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CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
FOR THE THREE MONTHS ENDED MARCH 31, 2019 AND 2018
(unaudited)
SSR Mining Inc. | Interim Financial Statements Q1 2019 | 1 |
Contents
Financial Statements | |
Condensed Consolidated Interim Statements of Income (Loss) | |
Notes to the Condensed Consolidated Interim Financial Statements | |
Statements of Financial Position | |
Note 4 – Provisions | |
Note 5 – Debt | |
Statements of Income (Loss) | |
Note 7 – Income (loss) per share | |
Statements of Shareholders’ Equity | |
Additional Disclosures | |
SSR Mining Inc. | Interim Financial Statements Q1 2019 | 2 |
Condensed Consolidated Interim Statements of Financial Position
SSR Mining Inc.
(expressed in thousands of United States dollars)
Note | March 31 | December 31 | |||
2019 | 2018 | ||||
$ | $ | ||||
Current assets | |||||
Cash and cash equivalents | 461,351 | 419,212 | |||
Trade and other receivables | 55,217 | 42,841 | |||
Marketable securities | 32,634 | 29,542 | |||
Inventory | 3 | 241,296 | 232,748 | ||
Other | 9,993 | 8,776 | |||
800,491 | 733,119 | ||||
Non-current assets | |||||
Property, plant and equipment | 719,807 | 701,175 | |||
Deferred income tax assets | 2,623 | 7,523 | |||
Goodwill | 49,786 | 49,786 | |||
Other | 34,435 | 29,535 | |||
Total assets | 1,607,142 | 1,521,138 | |||
Current liabilities | |||||
Trade and other payables | 70,004 | 78,466 | |||
Provisions | 4 | 4,604 | 4,788 | ||
Current portion of debt | 5 | 109,125 | — | ||
183,733 | 83,254 | ||||
Non-current liabilities | |||||
Deferred income tax liabilities | 120,108 | 107,909 | |||
Lease liabilities | 2 | 3,263 | — | ||
Provisions | 4 | 73,039 | 76,448 | ||
Debt | 5 | 164,380 | 247,551 | ||
Total liabilities | 544,523 | 515,162 | |||
Shareholders' equity | |||||
Share capital | 1,059,591 | 1,055,417 | |||
Other reserves | (11,426 | ) | (16,303 | ) | |
Equity component of convertible notes | 5 | 106,497 | 68,347 | ||
Deficit | (126,850 | ) | (133,314 | ) | |
Total equity attributable to SSR Mining shareholders | 1,027,812 | 974,147 | |||
Non-controlling interest | 34,807 | 31,829 | |||
Total equity | 1,062,619 | 1,005,976 | |||
Total liabilities and equity | 1,607,142 | 1,521,138 | |||
The accompanying notes are an integral part of the condensed consolidated interim financial statements
Approved by the Board of Directors and authorized for issue on May 9, 2019
"Beverlee F. Park" | "Paul Benson" | |
Beverlee F. Park, Director | Paul Benson, Director |
SSR Mining Inc. | Interim Financial Statements Q1 2019 | 3 |
Condensed Consolidated Interim Statements of Income (Loss)
SSR Mining Inc.
(expressed in thousands of United States dollars, except for per share amounts)
Note | Three months ended March 31, | ||||
2019 | 2018 | ||||
$ | $ | ||||
Revenue | 6 | 126,250 | 97,902 | ||
Cost of sales | 9 | (96,013 | ) | (80,671 | ) |
Income from mine operations | 30,237 | 17,231 | |||
General and administrative expenses | (6,871 | ) | (6,669 | ) | |
Exploration, evaluation and reclamation expenses | (3,738 | ) | (2,831 | ) | |
Operating income | 19,628 | 7,731 | |||
Interest earned and other finance income | 4,903 | 2,304 | |||
Interest expense and other finance costs | (8,645 | ) | (8,836 | ) | |
Loss on redemption of convertible debt | 5 | (5,423 | ) | — | |
Other income (expenses ) | 597 | (3,947 | ) | ||
Foreign exchange (loss) gain | (2,163 | ) | 1,942 | ||
Income (loss) before income tax | 8,897 | (806 | ) | ||
Income tax expense | (3,165 | ) | (1,516 | ) | |
Net income (loss) | 5,732 | (2,322 | ) | ||
Attributable to: | |||||
Equity holders of SSR Mining | 6,464 | (1,626 | ) | ||
Non-controlling interests | (732 | ) | (696 | ) | |
Net income (loss) per share attributable to equity holders of SSR Mining | |||||
Basic | 7 | $0.05 | $(0.01) | ||
Diluted | 7 | $0.05 | $(0.01) |
The accompanying notes are an integral part of the condensed consolidated interim financial statements
SSR Mining Inc. | Interim Financial Statements Q1 2019 | 4 |
Condensed Consolidated Interim Statements of Comprehensive Income (Loss)
SSR Mining Inc.
