Q4 2020 SSR Mining Inc Earnings Call

Good day, everyone and welcome to SSR Mining's fourth quarter and year end 2020 conference call. This call is being recorded.

At this time for opening remarks, and introductions I would like to turn the call over to Brian Martin Investor Relations for SSR mining.

Please go ahead.

Thank you operator, good day, ladies and gentlemen, welcome to SSR mining fourth quarter and year end 2020 conference call during which he will provide an update on our business and a review of our financial performance.

Financial statements and management discussion and analysis have been filed on SEDAR.

Edgar Yes, ex they're also available on our website.

To accompany our call Theres, an online webcast and you'll find the information to access the webcast in our news release relating to this call.

Please note that all figures discussed during this call are in U S dollars unless otherwise indicated.

All references to cash costs and on sustaining cost on a per payable ounce of metal sold.

We will be making forward looking statements today. So please read the disclosures on the relevant documents joining.

Joining us on the call today are Rod Antal, President and CEO, Greg Martin CFO, and Stewart Beckman CLO now I'd like to turn the call over to Rod for opening remarks.

Thanks, Brian and good afternoon, and good morning to you all.

'twenty 'twenty was truly a transformational year for SSR mining as we completed the merger and integrated unless ago, we delivered a number of value enhancing catalysts across our portfolio and successfully navigated the challenges presented by the COVID-19 pandemic.

During this period of on pretty set in a change we met our 2020 objectives with all four of our operating sites exiting 2020, with my mental and clearly defined growth initiatives, which we will touch on later in the presentation.

I'm proud to announce we declared our inaugural quarterly dividend. This morning in line with our recently announced capital returns policy, which is designed to maintain balance sheet strength from future growth opportunities and return capital to our shareholders.

Our balance sheet with $457 million in net cash and continuing peer leading free cash flow will allow us to assess additional capital returns in the form of supplemental dividends and share buyback programs moving forward.

From a gross perspective, we delivered a number of exciting catalysts highlighted by the release of the chirp with technical report, which demonstrated the scale quality and long term value of these assets.

The reported mainly featured outage. It was the first step in defining the significant organic growth potential of this world class assets.

We also announced the discovery of situ copper gold porphyry intersecting wide mineralization below the jetblue pit.

This is just another emerging example of just.

Of this significant and material growth potential within the business.

At Marigold, and Seabee and across the board broader portfolio, we have a number of organic growth and exploration opportunities, we expect to highlight as the year progresses.

We remained focused on sustaining and growing our business with a goal to demonstrate our organic ability to sustain production of seven to 800000 gold equivalent ounces for the next five plus years.

On this note we are planning to provide a longer dated production guidance to the market later in 2021.

Building from a fundamentally strong business, we have an exciting platform to firmly establish SSR as the Permian mid tier gold producer in the sector and our fourth quarter results clearly demonstrate the strength of the business.

So turning on to the next slide.

ESG has always been ingrained in the culture of SSR mining.

Going forward, we will continue to do the right things and be recognized as a true partner with our employees and the communities where we operate.

We're compiling our 2020 sustainability report and look forward to providing an update on our progress as well as a discussion on our 2021 priorities.

From a safety perspective, we hold ourselves and our high standard and have many examples of best practices across our business.

I'll take a minute to recognize two achievements in the quarter per.

Lastly, I congratulate the triplet team on being awarded the 2020 S. M. A Hilton safety operational Excellence award, which is truly a great achievement for the site.

And at Seabee. The team was successful in meeting the new diesel particulate matter regulations of the province, with the recently installed ventilation upgrades.

This means that is no longer mandatory to wear respirators in the underground, which is an excellent outcome for all.

We are proud of our achievements and will continue to be progressive and our approach to ESG moving forward.

This is looking ahead at our 2020 outlook our guidance represents an overall improvement relative to our 2020 performance.

Yeah.

Our focus for the year is to ensure site production and we have several initiatives being implemented to continue to improve our overall safety results.

We expect to generate peer leading free cash flow, while prudently investing in high return growth opportunities across the substantial asset base that we have.

Some examples of our growth initiatives include the flotation circuit construction and ramp up of share block.

Ongoing cost and continuous improvement initiatives at Marigold, our focus on increasing underground development rights, allowing us to utilize lightened mill capacity at Seabee in the future and the transition to owner operated haulage fleet of tuna.

On the exploration side, we're investing $65 million across the portfolio and expect these efforts will take center stage as we advance the exploration targets and provide some clarity on this scale and timelines during this year.

In this regard there are a few areas you should pay attention to in 2021.

