Troilus Mining Corp press release

SSR Mining Reports Third Quarter 2020 Results and Announces Dividend Policy

2020-11-12

TSX - Toronto Stock Exchange · Gold · Copper · Silver · Zinc · Molybdenum · Lead · Tantalum · Tin · Rubidium · Cesium · Beryllium · Canada

Canada NewsWire

DENVER, Nov. 12, 2020

ADJUSTED ATTRIBUTABLE EPS OF $0.49 PER SHARE

DENVER , Nov. 12, 2020 /CNW/ - SSR Mining Inc. (NASDAQ: SSRM) (TSX: SSRM) (ASX: SSR) ("SSR Mining") reports consolidated financial results for the third quarter ended September 30, 2020.

Rod Antal , President and CEO said, "With the transformational merger with Alacer Gold finalized, integration efforts near completion, and our operations running at steady state following COVID-19 interruptions, the focus has turned towards delivering a number of value enhancing catalysts before year-end.

From a growth perspective, we intend on publishing the Çöpler technical report and global exploration updates in the coming weeks. Operationally, we anticipate a robust fourth quarter with strong free cash flow generation, further strengthening our balance sheet. This continued peer-leading free cash flow generation has allowed us to put in place a dividend policy beginning in the first quarter of 2021. Our capital allocation strategy is intended to balance investment in high-return growth opportunities, maintaining peer leading financial strength, and providing sustainable capital returns to shareholders. A recurring quarterly dividend is expected to be the primary method of capital return, and we will periodically evaluate supplementing this dividend from trailing excess attributable free cash flow through incremental dividends and/or share buyback programs."

Third Quarter 2020 Highlights: (All figures are in U.S. dollars unless otherwise noted)

Closed zero-premium merger with Alacer: Completed the transaction with Alacer to create a leading intermediate precious metals producer with robust margins, strong free cash flow generation and long mine lives led by a highly experienced leadership team with a track record of value creation.

Dividend policy announced: On November 12, 2020 , the Board approved the initiation of a quarterly cash dividend of $0.05 per share beginning in the first quarter of 2021. In addition, the Board will periodically consider supplementing the quarterly dividend from trailing excess attributable free cash flow in the form of incremental dividends and/or share buyback programs.

On-track to meet full year 2020 updated production guidance: Year-to-date production of 491,821 gold equivalent ounces across the four operations. (1)

Updated full year 2020 outlook on completion of merger: Production of 680,000 to 760,000 gold equivalent ounces at AISC of $965 to $1,040 per gold equivalent ounce. (2)

Strong financial performance: Reported attributable net income of $26.8 million , or $0.19 per share and adjusted attributable net income of $67.8 million , or $0.49 per share. (2) At the beginning of the fourth quarter all four mines were at steady-state operation.

Maintained strong balance sheet and liquidity: Consolidated cash (2) balance at quarter end increased to $772.8 million , further strengthening our balance sheet.

Çöpler contributes low-cost production: From the date of acquisition to quarter-end, produced 19,586 ounces of gold at AISC of $737 per ounce. (2) Produced 76,666 ounces of gold during the full quarter. Pit cutback to provide access to higher grade ore expected in the fourth quarter of 2020.

Strong operational result at Marigold: Produced 49,137 ounces of gold at AISC of $1,243 per ounce. (2) Stacked over 73,000 recoverable ounces of gold in the third quarter, setting the operation up for a strong finish to the year.

Safe ramp-up of operations at Seabee: Produced 20,249 ounces of gold at AISC of $988 per ounce. (2) Mill throughput averaged 1,271 tonnes per day in September 2020 , a monthly record.

Strong margins at Puna: Produced 1.3 million ounces of silver at AISC of $11.26 per ounce. (2) Generated income from mine operations of $17.4 million in the third quarter.