(expressed in thousands of United States dollars)
Three months ended March 31, | |||||
2019 | 2018 | ||||
$ | $ | ||||
Net income (loss) | 5,732 | (2,322 | ) | ||
Other comprehensive income (loss) | |||||
Items that will not be reclassified to net income: | |||||
Gain (loss) on marketable securities at FVTOCI, net of tax ($410) and $5,532 | 2,639 | (38,327 | ) | ||
Items that may be subsequently reclassified to net income: | |||||
Unrealized gain (loss) on effective portion of derivative, net of tax ($477) and $146 | 1,598 | (337 | ) | ||
Total other comprehensive income (loss) | 4,237 | (38,664 | ) | ||
Total comprehensive income (loss) | 9,969 | (40,986 | ) | ||
Attributable to: | |||||
Equity holders of SSR Mining | 10,701 | (40,290 | ) | ||
Non-controlling interests | (732 | ) | (696 | ) |
The accompanying notes are an integral part of the condensed consolidated interim financial statements
SSR Mining Inc. | Interim Financial Statements Q1 2019 | 5 |
Condensed Consolidated Interim Statements of Changes in Shareholders' Equity
SSR Mining Inc.
(expressed in thousands of United States dollars)
Note | Common Shares | Other reserves | Equity component of convertible notes | Deficit | Total equity attributable to equity holders of SSR Mining | Non-controlling interest | Total equity | ||||||||||
Shares | Amount | ||||||||||||||||
000's | $ | $ | $ | $ | $ | $ | $ | ||||||||||
Balance, January 1, 2018 | 119,841 | 1,047,233 | 24,998 | 68,347 | (139,693 | ) | 1,000,885 | 23,043 | 1,023,928 | ||||||||
Exercise of stock options | 91 | 705 | (244 | ) | — | — | 461 | — | 461 | ||||||||
Equity-settled share-based compensation | 8 | — | — | 468 | — | — | 468 | — | 468 | ||||||||
Funding from non-controlling interest | — | — | — | — | — | — | 1,455 | 1,455 | |||||||||
Total comprehensive loss for the period | — | — | (38,664 | ) | — | (1,626 | ) | (40,290 | ) | (696 | ) | (40,986 | ) | ||||
Balance, March 31, 2018 | 119,932 | 1,047,938 | (13,442 | ) | 68,347 | (141,319 | ) | 961,524 | 23,802 | 985,326 | |||||||
Balance, January 1, 2019 | 120,740 | 1,055,417 | (16,303 | ) | 68,347 | (133,314 | ) | 974,147 | 31,829 | 1,005,976 | |||||||
Exercise of stock options | 478 | 4,174 | (1,126 | ) | — | — | 3,048 | — | 3,048 | ||||||||
Equity-settled share-based compensation | 8 | — | — | 460 | — | — | 460 | — | 460 | ||||||||
Transfer of equity-settled Performance Share Units | 8 | — | — | 1,284 | — | — | 1,284 | — | 1,284 | ||||||||
Equity value debt issued | 5 | — | — | — | 42,975 | — | 42,975 | — | 42,975 | ||||||||
Value of convertible debt redeemed | 5 | — | — | — | (4,825 | ) | — | (4,825 | ) | — | (4,825 | ) | |||||
Revaluation of reserve | — | — | 22 | — | — | 22 | — | 22 | |||||||||
Funding from non-controlling interest | — | — | — | — | — | — | 3,710 | 3,710 | |||||||||
Total comprehensive income for the period | — | — | 4,237 | — | 6,464 | 10,701 | (732 | ) | 9,969 | ||||||||
Balance, March 31, 2019 | 121,218 | 1,059,591 | (11,426 | ) | 106,497 | (126,850 | ) | 1,027,812 | 34,807 | 1,062,619 |
The accompanying notes are an integral part of the condensed consolidated interim financial statements
SSR Mining Inc. | Interim Financial Statements Q1 2019 | 6 |
Condensed Consolidated Interim Statements of Cash Flows
SSR Mining Inc.