C III and our Egfr, new millennium, and Trenton Canyon targets on Marigold, and the same toy gap hanging wall at Seabee.

Steve will touch on these later in the call.

I just wanted to highlight a few quarterly highlights before I turn the call over to Greg and shoot a dive into the data out operationally, we had a very strong fourth quarter with all four of our operating assets exiting the year with momentum and confidence moving into 'twenty one.

Our consolidated gold equivalent production totaled 220000 ounces at an all in sustaining costs of $976 per ounce.

<unk> set a number of operational records, while share plus Seabee and Puna all contributed to the strong results.

From a financial perspective, we reported an adjusted EPS of <unk> 50 per share and generated $157 million in free cash flow in the fourth quarter ending the year in an excellent position with consolidated cash of nearly $900 million and net cash of $457 million.

These results would have been even stronger if our sales had not lagged production due to the timing of gold pours and concentrate shipments at year end.

So with that I will turn the call every day, Greg who will discuss our financial performance in more detail.

Thank you.

As outlined by or on a fantastic final quarter for SSR mining with our assets integrated in all operations delivering.

We posted impressive financial results, which demonstrate the new strength and scale of our business model.

While COVID-19 continues to impact on cost and efficiencies it did not stop our mines from achieving revised guidance.

With annual numbers being a blend as pre and post merger results I'll focus my comments on the fourth quarter.

Revenue for the quarter increased 65% to $371 million as compared to $225 million in the previous quarter.

As we benefited from <unk> contribution for the full quarter combined with sequential improvements at all four assets.

Income from mine operations increased 76% quarter on quarter to $146 $5 million and net income effectively quadrupled from $90 million to $98 million from $25 million in the third quarter.

Adjusted net income increased 61% to $109 million or <unk> 50 per share in this quarter from $68 million in the third quarter.

So strong financial momentum across all metrics as SSR resets into a new higher scale peer space.

Perhaps the only blemish on the quarter was our results would have been even stronger if ounces sold would've equal ounces produced.

Timing of gold pours at year end drove higher carryover of finished goods inventory at our gold assets.

And for those of you familiar with the concentrate market, which is how our silver get sold you understand the normal lags from restarting concentrate shipments post COVID-19 closures on.

Our concentrates in Argentina are generally smelted in Europe, or Asia, So shipment cycles are long.

Shipments were back to steady state in November and is a bit of a bonus we're selling our concentrates into stronger silver prices to this point in Q1.

As I noted on our third quarter call amortization of fair value adjustments related to acquisition accounting for our last there will be an ongoing impact to reported income.

These items totaled $28 million in the quarter and $49 million for the full year and are identified in our adjusted income table.

Also through the fourth quarter, while all less than a third quarter COVID-19 cost care and maintenance costs and transaction and integration costs all impacted reported income.

Cash generation in the quarter was outstanding.

Cash from operations in the fourth quarter increased five fold relative to the third quarter to $217 million.

We generated $157 million in free cash flow, even while sustaining capital investments increased.

As the sites return to steady state operations.

Our net increase in cash was $127 million considering debt repayments.

These strong results support our inaugural quarterly dividend of <unk> <unk> per share announced today.

The maturing of SSR to a business that can sustain and grow our quarterly dividend has been a goal of mine since I joined the company. So it is satisfying to see this achievement.

As we discussed last quarter, our dividend framework of considering incremental shareholder returns above our base dividend from excess free cash flow provides opportunity to further consider these issues as we wrap our arms around the combined business.

Our balance sheet is in exceptional shape with $897 million of consolidated cash and $457 million of net cash.

We will continue to manage our capital structure in a responsible manner to ensure the ability to efficiently fund and grow our asset base.

Our outlook for 2021 as published earlier in the quarter puts us in a good position to continue our strong financial performance and free cash flow generation.

Capital intensity remains well managed as we grow to over 700000 equivalent ounces.

In our outlook, we noted cash flow weighted to the second half of 2021, recognizing that production profile, particularly as the flotation circuit at chip Blur starts, but also our sustaining and growth capital profile, which is heavier in the first half of the year.

Looking specifically at the first quarter. These cash flow effects are amplified as our working capital build is loaded towards Q1 due to the Seabee ice road restocking and an expected build in receivables as we return to steady state concentrate sales.

The first quarter also sees a concentration of cash tax payments.

With <unk> strong 2020 performance, we paid intercompany dividends in January which results in a joint venture partner distribution in the quarter.

And as announced we will recognize our first dividend payment in Q1.

So overall expecting a great 2021 within those first half second half variations.

With those comments I'll turn the call over to Stu.

Thanks, Craig before we move into them on slot summaries as always I'll start with AI chips in this environment health safety and sustainability.

