SSRM - Earnings call transcript Q2 2019

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Good morning everyone, and welcome to SSR Mining’s Second Quarter 2019 Conference Call. This call is being recorded. At this time, for opening remarks and introductions, I would like to turn the call over to Stacey Pavlova, Manager, Investor Relations. Please go ahead.

Stacey Pavlova

Thank you, operator. gentlemen. and ladies morning, Good Welcome to which business conference during quarter a Mining’s will provide second performance. we financial our of XXXX an review call our SSR update and on

access EDGAR and figures statements cash all during financial been this otherwise are SEDAR call. the all-in metal in available our are of To and find our Please discussion U.S. call, an to the sustaining and Our and analysis there you also are sold. will our the is ounce news relating in that call release management’s indicated. to filed have note All costs on website. costs webcast discussed dollars unless accompany on payable references and per to online information webcast and

making so the will please relevant forward-looking the We today, read documents. statements in disclosures be

this Benson, COO; Kevin on are Edmunds, us and Joining Carl CFO; and morning call our Greg O’Kane, CEO; the Exploration. Martin, President, Paul President Vice

would the I to turn to remarks. call like Paul opening Now, for over

Paul Benson

production nearly maintained you, a and more produce strategic number stacking you equivalent operations seeing a achieved morning, to in ounces grades over quarter XXXX delivered X.X year. and and equipment At well we new produced and tracking ore very strong gold and discuss silver progressed strength. initiatives, as the an well to million our while gold the on Puna to well. leach second already All results. XX,XXX mine Marigold, setting quarter XXX,XXX financial XX% of was underground of we up the I’m while ladies ounces gold, we At underground second of ounces operating with development our ounces. the commissioned silver, rate improved are a gentlemen. financial we Good early plant. higher our of call welcome recovery strong for the solid results. The remainder to grade as a to compared We pleased of nearly high mines Thank pad Stacey. three quarterly QX grade, led to produced at CB, quarter XX,XXX us

performance delivered slow is position year. solid by each the for overall, So, operation the

first the Greg increasing taking XXX,XXX gold to to production opportunity now we with strong a discuss royalties or ounces. consolidated later. drives mid-point guidance guidance this equivalent operation ounce. revise to behind year cost $XXX mid-point due gold each are the us, at half guidance will improving production to which expected our are basis, With marginally increasing and of as On metal our per Largely our equivalent upwards, we prices, cash are be we

to second and Valley opportunity During properties Trenton the the acquisition the announced south and almost of doubles provides the extend mine. mine package resources us Buffalo acquisition and with the Canyon and potentially Marigold of This land immediately located quarter, our reserves Marigold’s we grow life.

begin will the in to and of there later third quarter expect drilling We call. the discuss year this in this Carl

of been this reserves which particularly at considered recently our XXXX at discipline life capital mine the focused rather from expansion conversion of area, is the important expansion rightfully into is are sake. for exploration on where to CB study. early expansion as XXXXs replacement reported, of mining exploration to successful, the This the at environment have and number Marigold equipment capital expect Most for and the programs Dot extend Red resources without anticipate we previously As a and the expected Marigold we year-end reserves pleasingly, in targets. we investors to part resources than our operation

million and net strong properties. million operating income to quarter cash us Canyon we $XX acquire of even adjusted cash ended a outflow SSR the activities. Golden agreement of quarter $XX we purchase Arrow shareholders we Mining attributable as announced to it after financial the of $XX to Operations. and ownership, to Trenton We’re a with the from We remaining providing to both $XXX projects. million our into XX% as for provides an entered with also the have pleased generated This performance consolidate and Subsequent million during with reported quarter-end, allows balance while benefits of funding Golden acquisition Buffalo pursue our exploration many Valley Arrow of Puna sheet

allows a to Las Chispas participation interest exercise operational discuss right performance in will more our X.X% the call in With us also over purchase which to deposit. that, detail. elected maintain shares to additional who turn Kevin, We our in the SilverCrest, high-grade to I’ll

Kevin O’Kane

Thank you, Paul.