(expressed in thousands of United States dollars)
Note | Three months ended March 31, | ||||
2019 | 2018 | ||||
$ | $ | ||||
Cash flows from operating activities | |||||
Net income (loss) for the period | 5,732 | (2,322 | ) | ||
Adjustments for: | |||||
Depreciation, depletion and amortization | 25,798 | 25,400 | |||
Net finance expense | 3,406 | 6,072 | |||
Gain on sale of mineral property | (1,000 | ) | — | ||
Income tax recovery | 3,165 | 1,516 | |||
Non-cash foreign exchange gain | (483 | ) | (2,253 | ) | |
Loss on redemption of convertible debt | 5 | 5,423 | — | ||
Net changes in non-cash working capital items | 11 | (27,377 | ) | (11,868 | ) |
Other items impacting operating activities | 11 | 532 | 4,323 | ||
Cash generated by operating activities before interest and taxes | 15,196 | 20,868 | |||
Moratorium paid | (1,091 | ) | (1,820 | ) | |
Interest paid | (5,216 | ) | (5,822 | ) | |
Income taxes paid | (9,192 | ) | (2,219 | ) | |
Cash (used in) generated by operating activities | (303 | ) | 11,007 | ||
Cash flows from investing activities | |||||
Purchase of plant and equipment | (13,160 | ) | (8,775 | ) | |
Capitalized stripping costs | (8,484 | ) | (2,902 | ) | |
Underground mine development costs | (3,379 | ) | (2,283 | ) | |
Capitalized exploration costs | (4,039 | ) | (2,222 | ) | |
Chinchillas project costs | (6,148 | ) | (11,715 | ) | |
Loan to joint venture partner | (1,967 | ) | — | ||
Net proceeds from sale of marketable securities | 947 | 28,063 | |||
Interest received | 2,712 | 1,643 | |||
Other | (244 | ) | (422 | ) | |
Cash (used in) generated by investing activities | (33,762 | ) | 1,387 | ||
Cash flows from financing activities | |||||
Proceeds from exercise of stock options | 3,048 | 461 | |||
Funding from non-controlling interests | 3,710 | 1,455 | |||
Redemption of convertible notes | (152,250 | ) | — | ||
Issuance of convertible notes | 230,000 | — | |||
Convertible notes issuance costs | (7,067 | ) | — | ||
Cash generated by financing activities | 77,441 | 1,916 | |||
Effect of foreign exchange rate changes on cash and cash equivalents | (1,237 | ) | (1,273 | ) | |
Increase in cash and cash equivalents | 42,139 | 13,037 | |||
Cash and cash equivalents, beginning of period | 419,212 | 459,864 | |||
Cash and cash equivalents, end of period | 461,351 | 472,901 |
The accompanying notes are an integral part of the condensed consolidated interim financial statements
SSR Mining Inc. | Interim Financial Statements Q1 2019 | 7 |
Notes to the Condensed Consolidated Interim Financial Statements
SSR Mining Inc.
(tabular amounts expressed in thousands of United States dollars unless otherwise stated)
1. | NATURE OF OPERATIONS |
SSR Mining Inc. ("we", "us", "our" or "SSR Mining") is a company incorporated under the laws of the Province of British Columbia, Canada and our shares are publicly listed on the Toronto Stock Exchange in Canada and the NASDAQ Global Market in the United States. Together with our subsidiaries, we (the “Group”) are principally engaged in the operation, acquisition, exploration and development of precious metal resource properties located in the Americas. We have three producing mines and a portfolio of precious metal dominant projects located throughout the Americas. SSR Mining Inc. is the ultimate parent of the Group.
Our address is Suite 800, 1055 Dunsmuir Street, PO Box 49088, Vancouver, British Columbia, V7X 1G4.
