Troilus Mining Corp press release
SSR Mining Reports Third Quarter 2018 Results
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VANCOUVER, Nov. 8, 2018
VANCOUVER, Nov. 8, 2018 /CNW/ - SSR Mining Inc. (NASDAQ: SSRM) (TSX: SSRM) ("SSR Mining") reports consolidated financial results for the third quarter ended September 30, 2018.
Paul Benson, President and CEO said, "Our improved financial performance during the quarter marks another positive step forward in SSR Mining's growth plan. We more than doubled operating cash flow and increased attributable earnings compared to last quarter, having set new operating records at Marigold and Seabee, and achieved key milestones at Chinchillas. This added confidence in the business led to improved 2018 guidance, as we deliver another year of value and growth for our shareholders."
Third Quarter 2018 Highlights:
(All figures are in U.S. dollars unless otherwise noted). Cash costs per payable ounce of gold sold is a non-GAAP financial measure. Please see "Cautionary Note Regarding Non-GAAP Measures".
Increased cash flow and earnings:More than doubled cash generated from operating activities from the prior quarter to $35.4 millionand increased attributable net income to $0.05per share.
Increased production and lowered costs:Consolidated production increased to 94,808 gold equivalent ounces while achieving lower cash costs of $682per equivalent payable ounce of gold sold.
Enhanced scale at Marigold: Moved a record 21.3 million tonnes of material, a 33% quarterly increase, benefiting from four additional haul trucks that entered service as scheduled.
Production growth at Marigold: Produced 58,459 ounces of gold, an 18% quarterly increase, at cash costs of $711per payable ounce of gold sold.
Record production and cash costs at the Seabee Gold Operation:Produced a record 27,831 ounces of gold at record low cash costs of $447per payable ounce of gold sold.
Chinchillas project remains on track:Achieved key milestones during the quarter, including successful test processing of Chinchillas ore and production of saleable concentrates. The project remains on budget and commercial production is expected by the end of the year.
Maintained strong liquidity: Quarter-end cash balance of approximately $475 millionand total liquidity of approximately $550 millionincluding our undrawn revolving credit facility.
Marigold mine, U.S.
| | Three months ended | | | | | | | | | | Operating data | September 30 2018 | | June 30 2018 | | March 31 2018 | | December 31 2017 | | September 30 2017 | | | | | | | | | | | | | Total material mined (kt) | 21,284 | | 15,958 | | 16,150 | | 13,979 | | 20,311 | | Waste removed (kt) | 14,411 | | 8,083 | | 9,052 | | 8,136 | | 13,149 | | Total ore stacked (kt) | 6,873 | | 7,875 | | 7,099 | | 5,843 | | 7,162 | | Strip ratio | 2.1 | | 1.0 | | 1.3 | | 1.4 | | 1.8 | | Mining costs ($/t mined) | 1.51 | | 1.92 | | 1.80 | | 1.98 | | 1.52 | | Gold stacked grade (g/t) | 0.32 | | 0.42 | | 0.37 | | 0.37 | | 0.31 | | Processing costs ($/t processed) | 1.12 | | 0.86 | | 0.93 | | 1.08 | | 0.89 | | Gold recovery (%) | 72.3 | | 74.4 | | 73.6 | | 74.0 | | 72.0 | | General and admin costs ($/t processed) | 0.50 | | 0.41 | | 0.42 | | 0.51 | | 0.40 | | | | | | | | | | | | | Gold produced (oz) | 58,459 | | 49,436 | | 42,960 | | 52,768 | | 38,699 | | Gold sold (oz) | 59,612 | | 46,644 | | 42,078 | | 51,420 | | 38,818 | | | | | | | | | | | | | Realized gold price ($/oz) (1) | 1,207 | | 1,304 | | 1,331 | | 1,269 | | 1,270 | | | | | | | | | | | | | Cash costs ($/oz) (1) | 711 | | 700 | | 720 | | 699 | | 684 | | AISC ($/oz) (1) | 965 | | 981 | | 954 | | 1,001 | | 979 | | | | | | | | | | | | | Financial data ($000s) | | | | | | | | | | | Revenue | 71,848 | | 60,752 | | 55,880 | | 65,217 | | 49,395 | | Income from mine operations | 13,254 | | 14,670 | | 12,312 | | 12,777 | | 11,189 | | Capital expenditures (2) | 25,461 | | 14,481 | | 4,665 | | 8,194 | | 3,855 | | Capitalized stripping | 2,529 | | 850 | | 2,902 | | 5,712 | | 6,056 | | Exploration expenditures (3) | 2,956 | | 3,243 | | 1,914 | | 1,208 | | 1,130 |
