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