Although COVID-19 remains pervasive we are managing it at our thoughts caring for our people and getting on with business Marigold on chip.

Didn't suffer shutdowns due to the pandemic and both Seabee and Puna had bounced back to full production.

Our COVID-19 protocols focus first on protecting our pay per contract is in the communities in which we work.

As part of the merger integration, we reviewed our ESG policies, which were updated and approved by the New Board Bill.

The alignment and updating of the IHS and as standard followed and will be completed by the end of the quarter. This forms a foundation about AI chips on this management system, ensuring both efficiency and execution and that we have a high standard across the business.

I was delighted and very proud that our Turkish business unit anecdote was awarded the 2020, SMA health and safety.

<unk> Excellence Award I S M a.

The award recognized the achievement of over 22 million hours LTI free during the transformation of that business with the construction and commissioning of the $750 million sulphide plant.

<unk> is currently more than 500 days and approaching 7 million hours LTI free.

Not to be add on Marigold was also awarded the 2020 and Nevada Mining Association Safety Award for large operations.

It was a well deserved recognition of the Marigold team.

The new SSR sustainability report is in drafting and we plan to release this without annual filings at the end of this quarter.

Leveraging best practice across the business as a core of our integration process and the sustainability report, we will reconfirm our commitment.

To our communities and the environment, along with continuous improvement and reporting with disclosure starting to the CDP and Tcf day plant later this year.

We have a well resourced and experienced high just say the operations teams with Genesis.

Now please move to slide eight for some commentary on each of the sites.

2020 was another really big year for the chair for alkali operations. Despite the challenges of Covid the team managed to deliver within guidance.

327000 ounces.

$752, an ounce there was some indirect COVID-19 impacts, including production and pushing back on some work and cost into this year. Despite the challenges of 2020. The sulfide plant continues to perform at the higher end of expectation and is now consistently operating well above does on throughput.

On the autoclave has achieved an impressive 92, 5% operating Tom on 2020.

Chip demonstrated a game it is truly a world class operation and district with solid performance in the outstanding development pathways.

In Q4, we released the 2020 share per district Master plan Technical report.

Or the city until 2020 as we call. It. This is the next step on the development of the district included a supplemental flotation circuit in the base case, which significantly increases throughput rights and an alternate pea at <unk> for the development of the Nemo on outage deposit book.

It would have approved the construction of the flotation plant, which is on track for commissioning mid this year.

Key takeaways from the CDP CDM pay 2020, where the base.

The mineral reserve case, which incorporates a supplemental flotation circuit increase processing rates lowered costs significantly increased reserves and resources extended them on loss and delivered an NPV of $1 $7 billion at a 5% discount rate.

Lots of bond gold production for the reserve cases, three 6 million ounces.

The second scenario included and alternative <unk>, which had the development of the outage deposit outages like guided six kilometers northeast of the chair per processing facilities, where it's all will be treated.

The NPV for the P. I case was $2 $2 billion at 5% discount rate and the loss of on gold production was four 6 million ounces with plenty of upside there.

There were 175 holes drilled into outage that contributed to the <unk> 2020 since those first holes were drilled another 130 house and exploration and infill drilling is going on as we speak ex.

Finally in the last half of 2020, we discovered copper gold porphyry directly under the main pit.

And share for them on on the 25th of diverse.

And exploration release for the first four halls creatively, we designated the targets say two I'll talk more about situ later on.

Please jump to slide on and we'll talk about Marigold.

<unk> operated through 2020 without Covid stoppage due to excellent work and effort by the management team. They didn't just keep them on operating they broke record for annual production in 2020, along with quarterly and monthly production records in Q4.

Producing 77000 ounces in the quarter.

The Q4 production benefited from all being stacked onto low loose on the leach pads.

Record material movements were also achieved in 2020 and we expect these records will be beaten the guy on in 2021.

In Q4 issues with the new hydraulic shovels were largely resolved and we.

We're off to a good start in 2021, the expanded fleet improving performance and shorter hauls are supporting the higher tonnage rights in the mine.

The head grade crept up from the first quarter higher than previous quarters as always extracted from Mackie for Macchi di <unk>.

All in sustaining cost for 2000, $21222, an ounce and they were impacted by an increase in royalties as a result of gold price as it did at all of our sites.

Exploration drilling continued across the property with some interesting results Marigold has very large land package from acquisitions over the last few years. This provides lots of opportunities to discover and develop low cost name on resources by leveraging off our knowhow and our infrastructure I'll talk a little bit more.

About marigold exploration later.

Please move to slide 10.

