Q1 2021 SSR Mining Inc Earnings Call

So now moving on to the quarterly review.

The quality and operational consistency of our four operating sites were clearly on display in the quarter as we delivered production of 196000 gold equivalent ounces at an all in sustaining costs of $1004 per ounce we.

We generated $77 million as Unlevered free cash flow and this great start to the year firmly puts us on track to achieve our full year guidance targets.

Our peer leading free cash flow generation and strong balance sheet have allowed us to take the last day to our overall approach to capital management and allocation.

We already implemented a base dividend of <unk> $44 million per year to be paid quarterly.

Now and in addition to the base dividend, we announced the meaningful share buyback program of up to $150 million.

The combination of the base dividend and our share buyback program aligned to our peer leading free cash flow yield with our capital returns yield.

Our total capital returned to shareholders will be up to $194 million. This year, which is of P leading position.

It is important to highlight that we have entered into an automatic share purchase agreement with the Canadian broker and have full intention to execute on our share buyback programs, especially of the current share prices.

In the short period of time since closing of the merger we have implemented a holistic capital allocation program that allows us to continue to investing growth and maintain returns to our shareholders through the gold price cycles, which is great progress and provides clarity on our capital management going forward.

From a growth perspective, we continue to invest in value, adding capital projects, while advancing our large organic exploration portfolio.

The purpose of our exploration program is the dialogue our ability to sustain seven to 800000 ounces of gold production for at least the next 10 years.

So moving on to the next slide.

Which is on ESG, we've done a tremendous amount of work on setting and resetting priorities of both the legacy companies as well as finalizing a new suite the sustainability policies to align to leading industry practices.

This work formed the foundation for our 2020 sustainability report that was released during the quarter.

The sustainability report reconfirmed their commitment to communities and the environment and it all also highlighted several achievements during 2020 and most importantly set of priorities for 2021.

This included a commitment to establishing an action plan to achieve net zero greenhouse gas emissions by 2050.

We have also begun to improve disclosures on climate and water management by responding to the carbon disclosure project and aligning our reporting with the requirements of the task force on climate related financial disclosures.

From a safety perspective, all of our COVID-19 remains devices, we are doing a good job of managing it at all our sites.

COVID-19 protocols focus first on protecting our people contract is in the community in which we work and our efforts have been successful in media growth mitigating the impacts to our operations.

We have of real resource inexperienced Hs and the and operations team with the and SSR and are proud of our achievements envisioned for the future as we continue to be progressive the narrow approach.

Moving onto the next slide.

The <unk> production and cost performance is tracking well to meet our 2021 guidance that you can see here on this slide.

Our focus for the year is to ensure safe production and we have several initiatives underway as we push to improve our overall approach to.

The safety and results the <unk>.

Quarter, one safety results were a step in the right direction.

We are investing in several high growth returns across gross.

Opportunities across the business. Some examples of the growth in these initiatives include the Czapla the.

The flotation circuit construction and ramp up which is on track for commissioning in the second half.

We have an ongoing of continuous improvement initiatives of Marigold and Seabee with focused on increasing the underground development rights allow us to utilize the lightened mill capacity in the future.

And finally of tuna, the transition to an owner operators haulage fleet is underway.

All of the initiatives that I've just mentioned are now progressing to plan.

On the exploration side, we're investing $65 million across our portfolio and expect these.

Efforts will take center stage as we advance the exploration targets and provide some clarity on the scale and Tom launched during the year.

A good example is the step out and infill drilling at outage, which continues to support resource expansion and conversion to reserves for the sizable low capital intensity asset that is planned to come into production by 23.

Steve will touch on a number of those later in the call.

Just moving to the next slide and before I hand, the call of it to Allison, It's true I want to touch base on a few of the quarterly highlights.

As I said operationally.

Both sides had a good first quarter Nazi setting us up for the remainder of the year.

Our gold production and costs provide a solid start.

At Marigold, we set a record material movement.

And of Chirp, let's see the in tune of all contributed to the strong results from a financial perspective, we reported an EPS at <unk> 47 per share and generated $77 million in free cash flow, adding to a strong balance sheet.

Finally, we published the updated mineral resources and reserves during the quarter.

Gold mineral reserves increased five per se to 8 million ounces, while MNI mineral resources increased 14% to 15 million ounces so with that.

I will turn the call over to Alison who will discuss our financial performance in more detail starting on slide seven.

Thanks, Rod and good afternoon, everyone.

