Troilus Mining Corp press release
SSR Mining Reports First Quarter 2020 Results
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Canada NewsWire
VANCOUVER, May 14, 2020
VANCOUVER, May 14, 2020/CNW/ - SSR Mining Inc. (NASDAQ: SSRM) (TSX: SSRM) ("SSR Mining") reports consolidated financial results for the first quarter ended March 31, 2020.
Paul Benson, President and CEO said, "We would like to thank our employees who have acted with care and focus as each operation addresses its own set of operating conditions due to the COVID-19 pandemic during the first quarter of this year. Despite these challenges we had strong operating results for a near-record 107,000 gold-equivalent ounces and $58 millionof operating cash flow. Our balance sheet strength, with nearly $400 millionin cash, has continued to play an important role as we reduced debt, placed two operations on temporary care and maintenance and delivered encouraging exploration results all during the first quarter. As we look ahead our teams are reassessing the safe re-start of Seabee and Puna, and planning for production growth and exploration success to continue creating long-term value for our shareholders.
Importantly this week we announced a significant strategic development for SSR Mining, our zero-premium merger with Alacer Gold. This merger combines our portfolio of operations with a 'Tier 1' gold mine creating a free cash flow focused, diversified precious metals producer. This transaction aligns with investor interests for sector consolidation where both sets of shareholders benefit from being a part of a stronger company moving forward."
First Quarter 2020 Highlights: (All figures are in U.S. dollars unless otherwise noted)
Strong financial performance: Reported positive income from mine operations totaling $44.8 million, net income of $24.0 millionand adjusted attributable net income of $38.8 million, or $0.31per share.(1)
Maintained strong balance sheet and liquidity: Cash balance at quarter end was $398.4 millionand marketable securities of $50.3 million, while total convertible debt outstanding was reduced to $230 millionduring the quarter.
Robust production to start the year:Achieved quarterly consolidated production of 107,331 gold equivalent ounces at cash costs of $824per payable ounce of gold sold.(1)
High-grade production at Seabee Gold Operation:Produced 29,521 ounces of gold at cash costs of $544per payable ounce of gold sold.(1) Mill throughput exceeded 1,050 tonnes per day during January and February 2020. The temporary suspension of Seabee in late March reduced quarterly throughput to 981 tonnes per day.
Delivering at the Marigold mine: Produced 58,448 ounces of gold at cash costs of $824per payable ounce of gold sold.(1)Total material mined was over 20 million tonnes, continuing to demonstrate strong and efficient operating practices.
Consistent operating metrics at Puna Operations: Steady state mill throughput, silver feed grade and recovery led to 1.8 million ounces of silver production at cash costs of $13.49per payable ounce of silver sold.(1) Mill throughput averaged 4,300 tonnes per day up to March 20, 2020.
Temporary suspension of operations at Puna and Seabee: Announced the temporary suspension of operations at Puna and Seabee in response to the COVID-19 pandemic. Marigold experienced only minor impacts from the pandemic and continued normal operations during the quarter.
Continued exploration success:Drilling at Marigold and Seabee yielded positive results indicating potential increases to Mineral Resources. Drilling on greenfield targets yielded three resource grade intercepts at Fisher.
Redeemed outstanding 2.875% senior convertible notes: Redeemed remaining outstanding 2013 Notes for $115 millionin cash on March 30, 2020.
Announced a zero-premium merger with Alacer Gold on May 11, 2020: Creates a leading intermediate precious metals producer with robust margins, strong free cash flow generation, and long mine lives led by highly experienced management with a track record of value creation.
