SSR Mining (SSRM) Q1 2024 Earnings Name Transcript

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{dollars} except in any other case indicated. At the moment’s dialogue will embrace forward-looking statements, so please learn the disclosures within the related paperwork. Moreover, we’ll check with non-GAAP monetary measures throughout our dialogue and within the accompanying slides. Please see our press launch for details about the comparable GAAP measures.

Rod Antal, government chairman, will lead in the present day’s name. And members of our government crew, together with Michael Sparks, chief monetary officer; Eddie Farid, chief technique officer; and Invoice MacNevin, EVP operations, sustainability, are additionally current on the decision. I’ll now flip the road over to Rod.

Rod Antal — President and Chief Govt Officer

Nice. Thanks, Alex. I will converse first about Copler and supply all our stakeholders with an replace on each our speedy priorities and on our path ahead in Turkey. I’ll then present an replace on our ongoing operations within the Americas.

The present priorities for Copler could be distilled into 4 clear classes: one, the restoration efforts for our 5 remaining colleagues; two, the containment efforts; three, the remediation plan; and 4 planning for subsequent steps. So first, with respect to the restoration efforts. I want to begin by providing our honest condolences to the households of our lacking colleagues in addition to the neighborhood members who’re impacted by the Copler incident. The first focus at Copler has and continues to be the return of the remaining lacking colleagues to their households.

Our groups, in session with the related Turkish authorities, have been diligently engaged on discovering the lacking people and can proceed to take action. All restoration actions are at the moment centered within the Sabirli Valley. Up to now, over 6.7 million tons of heap leach materials has been relocated as a part of the continuing restoration, containment, and remediation exercise, together with the elimination of 4.2 million tons from the Sabirli Valley. Second, the containment efforts.

For the reason that incident, our containment efforts have superior alongside the elimination of the displaced materials. This work consists of actions such because the set up of a grout curtain, copper dam, and buttress, that are considerably full. There’s additionally the continuing set up of pumping programs and diversion channels. We at the moment anticipate the elimination of all of the displaced heap leach materials from a Sabirli Valley and into short-term storage places to be accomplished within the third quarter of 2024.

Third, the everlasting remediation planning. Whereas our groups on the bottom have superior the restoration and containment work, we’ve got additionally labored with the Turkish authorities, impartial consultants, and exterior consultants to develop a remediation plan. This plan consists of, amongst different issues, everlasting closure of the heap leach pad and development of a long-term storage facility for the displaced heap leach materials. This facility shall be designed to completely retailer the roughly 18 million to twenty million tons of displaced materials.

The long run remediation work is anticipated to price between $250 million to $300 million on a 100% foundation. That is along with the roughly $25 million already spent for the reason that incident in February. We anticipate work to be accomplished over a 2- to 3-year interval. With the corporate’s complete money place of $467 million on the finish of the primary quarter, money move from our three ongoing operations and no steadiness excellent on our revolving credit score facility, we’re well-positioned to fund this remediation work sooner or later.

And this transitions us to the preliminary plans for the subsequent steps. With the intention to restart the operations, the corporate would require the reinstatement of the beforehand suspended environmental influence evaluation and working permits. Presently, it stays too early to offer steering of if and when the mine will restart. However for future planning functions, we anticipate the sulfide plant will initially course of the greater than 700,000 ounces of gold from the sulfide stockpiles whereas remediation work is accomplished.

Now let’s transfer on to Slide 5 and focus on the 2024 working outcomes. First-quarter 2024 manufacturing was 102,000 gold equal ounces at an all-in sustaining price of $1,569 per ounce, together with 80,000 gold equal ounces from Marigold, Seabee, and Puna. The outcomes from these three operations had been in keeping with our expectations for a again half-weighted manufacturing profile, and every asset stays effectively on observe for the full-year manufacturing and price steering. As a reminder, Marigold’s 2024 manufacturing profile stays 70% weighted to the second half of the yr, whereas Puna’s manufacturing is 55% weighted to half 2.