Our focus is on safe, profitable gold and silver production from our Marigold mine in Nevada, U.S., Seabee Gold Operation in Saskatchewan, Canada and our 75% owned Puna Operations in Jujuy, Argentina, and to advance, as market and project conditions permit, our other principal development projects towards development and commercial production.
2. | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES |
The principal accounting policies applied in the preparation of these condensed consolidated interim financial statements are set out below.
a) | Basis of preparation |
These condensed consolidated interim financial statements should be read in conjunction with our audited consolidated financial statements for the year ended December 31, 2018.
These condensed consolidated interim financial statements have been prepared in accordance with International Financial Reporting Standards as issued by the International Accounting Standards Board ("IFRS") applicable to the preparation of interim financial statements, including IAS 34, Interim Financial Reporting, and do not include all the information required for full annual financial statements. The comparative information has also been prepared on this basis.
These statements were authorized for issue by our Board of Directors on May 9, 2019.
b) | Change in accounting policies |
IFRS 16 Leases
We have adopted the requirements of IFRS 16 Leases (“IFRS 16") as of January 1, 2019. IFRS 16 introduces a single lessee accounting model and requires a lessee to recognize assets and liabilities for leases. We elected to apply IFRS 16 using a modified retrospective approach by recognizing the cumulative effect of adopting IFRS 16 in an adjustment to the opening statement of financial position at January 1, 2019. Therefore, the comparative information has not been restated and continues to be reported under IAS 17 Leases. The details of the new accounting policy and the quantitative impact of change are described below.
At inception of a contract, we assess whether a contract is, or contains, a lease. A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset over a period of time in exchange for consideration. We assess whether the contract involves the use of an identified asset, whether we have the right to obtain substantially all of the economic benefits from the use of the asset during the term of the contract and if we have the right to direct the use of the asset.
SSR Mining Inc. | Interim Financial Statements Q1 2019 | 8 |
Notes to the Condensed Consolidated Interim Financial Statements
SSR Mining Inc.
(tabular amounts expressed in thousands of United States dollars unless otherwise stated)
2. | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) |
As a lessee, we recognize a right-of-use asset, which is included in property, plant and equipment, and a lease liability at the commencement date of the lease. The right-of-use asset is initially measured at cost, which is comprised of the initial amount of the lease liability adjusted for any lease payments made at or before the commencement date, plus any decommissioning and restoration costs, less any lease incentives received.
The right-of-use asset is subsequently depreciated from the commencement date to the earlier of the end of the lease term, or the end of the useful life of the asset In addition, the right-of-use asset may be reduced due to impairment losses, if any, and adjusted for certain remeasurements of the lease liability.
A lease liability is initially measured at the present value of the lease payments that are not paid at the commencement date discounted by the interest rate implicit in the lease or, if that rate cannot be readily determined, the incremental borrowing rate. The lease liability is subsequently measured at amortized cost using the effective interest method.
Lease payments included in the measurement of the lease liability comprise: fixed payments; variable lease payments that depend on an index or a rate; amounts expected to be payable under any residual value guarantee, and the exercise price under any purchase option that the Company would be reasonably certain to exercise; lease payments in any optional renewal period if the Company is reasonably certain to exercise an extension option; and penalties for any early termination of a lease unless the Company is reasonably certain not to terminate early.
We have elected not to recognize right-of-use assets and lease liabilities for short-term leases that have a lease term of twelve months or less and leases of low-value assets. The lease payments associated with these leases are charged directly to income on a straight-line basis over the lease term.
On adoption of IFRS 16, we recorded right-of-use assets of $4.3 million within property, plant and equipment. We recorded lease liabilities of $4.3 million as at January 1, 2019. The weighted average incremental borrowing rate for lease liabilities initially recognized as of January 1, 2019 was 7.5%.