Divested SilverCrest equity position:On May 14, 2020, sold entire SilverCrest equity position of 9.0 million shares at a price of C$10.06per common share for pre-tax gain of approximately C$55 million.
| (1) | We report the non-GAAP financial measures of cash costs per payable ounce of gold and silver sold, adjusted attributable net income and adjusted attributable net income per share to manage and evaluate operating performance at the Marigold mine, the Seabee Gold Operation and Puna Operations. See "Cautionary Note Regarding Non-GAAP Measures". |
Marigold mine, U.S.
| | Three months ended | | | | | | | | | | | | March 31 | December 31 | September 30 | June 30 | March 31 | | | | | | | Operating data | 2020 | 2019 | 2019 | 2019 | 2019 | | | | | | | Total material mined (kt) | 20,259 | 18,457 | 19,033 | 19,254 | 17,295 | | | | | | | Waste removed (kt) | 15,255 | 11,736 | 12,676 | 12,185 | 11,767 | | | | | | | Total ore stacked (kt) | 5,004 | 6,721 | 6,357 | 7,070 | 5,528 | | | | | | | Gold stacked grade (g/t) | 0.30 | 0.36 | 0.51 | 0.38 | 0.34 | | | | | | | Gold recovery (%) | 76.0 | 76.0 | 77.0 | 75.0 | 73.0 | | | | | | | Strip ratio | 3.0 | 1.7 | 2.0 | 1.7 | 2.1 | | | | | | | | | | | | | | | | | | | Mining cost ($/t mined) | $ | 1.64 | $ | 1.83 | $ | 1.73 | $ | 1.65 | $ | 1.73 | | Processing cost ($/t processed) | $ | 1.21 | $ | 1.03 | $ | 1.17 | $ | 1.01 | $ | 1.20 | | General and administrative costs | | | | | | | | | | | | ($/t processed) | $ | 0.70 | $ | 0.54 | $ | 0.54 | $ | 0.47 | $ | 0.54 | | | | | | | | | | | | | | Gold produced (oz) | 58,448 | 59,186 | 52,968 | 54,922 | 53,151 | | | | | | | Gold sold (oz) | 58,028 | 61,088 | 50,650 | 59,702 | 55,517 | | | | | | | | | | | | | | | | | | | Realized gold price ($/oz) (1) | $ | 1,588 | $ | 1,478 | $ | 1,481 | $ | 1,309 | $ | 1,303 | | | | | | | | | | | | | | Cash costs ($/oz) (1) | $ | 824 | $ | 778 | $ | 822 | $ | 835 | $ | 812 | | AISC ($/oz) (1) | $ | 1,277 | $ | 1,117 | $ | 1,104 | $ | 986 | $ | 930 | | | | | | | | | | | | | | Financial data ($000s) | | | | | | | | | | | | Revenue | $ | 92,081 | $ | 90,198 | $ | 74,820 | $ | 78,039 | $ | 72,263 | | Income from mine operations | $ | 32,457 | $ | 30,263 | $ | 22,064 | $ | 13,939 | $ | 12,981 | | Capital expenditures (2) | $ | 13,900 | $ | 17,768 | $ | 10,496 | $ | 6,924 | $ | 3,167 | | Capitalized stripping | $ | 10,927 | $ | 2,116 | $ | 2,031 | $ | 871 | $ | 2,293 | | Exploration expenditures (3) | $ | 1,102 | $ | 1,190 | $ | 1,990 | $ | 2,452 | $ | 3,653 |
| | | | (1) | We report the non-GAAP financial measures of realized gold price, cash costs and all-in sustaining costs ("AISC") per payable ounce of gold sold to manage and evaluate operating performance at the Marigold mine. See "Cautionary Note Regarding Non-GAAP Measures". | | (2) | Excludes capitalized exploration expenditures. | | (3) | Includes capitalized and expensed exploration expenditures. |
Mine production
In the first quarter of 2020, 20.3 million tonnes of material were mined, a 10% increase compared to the fourth quarter of 2019 reflecting the impact of shorter haul distances associated with increased waste movement and some benefit from the new hydraulic loader commissioned during the first quarter.