I'm thrilled to be here at SSR mining and very excited to talk about the quarterly results as shown on slide seven.

We've completed a strong quarter with the assets all delivering on quality and consistency producing 196094 gold equivalent ounces during the quarter.

And selling 201494 gold equivalent ounces for a total of 366 $5 million in revenue for the quarter.

Attributable net income was 53 million or <unk> 24 per share and adjusted attributable net income was $102 4 million for the quarter with adjusted attributable earnings per share of <unk> 47.

Operating cash flow were strong at $145 2 million for the quarter and our free cash flow was $77 million before paying out $49 1 million in shareholder in Noncontrolling interest dividends as well as $17 5 million to reduce debt.

On the right side of the slide narrow a more detail on the 47.

And adjusted earnings per share.

Walking from the 24 and attributable net income per share to add 11 cents for the amortization of the fair value as the result of the adjustment to bump up to the fair value of inventory and mineral properties at share player at the time of the acquisition.

Slowed by the <unk> per share for COVID-19 and integration cost less.

The last <unk> for taxes, and adding back <unk> <unk> 11 per share as a result of the foreign currency revaluation on the deferred tax assets held in Turkey.

Turning to slide eight we can talk about SSR balance sheet strength.

SSR continues to provide balance sheets strength amongst its peers and maintain strong liquidity.

Hosing the quarter with over 900 million, Inc, consolidated cash and $476 million in net cash.

Given the heavier loads on working capital in Q1, especially.

Especially at Seabee, where they restocked, while the ice road with Dell formed.

Dividend payments to our shareholders of $11 million and of $38 million payment to our Noncontrolling interest partner at Trippler, we are in an outstanding cash position.

Net cash the EBITDA ratio is <unk> six times.

Again, demonstrating our strength and placing us in the top quartile of our peer growth.

SSR continues to act on its multifaceted capital allocation strategy, declaring a <unk> <unk> dividend per share again during Q1, coupled with the recently announced non course issuer bid share buyback program.

Highlights starting on page 10.

Thank you I was from thank you Rob.

First of all free is G. We had it been crazy of health and safety quarter with the 65% reduction of the codable injury like compared to 2020.

All of the thoughts, saying improvement we also I can play the the sustainability report, which I hope you have had time the rate. It includes new commitments on greenhouse gas emissions in the water.

To match this resolved to deliver these extended asj commitments, we started some restructuring of of the AI chestnuts team.

The rollout of a new integrated ESG management system progress the plan and we will provide a business leaders with better tools for delivery risk management and approved by the slot and dot of analytics.

Paul Kobe day reminds of challenge for the World is now part of oncology and weird diligently managing it along with you all the risks in business factors.

Moving out of the operations and growth.

The businesses off to a really solid.

All operations achieving of pop budget of production an overall below the budget it costs survey and of great position to live the gardens of 2021.

Some cost savings of simply of timing of exploration of capital, Spain, which advice expected to catch up however, taking timing into consideration overall costs was still slightly better than the budget for the quarter.

Across the business, we've been reviewing and improving lots of of mine planning processes yet from of this slum cycle will form the basis of the long term gardens, which we will include for the first time with the annual guidance starting in 2022.

On the trip line.

The trip of softball, I planned continue the prices well above the design throughput writes writes with good relative to the budget and offset lower than planned recoveries the.

The triple oxide plant stacked well above budget of comparable ounces under the hate Blake with the gas and production of simply of function of timing of of the late cycled.

The free attention plant construction as well advanced of reminds on scheduled with commissioning and ramp up from the beginning of cute great. The.

The flotation quiet he's really got of transformed the trip of pressure oxidation pine.

This is doubly impressive given the sort of completed the scheduled 35 day shutdown for the big electrical paint Hydro 4100 shovel. The two new hydraulic P. C 7000, shovels stepped up and fill the gap during the shutdown.

And I'm on we started drilling in the equipping of the watering bowls and commenced the construction of the rapidly infiltration of bison. This is where the water will be put back into the water title.

We also I'm intentionally list some of ore in the pit during the quarter, while we completed construction of sell 24, the sale of the snap in place and we are stacking on it.

Exploration of Marigold focus mostly around the existing pits and we drilled about 25000 meters with what is looking a lot of good result.

Please move to CB.

The <unk> production was slightly above budget the.

Annual Australia restocking is done in a way of set for the year.

Some of you and additional underground mining equipment arrived on site, which will go into service in the coming months mine development is also in line with budget.