of stable Marigold, As gold sets quarter gold, you dry QX we ounce. the At gold XX,XXX more ounces mainly consecutive an half which up the for stacked, the XX,XXX strong have X% capitalized X ore heard, we fleet at in haul we with million of cash X At mobilized project. more At of had per more year. results the than injury. consolidated first base produced quarter, second safely recordable Puna, consumption the Cash on we CB, our up X% quarter. increased allocated Marigold, to compared incident us and no ton of costs. dripping, to Hitachi per a The more hours reagent operational And costs the were produced by $XXX quarter. reached equally driven at second lost equivalent dating this overburdened performance $XXX first tailing’s expansion maintenance higher, cost back costs cost cash lower time the in sees than equivalent and than ounce, were of years. ounces we from construction From ramped

per offset Approximately, the was an life. We material; partially were from the XX.X of ton year. the were oil million rate expect tons million grams diesel first a increase X.XX of gold This gold. tons Although ton lower improved we moved leach higher, increase of stack to to by to grade QX, X.X per [X.XX tariff pad of a at this and in at compared delivered tons through grams] heap prices of XX% to compares million ore cost grade this quarter. X.X

in we and XXXX, reserves at the assumptions, converted XXXX, and Dot into engineering was This to a $X,XXX XXX,XXX ounces already and reserves. XXXX to effort already add area, to ounce discussed, reported price Red Marigold the successful aiming Dot. HX of program This year-end now included drilling expect based early to drill mine As at by to current completed XXXXs. completed gold we’ve and anticipated life per convert in work as resources geotechnical reserves Red the and is extend Marigold work on at is which Paul

XXXX XX% at second of ounce new the underground gold benefited due pleased cost the commissioned in a thanks the of pours their for delivered hard road solid. beginning in was cash in operational Seabee's unit first was mining the over extend the ice the second to timing very QX as equipment quarter. were compared with We The higher complex. The XXXX. timing and quarter and driver per operation ounces XXXX result rates, quarter, quarter team quarter XX,XXX ore by $XXX compared during mining work. key the at development XX% an ounce, future are Cash XXXX, to gold year-end decrease, the operating production Santoy led of increased pours per to quarter. of this Underground at extraction that second of to the overall costs for of previous higher gold to is performance mainly the produced first in in gold the the the $XXX

quarterly of are year-to-date. to million mine and consistent reserve sales Silver of grams X.X over quarter, with totaled feed increase silver X.X processing than Gold quarter, per sales the million We’re silver for X,XXX grades, silver first first throughput X.X production plan. projected, day an to to which quarter X.XX part achieved per in and to of mainly costs byproduct production raising focus was to first to ounces, of and of Gold a ore project. grade quarter the silver quarter in our a the in on XXXX, the above $X.XX sales quarter, of the decline grade mill and Cash plan QX X less the second by track recovery tons as the ounces. increase distribution track increase average over lower day due second million reach been lower lower the silver the And the tailings percentage rate and recovery reflecting largely XXXX. the quarter. we’re ton, recovery ounce XXX on the basis, The previous Chinchillas attributable processing planned X% circuit second XX%, with project. quarter, PFS, and X the of per compared the that totaled lower XX% quarter, the ounces ore. silver the produced for of on electrical $X.XX aligns ounces, were credits. ounce operations in-line silver the during has first higher quarter per from year-end the per with work date. projected Zinc in than tons point expected the due tailing’s sales performance than the zinc The XX% the an with development compared to for on of system On was expansion mill a million expansion Puna for compared respectively. second reflecting

to of the and planned of the the continues mining XXXX. the compared of to the X,XXX trend long-term year Processed strip to previous quarter During of XXXX, planned. ore the decrease the will grade debottlenecking silver Strip the to ton, the delivered day, the mainly an outlined half The decrease, the well quarter, of second systems us plan. up the to second in is for XXX the consistent due Chinchillas Canadian half the rates the decrease pit setting the XX% as and the XX:X second PFS. with ratio of during at system quarter quarter compared Chinchillas third solid for of maintenance through pumping of of pit continue summary, tailings control In a average second the new grams per stabilize that results average quarter the was operation. operation ratio of quarter, continued year. was as in expected strip Mining ore quarter, the we during first and next of reached ratio as milled tons XX% per phase

and and Puna, Marigold, on our Seabee and at activities. the through state to I in exploration the focus who recently will exploring you safe will take purchased operation land production and our over including We while mineralization at achieving Gold for hand Operation. continue additional near now steady Carl, position

