Release Date: July 31, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- SSR Mining Inc (SSRM, Financial) reported strong performance from Marigold, Seabee, and Puna operations, all on track to meet full-year production and cost guidance.
- The company has a robust cash position of $358 million, despite significant remediation costs at the Ãöpler site.
- Successful installation of containment infrastructure at Ãöpler, with no recordable contamination to local soil, water, or air.
- Continued advancement of brownfield exploration programs at Marigold, Seabee, and Puna, indicating potential for future growth.
- Positive outlook for improved production and free cash flow generation in the second half of the year.
Negative Points
- High all-in sustaining cost (AISC) of $2,116 per ounce, significantly impacted by cash, care, and maintenance costs at Ãöpler.
- Negative cash flow from operating activities in the second quarter, amounting to negative $78 million.
- Significant remediation costs at Ãöpler, with an estimated total spend of $250 to $300 million.
- Uncertainty regarding the timeline and conditions for the restart of the Ãöpler mine, pending approvals from Turkish authorities.
- Second-quarter production of 76,000 gold equivalent ounces was relatively low, reflecting the impact of the Ãöpler incident.
Q & A Highlights
Q: Have you received indications from Turkish authorities suggesting that the mine at Ãöpler will restart at some unknown time and under some unknown conditions?
A: As you can appreciate, the focus for us has been on the priorities as I outlined. Moving diligently through each one of those sequences is really important to put us in the right environment for us to gain those approvals for restart. So those discussions are underway. Obviously, I'm not going to provide too much more color or comment on those. But we are actively discussing the work forward plan for Ãöpler, as we move through each one of those stages. - Rod Antal, Executive Chairman
Q: With the existing operations, do you anticipate replacing reserves based on drilling to date and do you anticipate any change to the gold price assumption on which those reserves are based?
A: The exploration this year is targeted on extending mine life at both Puna and Seabee, but that work program is still active. It's a bit early to tell exactly what the results will be or the timing of those results to do any more updates to what we already did comprehensively during 2023. We will release exploration results as and when they're available. - Rod Antal, Executive Chairman
Q: Is there any intention to change the gold price assumption for the year-end reserve statements or just keep that in line with the technical reports?
A: We haven't assessed the gold price yet. We won't do that until the end of the year. When we did the technical reports earlier this year, we were well in line with what our peer group was doing. - Rod Antal, Executive Chairman
Q: Can you provide more details on the remediation efforts and costs at Ãöpler?
A: The total remediation spend in the second quarter is $55 million against our estimated total remediation spend of $250 to $300 million. We are continuing discussions with Turkish government officials around the remediation plan, including the approval and construction of the east storage facility. - Rod Antal, Executive Chairman
Q: What is the current status of production and cost guidance for Marigold, Seabee, and Puna?
A: Marigold, Seabee, and Puna are all on track to meet full-year production and cost guidance. Marigold's second-quarter production was 26,000 ounces, Seabee's was 17,000 ounces, and Puna produced 2.7 million ounces of silver. - Bill MacNevin, EVP, Operations & Sustainability
Q: What are the financial highlights for the second quarter?
A: Second-quarter production was 76,000 gold equivalent ounces at an all-in sustaining cost of $2,116 per ounce. We finished the quarter with a cash position of $358 million. Attributable net income was $0.05 per share, while adjusted net income per share was $0.04. - Michael Sparks, CFO
Q: What are the future projections for free cash flow and production?
A: With an undrawn revolving credit facility and an outlook for improved production and free cash flow generation in the second half, we remain in a strong position financially. - Michael Sparks, CFO
Q: Can you provide an update on the exploration programs at Marigold, Seabee, and Puna?
A: Brownfield exploration programs at Marigold, Seabee, and Puna are advancing. At Seabee, exploration focuses on near mine extensions and the Porky targets. At Puna, exploration and technical work continue to evaluate opportunities to extend operations through potential extensions at Chinchillas and Cortaderas. - Bill MacNevin, EVP, Operations & Sustainability
Q: What is the status of the Hod Maden project?
A: Site establishment and engineering activities at Hod Maden continue to progress as we move towards a construction decision for the project. - Michael Sparks, CFO
Q: What are the next steps for the Ãöpler mine?
A: We continue to advance the remediation efforts and are fully committed to a restart of the operation once we receive all the necessary permits. We are cooperating fully with the relevant authorities in Turkey and have commissioned independent third parties to review the design, construction, and operation of the heap leach pad. - Rod Antal, Executive Chairman
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