During the first quarter of 2020, we delivered approximately 5.0 million tonnes of ore to the heap leach pads at a gold grade of 0.30 g/t. This compares to 6.7 million tonnes of ore delivered to the heap leach pads at a gold grade of 0.36 g/t in the fourth quarter of 2019. The gold grade delivered to the leach pad was 17% lower than the prior quarter and the strip ratio increased to 3.0:1 in the first quarter of 2020, a 76% increase compared to the prior quarter. The decrease in gold grade and increase in strip ratio are due to the completion of higher-grade ore deliveries from lower benches in the Mackay pit and the transition of mining equipment to stripping upper portions of the Mackay pit. Construction of the new leach pad is progressing per plan and on track to be completed during the year.
During the first quarter of 2020, the Marigold mine produced 58,448 ounces of gold, consistent with the prior quarter. During the first quarter of 2020, there were fewer tonnes stacked at lower grades compared to the fourth quarter of 2019, while production levels were similar compared to the fourth quarter of 2019 due to a draw down in leach pad inventories and benefits of the newly commissioned leach pad. While lower than the fourth quarter of 2019, the ounces stacked during the first quarter of 2020 were in fact higher than planned.
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".
In the first quarter of 2020, cash costs per payable ounce of gold sold were $824, a 6% increase compared to the prior quarter due to lower recoverable ounces stacked leading to higher unit inventory costs and an increase in royalty costs due to higher gold prices. Total mining costs of $1.64per tonne in the first quarter of 2020 were 10% lower than in the previous quarter primarily due to 10% higher tonnes mined and 2% lower total mining costs, mainly due to lower per unit fuel costs. Processing and general and administrative unit costs were 18% and 33% higher, respectively, in the first quarter of 2020 compared to the fourth quarter of 2019, due to 26% fewer ore tonnes mined.
In the first quarter of 2020, AISC per payable ounce of gold sold was $1,277, a 14% increase compared to the prior quarter due to higher planned sustaining capital expenditures on processing facility upgrades, deferred stripping and capitalized maintenance components.
Mine sales
Average realized gold price is a non-GAAP financial measure. Please see "Cautionary Note Regarding Non-GAAP Measures".
In the first quarter of 2020, we sold 58,028 ounces of gold, a 5% decrease compared to sales of 61,088 ounces of gold sold in the fourth quarter of 2019. We realized an average gold price of $1,588per ounce during the first quarter of 2020, an increase of 7% compared to an average realized gold price of $1,478per ounce during the fourth quarter of 2019.
Exploration
Our exploration plan for 2020 is focused on the discovery of additional Mineral Resources south of the currently producing Mackay Pit, including Trenton Canyon, Valmy, East Basalt and Crossfire. A minor amount of reverse circulation ("RC") drilling for additional Mineral Reserves at Mackay Pit and extensions at Red Dot is underway.
The acquisition in 2019 of adjacent claims south and west of our mining activities provide latitude to systematically explore for extensions to existing near surface oxide deposits similar to those mined at Marigold, and for higher grade sulphide deposits associated with deep fault structures, intrusive rocks and favourable Comus Formation sedimentary rocks similar to those hosting the deposits at the Turquoise Ridge Mine. Our exploration plan for high-grade, sulphide gold mineralization in 2020 includes 4,300 meters of core drilling supported by seismic and gravity geophysical surveys.
During the quarter, exploration drilling results included significant sulphide results at Trenton Canyon. These results demonstrate width and grade conditions similar to operating underground gold operations elsewhere in Nevada, and importantly show the new zone remains open at depth. As a result, we will continue to test and expand this new zone of gold mineralization.
In addition, exploration for extensions to oxide mineralization were successful at both Trenton Canyon and Valmy.
For further information regarding sulphide and oxide drill results, see our news release dated May 14, 2020(which is not incorporated by reference into this news release).
Looking ahead, we received approvals to build roads and construct drill sites along the identified mineralized corridors at Trenton Canyon. We anticipate moving the RC drill rigs to exploration areas in the second quarter of 2020.