Carl Edmunds

you, Thank Kevin.

for North Mackay the at and and Marigold For Valmy XXXX, exploration our new are objectives Red Dot south at resource and Dot areas. Red conversion at resources and of

growth resource objectives at Our drilling the wall. on and at at resource and and Santoy mine. Santoy at south XA, hanging conversion Gap Seabee project continue the activities Fisher select focus Gap Gap areas hanging of wall Greenfields

similarly, define activities to Turning for the of mine former QC for drilling Basalt mineral to this East completion for areas. and to exploration Mackay a South core sufficient Marigold, to through in XXXX Valmy North resources has main the detailed Red Dot reserve Red the has of drilling geotechnical planning. focus and QA, data been the been and Dot continued And pit and of at provide additional

at in drill our indicates meters XX the South Red July X.X we gold in meters mineral gold XX and convert XXX the of gold of as completed this and of X.X extend successful which set news XXXX the and XX out North quarter to meters Red circulation as Dot, of resources release Red view Red as ton Dot, September grams drilling life expected grams We a exploration Dot, majority mineral on North exploration drilling will XXXX second is release. disclosed meters in Dot, pit. from the at of grams results update July. per exploration at were holes per per this targeted received At news Marigold. at our Dot Mackay at the Valmy a the these ton During South to targets. total for quarter, year-end originally XX,XXX completed as result, that X.XX mine at such our Red late in reserves released We Examples ton reverse

reserves mineral We estimate our year-end at mineral XXXX. expect these impact resources results to positively and

Canyon quarter acquired will third the at Trenton the work XXXX, During recently of begin exploration property. we

near mineral gold the there evaluate meters consolidated of Our exploration Santoy package XX,XXX operation, perspective reserves are to mineral land underground for Seabee XXXX and surface At increase estimate the plans resources drilling targets. convert objectives mineral into develop the the other and mining of and greater to resources XX,XXX drilling the with to include objective meters our complex.

to completed XX second and quarter drilling meters of underground mine surface we of the Santoy XXXX, holes. in During close area, XX,XXX

drill XX.X holes Santoy Results completed the wall hanging meters our of the drill of X.X and number received in wall examples at as news with release. Gap per on Gap a programs meters during mineral focus Gap four zone. resource, Santoy hanging meters Santoy X.XX on as of quarter Our such Santoy grams mostly XA and highlights include the gold, grams of per ton X.X ton of intersections outside per ton July gold from XX gold, reported as grams second

programs fly Prospecting discovery work Fisher Mac are ton We meters are Santoy Seabee soil north June contribution previously a geological wall grams QX the to and Greenfields resource along already when will we XXXX. X.X anomalous over target Operation on work of entrenching conducted at resources Gold comprises X.X per the bedrock This confident and ton located field adjacent X.X per where and exploration hanging positive mineralization strategic on mapping began at located intercept in over in shear. reported meters prospect XXXX. claims as that from project. again of meters a in the reported Gap X.XX mineral activities grams of and reported has mineral gold camps year-end geochemistry, make inferred points XXX the drill focused

on Pitarrilla. to activity at is vein to potential high-grade mining our Last that we grade we lithology mineralization. in host current of vein following of scale terms zinc, and underrepresented improve mineralization rhyolite This a alternative. historic review the continuity the to parallel if of in to our in to announced the smaller assessing be contractors to further our dipping Turning of in higher-grade associated exploration would is cross-cut This most drill underground resource that dikes we the likely definition underground XXXX. angles based process Presently, silver, increase of program second half extend The underground project intention of in week, initiate existing and and resource. target drilling approved, are contemplated resource with are and the mineralization contained steeply orthogonally the is the evaluating current to decline drilling lead drilling.

for a Now, our of over financial Greg to discussion results.