| (1) | We report the non-GAAP financial measures of realized gold price, cash costs and all-in sustaining costs ("AISC") per payable ounce of gold sold to manage and evaluate operating performance at the Marigold mine. For a better understanding and a reconciliation of these measures to cost of sales, as shown in our Consolidated Interim Statements of Income, please refer to "Non-GAAP Financial Measures" in Section 9 of our Management's Discussion and Analysis for the three and nine months ended September 30, 2018 ("MD&A") . | | (2) | Includes expansion capital expenditures of $16.1 million for the three months ended September 30, 2018 ($5.9 for the three months ended June 30, 2018 and $nil for the previous three quarters). | | (3) | Includes capitalized and expensed exploration expenditures. |
Mine production
In the third quarter of 2018, the Marigold mine produced 58,459 ounces of gold, an 18% quarterly increase, benefiting from the record ore tonnes stacked in the second quarter.
During the quarter, a record 21.3 million tonnes of material were mined, a 33% increase compared to the second quarter, due to four additional haul trucks that entered service during the quarter, shorter haul distances and improved equipment availabilities.
Approximately 6.9 million tonnes of ore were delivered to the heap leach pads, at a gold grade of 0.32 g/t. This compares to 7.9 million tonnes of ore delivered to the heap leach pads at a gold grade of 0.42 g/t in the second quarter of 2018. The strip ratio was 2.1:1 for the quarter.
Mine operating costs
Cash costs and AISC per payable ounce of gold sold are non-GAAP financial measures. Please see "Cautionary Note Regarding Non-GAAP Measures".
Cash costs, which include all costs of inventory, refining costs and royalties, of $711per payable ounce of gold sold in the third quarter of 2018 were in line with the previous quarter. Mining costs of $1.51per tonne in the third quarter of 2018 were 21% lower than in the previous quarter primarily due to 33% more tonnes mined. Processing and general administrative unit costs were 30% and 22% higher, respectively, in the third quarter than in the second quarter due to lower ore tonnes stacked.
AISC per payable ounce of gold sold decreased in the third quarter of 2018 to $965from $981in the second quarter due to lower sustaining capital expenditures per payable ounce sold, which more than offset higher cash costs and capitalized stripping per payable ounce sold for the quarter.
Mine sales
A total of 59,612 ounces of gold were sold at an average realized price of $1,207per ounce during the third quarter of 2018, an increase of 28% from the 46,644 ounces of gold sold at an average realized price of $1,304per ounce during the second quarter of 2018.
Exploration
The main focus of our 2018 exploration program has been to conduct infill drilling of the Red Dot resource area and to explore higher grade structural zones within phases of the Mackay pit. During the third quarter, we completed a total of 76 reverse circulation drillholes for 26,961 meters at Red Dot and within the Mackay pit. Through the first nine months of 2018, we have completed 199 drillholes for 72,017 meters.
During the third quarter at Red Dot and Mackay, we received results from 44 holes that together with earlier drilling, increases our confidence that a portion of the Red Dot Inferred Mineral Resources will be upgraded at year-end 2018. If the current Inferred Mineral Resources upgrade work is successful, the upgraded Mineral Resources will be subject to additional geotechnical drilling and engineering during the first half of 2019, with the goal of declaring a Mineral Reserve at Red Dot, and also an updated mine plan, by mid-year 2019.
During the fourth quarter of 2018, we will complete the Red Dot exploration and infill drilling program and continue exploration drilling of the higher-grade structures in the Mackay Phase 5 area.