We see real potential in seabee above whats been a pretty consistent performance over recent years apart from the Covid impact of course.

On a hiatus in this front rod has already mentioned CBS achievement and lowering the diesel particulate matter and improving the working conditions about five <unk>.

<unk> continues to manage COVID-19 with some cases presenting on slot. While this has created difficulties for operations they are carefully.

And safely managing on CV ramp back up in August and in September had a record month mailing on average.

271 tonnes a day in Q4, the mill caught up with them on on the average mill throughput rate was 1081 ton per day, which is consistent with our P. Iqos, which was released in 2017 predicting 1050 tonnes per day for the loss of Martin.

The processing plant clearly has capacity and the mine is the bottleneck continuous improvement opportunities in the mall on it being pursued including some replacement and extra equipment, which is scheduled to come across the Australia on the next few weeks.

Additionally, we are putting a lot of effort into resource and reserve definition in the mining along with increased exploration targeting two targeting extensions to mineralization on strike and a very large tenement package and the contiguous Fisher JV areas.

Within them on in Q4, we did more than eight kilometers of drilling in the sand toy hanging will target, which is adjacent to the existing on infrastructure. This will be a focus for the reserve resource development team in 2021, and we're expecting that it will be the next development opportunity behind the gap hanging wall.

We are developing a second sale into the GAAP hanging hanging wall aiming to convert a significant portion of the gap hanging wall resources into reserve by the end of 2021.

Please note slide 11.

Who knows ramp it back up to the high items for Covid and it Hasnt had a great run at the end of the year throughput rates average just over 4500 ton per day, delivering $2 2 million ounces of silver in Q4.

Overall, 2020 produced $4 6 million ounces of silver and exceeded our updated guidance.

<unk> was $15 22, an ounce for silver and as Greg mentioned, the IOC was impacted by the delayed so.

Silver concentrate sales.

The team at <unk> are very focused on continuous improvement and cost control at the end of this quarter, we transitioned to iron ore haulage from the mine for the 40 kilometer trip to the processing plant.

Coming out of commissioning and the Covid shock Pune has stabilized really well and is consistently delivering now please move to slide 12.

I've already covered off a lot of this already.

But I'm going to take a couple of minutes to help frame. It the way we see the portfolio from an exploration perspective first of all it's a fantastic portfolio rich with brownfield name on targets, which present opportunities for low cost capital D M on and in mine development and.

And CV, we have non mineralization that if developed could leverage off the fact that the processing plant has a much higher capacity than the current on configuration can deliver <unk>.

<unk> has potential to achieve one of a number of value accretive outcomes first an increase in head grade and resources from near mine, which would then be processed in the current heap Leach pad areas. We are focused on increasing the grade and believes that there is good probability of a successful outcome, especially.

On the areas of body on the historical periods.

Recent tenure acquisitions have really bought boosted this prospect secondly, expanding and developing the resources at the recently purchased Trenton Canyon and Buffalo valleys.

And finally, the discovery of an economic sulfide ore body similar to other mines in our district is a tantalizing target, which we have reason to believe there's a real possibility.

Finally, but not lost.

As chip.

Jeff has a plethora of opportunities that can take advantage of the processing complex, which has the capacity to trade both oxide and sulfide ores. The development of Chakma taper them on in recent years is a great example of our ability to execute this strategy.

<unk> is the most advanced project with a target to deliver or to the chair per processing facility in 2023.

As I mentioned earlier developing outage is expected to add at least 1 million ounces of gold to the production of chips.

Our newest discovery is seat too, which also has the potential of significant value.

Please move to slide 13, and I'll give you a brief update of where we I would say too.

<unk> was discovered in the last half of 2020, and we re leased the exploration.

For the first hole Hall full halls.

Best Inc. 's it was bid over 240 meters at 2.0, 0.7% copper.

Copper equivalent starting from just 37 meters and included grades.

Included designs, where the grades for well over a percent.

Both holes were compensated for lithology and center, Canada for metallurgical testing, where we are encouraged by the preliminary results.

First round of met testing will be completed in the next weeks.

On the data analysis before the end of the quarter and the center of the slide you can see a photo of the Chalco power at trough from the lab testing of the <unk>.

There's really good reason to be excited by say too it seems to have dried and there is good potential for volume there are higher grades near surface mineralization starts practically in the funnel bottom of the existing pit, which you can see from the cross sections at the bottom of the slide.

<unk> breath blessed with great infrastructure and importantly, we've recently demonstrated that we can deliver a major project in the area.

There is a lot of work to do extensive two into a project and we're running hard at it we have non drills in situ at the mining ended and are advancing our thinking and preparation for a development study.