Continued exploration success: Encouraging exploration results in the third quarter across our portfolio at Çöpler, Marigold and Seabee.

| (1) | Year-to-date production includes full year 2020 production from Çöpler. SSR Mining is not entitled to the economic benefits from Çöpler prior to acquisition. | | (2) | We report the non-GAAP financial measures of all-in sustaining costs ("AISC") per ounce of gold and silver sold, adjusted attributable net income, adjusted attributable net income per share and consolidated cash to manage and evaluate our operating performance. Note that we have made adjustments to the items which are included in the determination of adjusted attributable net income compared to prior periods. See "Cautionary Note Regarding Non-GAAP Measures". |

Cöpler, Turkey (amounts presented on 100% basis)

| | Period from acquisition to September 30 | Three months ended September 30 | Nine months ended September 30 | | | | | Operating Data | 2020 (1) | 2020 (2) | 2020 (2) | | | | | Ore mined - oxide (kt) | 147 | 497 | 1,469 | | | | | Ore mined - sulfide (kt) | 99 | 715 | 1,320 | | | | | Total material mined (kt) | 1,063 | 6,851 | 18,816 | | | | | Waste removed (kt) | 817 | 5,639 | 16,027 | | | | | Strip ratio | 3.3 | 4.7 | 5.7 | | | | | | | | | | | | | Ore stacked - oxide (kt) | 121 | 535 | 1,549 | | | | | Gold grade stacked - oxide (g/t) | 1.24 | 0.97 | 1.08 | | | | | | | | | | | | | Ore processed - sulfide (kt) | 85 | 530 | 1,573 | | | | | Gold grade processed - sulfide (g/t) | 3.74 | 3.65 | 3.79 | | | | | Gold recovery - sulfide (%) | 89.0 | 90.7 | 90.8 | | | | | | | | | | | | | Gold produced - oxide (oz) | 5,258 | 19,617 | 66,348 | | | | | Gold produced - sulfide (oz) | 14,328 | 57,049 | 177,530 | | | | | Total gold produced (oz) | 19,586 | 76,666 | 243,878 | | | | | Gold sold (oz) | 27,895 | 74,665 | 240,885 | | | | | | | | | | | | | Average realized gold price ($/oz sold) | $ | 1,920 | $ | 1,902 | $ | 1,725 | | | | | | | | | | Cash costs ($/oz gold sold) (3, 4) | $ | 609 | N/A | N/A | | | | AISC ($/oz gold sold) (3, 4) | $ | 737 | N/A | N/A | | | | | | | | | | | | Financial Data ($000s) | | | | | | | | Revenue | $ | 53,566 | N/A | N/A | | | | Production costs | $ | 40,670 | N/A | N/A | | | | Depletion and depreciation | $ | 8,895 | N/A | N/A | | | | Income from mine operations | $ | 4,001 | N/A | N/A | | | | Exploration and evaluation expenses | $ | 953 | N/A | N/A | | | | Capital expenditures | $ | 4,420 | N/A | N/A | | |

| (1) | The data presented in this column is for the period from September 16, 2020 to September 30, 2020, the period for which we were entitled to all economic benefits of Çöpler following our acquisition of Alacer. | | (2) | The operating data presented in these columns includes operating results for Çöpler for the entire three and nine months ended September 30, 2020, including the period prior to our acquisition of Alacer on September 16, 2020. As we were not entitled to the economic benefits of Çöpler prior to the acquisition, financial results for the period prior to September 16, 2020 are not provided. | | (3) | We report the non-GAAP financial measures of cash costs and AISC per ounce of gold sold to manage and evaluate operating performance at Çöpler. For further information, please refer to "Cautionary Note Regarding Non-GAAP Measures". | | (4) | Cash costs and AISC per ounce of gold sold exclude the impact of the write-up of inventory to fair value as at the date of our acquisition of Alacer. |

Production

Çöpler produced 19,586 ounces of gold from September 16, 2020 , the date of our acquisition of Alacer, to the end of the third quarter of 2020 (the "Period").

Gold production from the Çöpler oxide plant was 19,617 and 66,348 ounces for the three and nine months ended September 30, 2020 , respectively. Gold production from the sulfide plant was 57,049 and 177,530 ounces for the three and nine months ended September 30, 2020 , respectively.

Çöpler produced 76,666 and 243,878 ounces of gold for the three and nine months ended September 30, 2020 , respectively. Production was in line with the revised mine plan that was adopted in the second quarter of 2020 to diversify ore sources and optimize production in light of the shortfall in mine operators resulting from COVID-19.