Seabee Gold Operation, Canada
| | Three months ended | | | | | | | | | | | | March 31 | December 31 | September 30 | June 30 | March 31 | | | | | | | Operating data | 2020 | 2019 | 2019 | 2019 | 2019 | | | | | | | Total ore milled (t) | 89,282 | 87,394 | 77,465 | 88,424 | 90,756 | | | | | | | Ore milled per day (t/day) | 981 | 950 | 842 | 971 | 1,008 | | | | | | | Gold mill feed grade (g/t) | 10.34 | 7.89 | 12.39 | 9.83 | 8.59 | | | | | | | Gold recovery (%) | 98.1 | 97.9 | 98.8 | 98.4 | 97.2 | | | | | | | | | | | | | | | | | | | Mining costs ($/t mined) | $ | 68 | $ | 59 | $ | 61 | $ | 53 | $ | 52 | | Processing costs ($/t processed) | $ | 31 | $ | 29 | $ | 28 | $ | 35 | $ | 28 | | General and administrative costs | | | | | | | | | | | | ($/t processed) | $ | 65 | $ | 59 | $ | 59 | $ | 50 | $ | 53 | | | | | | | | | | | | | | Gold produced (oz) | 29,521 | 22,069 | 32,345 | 26,539 | 31,184 | | | | | | | Gold sold (oz) | 27,714 | 24,362 | 28,278 | 24,276 | 27,999 | | | | | | | | | | | | | | | | | | | Realized gold price ($/oz) (1) | $ | 1,615 | $ | 1,484 | $ | 1,480 | $ | 1,329 | $ | 1,302 | | | | | | | | | | | | | | Cash costs ($/oz) (1) | $ | 544 | $ | 505 | $ | 373 | $ | 526 | $ | 467 | | AISC ($/oz) (1) | $ | 982 | $ | 751 | $ | 715 | $ | 828 | $ | 947 | | | | | | | | | | | | | | Financial data ($000s) | | | | | | | | | | | | Revenue | $ | 44,697 | $ | 36,142 | $ | 41,331 | $ | 32,237 | $ | 36,431 | | Income from mine operations | $ | 19,731 | $ | 13,735 | $ | 22,134 | $ | 11,762 | $ | 13,672 | | Capital expenditures (2) | $ | 9,027 | $ | 2,772 | $ | 5,406 | $ | 3,358 | $ | 8,772 | | Capitalized development | $ | 3,067 | $ | 3,312 | $ | 3,352 | $ | 3,345 | $ | 3,379 | | Exploration expenditures (3) | $ | 2,437 | $ | 1,210 | $ | 2,131 | $ | 2,257 | $ | 3,172 |
| | | | (1) | We report the non-GAAP financial measures of realized gold price, cash costs and AISC per payable ounce of gold sold to manage and evaluate operating performance at the Seabee Gold Operation. See "Cautionary Note Regarding Non-GAAP Measures". | | (2) | Excludes capitalized exploration expenditures. | | (3) | Includes capitalized and expensed exploration expenditures. |
Mine production
In the first quarter of 2020, the Seabee Gold Operation produced 29,521 ounces of gold, a 34% increase compared to the fourth quarter of 2019, largely due to higher gold mill feed grade.
In the first quarter of 2020, the operation milled 89,282 tonnes of ore compared to 87,394 tonnes in the fourth quarter of 2019. The mill achieved an average throughput of 981 tonnes per day over the first quarter of 2020, a 3% increase compared to the prior quarter, mainly due to increased mill feed from the Santoy mine. During the first quarter of 2020, gold mill feed grade was 10.34 g/t, a 31% increase compared to the fourth quarter of 2019. Gold recovery for the first quarter of 2020 was 98.1%, consistent with the prior quarter.
In response to the COVID-19 pandemic, our Seabee Gold Operation was voluntarily placed into temporary care and maintenance on March 25, 2020as a precautionary measure intended to protect our employees, their families and our communities. The annual winter road campaign was completed prior to the suspension of operations with all required operating and capital items received at site. We continue to assess public health and government guidelines to determine options to restart operations. During the interim, we continue to manage required activities to ensure the safety of our employees and the environment, and to enable operational readiness for when the operation resumes.
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".
