations and the movement in diesel prices can have a significant impact on the cost structure at all of our mines. We hedge a portion of our diesel usage to manage price risk of this consumable through 2019.

Consolidated financial summary
(presented in thousands of USD, except for per share value)
Selected Financial Data (1)
 
 
 
 
 
Three months ended June 30,
 
Six months ended June 30,
 
 
2018

2017

2018

2017

 
$

$

$

$

Revenue
104,028

116,982

201,930

234,887

Income from mine operations
21,203

29,462

38,434

69,551

Gross margin (%)
20

25

19

30

Operating income
8,883

46,193

16,614

71,002

Net income
2,607

37,747

285

52,795

Basic attributable income per share
0.04

0.31

0.03

0.44

Adjusted attributable income before tax
13,051

15,551

19,787

38,487

Adjusted attributable net income
12,080

13,017

17,742

32,826

Adjusted basic attributable income per share
0.10

0.11

0.15

0.27

Cash generated by operating activities
17,132

38,614

28,139

69,258

Cash generated by (used in) investing activities
1,731

(26,311
)
3,118

(44,431
)
Cash generated by financing activities
4,248

550

6,164

885

 
 
 
 
 
Financial Position
June 30, 2018
 
December 31, 2017
 
Cash and cash equivalents
 
493,642

 
459,864

Marketable securities
 
8,746

 
114,001

Current assets
 
759,586

 
799,597

Current liabilities
 
87,619

 
71,466

Working capital
 
671,967

 
728,131

Total assets
 
1,504,987

 
1,537,454


(1) 
We report non-GAAP financial measures, including gross margin, adjusted attributable income before tax, adjusted attributable net income, adjusted basic attributable income per share, and working capital to manage and evaluate our operating performance. See "Non-GAAP Financial Measures" in Section 9.




SSR Mining Inc.
MD&A Q2 2018 |  6



Quarterly financial summary

Revenue in the second quarter of 2018 decreased by 11% relative to the comparative quarter of 2017 due principally to the expected declines in sales at Puna Operations, as it processed lower grade stockpiles, and at the Marigold mine, due to planned changes in production and leach cycles.

Income from mine operations in the second quarter of 2018 generated a gross margin of 20%, lower than the 25% margin in the second quarter of 2017. Relative to the comparative prior year quarter, in the second quarter of 2018, cost of sales at Puna Operations were elevated as we processed lower grade stockpiles, and also higher cost of sales were experienced at the Marigold mine as we stacked lower grade ore in the previous quarters.

Net income for the quarter was impacted by the recognition of a one-time $5.8 million tax expense related to the re-organization of our business units in Argentina.

Cash generated by operating activities in the quarter was $17.1 million compared to $38.6 million in the second quarter of 2017. Lower sales combined with higher unit costs at both the Marigold mine and Puna Operations were partially offset by higher gold sales at Seabee Gold Operation. We also saw an increase in finished goods gold inventory which reduced operating cash flows in the current period.

We generated $1.7 million from investing activities in the second quarter of 2018 compared to a use of $26.3 million in the second quarter of 2017. In the second quarter of 2018, we received $35.4 million from the sale of common shares of Pretium which funded investments in our business including $11.4 million in property, plant and equipment and $16.1 million on the Chinchillas project. We received $2.5 million from our joint venture partner for its share of the development costs of the Chinchillas project. Cash and cash equivalents increased to $493.6 million during the quarter.

Year-to-date financial summary

The 14% decrease in revenue compared to the first half of 2017 was due to a 19% decrease in equivalent payable gold ounces sold, partially offset by higher gold and silver prices. The decrease in equivalent gold ounces sold was due to lower gold ounces sold from the Marigold mine and lower silver ounces sold from Puna Operations as both mines processed lower grade ore.

Income from mine operations in the first half of 2018 generated a gross margin of 19%, compared to the 30% margin in the first half of 2017 as higher cost of sales at both the Marigold mine and Puna Operations was partially offset by higher gold prices and lower cost of sales at Seabee Gold Operation. In the first half of 2017, the resolution of our export duty claim in Argentina resulted in a $4.3 million reduction to cost of sales, thereby increasing income from mine operations. Net income for the first half of 2017 was positively impacted by an impairment reversal of the Pirquitas plant of $24.4 million resulting its life extension following the formation of Puna Operations.

Cash generated by operating activities in the first half of 2018 decreased to $28.1 million compared to $69.3 million in the first half of 2017. Lower volume of gold and silver sold at higher unit costs and a build-up in working capital generated lower cash from operating activities. We generated $3.1 million from investing activities in the first half of 2018 compared to a use of $44.4 million in the first half of 2017. In the first half of 2018, we received $63.4 million from the sale of our remaining common shares of Pretium which was partially offset by investments in our business including $20.2 million in property, plant and equipment and $27.8 million in the Chinchillas project. We received $4.0 million from our joint venture partner for its share of the development costs of the Chinchillas project.