Seabee Gold Operation, Canada
| | Three months ended | | | | | | | | | | Operating data | September 30 2018 | | June 30 2018 | | March 31 2018 | | December 31 2017 | | September 30 2017 | | | | | | | | | | | | | Total ore milled (t) | 88,273 | | 84,010 | | 93,269 | | 89,237 | | 84,315 | | Ore milled per day (t/day) | 959 | | 923 | | 1,036 | | 970 | | 916 | | Gold mill feed grade (g/t) | 9.52 | | 7.95 | | 8.95 | | 8.89 | | 7.03 | | Mining costs ($/t mined) | 48 | | 60 | | 59 | | 66 | | 74 | | Processing costs ($/t processed) | 26 | | 27 | | 21 | | 24 | | 22 | | Gold recovery (%) | 97.1 | | 97.3 | | 97.4 | | 97.4 | | 97.2 | | General and admin costs ($/t processed) | 47 | | 62 | | 53 | | 61 | | 53 | | | | | | | | | | | | | Gold produced (oz) | 27,831 | | 23,582 | | 23,717 | | 24,227 | | 18,058 | | Gold sold (oz) (1) | 29,175 | | 20,512 | | 20,012 | | 23,969 | | 21,798 | | | | | | | | | | | | | Realized gold price ($/oz) (2) | 1,210 | | 1,306 | | 1,340 | | 1,276 | | 1,269 | | | | | | | | | | | | | Cash costs ($/oz) (2) | 447 | | 616 | | 481 | | 605 | | 634 | | AISC ($/oz) (2) | 596 | | 854 | | 896 | | 776 | | 775 | | | | | | | | | | | | | Financial data ($000s) | | | | | | | | | | | Revenue | 35,270 | | 26,706 | | 26,789 | | 30,571 | | 27,652 | | Income from mine operations | 11,061 | | 5,703 | | 6,672 | | 2,923 | | 3,643 | | Capital expenditures | 968 | | 1,035 | | 4,426 | | 920 | | 799 | | Capitalized development | 1,812 | | 2,069 | | 2,283 | | 2,301 | | 1,314 | | Exploration expenditures (3) | 2,860 | | 2,745 | | 2,032 | | 1,187 | | 1,253 |
| | | | (1) | Beginning with the first quarter of 2018, the holder of the 3% net smelter returns royalty elected to receive its royalty in-kind and we will no longer report these ounces within gold sold. | | (2) | We report the non-GAAP financial measures of realized gold price, cash costs and AISC per payable ounce of gold sold to manage and evaluate operating performance at the Seabee Gold Operation. For a better understanding and a reconciliation of these measures to cost of sales, as shown in our Consolidated Interim Statements of Income, please refer to "Non-GAAP Financial Measures" in Section 9 of our MD&A. | | (3) | Includes capitalized and expensed exploration expenditures. |
Mine production
Seabee Gold Operation produced a record 27,831 ounces of gold in the third quarter, a quarterly increase of 18%, driven by higher average mill feed grade and increased mill throughput.
The mill achieved an average throughput of 959 tonnes per day, a 4% quarterly increase reflecting a higher mining rate at the Santoy mine. Gold recovery for the quarter remained consistent at 97.1%.
Mine operating costs
Cash costs and AISC per payable ounce of gold sold are non-GAAP financial measures. Please see "Cautionary Note Regarding Non-GAAP Measures".
Cash costs per payable ounce of gold sold, which include all costs of inventory and refining costs, were $447in the third quarter of 2018, 27% lower than the $616recorded in the second quarter of 2018. Lower cash costs were primarily the result of higher tonnes milled at higher grades, while we incurred total operating costs that were comparable to the prior quarter. Mining costs per tonne mined were $48in the third quarter of 2018, lower than the previous quarter of $60due to higher tonnes of material mined. Processing costs per tonne remained comparable to the prior quarter, while general and administrative unit costs decreased by 24% in the third quarter of 2018 compared to the second quarter of 2018, due to higher tonnes milled.
AISC per payable ounce of gold sold were $596in the third quarter of 2018, lower than the $854in the second quarter of 2018, primarily due to lower cash costs and lower underground capital development and capital expenditures per payable ounce sold.
Mine sales
A total of 29,175 ounces of gold were sold at an average realized price of $1,210per ounce during the third quarter of 2018, compared to 20,512 ounces of gold sold in the second quarter of 2018, at an average realized price of $1,306per ounce.