$ '000s | ||
As at December 31, 2018 | — | |
IFRS 16 adoption | ||
Future aggregate minimum lease payments under operating leases as at December 31, 2018 | 5,988 | |
Effect of discounting at the incremental borrowing rate | (1,678 | ) |
Lease liabilities arising on initial application of IFRS 16 | 4,310 | |
Cash principal and interest payments | (294 | ) |
Non-cash accretion | 80 | |
As at March 31, 2019 | 4,096 | |
Less: current portion | 834 | |
3,262 |
c) | Significant accounting judgments and estimates |
The preparation of financial statements requires the use of assumptions, judgments and/or estimates that affect the amounts reported and disclosed in the consolidated financial statements and related notes. These assumptions, judgments and estimates are based on management’s best knowledge of the relevant facts and circumstances, having regard to previous experience, but actual results may differ materially from the amounts included in the financial statements. The significant judgments and estimates applied in the preparation of the unaudited condensed consolidated interim financial statements for the three months ended March 31, 2019 are consistent with those applied and disclosed in Note 2(u) to our 2018 audited consolidated financial statements.
SSR Mining Inc. | Interim Financial Statements Q1 2019 | 9 |
Notes to the Condensed Consolidated Interim Financial Statements
SSR Mining Inc.
(tabular amounts expressed in thousands of United States dollars unless otherwise stated)
3. | INVENTORY |
March 31, 2019 | December 31, 2018 | |||
$ | $ | |||
Current: | ||||
Finished goods | 31,376 | 23,433 | ||
Stockpiled ore | 11,448 | 18,195 | ||
Leach pad inventory | 158,640 | 162,335 | ||
Materials and supplies | 39,832 | 28,785 | ||
241,296 | 232,748 | |||
Non-current materials and supplies | 1,886 | 2,006 | ||
243,182 | 234,754 |
As at March 31, 2019, we have total provisions of $3,436,000 (December 31, 2018 - $3,436,000) for supplies inventory that we no longer expect to utilize.
4. | PROVISIONS |
March 31, 2019 | December 31, 2018 | |||||||
Current | Non-current | Current | Non-current | |||||
$ | $ | $ | $ | |||||
Moratorium (1) | 4,185 | 11,470 | 4,570 | 14,487 | ||||
Close down and restoration provision | 413 | 61,569 | 211 | 61,961 | ||||
Other provisions | 6 | — | 7 | — | ||||
4,604 | 73,039 | 4,788 | 76,448 |
(1) | We entered into a fiscal stability agreement with the Federal Government of Argentina in 1998 for production from the Puna Operations. In December 2007, the National Customs Authority of Argentina (Dirección Nacional de Aduanas) ("Customs") levied an export duty of approximately 10% from concentrate for projects with fiscal stability agreements pre-dating 2002 and Customs had asserted that the Puna Operations was subject to this duty. We had previously challenged the legality of the export duty applied to silver concentrate. |
On March 31, 2017, we entered into the tax moratorium system in Argentina to resolve the export duty dispute. Outstanding ARS amounts are subject to interest at a minimum rate of 1.5% per month.
5. DEBT
At December 31, 2018, we had $265,000,000 of senior convertible unsecured notes (the “2013 Notes”) outstanding. On March 19, 2019, the Company redeemed $150,000,000 of the 2013 Notes for a cash payment of $152,250,000. The redemption amount was bifurcated into the debt and equity components of the 2013 Notes purchased. The fair value of the debt portion of $148,000,000 was estimated using a discounted cash flow model based on a maturity date of February 1, 2020 and a discount rate of 4.95%. The difference between this amount and the book value of the redeemed 2013 Notes of $5,423,000 was recorded in the consolidated statements of income (loss) along with the related tax recovery of $1,687,000 and the residual of $4,825,000 was allocated to equity. At March 31, 2019, the expected life of the remaining 2013 Notes is less than one year, so they are recorded in current liabilities.
On March 19, 2019, the Company issued $230,000,000 of unsecured convertible senior notes due in 2039 (the “2019 Notes”) for net proceeds of $222,932,000 after payment of commissions and expenses related to the offering. The 2019 Notes mature on April 1, 2039 and bear an interest rate of 2.5% per annum, payable semi-annually in arrears on April 1 and October 1 of each year. The 2019 Notes are convertible into our common shares at a fixed conversion rate, subject to certain anti-dilution adjustments. In addition, if certain fundamental changes occur to the Company, holders of the 2019 Notes may be entitled to an increased conversion rate. The 2019 Notes are convertible into our common shares at an initial conversion rate of 54.1082 common shares per $1,000 principal amount of 2019 Notes converted, representing an initial conversion price of $18.48 per common share.
