SSR Mining Inc. (NASDAQ:SSRM) is a leading precious metals mining company with a diverse portfolio of producing assets located in the United States, Türkiye, Canada, and Argentina. The company's operations have demonstrated resilience in the face of industry headwinds, delivering solid financial and operational performance in 2023 despite the challenges encountered.

Financials

In the fiscal year 2023, SSR Mining reported annual revenue of $1,453,095,150, a testament to the strength of its diversified asset base. The company's net income for the year, however, was impacted by a significant incident at its Çöpler mine in Türkiye, resulting in a net loss of $99,804,332. Despite this setback, the company's annual operating cash flow remained strong at $429,458,936, and its free cash flow reached $201,939,642, highlighting the underlying resilience of its operations.

The second quarter of 2024 saw SSR Mining produce 76,102 gold equivalent ounces, with cost of sales of $1,357 per payable ounce and all-in sustaining costs (AISC) of $2,116 per payable ounce. This performance was primarily driven by the continued strong operational results from the company's Marigold, Seabee, and Puna mines, which collectively produced 155,864 gold equivalent ounces in the first half of 2024.

Çöpler Incident and Remediation Efforts

The primary focus for SSR Mining in 2024 has been the response to the Çöpler Incident, which occurred on February 13, 2024, resulting in the suspension of all operations at the Çöpler property. The company's immediate priorities following the incident were the recovery and return of its lost colleagues to their families, the containment of the incident, and the initiation of remediation efforts.

The company has made significant progress in these areas. All nine individuals who were lost as a result of the Çöpler Incident have been recovered, and the necessary containment infrastructure, including a grout curtain, coffer dam, and buttress, as well as pumping systems and the Sabırlı Creek diversion, have been successfully installed. Additionally, SSR Mining has moved over 13 million tonnes of displaced heap leach material, including more than 90% of the material from the Sabırlı Valley, into temporary storage locations.

The total remediation costs associated with the Çöpler Incident are estimated to be between $250.0 million and $300.0 million, including legal contingencies, material movement, and construction costs. As of the end of the second quarter of 2024, the company had incurred $277.7 million in reclamation and remediation costs related to the incident.

Operational Performance and Guidance

Despite the challenges posed by the Çöpler Incident, SSR Mining's other operations have continued to perform well. At the Marigold mine in Nevada, the company produced 60,371 ounces of gold in the first half of 2024, with AISC of $1,690 per ounce. Seabee Gold Operation in Saskatchewan, Canada, produced 40,482 ounces of gold in the same period, with AISC of $1,488 per ounce. Puna Operations in Argentina produced 4.6 million ounces of silver in the first half of 2024, with AISC of $15.36 per ounce.

The company remains on track to meet its full-year production and cost guidance for these operations. Marigold is expected to produce between 120,000 and 130,000 ounces of gold at AISC of $1,550 to $1,650 per ounce. Seabee is anticipated to produce between 80,000 and 90,000 ounces of gold at AISC of $1,450 to $1,550 per ounce. Puna is projected to produce between 9.0 and 9.5 million ounces of silver at AISC of $15.00 to $16.00 per ounce.

Liquidity

As of June 30, 2024, SSR Mining had a cash and cash equivalent balance of $358.3 million and available borrowings of $399.6 million under its revolving credit facility. The company had no borrowings outstanding under the revolving credit facility, exclusive of de minimus letters of credit, and was in compliance with its covenants.

The company's liquidity position remains strong, with the ability to sustain the operational needs of its three other mines, as well as satisfy reclamation and remediation-related costs, monitoring, and care and maintenance efforts at Çöpler, for the next twelve months without needing to borrow under its revolving credit facility. SSR Mining may still elect to borrow under the facility or seek alternate sources of capital for any additional liquidity needs.

Hod Maden Project Acquisition and Divestiture of San Luis

In May 2023, SSR Mining acquired a 10% interest in, and operational control of, the Hod Maden gold-copper development project in northeastern Türkiye. The company has the option to acquire an additional 30% interest in the project from its partner, Lidya Mines, for $120.0 million in structured payments tied to the completion of project construction spending milestones.

Additionally, in May 2024, the company completed the sale of its non-core San Luis project in Peru to Highlander Silver Corp. for $5.0 million in cash and up to $37.5 million in contingent payments. The transaction also included a 4.0% net smelter return royalty on the project, half of which can be repurchased by Highlander Silver for $15.0 million.

Exploration and Growth Initiatives

Alongside its focus on the Çöpler Incident response, SSR Mining has continued to advance its exploration and growth initiatives across its portfolio. At the Marigold mine, the company is targeting near-mine exploration opportunities at Buffalo Valley and other targets to potentially extend the mine's operating life.

At the Seabee Gold Operation, exploration activities have focused on near-mine extensions to existing underground mineralization, as well as the continued advancement of the Porky and Porky West targets, which represent potential mine life extension opportunities. Similarly, at Puna Operations, the company is evaluating opportunities to extend the mine's life through potential extensions at Chinchillas and the continued advancement of the Cortaderas target.

Risks and Challenges

While SSR Mining has demonstrated its operational resilience, the company faces several risks and challenges that warrant consideration. The ongoing investigations into the cause of the Çöpler Incident and the company's ability to obtain the necessary permits to restart operations at the site remain key uncertainties. Additionally, the company's financial performance is subject to fluctuations in commodity prices, particularly gold, silver, lead, and zinc, which can impact revenue and profitability.

The company also faces risks related to its international operations, including political, economic, and regulatory changes in the countries where it operates. Currency fluctuations, particularly in the Turkish Lira, Canadian Dollar, and Argentine Peso, can also affect the company's financial results.

Conclusion

SSR Mining has navigated a challenging period with the Çöpler Incident, but the company's diversified asset base and strong operational performance at its other mines have helped to mitigate the impact. The company remains focused on the recovery and remediation efforts at Çöpler, while also advancing its exploration and growth initiatives across its portfolio.

Despite the setbacks, SSR Mining's liquidity position remains robust, and the company is well-positioned to manage the remediation costs at Çöpler and continue investing in its business. As the company works to resolve the issues at Çöpler and capitalize on the opportunities presented by its other assets, investors will be closely watching its progress in the coming quarters.