Exploration
For 2018, the Seabee Gold Operation has planned 45,000 meters of underground drilling and 20,000 meters of surface drilling with the objective to increase and convert Mineral Resources into Mineral Reserves in the Santoy mine area. In the third quarter of 2018, in the Santoy mine area, we completed 14,577 meters of underground drilling and 13,539 meters of surface drilling in 59 and 58 drillholes, respectively. Our surface and underground drill programs focused on three targets for the third quarter, including Santoy Gap hanging wall ("HW"), the Santoy 8A area and Santoy Gap. Results at Santoy Gap HW confirm a discovery close to existing infrastructure that we expect to contribute new, additional Inferred Mineral Resources at year-end. Results have been positive and increase our confidence that the majority of the Santoy 8A area will be upgraded in classification, providing additional Mineral Reserves at year-end 2018.
Surface exploration drilling in the third quarter of 2018 focused on two areas including Santoy 8A East, with 1,113 meters in two drillholes, and the Fisher project, with 1,866 meters completed in four drillholes. Our activities in the quarter shifted from drilling to completing field-based programs of mapping, continued overburden geochemical surveys of soils and tills, prospecting, and drill testing of first pass targets on the extension of the Santoy shear zone identified along the length of the Fisher project. Mapping and prospecting on Fisher has identified new gold bearing shear zone quartz vein targets, and first pass drill results have been returned with anomalous gold values. We continue to be encouraged by the potential of this early stage property.
Activities in the fourth quarter will focus on continuing the conversion drilling from underground on the Santoy Gap and Santoy 8A targets, resource definition drilling on Santoy Gap HW, and advancing our surface exploration programs on Fisher. Surface drilling activity in the fourth quarter will also take place at Santoy 8A East.
Puna Operations, Argentina(75% interest) (Amounts presented on 100% basis unless otherwise stated)
| | Three months ended | | | | | | | | | | Operating data | September 30 2018 | | June 30 2018 | | March 31 2018 | | December 31 2017 | | September 30 2017 | | | | | | | | | | | | | Ore milled (kt) | 308 | | 396 | | 373 | | 442 | | 461 | | Silver mill feed grade (g/t) | 96 | | 110 | | 115 | | 125 | | 153 | | Zinc mill feed grade (%) | 1.25 | | 0.71 | | — | | — | | — | | Processing costs ($/t milled) | 20.87 | | 17.26 | | 15.34 | | 13.53 | | 11.92 | | Silver recovery (%) | 69.9 | | 68.1 | | 67.7 | | 66.0 | | 67.8 | | Zinc recovery (%) | 38.1 | | 31.5 | | — | | — | | — | | General and admin costs ($/t milled) | 7.98 | | 7.07 | | 6.33 | | 5.74 | | 4.81 | | | | | | | | | | | | | Silver produced ('000 oz) | 666 | | 954 | | 938 | | 1,169 | | 1,541 | | Silver produced (attributable) ('000 oz) (1) | 500 | | 716 | | 704 | | 877 | | 1,156 | | Lead produced ('000 lb) (2) | 372 | | — | | — | | — | | — | | Lead produced (attributable) ('000 lb) (1,2) | 279 | | — | | — | | — | | — | | Zinc produced ('000 lb) (3) | 3,241 | | 1,521 | | — | | — | | — | | Zinc produced (attributable) ('000 lb) (1,3) | 2,431 | | 1,141 | | — | | — | | — | | Silver sold ('000 oz) | 623 | | 1,142 | | 1,064 | | 820 | | 2,076 | | Silver sold (attributable) ('000 oz) (1) | 467 | | 857 | | 798 | | 615 | | 1,557 | | Zinc sold ('000 lb) (3,5) | 383 | | — | | — | | — | | — | | Zinc sold (attributable) ('000 lb) (1,3) | 287 | | — | | — | | — | | — | | | | | | | | | | | | | Realized silver price ($/oz) (4) | 15.45 | | 16.49 | | 16.79 | | 16.96 | | 16.77 | | | | | | | | | | | | | Cash costs ($/oz) (4,5,6) | 17.41 | | 14.73 | | 17.07 | | 16.36 | | 12.76 | | AISC ($/oz) (4,6) | 22.39 | | 17.66 | | 18.37 | | 18.30 | | 13.56 | | | | | | | | | | | | | Financial Data ($000s) | | | | | | | | | | | Revenue | 7,915 | | 16,570 | | 15,233 | | 12,093 | | 28,958 | | (Loss) income from mine operations | (2,440) | | 830 | | (1,753) | | 5,490 | | 7,690 | | Capital expenditures (7) | 2,390 | | 2,652 | | 789 | | 917 | | 1,006 | | Exploration expenditures (7) | 6 | | 429 | | 6 | | — | | — |
