Troilus Mining Corp press release
SSR Mining Reports Fourth Quarter and Year-End 2018 Production Results and 2019 Guidance
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Canada NewsWire
VANCOUVER, Jan. 15, 2019
VANCOUVER, Jan. 15, 2019/CNW/ - SSR Mining Inc. (NASDAQ: SSRM) (TSX: SSRM) ("SSR Mining") reports fourth quarter and year-end 2018 operating results. Additionally, we are providing 2019 guidance.
Fourth Quarter and 2018 Operating Highlights
Achieved total annual production guidance: Produced over 345,000 gold equivalent ounces in 2018 and over 88,000 gold equivalent ounces in the fourth quarter, meeting or exceeding initial guidance for a seventh consecutive year. Delivered attributable gold equivalent production of over 335,000 ounces in 2018.
Strong finish to the year at Marigold:Annual production of 205,160 ounces of gold in 2018, as fourth quarter gold production of 54,306 ounces led to Marigold exceeding the upper end of our revised annual guidance.
Delivered record annual gold production at Seabee:The operation achieved the highest annual production in its history, producing 95,602 ounces of gold in 2018, exceeding the top end of the upwardly revised annual guidance.
Strong operating performance at Seabee:In 2018, the operation milled 352,000 tonnes of ore or 964 tonnes per day, another operating record, while average gold mill feed grade was an impressive 9.16 g/t.
Ramp-up of operations at Puna: Exceeded the upper end of the revised annual silver production guidance with a total of 3.7 million ounces. With the declaration of commercial production at the Chinchillas mine in December 2018, we produced 1.2 million ounces of silver in the fourth quarter, a 79% increase over the third quarter, as the mill averaged nearly 3,800 tonnes per day.
Paul Benson, President and CEO said, "As all three of our operations exceeded expectations and with both Marigold and Seabee at or near record annual production, we produced over 345,000 gold equivalent ounces in 2018. This marks the seventh consecutive year that we have met or exceeded our annual production guidance. In the year ahead, we are forecasting production growth to nearly 400,000 gold equivalent ounces, with Seabee and Marigold continuing to deliver to plan and Puna ramping-up to steady-state operations. Importantly, due to the exploration success across our portfolio and our strong balance sheet, we are able to invest in our assets for the long-term benefit of our shareholders, communities, and employees."
Marigold Mine, U.S.
| | | Q4 2018 | Q3 2018 | % Change 1 | FY 2018 | FY 2017 | % Change 1 | | Total material mined | kt | 17,039 | 21,284 | (19.9%) | 70,431 | 69,011 | 2.1% | | Waste removed | kt | 11,361 | 14,411 | (21.2%) | 42,906 | 43,422 | (1.2%) | | Ore to leach pad | kt | 5,679 | 6,873 | (17.4%) | 27,525 | 25,589 | 7.6% | | Strip ratio | w/o | 2.0 | 2.1 | (4.8%) | 1.6 | 1.7 | (5.9%) | | Gold grade to leach pad | g/t | 0.34 | 0.32 | 6.3% | 0.37 | 0.35 | 5.7% | | Gold recovery | % | 73% | 72% | 1.4% | 73% | 73% | 0.0% | | Gold produced | oz | 54,306 | 58,459 | (7.1%) | 205,160 | 202,240 | 1.4% | | Gold sold | oz | 50,550 | 59,612 | (15.2%) | 198,884 | 200,192 | (0.7%) |
| Notes: | | | (1) | Percent changes are calculated using rounded numbers presented in the table. |
In 2018, the Marigold mine produced 205,160 ounces of gold, surpassing the upper end of our revised production guidance. This compares to 202,240 ounces of gold produced in 2017. For the full-year, gold sales were 198,884 ounces due to bullion inventory increasing in the fourth quarter relative to the previous quarter, which we expect to sell in the first quarter of 2019.
Material mined during the year totaled 70.4 million tonnes, a 2% increase as compared to 2017. The mine achieved record annual ore tonnes to the leach pads with over 27.5 million tonnes stacked.