Accordingly, we anticipate the second quarter to be our highest price and lowest manufacturing interval of the yr. Nonetheless, over 2024, we anticipate the operations will ship stable asset free money move. On the event aspect, whereas the deliberate actions for 2024 at Hod Maden have been decreased, we’ve got continued to advance engineering and mission execution planning and the technical research. We are going to present extra updates at a later date.

Now transferring on to Slide 6 and a short have a look at the monetary outcomes. We recorded an attributable internet lack of $1.42 per share within the first quarter, reflecting the monetary impacts of the Copler incident, which we’ll focus on shortly. Adjusted internet revenue per share was $0.11, and we generated $25 million in working money move within the quarter. Free money move was a unfavourable $9 million.

As famous, our complete money place is $467 million with a further undrawn revolving credit score facility accessible. We proceed to have a stable liquidity place to handle remediation prices at Copler and reinvestment wants throughout the enterprise going ahead. Shifting on to Slide 7 and shed some extra shade on the noncash and money impacts of the Copler incident. As I discussed, our first-quarter monetary outcomes had been considerably impacted by the Copler incident.

We recorded prices totaling $288 million, together with prices incurred thus far, plus future remediation prices and authorized contingencies. This reclamation and remediation work will embrace the development of the [East] storage facility, displaced heap leach materials motion, heap leach pad remediation, and ore containment infrastructure. As well as, we recorded an impairment of $76 million for all heap leach stock, which contained an estimated 44,000 ounces of recoverable gold, and an impairment of $38 million for the now out of date heap leach gear and infrastructure given the heap leach pad facility shall be completely thermally closed. On to Slide 9 and a dialogue on the working outcomes beating with Marigold.

Marigold’s first-quarter manufacturing of 35,000 ounces was in keeping with our expectations. The 2024 mine plan referred to as for the primary quarter to characteristic the bottom quarterly stacked ore grades, reflecting the give attention to waste stripping at Purple Dot within the first half of this yr. Regardless of this, the all-in sustaining price of $1,430 per ounce had been higher than anticipated, largely as a result of timing of the capital spend. Quarter 2 all-in sustaining prices, they’re anticipated to be above full-year steering because of the deferral — the capital spend from quarter 1.

Marigold stays effectively on observe for its full-year manufacturing and price steering. Shifting on to Seabee on Slide No.10. At Seabee, the first-quarter manufacturing was 24,000 ounces and an all-in sustaining price of $1,416 per ounce. Manufacturing and prices had been barely higher than deliberate, reflecting the processing of higher-grade materials stockpiled within the fourth quarter of 2023.

The rest of the yr, Seabee expects mine and processed grades to common between 5 and 6 grams per ton. Seabee stays on observe for its full-year manufacturing and price steering as effectively. The exploration actions at Seabee continues to give attention to near-mine extensions to current underground mineralization in addition to continued developments of Porky and the Porky West targets. The Porky targets characterize a possible mine life extension alternative, and the Seabee crew is aggressively advancing the technical research to raised delineate this chance.

Lastly, let’s transfer on to Puna on Slide 11. Puna produced 1.9 million ounces of silver within the first quarter, barely decrease than anticipated attributable to a major rainfall that impacted the mining charges. Regardless of this, Puna stays effectively on observe for full-year manufacturing steering of 8.75 million to 9.5 million ounces of silver at an all-in sustaining price of $14.75 to $16.25 per ounce. Exploration and technical work continues to judge alternatives to increase operations at Puna by way of potential extensions at Chinchillas and the continued development of the Cortaderas goal by way of near-mine drilling.

Our crew at Copler stays centered and steadfast as we proceed with the general restoration efforts. This has been supported by the robust working outcomes at Marigold, Seabee, and Puna, and I wish to acknowledge our crew’s focus and dedication throughout a troublesome time. Earlier than I open up for questions, I want to remind of us, there are specific matters round authorized issues and ongoing investigations that I can not touch upon right now. So operator, if we are able to open up the decision now to any questions folks may need.