SSR Mining Inc.
MD&A Q2 2018 |  7



4.
RESULTS OF OPERATIONS

Consolidated results of operations

The following table presents consolidated operating information for our Marigold mine, our Seabee Gold Operation and our 75% interest in Puna Operations, which comprises the Pirquitas and the Chinchillas properties. Additional operating information is provided in the sections relating to the individual mines.
 
 Three months ended
Operating data
June 30
2018

March 31
2018

December 31
2017

September 30
2017

June 30
2017

Consolidated production and sales:
 
 
 
 
 
Gold produced (oz)
73,018

66,677

76,995

56,757

76,248

Silver produced ('000 oz)
954

938

1,169

1,541

1,947

Silver produced (attributable) ('000 oz) (1)
716

704

877

1,156

1,777

Zinc produced ('000 lb)
1,521





Zinc produced (attributable) ('000 lb) (2)
1,141





 
 
 
 
 
 
Gold sold (oz)
67,156

62,090

75,389

60,616

75,335

Silver sold ('000 oz)
1,142

1,064

820

2,076

1,655

Silver sold (attributable) ('000 oz) (1)
857

798

615

1,557

1,473

Zinc sold ('000 lb)





Zinc sold (attributable) ('000 lb) (2)





 
 
 
 
 
 
Cash costs ($/oz) - payable gold from Marigold mine (3)
700

720

699

684

632

Cash costs ($/oz) - payable gold from Seabee Gold Operation (3)
616

481

605

634

592

Cash costs ($/oz) - payable silver from Puna Operations (3)
14.73

17.07

16.36

12.76

12.15

 
 
 
 
 
 
Gold equivalent production (oz) (4)
85,082

78,483

92,594

77,105

102,933

Gold equivalent production (attributable) (oz) (4)
82,072

75,538

88,698

72,022

100,603

 
 
 
 
 
 
Realized gold price ($/oz) (3)
1,304

1,334

1,271

1,270

1,263

Realized silver price ($/oz) (3)
16.49

16.79

16.96

16.77

17.31

 
 
 
 
 
 
Consolidated costs:
 
 
 
 
 
Cash costs per equivalent gold ounce sold ($/oz) (3,4)
758

766

737

757

682

AISC per equivalent gold ounce sold ($/oz) (3,4)
1,141

1,115

1,008

1,024

889

 
 
 
 
 
 
Financial data ($000s)
 
 
 
 
 
Revenue
104,028

97,902

107,881

106,005

116,982

Income from mine operations
21,203

17,231

21,190

22,522

29,462


(1) 
Figures for the second quarter of 2017 for attributable silver production and sales represent Puna Operations at 100% for April and May and 75% for June 2017. Figures for all subsequent quarters for attributable production and sales represent Puna Operations at 75%.
(2) 
Data for zinc production and sales relate only to zinc in zinc concentrate.
(3) 
We report the non-GAAP financial measures of cash costs, realized metal prices 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 Income (Loss), please refer to “Non-GAAP Financial Measures” in Section 9.
(4) 
Gold equivalent ounces have been calculated using the realized gold and silver prices in the period and applied to the recovered silver metal content produced by the mine. Zinc production is not included in gold equivalent ounces produced.



SSR Mining Inc.
MD&A Q2 2018 |  8



Marigold mine, U.S.
 
 Three months ended
Operating data
June 30
2018

March 31
2018

December 31
2017

September 30
2017

June 30
2017

Total material mined (kt)
15,958

16,150

13,979

20,311

17,985

Waste removed (kt)
8,083

9,052

8,136

13,149

11,075

Total ore stacked (kt)
7,875

7,099

5,843

7,162

6,910

Strip ratio
1.0

1.3

1.4

1.8

1.6

Mining cost ($/t mined)
1.92

1.80

1.98

1.52

1.67

Gold stacked grade (g/t)
0.42

0.37

0.37

0.31

0.31

Processing cost ($/t processed)
0.86

0.93

1.08

0.89

0.82

Gold recovery (%)
74.4

73.6

74.0

72.0

73.0

General and admin costs ($/t processed)
0.41

0.42

0.51

0.40

0.42

 
 
 
 
 
 
Gold produced (oz)
49,436

42,960

52,768

38,699

55,558

Gold sold (oz)
46,644

42,078

51,420

38,818

57,426

 
 
 
 
 
 
Realized gold price ($/oz) (1)
1,304

1,331

1,269

1,270

1,265

 
 
 
 
 
 
Cash costs ($/oz) (1)
700

720

699

684

632

AISC ($/oz) (1)
981

954

1,001

979

833

 
 
 
 
 
 
Financial data ($000s)
 
 
 
 
 
Revenue
60,752

55,880

65,217

49,395

72,451

Income from mine operations
14,670

12,312

12,777

11,189

21,373

Capital expenditures (2)
14,481

4,665

8,194

3,855

5,272

Capitalized stripping
850

2,902

5,712

6,056

4,350

Exploration expenditures (3)
3,243

1,914

1,208

1,130

1,538


(1) 
We report the non-GAAP financial measures of realized gold prices, 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 Income (Loss), please refer to “Non-GAAP Financial Measures” in Section 9.
(2) 
Includes expansion capital expenditures of $5.9 million for the three months ended June 30, 2018 ($nil for the previous four quarters).
(3) 
Includes capitalized and expensed exploration expenditures.