During the fourth quarter of 2018, 17.0 million tonnes of material were mined, down 20% from the third quarter due to scheduled maintenance on the electric rope shovel and longer haul cycles. Construction delays deferred the new leach pad commissioning to the first quarter of 2019 and solution application commenced in January 2019.
Approximately 5.7 million tonnes of ore were delivered to the heap leach pads at a gold grade of 0.34 g/t in the fourth quarter. This compares to 6.9 million tonnes of ore delivered to the leach pads at a gold grade of 0.32 g/t in the third quarter. Gold grade mined in the fourth quarter was 6% higher than the third quarter due to mining deeper in the current phase of the Mackay pit. The strip ratio declined to 2.0:1 in the quarter, a 5% reduction compared to the previous quarter.
In the fourth quarter of 2018, Marigold produced 54,306 ounces of gold, representing a 7.1% reduction as compared to the previous quarter. Gold sales totaled 50,550 ounces for the quarter.
Seabee Gold Operation, Canada
| | | Q4 2018 | Q3 2018 | % Change 1 | FY 2018 | FY 2017 2 | % Change 1 | | Total ore milled | t | 86,447 | 88,273 | (2.1%) | 352,000 | 330,415 | 6.5% | | Ore milled per day | t/day | 940 | 959 | (2.0%) | 964 | 905 | 6.5% | | Gold mill feed grade | g/t | 10.20 | 9.52 | 7.1% | 9.16 | 8.25 | 11.0% | | Gold recovery | % | 97.6% | 97.1% | 0.5% | 97.4% | 97.4% | 0.0% | | Gold produced | oz | 20,473 | 27,831 | (26.4%) | 95,602 | 83,998 | 13.8% | | Gold sold | oz | 21,711 | 29,175 | (25.6%) | 91,410 | 86,087 | 6.2% |
| Notes: | | | (1) | Percent changes are calculated using rounded numbers presented in the table. |
The Seabee Gold Operation produced 95,602 ounces of gold in 2018, an annual production record resulting from an improved milling rate and higher gold grade. A total of 91,371 ounces of gold were sold during the year.
In 2018, the operation milled 352,000 tonnes of ore, another operating record, largely due to our ongoing Operational Excellence initiatives. During the year, average gold mill feed grade was 9.16 g/t, 11% higher compared to the average gold grade milled in 2017. The Santoy mine supplied 93% of ore milled, predominantly from long hole stopes; the remaining ore was sourced from the Seabee mine, which was closed in the second quarter of 2018.
In the fourth quarter of 2018, the operation produced 20,473 ounces of gold, a 26% decrease primarily due to gold ounces contained in circuit at year-end 2018 due to timing of gold pours. Gold sales totaled 21,711 ounces during the quarter.
During the fourth quarter, 86,447 tonnes of ore were milled at an average gold grade of 10.2 g/t and recovery of 97.6%. This compares to 88,273 tonnes of ore milled at an average gold grade of 9.52 g/t and recovery of 97.1% in the third quarter of 2018.