Oxide ore tonnes mined in the three and nine months ended September 30, 2020 were 0.5 million and 1.5 million tonnes, respectively. The contained gold ounces in the oxide ore mined were 11,575 and 45,334 for the three and nine months ended September 30, 2020 , respectively, lower than similar periods in the prior year, but in line with the mine plan, due to the completion of Çakmaktepe phase one mining in 2019. The oxide ore mined grade was 0.72 g/t and 0.96 g/t for the three and nine months ended September 30, 2020 , respectively.

The stacked oxide ore contained 16,747 and 53,563 ounces of gold for the three and nine months ended September 30, 2020 , respectively.

Sulfide ore tonnes mined in the three and nine months ended September 30, 2020 were 0.7 million and 1.3 million tonnes, respectively, in line with the revised mine plan referred to above.

The sulfide plant treated 0.5 million and 1.6 million tonnes of sulfide ore for the three and nine months ended September 30, 2020 , respectively. The sulfide plant continued to efficiently operate above design throughput, though marginally below that of the prior quarter as autoclave 1 was shutdown in July 2020 to perform inspections, which indicated it was in excellent condition. Plant gold recovery has averaged approximately 91% through September 30, 2020 . Projects are underway to increase gold recovery. Some improvement in recovery was achieved by installation of oxygen injection into the leach tanks which was commissioned in late June.

Mine operator availability suffered in 2020 due to COVID-19 restrictions. The revised plan reduced the over-haulage of extra material to the tailings storage facility ("TSF"), allowing for available mining resources to be focused on the Manganese pit cutback. The TSF is an approximately 5 km haul from the mine and is constructed from competent mine waste. Despite the reduced construction rate this year, the TSF is advancing ahead of operational requirements. The Manganese pit cutback remains on track to provide access to higher grade ore in the fourth quarter of 2020. A mining area was also brought into production in the Main pit to diversify ore sources, in part, as a risk management strategy should COVID-19 related restrictions increase.

The total waste tonnes mined in the three and nine months ended September 30, 2020 were 5.6 million and 16.0 million tonnes, respectively, in line with the revised mine plan.

The 2020 Çöpler technical report, planned to be issued in the fourth quarter of 2020, will update the operating parameters of the plant and include the results of optimization studies and programs, including the proposed supplemental flotation circuit. Detailed engineering for the proposed flotation circuit is underway and the final construction decision remains subject to final Board and other approvals once the technical work is complete. If approved, the flotation circuit commissioning is targeted for the third quarter of 2021. The proposed flotation circuit was included in the recent amendment to the Çöpler Environmental Impact Assessment application.

The proposed flotation circuit would treat a side stream from the grinding circuit, with the concentrate reporting to autoclave feed and the tails to leaching. Studies indicate a negative recovery impact due to the float tails recovery; however, such impact will be more than offset by increased plant throughput. The currently-installed grinding mills have demonstrated significant latent capacity, sufficient to support an increase in sulfide plant throughput capacity up to approximately 3 million tonnes per annum. The preliminary capital estimate for the proposed flotation circuit is approximately $15 million . The flotation circuit is anticipated to increase the gold and sulfur grades processed through the autoclaves (increasing autoclave and oxygen utilization), reduce unit costs, and increase total sulfide plant throughput and gold production.

Revenue

Revenue for the Period was $53.6 million as 27,895 ounces of gold were sold at an average realized gold price of $1,920 per ounce. Finished goods inventory that was built-up prior to acquisition was sold during the Period.

Operating Costs

Cash costs and AISC per ounce of gold sold are non-GAAP financial measures. Please see the discussion under "Cautionary Note Regarding Non-GAAP Measures".

Unit operating costs remained stable as a weaker local currency helped offset COVID-19 associated impacts to operating efficiencies. Cash costs per ounce sold in the Period were $609 . Cash costs were impacted by a higher royalty expense due to higher realized gold prices.

AISC per ounce sold in the Period was $737 which is lower than planned due to lower sustaining capital spend, primarily related to the deferral in TSF expansion as discussed above and delays in Sabirli Road and heap leach expansion construction due to COVID-19 related manning shortfalls.