Should hear more about <unk> in the future. Thank.

Thank you very much and back to Rod.

So thanks to you and thanks, Greg.

So despite the challenges thrown at us by Covid.

That team have done a tremendous job managing your operations completing the merger and integration worldwide, finishing the year with exceptionally strong fourth quarter performance.

Declared our inaugural dividend this morning, which highlights the financial strength of our new business at a responsible approach to capital allocation.

We will assess the potential for further capital returns to our shareholders in line with our capital allocation policy.

Without quarter, one 2020 financial results.

In 'twenty, one we remained focused on creating value for our shareholders safety and execution, while progressing the many organic hard value growth options that we have been in.

<unk> ordered during this presentation, so with that I'll pass along to the operator to take any questions you might have.

Thank you.

We will now begin the question and answer session to join the question queue. You May Press Star then one on your telephone keypad, you will hear a tone acknowledging your request.

If you are using a speakerphone please pick up your handset before pressing any keys to.

To withdraw your question. Please press Star then two.

We will pause for a moment as callers join the queue.

Our first question comes from obese Habib Scotia Bank. Please go ahead.

Hi, Ron and Jamie Thanks for taking my questions.

Rob just a.

The first question again.

Again, you've touched on asset allocation quite a bit.

And talked about share buybacks and is there.

Obviously your balance sheet is extremely strong you're you've got you're going to be generating a lot of good free cash flow in 2021.

And.

Your free cash flow profile is second half weighted is is this kind of what you are looking to get over in terms of announcing any sort of a share buyback program or is there any other plans in place.

Thanks advice and.

Look I'll answer the question in a slightly long version because I think it's important.

The capital allocation policy that we established towards the end of last year was really in three prongs in the the first part was to maintain the my tie that strengthen the balance sheet to ensure we continue with our debt management and other needs of the business.

Keeping in on to the future and some of the exciting growth.

Loss picks that we have.

You know emerging in the portfolio in particular more recently, we want to be able to to maintain that strengthened our balance sheet to allow us to grow from within our means so that's really important to us and then obviously the loss basis.

Returning.

Excess cash.

Two to shareholders.

This dividend that kicks it off this morning.

Is the first step in that direction.

And and Thats something that we feel very confident that can sustain through.

Any cycle and so we are really really really pleased to get that behind us.

And then obviously with.

You know now we're already in 'twenty one.

Once we complete our quarter one financial results were in conjunction with those quarter. One financial results, we will start doing the assessment of.

Other supplementing those price dividends with innovative another dividend and all the other share buyback.

So as not to not too far down the day on the road here of ice.

Okay. Thanks, Rob.

On CCAR I guess.

Just moving on to exploration.

You know definitely focus seems to be buying organic opportunities youre looking at it jumped on.

Marigold as well as CB.

What are your plans on Korea and San Luis.

Are those assets, becoming a little bit non core or just will remain part of the portfolio and then once you do kind of go through your three main assets. Then you will start looking at those assets.

The next.

In the organic pipeline.

Yes, no price.

Haven't made any determinations about.

Core and non core.

On the other portfolio at this stage, where we will go through a process and we will continue to do it as normal course business for us too.

Ensure that.

We always have.

You to managing the portfolio because you can easily get you know hum in the bad habit of not doing that and being ruthless on rigorous in those approach.

It's still status quo in terms of a.

San Louise Peter area in particular in your question.

And we'll continue to look at those during 'twenty 2021.

And then your opinion of tuna towards zero is another question that comes up quite a lot.

It is.

It's a great little cash flow generator, and particularly we silver prices, where they are today.

Say that continuing.

And this year, we are going to put some money into investing and looking at some of the exploration potential around around tuner as well to see what else might exist. There. So at this stage.

A holding pattern.

A voice and.

Really important that we.

I understand the full value of the portfolio.

And as time goes on obviously those questions will become more front of mind for us.

Okay, great. Thanks, so much on that.

Again, yes, thanks for taking my questions.

Our next question comes from Cosmos <unk> of CIBC. Please go ahead.

Hi, Thanks, Roger and team from the conference call and great to see that you've put in India and other one dividend too.

Maybe my first question is on reserves and resources Rod.

Great to see that you've put in the technical report.

Late last year on travel or updating the reserve and resources there.

But how about the other deposits in terms of Marigold and Seabee and toy.

Well, what we should we be expecting in terms of a reserve.

This update.

And on a go forward basis should we expect it on an annual basis in terms of reserve resource updates at the various deposits.

Yeah Cosmos, it's Stuart here.

So we used to do this.

Differentially you know Alex that used to do it annually.

And.

With the <unk>.