SSR Mining Inc. | Interim Financial Statements Q1 2019 | 10 |
Notes to the Condensed Consolidated Interim Financial Statements
SSR Mining Inc.
(tabular amounts expressed in thousands of United States dollars unless otherwise stated)
5. DEBT (Continued)
Prior to April 1, 2023, we may not redeem the 2019 Notes, except in the event of certain changes in Canadian tax law. On or after April 1, 2023 and prior to April 1, 2026 we may redeem all or part of the 2019 Notes for cash, but only if the last reported sales price of our common shares for 20 or more trading days in a period of 30 consecutive trading days exceeds 130% of the conversion price in effect on each such trading day. On or after April 1, 2026, we may redeem the 2019 Notes in full or in part, for cash.
Holders of the 2019 Notes have the right to require us to repurchase all or part of their 2019 Notes on April 1 of each of 2026, 2029 and 2034, or upon certain fundamental corporate changes. The repurchase price will be equal to 100% of the 2019 Notes, plus accrued and unpaid interest to the repurchase date.
The proceeds of the 2019 Notes have been bifurcated between their debt and equity components. The fair value of the debt portion of $169,365,000 was estimated using a discounted cash flow model method based on an expected life of seven years and a discount rate of 7.5%. The residual of $44,838,000 ($60,635,000 less deferred tax liability of $15,797,000) was allocated to equity. The debt portion has been recorded at amortized cost, net of transaction costs, and is being accreted to face value over the expected life using the effective interest method. The transaction costs of the issuance of the 2019 Notes of $7,068,000 have been allocated on a pro rata basis with $5,205,000 to debt and $1,863,000 to equity.
March 31, 2019 | December 31, 2018 | |||
$ | $ | |||
Balance, beginning of period | 250,729 | 236,358 | ||
Accretion of discount | 3,760 | 14,371 | ||
Interest accrued | 1,925 | 7,619 | ||
Interest paid | (4,384 | ) | (7,619 | ) |
Redemption of 2013 Notes | (141,982 | ) | — | |
Issuance of 2019 Notes | 164,160 | — | ||
Balance, end of period | 274,208 | 250,729 | ||
Balance of debt (current) | 109,125 | — | ||
Accrued interest outstanding | 703 | 3,178 | ||
Total current portion of debt | 109,828 | 3,178 | ||
Non-current portion of notes outstanding | 164,380 | 247,551 |
6. REVENUE
Three months ended March 31, | ||||
2019 | 2018 | |||
$ | $ | |||
Gold doré and bullion sales | 108,694 | 82,669 | ||
Concentrate sales | 17,187 | 16,153 | ||
Other revenue | 369 | (920 | ) | |
126,250 | 97,902 |
SSR Mining Inc. | Interim Financial Statements Q1 2019 | 11 |
Notes to the Condensed Consolidated Interim Financial Statements
SSR Mining Inc.
(tabular amounts expressed in thousands of United States dollars unless otherwise stated)
7. INCOME (LOSS) PER SHARE
The calculations of basic and diluted income (loss) per share are based on the following:
Three months ended March 31, | ||||
2019 | 2018 | |||
$ | $ | |||
Net income (loss) | 5,732 | (2,322 | ) | |
Net loss attributable to non-controlling interests | (732 | ) | (696 | ) |
Net income (loss) used in the calculation of diluted net income (loss) per share | 6,464 | (1,626 | ) | |
Weighted average number of common shares issued (thousands) | 121,023 | 119,882 | ||
Adjustments for dilutive instruments: | ||||
Stock options (thousands) | 966 | — | ||
Weighted average number of common shares for diluted income per share (thousands) | 121,989 | 119,882 | ||
Basic net income (loss) per share attributable to equity holders of SSR Mining | $0.05 | $(0.01) | ||
Diluted net income (loss) per share attributable to equity holders of SSR Mining | $0.05 | $(0.01) |
8. SHARE-BASED COMPENSATION
Total share-based compensation, including all equity and cash-settled arrangements, for the three months ended March 31, 2019 and 2018 has been recognized in the condensed consolidated interim financial statements as follows:
Three months ended March 31, | ||||
2019 | 2018 | |||
$ | $ | |||
Equity-settled | ||||
Cost of inventory | 35 | 54 | ||
General and administrative expenses | 416 | 403 | ||
Exploration, evaluation and reclamation expenses | 9 | 11 | ||
Cash-settled | ||||
Cost of inventory | 186 | 293 | ||
General and administrative expenses | 3,315 | 2,468 | ||
Exploration, evaluation and reclamation expenses | 47 | 24 | ||
4,008 | 3,253 |
Under the Company’s 2017 Share Compensation Plan, the Company has the option to settle vested Preferred Share Units (‘PSU’s) in either cash or common shares. On February 22, 2019 the Board of Directors of the Company indicated its intention to settle all of the PSU’s issued under the Company’s 2017 Share Compensation Plan, when vested, in common shares of the Company. Prior to this date, based on the past history of settling PSU’s in cash, the Company had accounted for its obligations as a liability. As a result of this change, the value of the relevant outstanding PSU’s was fixed at that date and the existing liability of $1,764,000 ($1,284,000 net of tax) was transferred to the share-based compensation reserve of shareholders’ equity. The unamortized portion of $4,652,000 relating to these PSU’s will be amortized over the remaining vesting period.