Marigold, USA

| | Three months ended September 30 | Nine months ended September 30 | | | | | | | | | | | | | | | | | | | | | | Operating Data | 2020 | 2019 | Change | 2020 | 2019 | Change | | | | | | Total material mined (kt) | 20,582 | 19,033 | 8% | 62,895 | 55,583 | 13% | | | | | | Waste removed (kt) | 13,890 | 12,676 | 10% | 46,092 | 36,628 | 26% | | | | | | Total ore stacked (kt) | 6,692 | 6,357 | 5% | 16,803 | 18,955 | (11)% | | | | | | Gold stacked grade (g/t) | 0.43 | 0.51 | (16)% | 0.35 | 0.41 | (15)% | | | | | | Strip ratio | 2.1 | 2.0 | 5% | 2.7 | 1.9 | 42% | | | | | | | | | | | | | | | | | | Gold produced (oz) | 49,137 | 52,968 | (7)% | 157,502 | 161,041 | (2)% | | | | | | Gold sold (oz) | 51,700 | 50,650 | 2% | 156,117 | 165,871 | (6)% | | | | | | | | | | | | | | | | | | Average realized gold price ($/oz sold) | $ | 1,912 | $ | 1,481 | 29% | $ | 1,735 | $ | 1,359 | 28% | | | | | | | | | | | | | | Cash costs ($/oz gold sold) (1) | $ | 899 | $ | 822 | 9% | $ | 861 | $ | 823 | 5% | | AISC ($/oz gold sold) (1) | $ | 1,243 | $ | 1,104 | 13% | $ | 1,297 | $ | 1,003 | 29% | | | | | | | | | | | | | | Financial Data ($000s) | | | | | | | | | | | | Revenue | $ | 98,748 | $ | 74,820 | 32% | $ | 270,615 | $ | 225,122 | 20% | | Production costs | $ | 46,387 | $ | 41,551 | 12% | $ | 134,181 | $ | 136,310 | (2)% | | Depletion and depreciation | $ | 10,737 | $ | 11,205 | (4)% | $ | 32,092 | $ | 39,828 | (19)% | | Income from mine operations | $ | 41,624 | $ | 22,064 | 89% | $ | 104,342 | $ | 48,984 | 113% | | Exploration and evaluation expenses | $ | 953 | $ | 893 | 7% | $ | 2,035 | $ | 1,380 | 47% | | Capital expenditures | $ | 16,532 | $ | 13,256 | 25% | $ | 64,329 | $ | 27,778 | 132% |

| (1) | We report the non-GAAP financial measures of cash costs and AISC per ounce of gold sold to manage and evaluate operating performance at Marigold. For further information, please refer to "Cautionary Note Regarding Non-GAAP Measures". |

Production

In the third quarter of 2020, 20.6 million tonnes of material were mined, an 8% increase compared to the third quarter of 2019, reflecting the impact of shorter haulage cycles coupled with increased shovel fleet capacity. For the nine months ended September 30, 2020 , 62.9 million tonnes of material were mined, a 13% increase over the first nine months of 2019. The increase is attributable to shorter haulage cycles, the addition of one haul truck to the fleet and increases in shovel fleet capacity.

During the third quarter of 2020, 6.7 million tonnes of ore was stacked at a gold grade of 0.43 g/t. This compares to 6.4 million tonnes of ore was stacked at a gold grade of 0.51 g/t in the third quarter of 2019. Higher tonnes stacked at a lower grade are associated with the transition of primary mining from the higher grade lower levels of Mackay 5 in the third quarter of 2019 to the upper levels of Mackay 4, which transitioned from stripping to primary ore delivery in the third quarter of 2020.

For the nine months ended September 30, 2020 , 16.8 million tonnes of ore was stacked at a gold grade of 0.35 g/t compared to approximately 19.0 million tonnes of ore stacked at a gold grade of 0.41 g/t for the first nine months of 2019. The reduction in both ore tonnes stacked and gold grade are in line with the mine plan and associated with the transition from mining Mackay 5 ore mining in 2019 to the stripping and mining of Mackay Phases 4 and 8 in 2020.

During the third quarter of 2020, Marigold produced 49,137 ounces of gold, a decrease of 7% compared to the third quarter of 2019, predominantly due to lower gold grades stacked within the previous three months. Recoverable ounces stacked in the third quarter of 2020 and 2019 were 73,595 and 79,306, respectively. The majority of recoverable ounces stacked in the third quarter of 2020 were at low elevations on the heap leach pads to facilitate faster leach recovery times.