In the first quarter of 2020, cash costs per payable ounce of gold sold were $544, an 8% increase compared to the fourth quarter of 2019 due to higher unit inventory costs. Mining unit costs were $68per tonne mined in the first quarter of 2020, a 15% increase compared to the prior quarter due mainly to higher mobile equipment maintenance costs as a result of timing and increased operating development. Processing unit costs were $31per tonne milled in the first quarter of 2020, a 7% increase compared to the prior quarter due to higher assay and compensation costs. General and administrative costs per tonne milled were 10% higher mainly due to costs related to the winter road operations, which saw more truck crossings than originally planned, as well as an increase in flight costs and timing of compensation payments.
In the first quarter of 2020, AISC per payable ounce of gold sold was $982, a 31% increase compared to the prior quarter due to higher cash costs, as described above, and higher planned sustaining capital expenditures relating to equipment delivered over the winter road, partially offset by higher ounces sold.
Mine sales
Average realized gold price is a non-GAAP financial measure. Please see "Cautionary Note Regarding Non-GAAP Measures".
In the first quarter of 2020, we sold 27,714 ounces of gold, a 14% increase compared to 24,362 ounces of gold sold in the fourth quarter of 2019. We realized an average gold price of $1,615per ounce during the first quarter of 2020, an increase of 9% compared to an average realized gold price of $1,484per ounce during the fourth quarter of 2019.
Exploration
Exploration at the Seabee Gold Operation for 2020 is focused on defining Mineral Reserves and adding Mineral Resources at Gap Hanging Wall ("Gap HW") and adding Mineral Reserves and Mineral Resources at Santoy 8A. Our exploration program is comprised of 50,000 meters of underground infill drilling and 10,000 meters of surface drilling. Planned exploration for 2020 also includes an additional 10,000 meters of surface drilling peripheral to the Santoy mine, but within proximity of infrastructure and access points.
During the first quarter of 2020, we completed over 11,400 meters of underground drilling and over 4,830 meters of surface drilling on near-mine targets. The majority of the work completed during the first quarter related to Gap HW.
We received positive results from infill and surface exploration holes at the Gap HW, including one surface hole drilled 210 meters down plunge from the existing Gap HW Mineral Resources, which included a resource grade intercept implying that Mineral Resources may extend to these depths.
We expect first quarter 2020 results to further expand Mineral Resources at Gap HW when estimated at year-end 2020.
Outside of the immediate mine area, we drilled over 3,450 meters in 13 holes at surface targets near Batman Lake, approximately 650 meters south of Santoy 8. Drilling at the Joker target included resource grade intercepts. These intercepts demonstrate the near-surface Mineral Resource potential of the Santoy mine complex proximal to existing mine infrastructure.
At the Fisher project, our 2020 objectives include exploring areas with the potential to add Mineral Resources. We have planned a 12,000 meter drilling program, augmented by soil sampling, mapping and prospecting. We identified and prioritized target exploration areas at Mac North and Abel Lake. During the first quarter of 2020, we completed over 9,460 meters of drilling in 31 core holes on four targets near Mac North and Abel Lake, with positive results identified at Abel Lake, Yin and Mac Northtargets.
For further information regarding Gap HW, Batman Lake and Fisher project drill results, see our news release dated May 14, 2020(which is not incorporated by reference into this news release).
Exploration activities were completed in late-March 2020and coincided with our voluntary suspension of operations at Seabee. We will resume our Seabee and Fisher project exploration activities after the safe restart of operations at Seabee to allow for added exploration personnel on site.