SSR Mining Inc. | Interim Financial Statements Q1 2019 | 12 |
Notes to the Condensed Consolidated Interim Financial Statements
SSR Mining Inc.
(tabular amounts expressed in thousands of United States dollars unless otherwise stated)
9. OPERATING SEGMENTS
The following is a summary of the reported amounts of income or loss, and the carrying amounts of assets and liabilities by operating segment:
Three months ended March 31, 2019 | Marigold mine | Seabee Gold Operation | Puna Operations | Exploration and evaluation properties | Other reconciling items (i) | Total | ||||||
$ | $ | $ | $ | $ | $ | |||||||
Revenue | 72,263 | 36,431 | 17,556 | — | — | 126,250 | ||||||
Cost of inventory | (44,992 | ) | (13,047 | ) | (12,827 | ) | — | — | (70,866 | ) | ||
Depletion, depreciation and amortization | (14,290 | ) | (9,712 | ) | (1,145 | ) | — | — | (25,147 | ) | ||
Income from mine operations | 12,981 | 13,672 | 3,584 | — | — | 30,237 | ||||||
Exploration, evaluation and reclamation expenses | (106 | ) | (2,903 | ) | (80 | ) | (614 | ) | (35 | ) | (3,738 | ) |
Operating income (loss) | 11,157 | 10,016 | 2,368 | (298 | ) | (3,615 | ) | 19,628 | ||||
Income (loss) before income tax | 7,656 | 10,671 | (708 | ) | 702 | (9,424 | ) | 8,897 | ||||
As at March 31, 2019 | ||||||||||||
Total assets | 475,977 | 455,370 | 212,657 | 58,793 | 404,345 | 1,607,142 | ||||||
Non-current assets | 236,047 | 326,955 | 144,130 | 56,571 | 42,948 | 806,651 | ||||||
Total liabilities | (77,657 | ) | (99,448 | ) | (61,191 | ) | (6,341 | ) | (299,886 | ) | (544,523 | ) |
Three months ended March 31, 2018 | Marigold mine | Seabee Gold Operation | Puna Operations | Exploration and evaluation properties | Other reconciling items (i) | Total | ||||||
$ | $ | $ | $ | $ | $ | |||||||
Revenue | 55,880 | 26,789 | 15,233 | — | — | 97,902 | ||||||
Cost of inventory | (30,196 | ) | (9,604 | ) | (15,933 | ) | — | — | (55,733 | ) | ||
Depletion, depreciation and amortization | (13,372 | ) | (10,513 | ) | (1,053 | ) | — | — | (24,938 | ) | ||
Income (loss) from mine operations | 12,312 | 6,672 | (1,753 | ) | — | — | 17,231 | |||||
Exploration, evaluation and reclamation expenses | (101 | ) | (1,814 | ) | (70 | ) | (641 | ) | (205 | ) | (2,831 | ) |
Operating income (loss) | 11,053 | 4,321 | (2,561 | ) | (641 | ) | (4,441 | ) | 7,731 | |||
Income (loss) before income tax | 6,822 | 1,815 | (3,982 | ) | (552 | ) | (4,909 | ) | (806 | ) | ||
As at December 31, 2018 | ||||||||||||
Total assets | 478,187 | 448,891 | 185,298 | 71,830 | 336,932 | 1,521,138 | ||||||
Non-current assets | 235,242 | 321,802 | 121,890 | 69,263 | 26,498 | 774,695 | ||||||
Total liabilities | (79,210 | ) | (93,017 | ) | (62,243 | ) | (6,330 | ) | (274,362 | ) | (515,162 | ) |
(i) Other reconciling items refer to items that are not reported as part of segment performance as they are managed on a corporate basis.