Greg Martin

Carl. Thanks

Chinchillas, the sequential second Gold The on to quarter with the price limited back impact support the had results. start-up XXXX on the continued quarter and were expectations in in late stronger our improvement the December year quarter for of performance. second continued of a silver production on driving prices financial drag strength a

So, performance. our financial improvement operating reflects

generated from revenues a down impacted For $XXX was Puna, million, the Revenue in at we production sales XX% good XX% first by quarter, above the as a increase from quarter. inventory quarter. the first quarter, built comparative of the portion increase a positively sold we of and

XX% Though quarter, assets comparative our from and saw will about higher from in-line offset general as contribution net per a both our some balance income in forward, with quarter, $XX was Reported remains gold million $X.XX the and above and it's Adjusted by $XX from production an was silver million net volatility million $X.XX Going QX share, objective from concentrate a we lower or operations, income contribution or $XX.X achieving per a persist. improvement first sales. mine asset. operations share. marginally was a of Income quarter. the this typical comparative

was better first straightforward Cash the statement million, the from quarter operating and clearly double perspective. positive quarter, So, generated $XX quarter. a an by and than activities income comparative roughly significantly

million working have by may noted negatively capital. build an that impacted non-cash was of operating $XX.X You cash

totaling largely the by the driven working second that high sales $XX in accounts seen half in have concentrate an payment have the capital Non-cash receivable from million. was We overall build a quarter first terms. increase year delayed in the of large

to capital biggest Buffalo track So, for and aggressively totaling the working we stabilize for cash of was our as the balance and cost. works consumable acquisition of on paid will the capital sales Investment for the exploration this the definitely concentrate properties see site of and guidance, its remained inventories million Trenton assets contiguous recovery Seabee million capitalized Marigold. $XX.X in Valley year. over $XX use of operating Canyon mining The through and

for We liquidity capital at of project. our to We with balance, also position. million cash, Chinchillas at completely reduction closed cash $XX a credit facility use and the the marginal $XXX we working $X.X million the in enviable our in infrastructure million works an due quarter land And acquisition. residual our remain undrawn,

with our a first At the increased the XXX,XXX forecast ounces. between production has certain We process, half to Marigold of mid-year combined which year have metrics. to of and driven mine, our has XXX,XXX guidance favorable revisions full-year completed

As stack year mining back guidance gold pit the higher in in price early costs ounces to anticipated, of we capitalized, waste royalty being proportion approximately due more has prices. optimization. cost have than increased gold due to reported cost. marginally, lower been $XX to Marigold adds able higher the $XXX to Each and the cost cash a Cash increase on of

reduction to sustaining similarly in Seabee higher cost ounces, to grades has capitalized unchanged. Operation, due to remained guidance Gold the mined. stripping production million, increased between XXX,XXX the guidance and With all-in $XX At largely XXX,XXX

the $XXX At for meaningful performance incorporated We discipline. with rates at six have operations, a at impressive these mine operating revision in payable have we grades, to The year, we exchange mill months, to first guidance data, Puna higher the cost have per operating cash and the quite actual also update. gold guidance margins ounce our favorable Seabee had prices. now and cost foreign between due are sold, into $XXX to and half downward strong of

zinc lower value The and majority better payment silver holds of recovery. seen recovery with the modelled have We better terms. concentrate then silver/lead

as remains performance ounce. to X.X to ounces, guidance days on is X of payable and X.X stripping Work lead. have and recognizing optimize expenditures million increased of the on Silver between higher cash Capital we $X.XX at and silver ongoing per So, has the focus been optimizing between in capital and $XX.XX Phase our we early costs marginally pit. million silver focus Chinchillas increased stripping operations. are

So are overall, for we set second XXXX. well the up of half

deal in Looking quarter consideration forward This an is the non-cash third date the the all intent we full to results, mainly almost the results sheet in to the our we asset remaining of will elimination is once of have QX. the on benefit quarter, unlikely Puna reporting Puna expected Post-acquisition, are from close third financial balance the third the and consolidate late quarter XX% or completes with operations. announced of early already XXX% to as related. operating we The through results of noncontrolling acquire the impact interest. the acquisition exposure