Questions & Solutions:

Operator

[Operator instructions] The primary query comes from Ovais Habib with Scotiabank. Please go forward.

Ovais Habib — Scotiabank — Analyst

Hello, Rod and SSR crew. Simply a few questions from me. Simply concerning the remediation prices at Copler of $250 million to $300 million, does this quantity embrace any form of care and upkeep price all through the two to three years that is going to take you to finish the remediation?

Rod Antal — President and Chief Govt Officer

No, it does not, Ovais. It takes into consideration the development of the storage facility. The remediation efforts on the heap leach pad, et cetera. In the event you have a look at the financials, the care and upkeep prices within the first quarter are round, I feel, $17 million from reminiscence.

And so I feel if you happen to permit for these per quarter going ahead. And I feel it might additionally depend upon, clearly, how lengthy that goes for whereas we’re shut down.

Ovais Habib — Scotiabank — Analyst

OK. And simply regarding the environmental permits. So will you look to use for the environmental permits whereas the remediation is ongoing? Or as soon as the remediation is full, primarily, I imply, is there a chance that the sulfide plant may begin earlier than the remediations are full?

Rod Antal — President and Chief Govt Officer

Sure. Look, I feel Ovais, as I form of talked about and we’ll hold saying our efforts and focus has actually been on discovering our lacking colleagues and the work to outline what the remediation efforts shall be in getting that — these in session with the federal government authorities authorized. We have solely actually simply began to show our thoughts to the start-up and all the opposite elements that go along with which would require us to get that EIA allow reinstated and another issues as effectively. So it is just a little bit early to say precisely what pathway we’d like and the way lengthy it should take and all these different questions I do know you all have, however that can come over time.

Ovais Habib — Scotiabank — Analyst

OK. Possibly I will leap again into the queue and let another guys are available in, however thanks for taking my preliminary questions.

Rod Antal — President and Chief Govt Officer

Thanks, Ovais.

Operator

The subsequent query comes from Mike Parkin with Nationwide Financial institution. Please go forward.

Mike Parkin — Nationwide Financial institution Monetary — Analyst

Thanks, guys. First on Seabee. Traditionally, you have at all times had an enormous working capital outflow within the first quarter with the stock construct at Seabee on the ice street. I could not discover any point out of that within the 10-Q.

Is that one thing that has occurred? Did you get every part to the positioning that you simply’re hoping for?

Rod Antal — President and Chief Govt Officer

Firstly, Mike, welcome again. Hope you are doing effectively. We really had a really profitable winter program this yr on the ice street, most likely our greatest one for a few years. So we did not have the conventional form of buildup that we have had earlier than the place we have had some delays on the ice roads to get the logistics up and down the street itself.

So it was a barely totally different end result this yr. We’re a way more environment friendly, higher end result when it comes to that buildup and effectivity in our working capital.

Mike Parkin — Nationwide Financial institution Monetary — Analyst

OK. That is good. After which on Copler, are you want — are you able to give us — I do know you may’t converse on every part. However when it comes to who you are dialoguing with the place you’re within the course of, is there nonetheless like an investigation being carried out by — I do not even know what ministry if it is like Ministry of Labor, Ministry of Setting.

Are these concluded and also you’re awaiting their ruling on that? Or like the place are you within the course of on that entrance?

Rod Antal — President and Chief Govt Officer

Sure. Look, once more, Mike, I feel you’d respect, I can not remark particularly on the continuing investigations and the authorized proceedings. However, sure on the bottom, we’ve got — I feel we talked about it final quarter when the incident occurred. We’ve many authorities stakeholders really at Copler from the assorted totally different ministries that we might usually interacting on mining — regular mining actions in addition to different ministries which have been a fantastic help on the bottom for us.

And so these conversations have been occurring since day 1 and discussing every part, as I discussed, as ISS questions across the remediation efforts round how we’ll have a look at the long-term storage options for the displaced heap leach materials, how we treatment the heap leach pad and shut that as effectively, et cetera, et cetera. So all that dialogue has been ongoing on the varied ministry ranges with in any respect ranges inside these ministries and that can proceed.