For the nine months ended September 30, 2020 , 157,502 ounces of gold were produced compared to 161,041 ounces of gold over the same period in 2019.

Revenue

Revenue increased by 32% to $98.7 million in the third quarter of 2020 as compared to the third quarter of 2019 due to an increase of 29% in the average realized gold price as well as 2% more ounces sold.

Revenue increased 20% for the nine months ending September 30, 2020 as compared to the same period in the prior year, due to an increase of 28% in the average realized gold price slightly offset by 6% fewer ounces sold.

Operating Costs

Cash costs and AISC per ounce of gold sold are non-GAAP financial measures. Please see the discussion under "Cautionary Note Regarding Non-GAAP Measures".

In the third quarter of 2020, cash costs per ounce of gold sold were $899 , a 9% increase compared to the third quarter of 2019, primarily due to an increase in per unit royalty costs due to higher realized gold prices and the impact of lower grades mined which has resulted in a higher cost per ounce in inventory.

In the third quarter of 2020, AISC per ounce of gold sold was $1,243 , a 13% increase compared to the third quarter of 2019, due to higher cash costs and an increase in capital expenditures per gold ounce sold. Capital expenditures were higher than in the third quarter of 2019 primarily due to mine equipment purchases as well as increased leach pad and dewatering construction costs. Mine equipment additions included two replacement haul trucks and support equipment.

Cash costs per ounce of gold sold for the nine months ending September 30, 2020 were $861 , a 5% increase compared to the same period of 2019, primarily due to an increase in per unit royalty costs due to higher realized gold prices.

AISC per ounce of gold sold for the nine months ending September 30, 2020 was $1,297 , a 29% increase compared to the same period of 2019 due to higher cash costs and an increase in capital expenditures per gold ounce sold. Capital expenditures were higher than the nine months ending September 30, 2019 , primarily due to new mobile mine equipment purchases, as well as increased leach pad and dewatering construction costs.

Seabee, Canada

| | Three months ended September 30 | Nine months ended September 30 | | | | | | | | | | | | | | | | | | | | | | Operating Data | 2020 | 2019 | Change | 2020 | 2019 | Change | | | | | | Total ore milled (t) | 66,409 | 77,465 | (14)% | 155,690 | 256,645 | (39)% | | | | | | Ore milled per day (t/day) | 722 | 842 | (14)% | 568 | 940 | (40)% | | | | | | Gold mill feed grade (g/t) | 10.17 | 12.39 | (18)% | 10.27 | 10.16 | 1% | | | | | | Gold recovery (%) | 98.6 | 98.8 | — | 98.3 | 98.2 | — | | | | | | | | | | | | | | | | | | Gold produced (oz) | 20,249 | 32,345 | (37)% | 49,770 | 90,068 | (45)% | | | | | | Gold sold (oz) | 19,900 | 28,278 | (30)% | 47,614 | 80,553 | (41)% | | | | | | | | | | | | | | | | | | Average realized gold price ($/oz sold) | $ | 1,913 | $ | 1,480 | 29% | $ | 1,739 | $ | 1,372 | 27% | | | | | | | | | | | | | | Cash costs ($/oz sold) (1) | $ | 538 | $ | 373 | 44% | $ | 542 | $ | 452 | 20% | | AISC ($/oz sold) (1) | $ | 988 | $ | 715 | 38% | $ | 1,035 | $ | 830 | 25% | | | | | | | | | | | | | | Financial Data ($000s) | | | | | | | | | | | | Revenue | $ | 38,035 | $ | 41,331 | (8)% | $ | 82,732 | $ | 109,999 | (25)% | | Production costs | $ | 10,677 | $ | 10,426 | 2% | $ | 25,725 | $ | 36,187 | (29)% | | Depletion and depreciation | $ | 7,167 | $ | 8,771 | (18)% | $ | 17,085 | $ | 26,244 | (35)% | | Income from mine operations | $ | 20,191 | $ | 22,134 | (9)% | $ | 39,922 | $ | 47,568 | (16)% | | Exploration and evaluation expenses | $ | 1,108 | $ | 2,131 | (48)% | $ | 4,020 | $ | 7,300 | (45)% | | Capital expenditures | $ | 10,371 | $ | 8,759 | 18% | $ | 25,555 | $ | 27,613 | (7)% |