We the of third will shares quarter. the in the purchase record also top-up SilverCrest

participation positive. modest impact increase million $XX Our financing of end cash up of million. a $X.X has quite purchase At has The relatively value. about its in to saw we July, of shares proven the in original to

to So, metal through moved in back Each highlight we long-term to July those are will metal both to turn move pleased significant final I The to silver. levels, With I prices development. and some is has their support encouraging call success. the is comments, point that so gold Paul. for through an continue resistance

Paul Benson

Greg. Thanks,

to positions us production in the for enabling eighth to summary, consecutive exceed guidance So, year. another meet improve guidance, or us strong quarter, which

we existing wall extend and expect Las drill for the increasing Gap the Santoy need Dot X.X% and Marigold, the project. completing will pursue strong capital of with the We’ve the complete to Marigold, exploration continue mine zones Red and includes opportunities, objective acquisition the SilverCrest and to returns to price. to final discipline, high-grade remaining Valley Our Chispas aim properties approval, spot Puna of campaign Pending silver announcing without we drilling at investment to a life acquisition double-digit look neighboring Seabee. the the XX% as we at in dividends hanging Trenton and maintaining Pitarrilla increase expansion a while external also our continues to maintaining decline financial the pay continued in as in Canyon at to hit of at high-grade the the our of which exposure operations, Buffalo increase

refinancing sheet of our opportunities. external to of any earlier pursue us very growth to This internal a now the have. the convertible concludes I'll to in formal questions our with year, our this remarks position line Finally, and take pass earnings notes you balance is call. our the may strong operator allowing

Operator

[Operator from Bank. Benson. Instructions] National question comes Parkin Mr. first Mike you, Please Thank with go-ahead, The sir.

Mike Parkin

Hi, for taking guys. my call. Thanks

in comments do the kind of Following end up where on you first the to like of the expect about Greg’s year? the normalize capital build half, by receivable accounts working

Paul Benson

Good thanks. Mike. Yes, morning,

an sales gold and Puna we those obviously note at related sales would fashion. largely accounts any will our receivable You immediate to concentrate in cover are sales,

and now. those of come that as back the we production in receivable level above line come we accounts So, XX% will we see just probably see

guidance If see at and up to expect kind would those production of up sales our you too. look match that you line what range is the we come in

Mike Parkin

Good. Okay.

I else from with much. seems straight was much Thanks me. releases think that you’ve given. pretty the Everything forward pretty previous very it

Paul Benson

Thanks.

Operator

Thompson with comes The question Chris from PI Financial. next

Chris Thompson

Hi, the good Thanks for morning call. guys. organizing

questions, first be the looking all. two plan quick specifically capitalize? more the guess How Marigold you at the of should for I year to portion and – the remainder we that strips Just of

Greg Martin

we Kevin on are mining in moment. terms of at ratios, We don’t strip guidance where give but the just quarterly

Kevin O’Kane

Yes.

remain first ratios to stripping should year. half plant. of the is Our nothing, in There no changes the in made mine have the similar what been they

Paul Benson

on projects, Greg, any the catalogs? comments

Greg Martin

Yes.

would Chris, So, guidance. point I you towards our

we dropped that’s stripped So, started where on in guidance you mined can what’s year half the ore the can see and we with more tons see first you year reflecting relative the being that to the happened really of stack. in preferred and

get average the ratios in the of number or And call to million indicates quarter for So, return back to capitalized what guidance $X million the the balance level clearly, take $X strip give kind of over typical year. year. our see of will guidance to to towards a each I we us that our

Chris Thompson

around Puna, the obviously And would representative silver way a and there, that QX obviously be Thank would lower should to remainder switch the Perfect. and zinc we that. here? just you of moving then more of true be a recoveries head bit say it over grade production higher to what and – sorry year to the through to of grades by for expect

Kevin O’Kane

right. Yes, that’s Chris

see very metals. metals, for similar the both in half and the will QX second being all You in for both to grades recoveries