Puna Operations, Argentina1
| | | Q4 2018 | Q3 2018 | % Change 2 | FY 2018 | FY 2017 3 | % Change 2 | | Total material mined | kt | 897 4 | - | - | 897 4 | 89 | na | | Waste removed | kt | 696 4 | - | - | 696 4 | 36 | na | | Ore mined | kt | 201 4 | - | - | 201 4 | 53 | na | | Strip ratio | w/o | 3.5 4 | - | - | 3.5 4 | 0.7 | na | | Ore milled | kt | 342 | 308 | 11.0% | 1,420 | 1,798 | (21.0%) | | Silver mill feed grade | g/t | 133 | 96 | 38.5% | 114 | 152 | (25.0%) | | Zinc mill feed grade | % | 1.14% | 1.25% | (8.8%) | 0.84% | - | - | | Lead mill feed grade | % | 0.92% | - | - | 0.85% | - | - | | Silver recovery | % | 81.5% | 69.9% | 16.6% | 72.1% | 70.3% | 2.6% | | Zinc recovery | % | 49.5% | 38.1% | 27.2% | 39.3% | - | - | | Lead recovery | % | 83.1% | 78.7% | 5.6% | 82.6% | - | - | | Silver produced | koz | 1,189 | 666 | 78.5% | 3,747 | 6,177 | (39.3%) | | Silver sold | koz | 932 | 623 | 49.6% | 3,761 | 5,994 | (37.3%) | | Zinc produced | Klb | 4,014 | 3,241 | 23.9% | 8,775 | - | - | | Zinc sold | Klb | 1,983 | 383 | na | 2,365 | - | - | | Lead produced | Klb | 2,735 | 372 | na | 3,107 | - | - | | Lead sold | Klb | 1,059 | - | - | 1,059 | - | - |
| _Notes__:_ | | | (1) | Figures are on 100% basis. "na" refers to not applicable. | | (2) | Percent changes are calculated using rounded numbers presented in the table. | | (3) | Figures for 2017 represent 100% for the period from January to May 2017 and 75% for the period from June to December 2017. | | (4) | Data is for the period subsequent to December 1, 2018, the date upon which commercial production was declared at the Chinchillas mine. |
In 2018, Puna Operations produced a total of 3.7 million ounces of silver, 8.8 million pounds of zinc and 3.1 million pounds of lead. Silver sold for the year totaled 3.8 million ounces. On an attributable basis, silver production and sales in 2018 totaled 2.8 million ounces and 2.8 million ounces, respectively.
During the year, ore was milled at an average of 3,890 tonnes per day. Ore milled contained an average silver grade of 114 g/t. The average silver recovery was 72.1%, a 3% improvement as compared to 2017.
In the fourth quarter of 2018, silver production was 1.2 million ounces, an increase of 79% relative to the third quarter, due mainly to the increased tonnage of higher-grade Chinchillas ore milled. Silver sales totaled 0.9 million ounces. On an attributable basis, silver production and sales for the quarter totaled 0.9 million ounces and 0.7 million ounces, respectively.
Subsequent to the declaration of commercial production at Chinchillas, material mined in December 2018totaled 897,000 tonnes, including 201,000 tonnes of ore.
During the fourth quarter, ore was milled at an average of 3,720 tonnes per day. In December ore was sourced exclusively from Chinchillas and achieved a 3,605 tonnes per day milling rate. Processed ore in the fourth quarter contained an average silver grade of 133 g/t, a 38% increase as compared to the third quarter of 2018, due to processing of high grade Chinchillas ore in December. The average silver recovery in the fourth quarter was 81.5%.
Outlook
This section of the news release provides management's production and cost estimates. See "Cautionary Note Regarding Forward-Looking Statements."
| Operating Guidance | | Marigold mine | Seabee Gold Operation | Puna Operations (75% interest) 4 | | Gold Production | oz | 200,000 – 220,000 | 95,000 – 110,000 | - | | Silver Production
(Attributable) | Moz | - | - | 6.0 – 7.0
(4.5 – 5.3) | | Lead Production
(Attributable) | Mlb | - | - | 20.0 – 26.0
(15.0 – 19.5) | | Zinc Production
(Attributable) | Mlb | - | - | 15.0 – 20.0
(11.3 – 15.0) | | Cash Costs per Payable Ounce Sold 1 | $/oz | $750 – $790 | $525 – $555 | $8.00 – $10.00 | | Sustaining Capital Expenditures 2 | $M | $35.0 | $25.0 | $12.0 | | Capitalized Stripping / Capitalized
Development | $M | $20.0 | $12.0 | $20.0 | | Exploration Expenditures 3 | $M | $7.5 | $6.0 | $1.0 |
| _Notes__:_ | | | (1) | We report the non-GAAP financial measure of cash costs per payable ounce of gold and silver sold to manage and evaluate operating performance at the Marigold mine, the Seabee Gold Operation and Puna Operations. See "Cautionary Note Regarding Non-GAAP Measures". Cash costs figures are presented on a by-product basis. | | (2) | Sustaining capital expenditures for Puna Operations exclude initial capital expenditures related to the development of the Chinchillas project. | | (3) | Includes capitalized and expensed exploration expenses. | | (4) | Shown on a 100% basis unless otherwise indicated by "attributable" which is shown on a 75% basis. |
Based on the mid-points of guidance, on a consolidated basis we expect to produce 395,000 gold equivalent ounces in 2019 at gold equivalent cash costs of $700per ounce. On an attributable basis we expect to produce 375,000 gold equivalent ounces in 2019 at gold equivalent cash costs of $700per ounce based on the mid-points of guidance.