Mike Parkin — Nationwide Financial institution Monetary — Analyst

OK. After which only one follow-up on the remediation work that you simply’re estimating will price $250 million to $300 million, is that — are these plans like concrete and authorized by the federal government? Or is {that a} work in progress?

Rod Antal — President and Chief Govt Officer

It is based mostly on the discussions in engineering design that we’ve got finished thus far. So these estimates are based mostly on quite a lot of work and quite a lot of detailed work at this stage. So sure, it is effectively superior when it comes to the engineering.

Mike Parkin — Nationwide Financial institution Monetary — Analyst

OK. After which simply over again over the ocean to Marigold. Barrick’s repeatedly commenting of an especially tight labor market in Nevada. However then others that we talked to notice that it is not — does not appear to be as dangerous.

What’s your expertise with Marigold? Are you discovering turnover charges are elevated or extra in keeping with historic norms? Or are you benefiting from probably gaining employees from different websites?

Rod Antal — President and Chief Govt Officer

Mike, I will move that one over to Invoice to reply.

Invoice MacNevin — Govt Vice President, Operations and Sustainability

Good afternoon, Mike. We do quite a lot of work with our workforce, each clearly specializing in the place we’re going as a enterprise, but in addition within the improvement of the folks and their half in that. By way of the turnover typically, we’re actually simply at our historic ranges. And if something, we’re doing quite a lot of work to enhance off that.

So no actual influence to the enterprise, and we’re trying to leverage on lowering it even additional.

Mike Parkin — Nationwide Financial institution Monetary — Analyst

Nice. Thanks very a lot, Rod. It is good to be again.

Rod Antal — President and Chief Govt Officer

Yeah. Good. Thanks, Mark.

Operator

The subsequent query comes from Carey MacRury with Canaccord Genuity. Please go forward.

Carey MacRury — Canaccord Genuity — Analyst

Hello. Good afternoon, guys. Simply questioning if you’ll be able to restart the plant with stockpiles solely, do you may have a way of what the money prices of that may be?

Rod Antal — President and Chief Govt Officer

Look, Carey, that information will come down the observe. As soon as we’ve got readability in regards to the pathways, date, et cetera, et cetera, we’ll reset these planning efforts round that, but it surely’s simply too early to speak about these issues simply but.

Carey MacRury — Canaccord Genuity — Analyst

OK. Honest sufficient. And simply on the convertible debt on the traders have the appropriate to redeem probably in 2026 or have the corporate repurchase. Is there something associated to the incident Turkey that might set off that in 2026? Or is that associated to one thing else?

Rod Antal — President and Chief Govt Officer

I will move that one to Eddie.

Eddie Farid — Chief Company Improvement Officer

Not at this stage.

Carey MacRury — Canaccord Genuity — Analyst

Any element round that or probably not?

Eddie Farid — Chief Company Improvement Officer

Look, if you happen to undergo the contracts of the convertible notes. At this stage, there’s nothing across the incident that offers us concern concerning the convertible notes.

Carey MacRury — Canaccord Genuity — Analyst

OK. Thanks.

Operator

This concludes the question-and-answer session. I want to flip the convention again over to Mr. Antal.

Rod Antal — President and Chief Govt Officer

Nice. Thanks, operator. And once more, I respect everybody becoming a member of us in the present day and stay up for persevering with with the updates as we transfer alongside, notably at Copler. Good night to you all.

Operator

[Operator signoff]

Length: 0 minutes

Name individuals:

Alex Hunchak — Director, Investor Relations and Company Improvement

Rod Antal — President and Chief Govt Officer

Ovais Habib — Scotiabank — Analyst

Mike Parkin — Nationwide Financial institution Monetary — Analyst

Invoice MacNevin — Govt Vice President, Operations and Sustainability

Carey MacRury — Canaccord Genuity — Analyst

Eddie Farid — Chief Company Improvement Officer

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