| | | | (1) | Figures are on a 75% attributable basis. | | (2) | Data for lead production relates only to lead in lead-silver concentrate. | | (3) | Data for zinc production and sales relate only to zinc in zinc concentrate. | | (4) | We report the non-GAAP financial measures of realized silver price, cash costs, and AISC per payable ounce of silver sold to manage and evaluate operating performance at Puna Operations. For a better understanding and a reconciliation of these measures to cost of sales, as shown in our Consolidated Interim Statements of Income, please refer to "Non-GAAP Financial Measures" in Section 9 of our MD&A. | | (5) | Zinc revenue is treated as a by-product credit in cash costs and AISC. Refer to "Non-GAAP Financial Measures" in Section 9 of our MD&A. | | (6) | Cash costs and AISC per payable ounce of silver sold include stockpile inventory costs previously incurred of $nil for the three months ended September 30, 2018 (June 30, 2018 - $nil, March 31, 2018 - $5.75, December 31, 2017 - $5.30, September 30, 2017 - $5.20). | | (7) | Does not include exploration or development of the Chinchillas project. |
Mine production
During the third quarter of 2018, Puna Operations produced 0.7 million ounces of silver and 3.2 million pounds of zinc, reflecting a shift to processing stockpiles with higher zinc content.
Ore was milled at an average rate of 3,348 tonnes per day in the third quarter, 23% below the second quarter, due to planned major mill maintenance occurring in July and test processing of Chinchillas ore. Ore milled in the third quarter contained an average silver grade of 96 g/t, 13% lower than the 110 g/t average silver grade in the second quarter, consistent with processing of increasingly lower grade stockpiles. The average silver recovery in the third quarter was 70%, a 3% improvement compared to the previous quarter.
Mine operating costs
Cash costs and AISC per payable ounce of silver sold are non-GAAP financial measures. Please see "Cautionary Note Regarding Non-GAAP Measures".
Cash costs, which include costs of inventory, treatment and refining costs, provincial royalties, export duties and by-product credits, were $17.41per payable ounce of silver sold in the third quarter of 2018, an increase from $14.73per payable ounce of silver sold in the second quarter of 2018. Such increase was primarily due to lower production resulting from lower silver grade of the stockpiled ore processed. Zinc sales were significantly below production in the period and generated minimal by-product credits.
AISC per payable ounce of silver sold in the third quarter of 2018 were $22.39, 27% higher than $17.66in the second quarter of 2018 due to higher cash costs and sustaining capital expenditures per payable ounce of silver sold compared to the second quarter.
During the third quarter, the Federal Government of Argentinainstituted export duties on several goods, including metal concentrate exports. Effective September 3, 2018, the export of silver, lead and zinc concentrates were levied with an export duty of three Argentine Pesos per one U.S. dollarof export value. Such export duty is mandated to cease at the end of 2020.
Mine sales
Silver sales were 0.6 million ounces for the quarter, marginally lower than production. We re-commenced zinc concentrate sales during the third quarter, selling 0.4 million pounds of zinc with a ramp-up of zinc sales anticipated through the fourth quarter.
Exploration
There were no exploration activities during the third quarter at Puna Operations as we focused on commencing mining activities at Chinchillas. We continue to evaluate the results from the drill program conducted in the first half of 2018 on the Potosivein extension for its potential to enhance our underground Mineral Resources.
Chinchillas project, Argentina
During the third quarter, pre-stripping activities at the Chinchillas project continued to advance, with approximately 2.1 million tonnes of waste and 0.3 million tonnes of ore mined. Approximately 73,000 tonnes of ore from the Chinchillas pit were delivered to the Pirquitas mill, of which approximately 39,000 tonnes were processed in two separate test runs as part of the project execution. The tests successfully validated metallurgical performance of the ore and produced saleable lead-silver and zinc concentrates. Data related to pre-commercial processing of ore from the Chinchillas pit is included in the table above.