At the Marigold mine, gold production is expected to increase in 2019 with the full-year benefits from the four haul trucks added to the fleet in mid-2018 and production from the new leach pad beginning in the first quarter of 2019. Due to the ongoing positive operating performance and optimization of pit designs, cash cost guidance of $750to $790per payable gold ounce sold is an improvement to the forecast from the 2018 Technical Report. Capital investments are expected to total $35 millionincluding $22 millionin the mine for maintenance and purchase of mobile fleet as well as $10 millionfor accelerated leach pad construction and process infrastructure. To accommodate the higher ore tonnes mined and to provide additional operating flexibility regarding leach cycles, construction of a leach pad is expected to be accelerated to the second half of 2019 from 2020. Capitalized stripping is expected to total $20 millionwith the majority incurred through the first three quarters of the year. Exploration expenditures totaling $7.5 millionre-focuses to Mackay, Valmy and Basalt with the goals of adding Mineral Reserves and defining additional Mineral Resources within these areas. Having completed the Red Dot exploration program in 2018, we intend to complete geotechnical drilling and engineering of the Red Dot Mineral Resources with the objective of evaluating the potential for Red Dot Mineral Reserves by mid-2019.
At the Seabee Gold Operation we expect to continue executing our plan of increasing mining and milling rates and to deliver another record gold production year in 2019. The plan includes investment of $7 millionin underground mining equipment to increase capacity and reliability. With higher tonnes mined and demonstrated milling infrastructure capacity, cash costs are expected to remain low at between $525and $555per payable gold ounce sold. Due to continued exploration success at Seabee, we are embarking on an expansion to tailings capacity in excess of that contemplated in the 2017 Technical Report. The first phase is expected to be completed in 2019 at an investment of $15 million, with the remaining sustaining capital investments related for the mill and surface infrastructure. Capitalized development expenditures of $12 millionsupport higher mining rates and reflects the development strategy for the Santoy complex. Exploration expenditures at Seabee total $6 millionto continue underground exploration at depth, expansion of Santoy Gap hanging wall and continued testing of surface targets.
At Puna Operations, with commercial completion of the Chinchillas open pit achieved, 2019 marksthe first full year of ore production from the Chinchillas mine transported for processing at the Pirquitas mill. Puna is expected to produce between 6.0 and 7.0 million ounces of silver at cash costs of between $8.00and $10.00per payable silver ounce sold. Reported cash costs may vary quarter to quarter due to the by-product credits arising from the production of lead and zinc as such credits vary based on the timing of sales of each concentrate. Capital investments at Puna of $12 millioninclude $5 millionfor mine equipment maintenance, and $5 millionfor plant equipment maintenance. Capitalized stripping is elevated through 2019 as the mine completes the highwall pushback and commences stripping the next phase of the Chinchillas pit. As Chinchillas operations ramp-up through 2019, only waste material will be mined over certain periods of the year with ore stockpiled during the pre-production phase transported to and processed at the Pirquitas mill.
With Puna focused on optimization of the mine, transport and mill operations through 2019, limited exploration expenditures of $1 millionare planned.
As previously announced, the completion of certain Chinchillas project infrastructure carries over into 2019 with remaining investment of approximately $9 millionexpected to be incurred in the first quarter. The project remains on budget.
In addition to exploration at our three operating mines, we expect to invest $3 millionin exploration on the Fisher project adjacent to our Seabee Gold Operation. Community, development and holding costs related to non-operating properties total approximately $5 million.