Very busy with exploration of say the drilling out of the gap hanging wall and the center of Haynesville looking to pull those into reserve and resource in the near term. We're also drilling.

Exploration of sorts of Mac north of <unk> Fisher, and we're sitting out for more work at.

We remain pretty bullish on the growth potential at both the growth CB and honest placement of two <unk> to two now.

Turning to smash the production targets out of the park there were well over budget on production and unit cost was significantly below budget.

Throughput with sustained the greater than 4500 per ton a day, a new record along the way the changeover to the iron ore haulage from the for the.

Mine to the plant started in the IPO and should further lower operating costs. We are reviewing the lots of mine planning at a higher processing of rights of paint.

Moving to the exploration of the slot of pretty much talked about all of these items.

Items already and so in summary for.

For the business sites. He was excellent production was above budget couple of by budget kind of organic growth projects of banks, a good quarter for the business and the operations and growth teams.

Thank you very much back to you Rob.

Thanks, Sue and thank you Allison so just to summarize.

As of all mentioned, the very strong quarter to start the year, both financially and operationally.

With the now completed capital allocation framework, and continuing strong free cash flow, our capital return to shareholders of <unk>, while allowing us to growth.

With the operation delivering low capital intensity growth the <unk>.

<unk> in terrific shape and now our capital returns in place. We believe we will regain share price momentum and offer an excellent long term investment choice for shareholders.

So with that operator, I'll pass the call out of it to any questions you might have.

Thank you we will now begin the question and answer session.

Join the question queue. You May Press Star then one on your telephone keypad, you will hear of tone acknowledging your request.

You are using a speakerphone please pick up your handset before pressing keys to withdraw your question. Please press Star then two.

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

The first question comes from Tyler Langton with J P. Morgan. Please go ahead.

Yes, good afternoon, and thanks for taking my questions.

I guess the start or are you seeing any sort of inflationary pressures for like materials of energy.

Labor and then I guess somewhat related with <unk>.

Exchange rates.

I guess any details on the impact on costs just sort of.

And Canada, Turkey.

Argentina.

Our total I'm going to pass that one over to Alison.

Tyler So I'll take the first portion of your question off the bat about inflation pressures. So at this point.

We really have not seen any.

The material inflation pressures across the business, we are continuing to monitor that and stay close to the market.

The two.

This way anything that could be coming our way, but we have not yet seen that come through.

And then on the on the second part of point of your question color around exchange rates and the devaluation of some of the currencies in the countries, where we operate again, it's a <unk>.

It usually of shortly win for us.

We we normally get offset by the.

The country inflation rates increasing with.

With the with the devaluation, so wallets, while it's a short when leaving it looks good on paper it usually catches up to the sort of net net neutral.

Okay. That's helpful. And then just with the triple or I guess, obviously it was a good start to the year I mean sort of the.

Annualized Q1 production would just get you to the low end of the guidance.

Of course, sorry.

Production should be sort of ramping throughout the year and costs sort of came in.

Can you sort of kind of around the midpoint of annual guidance.

The acres can you just talk about the the cadence of production.

For the remainder of the year and just kind of how to think about cost as well, especially as the.

You know the flotation starts up.

Yeah.

Hi, Tal, it's true so youll remember.

When we got Guardians of the beginning of the year, we said that.

We expected share kind of be back end loaded.

When we issued the technical report one of the main drivers.

In the technical report was the construction of the flotation plant, which drives volumes.

Sure Paul.

Sulfide plant and significantly pushes the cost down side.

Our expectation is always the thing that you would be back quite backend loaded and the costs were dropped in the second half.

Got you great. Thanks, so much.

Thanks, Paul.

The next question comes from Cosmos <unk> with CIBC. Please go ahead.

Great.

Thanks, Robin Stewart welcome Alison It was certainly a great way to kick off of your journey with SSR mining with the huge earnings beat.

Tom.

Maybe first off my question is on Marigold.

I think in the MD&A you mentioned that the.

The heaps are getting fairly high now.

And so part of the Q1 production was actually a result of.

Stocking in Q4.

And that can I ask you about the leach cycle of these days.

And marigold.

What is the height of some of these list here and I guess the point of my question is you stacked.

$5 7 million tonnes in Q1 fairly good grade four gram per ton when is that going to come true.

Got.

Interesting question Cosmos.

So the.

The.

For the rest of this year will be stocking and sell 20, Paul which I mentioned, which is sort of stacking on and we'll start irrigating on same sex of the reminder of the year, we're going to see.