Puna Operations, Argentina (amounts presented on 100% basis unless otherwise stated)
| | Three months ended | | | | | | | | | | | | March 31 | December 31 | September 30 | June 30 | March 31 | | | | | | | Operating data | 2020 | 2019 | 2019 | 2019 | 2019 | | | | | | | Total material mined (kt) | 1,953 | 3,244 | 3,116 | 3,304 | 2,618 | | | | | | | Waste removed (kt) | 1,674 | 2,725 | 2,531 | 3,114 | 2,469 | | | | | | | Strip ratio | 6.0 | 5.3 | 4.3 | 16.4 | 16.6 | | | | | | | Ore milled (kt) | 340 | 400 | 336 | 313 | 345 | | | | | | | | | | | | | | | | | | | Silver mill feed grade (g/t) | 170 | 174 | 165 | 160 | 235 | | | | | | | Lead mill feed grade (%) | 0.81 | 0.99 | 0.81 | 0.71 | 1.07 | | | | | | | Zinc mill feed grade (%) | 0.44 | 0.63 | 0.60 | 0.46 | 0.46 | | | | | | | Silver recovery (%) | 95.3 | 95.1 | 93.5 | 92.4 | 91.7 | | | | | | | Lead recovery (%) | 91.4 | 91.9 | 88.1 | 79.4 | 83.6 | | | | | | | Zinc recovery (%) | 55.0 | 54.3 | 49.3 | 48.1 | 47.3 | | | | | | | | | | | | | | | | | | | Mining costs ($/t mined) | $ | 3.62 | $ | 2.62 | $ | 2.76 | $ | 2.33 | $ | 2.74 | | Processing costs ($/t milled) | $ | 29.98 | $ | 29.53 | $ | 36.34 | $ | 32.57 | $ | 29.62 | | General and administrative costs | | | | | | | | | | | | ($/t milled) | $ | 8.36 | $ | 9.11 | $ | 9.24 | $ | 8.27 | $ | 8.02 | | | | | | | | | | | | | | Silver produced ('000 oz) | 1,770 | 2,132 | 1,664 | 1,486 | 2,392 | | | | | | | Silver sold ('000 oz) | 1,834 | 2,584 | 1,505 | 2,679 | 927 | | | | | | | | | | | | | | | | | | | Lead produced ('000 lb) (1) | 5,536 | 7,985 | 5,304 | 3,879 | 6,789 | | | | | | | Lead sold ('000 lb) (1) | 6,407 | 9,371 | 4,119 | 7,652 | 2,977 | | | | | | | | | | | | | | | | | | | Zinc produced ('000 lb) (2) | 1,821 | 3,007 | 2,206 | 1,539 | 1,640 | | | | | | | Zinc sold ('000 lb) (2) | 2,166 | 3,067 | 2,030 | 5,757 | 3,218 | | | | | | | | | | | | | | | | | | | Realized silver price ($/oz) (3) | $ | 17.47 | $ | 17.32 | $ | 17.31 | $ | 14.92 | $ | 15.35 | | Realized lead price ($/lb) (3) | $ | 0.85 | $ | 0.92 | $ | 0.94 | $ | 0.85 | $ | 0.95 | | Realized zinc price ($/lb) (3) | $ | 0.88 | $ | 1.11 | $ | 1.03 | $ | 1.28 | $ | 1.27 | | | | | | | | | | | | | | Cash costs ($/oz) (3,5) | $ | 13.49 | $ | 8.90 | $ | 14.22 | $ | 9.80 | $ | 9.94 | | AISC ($/oz) (3,5) | $ | 16.40 | $ | 11.18 | $ | 17.36 | $ | 13.08 | $ | 19.76 | | | | | | | | | | | | | | Financial Data ($000s) | | | | | | | | | | | | Revenue | $ | 27,685 | $ | 51,263 | $ | 31,697 | $ | 44,873 | $ | 17,556 | | (Loss) Income from mine operations | $ | (7,405) | $ | 14,915 | $ | 7,708 | $ | 4,126 | $ | 3,584 | | Capital expenditures (4) | $ | 2,088 | $ | 2,134 | $ | 1,782 | $ | 1,157 | $ | 1,543 | | Capitalized stripping | $ | 2,192 | $ | 2,565 | $ | 1,385 | $ | 6,273 | $ | 6,191 | | Exploration expenditures | $ | 150 | $ | 492 | $ | 229 | $ | 65 | $ | 1 |