That's what we're going to do going forward.

So you'll see those come out.

<unk> prepared ready to go we're just finalizing them ticking and tying them at the moment, so youll get to see those with our filings at the end of the year.

Year end filings I should say.

Okay, so it should be coming out.

On the assumed within the month.

And we will do that regularly.

Okay.

Okay. It sounds good.

And then I guess my next question is on.

In terms of seed to.

Great to see that you've made a discovery here, but.

Maybe it's too early right now, but I'm just trying to figure out how this kind of fits in you put it you put out the.

On the technical report the Triple or Master plan late last year.

Clearly <unk> is not in it yet.

But how does it soda and kind of fit in and and clearly you know it's a bit different you know you're getting down to the porphyry now.

Third to multi app with thermo deposit up at the top and so it sounds like to me you're going to have to put on some infrastructure. However, Stuart you said there is already some infrastructure in place could you kind of help me in terms of trying.

Try to piece it together, how does kind of fits in and potentially could fit in based on what you know today.

So because I think I think I'll.

I'll just make a point.

I'll, let you to also.

Contributed on these question in particular the.

<unk>.

On the take repo that we put out for Triple lost last year.

We're very clear that it was really just the start.

For that asset in terms of.

Dialog in the other full value in the full potential of it.

We did we did.

I see.

Still have constraints around the other drilling around outage and so there'll be more to come.

A number of other targets that we will pursue around the turbo saddle and also within the chirp lipid. So so it really was just the beginning of the.

The new story on.

<unk>, obviously on the backs on that.

We discovered the Aussie to see too as well. So my view is on agnostic two discoveries in terms of.

Whether it's a gold copper porphyry or whether its a gold discovery annually.

Because the time, great and Thats, the best Bang for the Bakken the best value for.

For our shareholders, but.

Definitely.

Definitely exciting.

Yeah. So.

Maybe I could just help you how to think about it so.

The poll free.

Deposit.

We should we're thinking about that.

Potentially a standalone porphyry, which would carriers, which would carry outs on infrastructure. So you know what.

Typical concentrated.

And Thats the test work that we are currently undertaking that said.

As we do the Capex, we would expect to pick up more of the epic thermal on the contact at each of the context.

We also have the areas.

In at the low pocket that might be very high gold and Laura and Copa which might be suitable for the sulfide plant.

Going forward and one of the things that we have been looking at in the laboratory is whether or not.

After we make the typical copper concentrate whether there is any any opportunity for us too.

Recover more of the gold into a par on concentrates.

In typical share from a fashion.

Got lots of opportunities, but if you look at the grade.

Of.

The first holes that we pulled out.

On the length of those and where they sit in the strike length.

If we can get enough volume in the bottleneck.

Into the porphyry.

It'll stand well against other porphyry discoveries in the world.

Okay, Great and then as you mentioned too on the grade.

The drill intercepts that you put out a day on a copper equivalent basis could you remind me what's the split here between copper and gold and is it really the items.

Non banks behind here or is it really copper driven.

It's it's golf driven so about two thirds go.

In value.

At this stage for the first full hauls that we sold.

Okay.

Okay I, just wondering because I guess, so why why do you put it all as a copper equivalent grade.

Because thats typically how people look at pull throughs.

Just help people understand it to be able to write it against other pull throughs.

Got you, Okay and then.

The other thing.

We have a couple of with a porphyry they tend to be larger volume lowered grades so.

The development of our core free would generally mean, a larger a larger throughput concentrated.

Robert.

The higher grade low lower tons that you see fitting the current share per facility.

Gotcha. Thanks, Joe Let me maybe I'll ask my last question is on the 2021 catalyst.

You know as you mentioned and Marigold Youre looking at ongoing cost reduction continuous improvement.

This showed us.

Could you maybe expand on that.

I guess on the past SSR mining I talked about.

Equipment replacement at Marigold.

That something that's being considered you know great control drilling and.

Enhancement is that something that's being considered I'm, just trying to get a better sense in terms of how youre going to get about.

On getting to that.

On a continuous improvement at Marigold.

Yes so.

We've obviously got a.

Quite a program move slight replacement at Marigold going on at the moment.

<unk> seven thousands it really started to hit their straps.

This year when we did the original pass of the plan.

Our plan was showing.

The biggest movements that we would have ever seen in the pit and as per.

Part of that caution was we kept the throughput right based on the fact that we thought we might see congestion and we think theres a real opportunity to start to apply some higher level control.

Over the top all the dispatch.

And we're doing some work we've done some work we've actually got operating.

We've seen share flow within the plant some Iowa.