Gold equivalent figures for our 2019 operating guidance are based on gold-to-silver ratio of 81:1. Cash costs and capital expenditures guidance is based on an oil price of $65per barrel and exchange rate of 1.25 Canadian dollarto U.S. dollar.
Qualified Persons
The scientific and technical data contained in this news release relating to the Marigold mine has been reviewed and approved by James Frost, P.E., a qualified person under National Instrument 43-101 – _Standards of Disclosure for Mineral Projects_("NI 43-101") and our Technical Services Superintendent at the Marigold mine. The scientific and technical data contained in this news release relating to the Seabee Gold Operation has been reviewed and approved by Cameron Chapman, P.Eng., a qualified person under NI 43-101 and General Manager at the Seabee Gold Operation. The scientific and technical data contained in this news release relating to Puna Operations has been reviewed and approved by Bruce Butcher, P.Eng., a qualified person under NI 43-101 and our Director, Mine Planning.
About SSR Mining
SSR Mining Inc. is a Canadian-based precious metals producer with three operations, including the Marigold gold mine in Nevada, U.S., the Seabee Gold Operation in Saskatchewan, Canadaand the 75%-owned and operated Puna Operations joint venture in Jujuy, Argentina. We also have two feasibility stage projects and a portfolio of exploration properties in North and South America. We are committed to delivering safe production through relentless emphasis on Operational Excellence. We are also focused on growing production and Mineral Reserves through the exploration and acquisition of assets for accretive growth, while maintaining financial strength.
For further information contact: W. John DeCooman, Jr. Senior Vice President, Business Development and Strategy SSR Mining Inc. Vancouver, BC Toll free: +1 (888) 338-0046 All others: +1 (604) 689-3846 E-Mail: invest@ssrmining.com
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Cautionary Note Regarding Forward-Looking Statements
This news release contains forward-looking information within the meaning of Canadian securities laws and forward-looking statements within the meaning of the U.S. Private Securities Litigation Reform Act of 1995 (collectively, "forward-looking statements") concerning the anticipated developments in our operations in future periods, and other events or conditions that may occur or exist in the future. All statements, other than statements of historical fact, are forward-looking statements.
Generally, forward-looking statements can be identified by the use of words or phrases such as "expects," "anticipates," "plans," "projects," "estimates," "assumes," "intends," "strategy," "goals," "objectives," "potential," or variations thereof, or stating that certain actions, events or results "may," "could," "would," "might" or "will" be taken, occur or be achieved, or the negative of any of these terms or similar expressions. The forward-looking statements in this news release relate to, among other things: future production of gold, silver and other metals; the prices of gold, silver and other metals; the effects of laws, regulations and government policies affecting our operations or potential future operations; future successful development of our projects; the sufficiency of our current working capital, anticipated operating cash flow or our ability to raise necessary funds; estimated production rates for gold, silver and other metals produced by us; timing of production and the cash costs and total costs of production at the Marigold mine, the Seabee Gold Operation and Puna Operations; our ability to convert Inferred Mineral Resources to Indicated Mineral Resources and to convert Mineral Resources into Mineral Reserves; timing of production and production levels at the Marigold mine, the Seabee Gold Operation and Puna Operations; timing and focus of our exploration and development programs; expected timing of the commissioning of the new leach pad at the Marigold mine in the first quarter of 2019 and the construction of an additional leach pad at the Marigold mine in the second half of 2019; expected cost and timing of completion of the first phase of the expansion to tailings capacity at the Seabee Gold Operation in 2019; expected cost and timing of completion of construction milestones at Puna Operations, including the expectation that the Chinchillas project will remain on budget and certain project infrastructure will be completed in the first quarter of 2019; ongoing or future development plans and capital replacement, improvement or remediation programs; the estimates of expected or anticipated economic returns from our mining projects, including future sales of metals, concentrate or other products produced by us; our ability to achieve our production and cost guidance; and our plans and expectations for our properties and operations.