Chris Thompson

thank guys. very much. you Alright, Perfect

Paul Benson

you. Thank

Operator

The [Operator question Graf from Riley sir. Please Instructions] comes next FBR. Adam B. ahead, with go

Adam Graf

Hi, give congratulations for we call. quite detailed for I half a taking strong us couple you just year? guidance of rates expect questions; Greg guys. tax Thanks second on my the any can that a a of quarter. have on tax effective – the can

Greg Martin

will variability really have sure. a would They are in best nothing happened I and taxes a quarter I always Yes, is predict. Adam, unusual is it What an I do some my is, to in bit issue to say previous of quarters. this difficult talked number and tax. that has there over our

expense inflation at that’s recoveries You an corporate ongoing Puna we flow at that be and Seabee the that recoveries recovery we calls. in issue to different Puna Marigold the know basically some tax have we tax couple last and of are going that’s highlighted where and see and taxable I’ve at down adjustments in through at resulted

foreign Argentina certainly could variability. are go inflation about exchange rates we in So, percentage to to, but a on and see guide meaningfully where very longer-term I’d effective a period, principally. that we still XX% generally going rate a in tax you period just down see that from some over depending quarter-to-quarter know

Adam Graf

the guys rough income us or the speaking – prices exact can realized maybe that you Puna, then, about realized? you give the lead And

Carl Edmunds

exact I the shipments I’m in settled. sorry, have for was prevailing would don’t would price that the call effectively numbers, but realize we the what what we quarter the

that settle go. we six to be metal would to have quarter a over where on base price outstanding that continue depending of kind post those the We adjustments subject prices of shipments number will weeks end

Adam Graf

And was TCRCs what realized impact of the quarter? in to the related price, the

Greg Martin

Yes.

table. look cash disclosed see cost at in an in note Adam, TCRCs incurred, our item separately as that So, our that we the you'll MD&A, if you

that if follow-up, discussion at happy know look You you to want it. certainly specifics have to and on I’m on any a

Adam Graf

kind And Alright. us plan issues, a then of plan mine plan from sort or for away idea are type idea of you you when give mine new have mine of to an a getting guys Pitarrilla? potential for of can going accounting

Paul Benson

at said and months, drilling. feel have would of moment, we the looking moment, that around be we As then Pitarrilla, diamond at of magnitude extending the decline extension and XX drilling doing reviewing for decline XX are the then the interpretation. the order to at the Gut the

so, from that new and like. following plan obviously And about what worry mine the on looks we

Adam Graf

And you're that spot about of what, thinking assume going sort sort to be at of I time? pricing

Paul Benson

has have is, only about double-digit we projects What challenge Yes. spot silver, said price. the in recent at price. Pitarrilla us if the with it IRR years consensus hit gives we will move with forward, Obviously, fairly significantly the sport

project the price. consensus the for just So, justify hoping you can't with

that a time. time making spot prices valuation at at what We that into will and account the take

Adam Graf

plan, exchange at the look current $XX And silver? old Pitarrilla rates, based the good does on and pretty

Paul Benson

said underground said needed year, a return. project was at the well look single history a study on we on IRR, XXXX maintain get in a coming project a digit $XX came back of focus With to grade a be will we’re focused to double-digit we It smaller our do at the higher with that discipline. a going and sulfites. we That to plan Pitarrilla, Last original capital. over

is which represented positive, grade model. that there good we is that we went a great, under – want look, back higher a we the NPV maintain we're that think chance is realize we discipline. that old but resource in When So, to have to

we're So, going to go ahead this. with

that increase we're this evaluation to because to So, chance being we going volume does price irrespective do is the silver believe the growth. of high short-term, what and this impacted

Adam Graf

many Alright. Thanks taking the patience. guys. I questions so for appreciate

Paul Benson

Thank Not at you. all.

Operator

turn This call to concludes question-and-answer the Mr. session. I the back will Benson.

Paul Benson

participating much the much Thanks today. operator. very call day. a great in for everyone Thanks very Have

Operator

conference today’s concludes call. This

your a may Thank participating for pleasant have You disconnect and lines. you day.

SSR Mining (SSRM) 9 Aug 192019 Q2 Earnings call transcript