And there is some advances in similar technology from Pip control. So the guys are starting to look at those types of that type of work as well as the the other talks of continuous improvement that we're always working on site.

As part of the merger.

We're going through a process.

Rejigging that hull.

Improvement space and we've really broken into two parts one is continuous improvement which is.

Doing good business, you're not doing better at what we do every day lean six Sigma.

And these programs the second the second part we are doing is how can we how can we get step change improvement into the business leveraging off some of this new technology at at sort of low cost and to get it into price quickly. So.

We're not looking immediately to automate slate, but how can we use IRI to help us to manage and plan better and.

Allocate resources better than.

When you mean, because on marigold increments of really meaningful.

So.

Some of the work programs, we'll obviously talk about as I as I get through further advancement issue.

We've been busy reaching out.

To all of that network.

To see how we can advances.

And I have to say you know the marigold team are pretty impressive team and.

Always looking for and are hungry for these opportunities.

Yes, I concur I was there three years ago, and I was quite impressed by the team out there at Marigold.

And my last question here again on the 'twenty and 'twenty, one catalyst that CEB you mentioned low.

To increase the mining rates to exploit a latent mill capacity here again.

Again could you help me understand elaborate on what you were trying to do at Seabee sampler.

Yes.

In the first instance.

So this has been a continuous improvement program and increasing lateral development is recorded at Seabee.

Some of that was required just to meet the continued go forward plan. They were also looking at.

So we.

We've got a couple of jumbos coming in the same type of things that I was talking about doing at Marigold, we are looking to implement at Seabee.

Going forward.

This year will be stabilized I shouldn't getting the lateral development rates up and I have to say.

Implementing sort of continuous improvement work that well.

Well at the end of last year and sort of started to move consistently at rates that they hadn't moved out before at the beginning of this year.

They are slightly ahead of what the client has in place Iris.

Remove intellectual right. So that's sort of a guy and that's the foundational continuous improvement place. The other place that we're doing is a little bit longer lived.

Everybody believes that CB is I.

Project that sort of always has four or five years lots in front of it and we will have four or five use lots in front of it for the next 20 or 30 or 40 years. However, how long we manage to continue to develop the next tranche and bring it on the question has to be free.

A bit more.

Net.

Our focus and effort and money into exploration and we can lift out time horizon, a little bit where we.

Be able to bring some of that other.

Some of the other mineralization forward and invest in building up the mine capacity to be able to at least meet.

What the mill can do and then maybe fully exploit the resource.

So you sort of got the immediate do better on what we're doing and go faster than halfway to that improvement.

On sort of innovation and then the longer term.

Lifts the horizon then.

Can we change the paradigm for CB Theres a lot of work to.

To do the work out whether that's a.

Gotta be achievable, but we believe that there is a pretty good chance that that's real opportunity.

Thanks, Thanks for the very thorough answer here and those auto questions on whole. Thanks a lot.

Our next question comes from Tyler Langton with Jpmorgan. Please go ahead.

Yeah. Good afternoon, Thanks for taking my question.

I guess.

In General and then I guess oil prices up diesel prices up are outside of those are you seeing sort of just any inflation, whether it's through labor materials equipment that could kind of pressure.

The cost targets for the year, and then I guess on where specifically with Kepler.

I guess you know the flotation circuit, it's not a huge capex spend but we think just other.

P case, and yet and the Capex there.

Over the next you know year or so.

Any sort of inflationary risks with that.

Hey, Tyler, it's Rob I'll, let I'll, let Gregg take only the.

Most of that question actually if not all.

Okay, Yeah sure. Thanks, Thanks Tyler.

We're still seeing cost pressure is to be fairly moderated generally from the labor side, where we're operating obviously, we're still seeing generally economic conditions not fully rebounded. So we're not seeing significant pressure ease as you noted obviously commodity prices are trending up so that.

It is an area that we're monitoring.

We're fairly well protected on the diesel side for 2021.

We're well hedged at both Marigold and Seabee on that pace. So we do have we do have some protection on those assets lets sell at <unk> and at <unk>, but it does provide a better better protection against those pieces. So it's certainly an area we will be monitoring, but I would say currently we're not seeing significant pressures translate.

Through.

Great. That's helpful. Thanks, and then in terms of just.

Just a follow up on the capital allocation I mean is there.

Can you kind of ended the year with.

Close to 900 million of cash, but is there a sort of as you go forward a minimum level of cash that you want to keep on the balance sheet just to kind of provide support for the various sort of projects.

Projects on exploration Youre looking at.

Yeah look I think I think it's a.

We sort of take a more holistic view of total that moves towards to all of it yes. That's definitely part of the objective to ensure we have the balance sheet recognizing we are in a cyclical business.