Sticking pretty close to the plastic and so I will say of pretty quick return.

The short late cycle, and we will actually see a drawdown in inventory from the from the rest of us of the rest of the heights.

Great.

And then maybe moving to CB here.

As you mentioned eight four of five Gram per tonne head grade in Q1.

Lower than last year, but as expected as you were working through some of the lower productivity areas.

Stu could you remind us when are you getting back to some of the higher productivity areas.

The higher grades.

Okay.

Yes, so we are saying some of <unk> coming through.

The mall lineup of mining.

But you will remember the.

So, let's say there was a little bit low this year than the previous use on the on the basis of that swap demand schedule is doing.

And.

With an expectation of it will come back up in the following years.

We'll as I said in my coal being the issuing long term garden City will help you to map that out at least all of it.

<unk> when we issued the long term guidance at the end of the year.

Great.

Bringing this all together as you mentioned earlier.

<unk> is going to be backend loaded.

It sounds like Marigold and the <unk>.

Half of production is going to be fairly good as well and CB youre seeing some of the higher grades.

I guess, what I'm trying to get to is if I look at Q1 production of 196000 shields.

If I were to annualize that and you might say I cant.

You would hit the top end of full year guidance.

Is that how should we look at it is it I know it's still early days, but is that is that possible.

Okay.

This is alison thanks for the question Allison.

Hi, and thank you for the welcome earlier I appreciate that.

So I think that our guidance for the year remains consistent with what we've previously talked about.

And we are going to continue to monitor if theres any intra quarter changes.

Right now we are affirming what we've previously said.

And we will.

Bring back any additional information that we have when we are aware of it.

Sure. Thanks, Allison and maybe one last question.

Just looking at Turkey here, I think two days ago or several days ago. There was you know the government announced a shutdown given COVID-19, maybe a question for Rod you know could.

Could you make some comment in terms of COVID-19 in Turkey, and the shutdown does it have any impact on our mining operations.

No it doesn't cause.

Similar to what we've seen all true kind of it actually.

In Turkey It has been.

At times, where there's been restrictions price that hasnt been colleagues both of the country on of shutdowns.

The mining industry is sort of considered in that.

The essential service group and so we can continue to operate as long as it's gone sideways.

The the restrictions are really around just.

The Republican.

And.

Restricting the hours.

Out of their homes and that sort of stuff.

I went through more recently quite a big spikes from COVID-19 cases, and it truly just in response to that short term and particularly the fact that the just about the stock celebrating the religious holidays as well where at some level of people usually my ball moving around sorry. The they are trying to avoid another big spark.

Uh-huh of course got it.

The other questions I have thanks, again, Roger and team and congrats again.

Yeah. Thanks, Chris.

Once again, if you have a question. Please press Star then one.

The next question comes from Mike Parkin with National Bank. Please go ahead.

Alright, guys. Thanks for taking the questions and congrats on the solid quarter.

Most of my questions have been answered just one.

On the exploration side of things.

Our work when could we expect the next exploration update coming out of Marigold and you know just in terms of drilling the Trenton Canyon. The oxides hour. How are you kind of on that program as that program well established and ramping up or are you still kind of mobilizing drills and stuff.

Should we expect kind of.

Greater number of holes coming in the second half versus the first half in terms of updates.

So we are ramping up and.

In that area.

We'll bring out.

Over the next.

The quarters an update of.

The Trenton Canyon, and we will bring out of types of H H.

The more.

The advanced exploration thoughts from CBS from chip.

Got up types of where we are across all of the businesses in Trenton Canyon.

We.

Took a step back and doing more drilling before we advance into study work at Trenton Canyon.

To make sure we fully understand that.

Resource, but fully per se to the next step.

But we are out there drilling.

Okay, Great and then with pit of Ria.

When do you think you'd be in a position the start.

Drilling from the underground.

So after the.

Mitch.

Took the opportunity and we've put the advancement of the underground.

The decline on hold while we do of more wholesome assessment of the current resource of the current resource knowledge and the status of that study so are we.

We don't have an immediate clients not drilling in the pit.

Yeah on the ground.

Okay.

Alright, that's it from me guys. Thanks very much.

Alright, Thanks Mark.

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

Alright, Thanks, Anastasia and again, thank you all for joining us today, a really solid quarter and it's obviously not the north to introduce Allison that way too to the company and hopefully have many more of them to come.

Thanks, again and have a great day.

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

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Yes.

Okay.

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