SSR Mining Inc. | Interim Financial Statements Q1 2019 | 13 |
Notes to the Condensed Consolidated Interim Financial Statements
SSR Mining Inc.
(tabular amounts expressed in thousands of United States dollars unless otherwise stated)
10. FAIR VALUE MEASUREMENTS
Assets and liabilities that are held at fair value are categorized based on a valuation hierarchy as follows:
Fair value at March 31, 2019 | Fair value at December 31, 2018 | |||||||||||||||
Level 1 | Level 2 | Level 3 | Total | Level 1 | Level 2 | Level 3 | Total | |||||||||
$ | $ | $ | $ | $ | $ | $ | $ | |||||||||
Recurring measurements | ||||||||||||||||
Trade receivables | — | 21,431 | — | 21,431 | — | 11,287 | — | 11,287 | ||||||||
Marketable securities | 32,634 | — | — | 32,634 | 29,542 | — | — | 29,542 | ||||||||
Other financial assets | — | — | 8,684 | 8,684 | — | — | 3,711 | 3,711 | ||||||||
Accrued liabilities | — | (2,678 | ) | — | (2,678 | ) | — | (16,649 | ) | — | (16,649 | ) | ||||
32,634 | 18,753 | 8,684 | 60,071 | 29,542 | (5,362 | ) | 3,711 | 27,891 | ||||||||
Fair values disclosed | ||||||||||||||||
Convertible notes | (343,155 | ) | — | — | (343,155 | ) | (263,675 | ) | — | — | (263,675 | ) | ||||
(343,155 | ) | — | — | (343,155 | ) | (263,675 | ) | — | — | (263,675 | ) |
There were no transfers between Level 1 and Level 2 fair value measurements. During the three months ended March 31, 2019, there were no transfers into or out of Level 3 fair value measures.
11. SUPPLEMENTAL CASH FLOW INFORMATION
Changes in working capital items during the three months ended March 31, 2019 and 2018 are as follows:
Three months ended March 31, | ||||
2019 | 2018 | |||
$ | $ | |||
Trade and other receivables | (14,296 | ) | 5,581 | |
Inventory | (14,676 | ) | (18,473 | ) |
Trade and other payables | 1,831 | 1,487 | ||
Provisions | (236 | ) | (463 | ) |
(27,377 | ) | (11,868 | ) |
Adjustments for non-cash other operating activities during the three months ended March 31, 2019 and 2018 are as follows:
Three months ended March 31, | ||||
2019 | 2018 | |||
$ | $ | |||
Share-based payments | 460 | 468 | ||
Write down of fixed assets | 293 | 2,749 | ||
Other | (221 | ) | 1,106 | |
532 | 4,323 |
SSR Mining Inc. | Interim Financial Statements Q1 2019 | 14 |
Notes to the Condensed Consolidated Interim Financial Statements
SSR Mining Inc.
(tabular amounts expressed in thousands of United States dollars unless otherwise stated)
11. SUPPLEMENTAL CASH FLOW INFORMATION (Continued)
Non-cash investing and financing transactions conducted during the three months ended March 31, 2019 and 2018 are as follows:
Three months ended March 31, | ||||
2019 | 2018 | |||
$ | $ | |||
Transfer of share-based payment reserve upon exercise of stock options | (1,126 | ) | (244 | ) |
Transfer of equity-settled PSU's | 1,284 | — | ||
Marketable securities received from sale of exploration and evaluation properties | — | 1,303 | ||
158 | 1,059 |
SSR Mining Inc. | Interim Financial Statements Q1 2019 | 15 |