SSR Mining Inc. (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 has a rich history spanning over two decades, marked by strategic acquisitions, operational improvements, and a steadfast commitment to sustainable mining practices.
Company Background and Growth
Founded in 1999, SSR Mining began as a junior exploration company, rapidly evolving into a multi-asset producer of gold, silver, lead, and zinc. The company's transformation was fueled by a series of strategic acquisitions, including the Marigold mine in Nevada, the Seabee Gold Operation in Saskatchewan, and the Puna Operations in Argentina, which have all contributed to its diversified production profile.
In 2010, SSR Mining made a significant move by commencing production at the Çöpler Gold Mine in Türkiye, which has since become a cornerstone of the company's operations. The company's expansion continued with the acquisition of the Marigold mine in Nevada, USA in 2014, followed by the addition of the Seabee Gold Operation in Saskatchewan, Canada in 2016. In 2017, SSR Mining further diversified its portfolio by entering into a joint venture agreement for the Puna Operations in Jujuy, Argentina.
Overcoming Challenges
Throughout its growth trajectory, SSR Mining has faced and overcome various operational challenges. In 2018, the company encountered issues with the heap leach pad at Çöpler, necessitating a temporary shutdown and capital investment to resolve the problems. Similarly, in 2020, the Seabee mine experienced a mill failure that disrupted production for several months. Despite these setbacks, SSR Mining demonstrated its resilience and operational expertise by successfully addressing these issues and maintaining steady production across its asset portfolio.
Strategic Expansion
In a strategic move to expand its development pipeline, SSR Mining acquired a 10% interest in the Hod Maden gold-copper project in northeastern Turkey in 2023. This acquisition, made through the company's Alacer Gold subsidiary, provided SSR Mining with operational control and an opportunity to participate in the development of a potentially world-class asset.
Recent Performance
Despite the challenges faced in 2024, including the Çöpler Incident and the temporary suspension of operations at Seabee due to forest fires, SSR Mining has demonstrated its resilience and operational excellence. The company's consolidated gold equivalent production for the nine months ended September 30, 2024, was 275,110 ounces, with Marigold, Seabee, and Puna contributing 249,000 ounces during this period.
Financials
The financial results for the third quarter of 2024 reflect the company's ability to navigate through these obstacles. SSR Mining reported attributable net income of $0.05 per share, while adjusted net income per share was $0.03, highlighting the company's disciplined approach to cost management and operational optimization.
For the most recent quarter, SSR Mining reported revenue of $257,356,000, net income of $10,557,000, operating cash flow of -$1,986,699, and free cash flow of $70,042,738. Year-over-year growth was -33.2% for revenue and 30.4% for net income attributable to SSR Mining shareholders. The decrease in revenue was primarily due to 60.9% fewer gold equivalent ounces sold, partially offset by a 32.3% higher average realized gold price. The decrease in gold ounces sold was related to the suspension of operations at Çöpler following the Çöpler Incident and the suspension of operations at Seabee due to forest fires.
Liquidity
Liquidity remains a key strength, with the company finishing the third quarter of 2024 with $334.3 million in total cash and a net cash position of $104 million. This, combined with total liquidity of $834 million inclusive of its revolving credit facility and accompanying accordion feature, positions SSR Mining well to manage the remediation costs at Çöpler and continue its reinvestment efforts across the business. The company has no borrowings outstanding under the revolving credit facility, exclusive of de minimis letters of credit, and was in compliance with its covenants.
Additional financial metrics include a debt-to-equity ratio of 0.106, a current ratio of 3.909, and a quick ratio of 1.969, further demonstrating the company's strong financial position.
Çöpler Incident Response
The Çöpler Incident has been a significant challenge for the company, but SSR Mining has made substantial progress in its four key priorities: the recovery of missing colleagues, containment and remediation of the site, investigation into the root cause, and preparation for the restart of the Çöpler mine. The company has successfully removed substantially all of the displaced heap leach material from the Sabırlı Valley and is actively engaged with the Turkish authorities to finalize the permanent storage facility and secure the necessary approvals for a potential restart.
On February 13, 2024, the company suspended all operations at its Çöpler property in Türkiye as a result of a significant slip on the heap leach pad. Nine employees lost their lives in connection with the Çöpler Incident. The remediation and containment work is estimated to cost between $250 million to $300 million and take 24 to 36 months to complete. Once all regulatory approvals, including operating permits, are reinstated, the initial operations at Çöpler could restart within 20 days.
Operational Highlights
Operational highlights from the company's other assets further demonstrate SSR Mining's resilience. Marigold's third-quarter production of 48,000 ounces was in line with expectations, and the team continues to advance brownfield exploration programs to replace mine depletion and potentially extend the operation's life. For the full year 2024, Marigold was on track to meet its production guidance of 155,000 to 175,000 ounces. However, AISC for Marigold was expected to increase due to higher royalty costs and higher maintenance costs.
At Seabee, the temporary suspension of operations due to forest fires in the third quarter has been resolved, with the mine fully restarted on October 11, 2024. Seabee's full year 2024 guidance was revised to 65,000 to 70,000 ounces at AISC of $17.25 to $17.55 per ounce, due to the temporary suspension of operations in Q3 2024 from forest fires.
Puna, on the other hand, delivered a second consecutive quarter of record throughputs, positioning the operation to exceed its initial 2024 production guidance. Puna was now expected to produce 10 million to 10.5 million ounces of silver in 2024, an increase of over 1 million ounces from the prior guidance.
Segment Performance
SSR Mining operates four main product segments: Çöpler, Marigold, Seabee, and Puna.
The Çöpler mine, located in Erzincan, Türkiye, produces gold doré. Operations remained suspended during the third quarter of 2024 following the Çöpler Incident. Care and maintenance expenses were incurred during this period.
Marigold, an open-pit gold mine in Nevada, USA, saw a 42.1% decrease in gold production compared to the prior year period, primarily due to fewer tonnes and lower grade ore stacked, as well as timing of leach recoveries. Revenue decreased by 24.4%, with fewer gold ounces sold partially offset by a higher average realized gold price.
Seabee, an underground gold mine in Saskatchewan, Canada, experienced a 48.3% decrease in gold production compared to the prior year period due to the temporary suspension of operations on August 21, 2024, caused by forest fires in the vicinity. Revenue decreased by 23.8%, with fewer gold ounces sold partially offset by a higher average realized gold price.
Puna, a silver, lead, and zinc mine in Jujuy, Argentina, saw a 9.1% increase in silver production compared to the prior year period due to more ore tonnes milled. Revenue increased by 29.2%, primarily due to higher average realized silver and zinc prices, partially offset by lower average realized lead price and lower volume of concentrate sold.
Future Outlook
Looking ahead, SSR Mining remains focused on operational excellence, cost discipline, and strategic growth. The company's commitment to sustainability and environmental stewardship is exemplified by its efforts at Çöpler, where the remediation work is progressing with the utmost care and attention to detail.
SSR Mining plans to provide an update on their anticipated 2025 capital spend for the Hod Maden project with their normal guidance update early next year.
Despite the challenges faced, SSR Mining has demonstrated its ability to navigate through complexities and maintain a strong financial and operational position. As the company continues to execute its strategy and capitalize on the growth opportunities within its portfolio, investors can take comfort in the proven leadership team's ability to deliver long-term value.