As quickly as things go up we've seen more recently prices prices come off.

And.

Ensuring that we have the ability then to.

So fund the growth that we have in the pipeline. So that's definitely part of the overall strategy for us.

Obviously with the current share price weakness will flow.

If I look more closely at using tools available to us locking NCI very program per share buyback moving.

Moving into.

This quarter, so I'm not promising it but it.

It definitely becomes.

It definitely becomes a.

A key piece of our considerations as we move forward.

It's really just trying to do it all.

Recognize the strength of the business recognized the growth potential and recognized.

The cash flow generation through the cycles. So.

And this whole COVID-19, obviously evolving it's it's new it's still a new company and.

We will continue to mature our thoughts as we move along.

Great. Thanks, so much.

Our next question comes from Daniel Morgan with UBS. Please go ahead.

Hi, rather and Sam too.

Two questions if I may firstly, just on Marigold.

Can you Simplistically talk to when it will hit its sweet spot.

Sure.

This year, you've got record record material movements coming and I think Greg correct me if I'm wrong. This year will still be below reserve grade. So I'm. Just wondering when are we going to get that sweet spot, where stripping comes off and you get you.

You know grade or above reserve grade.

Yes, it's not it's not this year its in the next few years.

This year, we've got.

Our highest strip pressure.

We do get some hard right at the end of the year when we move to fourth.

<unk> to the north.

But it's a another stripping year.

Yeah.

Okay and.

Czapla just wondering if you could elaborate on when other shutdowns budgeted for this year I'm just trying to get my.

Quarterly.

Numbers on trajectory right on it.

Perhaps if you could also call out if there's any major season.

Seasonal or quarterly changes to production this year that are worth worthy of note.

Yeah. So for this year.

We've only got one major shut down on the other clubs and levels.

<unk>, one which will happen.

Brought at the end of this quarter at the beginning of the next quarter.

It will be.

About three weeks.

And then other than that the big drivers to chip for this year.

The grade varies a bit just based on the mine plan and then the big really big footprint is the commissioning of the flotation plant, which happens in starting in <unk>.

Starting at the beginning.

Third quarter.

Dan when we put it out from 'twenty one guidance.

I'll, let Brian to Greg just to give you the exact numbers, we actually did note that the.

Production will be backend weighted for the year.

For some other reasons to just add on but for other reasons that other operations as well I don't think Greg gave a really good overview of.

It also translates into cash generation in 2021 so.

If you look back at those documents as they do not anything else. We can always we can always do it offline.

No that's perfect. Thanks for your AR experiences.

Our next question comes from Brian Thompson of BMO. Please go ahead.

Hey, guys. Thanks for the update.

Most of my questions have been asked but maybe just a couple of housekeeping things for the model.

I think Greg mentioned the dividend to the JV partner was paid in January.

Just for the benefit of the I guess legacy SSR analysts what is like how should we model that that dividend going forward in terms of.

And then just secondly.

Just on the sales lagging production is it safe to assume that.

Welcome both the gold and silver that wasn't sold in <unk>.

Q4 is going to hit the Q1 income statement.

Yes, sure I'll, let <unk> address those Ryan I think just first talking about the sales I mean, we will see normal variations moderate quarter on quarter. Yeah. It was extreme in the fourth quarter, just as really all four assets returned to much higher levels of production relative.

On to Q3, so typically on a portfolio effect, we won't see that kind of variation Nord.

Now assuming we stay at steady state, which is obviously something where we're expecting we'd see that moderate so again youll see youll see normal variations, but I think as we move towards the end of Q2 will be will be right on track.

With regards to the dividend piece, it's really that's a question that's really challenging to answer specifically.

On a lot of that is going to depend on some of the issues that <unk> talked about in terms of the needs of that operation from an investment standpoint that would dictate how we look at distributions out of that operation going forward.

And there's also you know debt repayments and other things that come out of that operation as part of the debt structure in there so.

Well, we'll provide guidance has as its appropriate but its something that we can't really give you a formula to determine.

In any manner.

Okay I appreciate I appreciate the update guys.

This concludes the question and answer session I would like to turn the conference back over to Rod Antal for any closing remarks.

Well, thanks, operator, and thanks, everyone for participating today and look forward to keeping you informed of our progress in 2021 and on.

Recapturing some some loss of momentum here as we are.

Give this year get this year and start the dialogue some of the.

Excellent growth potential we have in the portfolio.

So with that good afternoon, good assets, good evening and good morning.

This concludes today's conference call you may disconnect. Your lines. Thank you for participating and have a pleasant day.

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