Mine production

In the second quarter of 2018, the Marigold mine produced 49,436 ounces of gold, a 15% increase over the first quarter.

During the quarter, 16.0 million tonnes of material were mined, similar to the first quarter primarily due to longer haul distances associated with the increase in ore tonnes. We expect total material mined to increase during the second half of 2018 due to shorter haul distances and as the four additional haul trucks enter service. These factors, along with completion of the new leach pad, are expected to increase gold production through the second half of the year.

Approximately 7.9 million tonnes of ore were delivered to the heap leach pads, a quarterly record. Gold grade increased to 0.42 g/t. This compares to 7.1 million tonnes of ore delivered to the heap leach pads at a gold grade of 0.37 g/t in the first quarter of 2018. The strip ratio was 1.0:1 for the quarter, 23% lower than the prior quarter.








SSR Mining Inc.
MD&A Q2 2018 |  9



Mine operating costs

Cash costs and AISC per payable ounce of gold sold are non-GAAP financial measures. Please see the discussion under "Non-GAAP Financial Measures" in Section 9.

Cash costs, which include all costs of inventory, refining costs and royalties, of $700 per payable ounce of gold sold in the second quarter of 2018 were 3% lower than the previous quarter. This was primarily due to stacking 26% more recoverable ounces in the second quarter compared to the first quarter, which lowered the cost per ounce of inventory. The increase in recoverable ounces stacked was a result of the increased ore tonnage and grade in the second quarter compared to the first quarter. Total mining costs of $1.92 per tonne in the second quarter of 2018 were 7% higher than in the previous quarter primarily due to a 25% increase in total fuel costs through a combination of higher diesel price and increased consumption due to longer haul distances. Processing and general administrative unit costs were 8% and 2% lower, respectively, in the second quarter than in the first quarter due to higher tonnes processed while total costs remained stable.

AISC per payable ounce of gold sold increased in the second quarter of 2018 to $981 from $954 in the first quarter due to higher sustaining capital expenditures as construction of the new leach pad resumed and higher planned exploration expenditures.

Mine sales

A total of 46,644 ounces of gold were sold at an average realized price of $1,304 per ounce during the second quarter of 2018, an increase of 11% from the 42,078 ounces of gold sold at an average realized price of $1,331 per ounce during the first quarter of 2018. Finished goods inventory increased as sales were below production.

Exploration

The main focus of our 2018 exploration program is to conduct infill drilling of the Red Dot resource area and to explore higher grade structural zones within phases of the Mackay pit. During the second quarter, we completed a total of 75 reverse circulation drillholes for 27,886 meters at Red Dot and within the Mackay pit.

Drilling of two east-west test sections were completed during the quarter within the Red Dot area. Drill results met expectations confirming the geologic interpretation and are expected to increase Mineral Resources at year-end 2018. In June, we decided to continue the program and complete infill drilling of the Red Dot area. Our objective is to convert Inferred Mineral Resources to Indicated Mineral Resources, and to upgrade existing Indicated Resources with the ultimate goal of declaring a Mineral Reserve at Red Dot by mid-2019.

In June, we completed the acquisition of a parcel of land, and the associated mineral and surface rights, that is proximal to the south-western margin of the Mackay pit. We anticipate that operating synergies and exploration benefits will be realized from the incorporation of these lands into the Marigold land package.

During the third quarter of 2018, we will continue drilling for higher grade structures in the Mackay Phase 5 area while advancing the Red Dot exploration program.



SSR Mining Inc.
MD&A Q2 2018 |  10



Seabee Gold Operation, Canada

 
Three months ended
Operating data
June 30
2018

March 31
2018

December 31
2017

September 30
2017

June 30
2017

Total ore milled (t)
84,010

93,269

89,237

84,315

84,469

Ore milled per day (t/day)
923

1,036

970

916

928

Gold mill feed grade (g/t)
7.95

8.95

8.89

7.03

7.97

Mining costs ($/t mined)
60

59

66

74

60

Processing costs ($/t processed)
27

21

24

22

20

Gold recovery (%)
97.3

97.4

97.4

97.2

97.3

General and admin costs ($/t processed)
62

53

61

53

50

 
 
 
 
 
 
Gold produced (oz)
23,582

23,717

24,227

18,058

20,690

Gold sold (oz) (1)
20,512

20,012

23,969

21,798

17,909

 
 
 
 
 
 
Realized gold price ($/oz) (2)
1,306

1,340

1,276

1,269

1,257

 
 
 
 
 
 
Cash costs ($/oz) (2)
616

481

605
634

592

AISC ($/oz) (2)
854

896

776