Q2 2023 SSR Mining Inc Earnings Call

August 2, 2023

Operator: Hello, everyone, and welcome to SSR Mining's Q2 2023 conference call. This call is being recorded. At this time, for opening remarks and introductions, I'd like to turn the call over to Alex Hunchak with SSR Mining.

Hello, everyone and welcome to SSR mining second quarter 2023 conference call.

This call is being recorded.

At this time for opening remarks, and introductions I'd like to turn the call over to Alex unchecked with SSR mining.

Alex Hunchak: Thank you, operator, and hello, everyone. Thank you for joining SSR Mining's Q2 2023 Conference Call, during which we'll provide an update on our business and a review of our financial performance. Our Q2 2023 consolidated financial statements have been presented in accordance with US GAAP. These financial statements have been filed on EDGAR, SEDAR, the ASX, and are also available on our website. To accompany our call, there is an online webcast, and you will find the information to access the webcast in our news release relating to this call. Please note that all figures discussed during the call are in US dollars, unless otherwise indicated. Today's discussion will include forward-looking statements, so please read the disclosures in the relevant documents.

Okay.

Thank you operator, and Hello, everyone. Thank you for joining SSR mining second quarter 2023 conference call during which we'll provide an update on our business and a review of our financial performance.

Our second quarter 2023 consolidated financial statements have been presented in accordance with U S. GAAP.

The financial statements have been filed on Edgar and SEDAR. The ASX and are 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 the call are in U S dollars unless otherwise indicated.

Today's discussion will include forward looking statements. So please read the disclosures in the relevant documents.

Alex Hunchak: Joining us on the call today are Rod Antal, Executive Chairman, Alison White, Chief Financial Officer, and Bill MacNevin, Executive Vice President, Operations and Sustainability. Now, I will turn the call over to Rod for his opening remarks.

Joining us on the call today are Rod Antal executive Chairman.

Allison White, Chief Financial Officer, and Bill Mcnevin Executive Vice President of operations and sustainability.

Rod Antal: Great. Thanks, Alex, and hello to you all, and thanks for joining us. Before I get started, I wanted to introduce Bill MacNevin, who is joining us for his first quarterly earnings call. It's a pleasure to have him finally join us. He's been in the field for the last six months, and welcome to the call, Bill. As we close out the first half of 2023, it is pleasing to report that our consolidated operational results to date have been generally well aligned to our expectations. Production from Çöpler, Marigold, and Puna have been solid, partially offsetting the slower start to the year at Seabee. Looking forward, and as we guided at the beginning of the year, we expect the second half to provide the majority of our ounce production and free cash flow generation.

Now I will turn the call over to Rod for his opening remarks.

Thanks, Alex and Hello to you all and thanks for joining us.

Before I get started I wanted to introduce Bill Mcnee, Ben who is joining us today's quarterly earnings call.

Pleasure, having finally join US he has been in the field for the last six months and a welcome to the call Bill.

As we closed out the first half of 2023. These pleasing to report that our consolidated operational results today.

Generally well onto our expectations.

Production from chips, Marigold, and two that have been solid partially offsetting the slower start to the year at Seabee.

Looking forward and as we guided at the beginning of the year, we expect the second half to provide the majority of Iran's production and free cash flow generation.

Rod Antal: Our portfolio is expected to deliver strong production of approximately 400,000 GEOs, split relatively evenly between Q3 and Q4 at reduced costs, generating positive free cash flow. Given our outlook for a strong second half of the year and our recent share price, we repurchased over $45 million of shares in the first half of the year. Combined with our base dividend, we are on track to exceed $100 million in capital returns in 2023, or a 3.4% yield. This is a strong message that should confirm our free cash flow outlook for the second half of the year. It was a busy quarter, advancing our organic production growth and announcing a strategic acquisition. At Çöpler's Çakmaktepe extension, we began pre-stripping.

Our portfolio is expected to deliver strong production of approximately 400000 G OS split relatively evenly between the third and fourth quarters that reduce cost generating positive free cash flow.

Given our outlook for a strong second half of the year and our recent share price, we repurchased over $45 million of shares in the first half of the year combined with our base dividend. We are on track to exceed $100 million in capital returns in 2023, all three.

4% yield.

This is a strong message that you consider them as a free cash flow outlook for the second half of the year.

It was a busy quarter advancing our organic production growth and announcing a strategic acquisition.

Chip is check my tape by extension, we began pre stripping that will allow access to the first oxide ore. This year and is it and is aligned to our original time table.

Rod Antal: That will allow access to the first oxide ore this year and is aligned to our original timetable. For our team, this progress is obviously very exciting. Also, during the quarter, we announced the highly accretive acquisition of the world-class Hod Maden project in Türkiye, which provides us operatorship and an up to 40% interest in the project. We have been busy completing the handover from our partner, Lidya Mines, who has been doing a tremendous job advancing the project and establishing sustainable relationships with all the key stakeholders, including the local communities. We've been focused on recruiting the project team to complement the team already on the ground and progressing the initial site works, which are underway. Finally, we anticipate the release of an updated technical report and subsequent construction decision for the project during 2024.

For our team. This progress is obviously very exciting.

Also during the quarter, we announced the highly accretive acquisition, if the World class Hot Madden project can take it.

Which provides us operator ship and in up to 40% interest in the project.

We've been busy completing the hain divert from our partner Lydia mines, who has been doing a tremendous job of advancing the project and establishing sustainable relationships with all the key stakeholders, including the local communities.

We've been focused on recruiting the project team to complement the team already on the ground and progressing the initial sad works, which are underway.

Finally, we anticipate the release coming up that technical report and subsequent construction decision for the project during 2024.

Rod Antal: We also have a number of key value-driving catalysts on the horizon. This includes the first production from the Çakmaktepe Extension and the technical report updates that showcase the future of Marigold, Çöpler, and again, Hod Maden. These technical reports are the next step in our continued de-risking of the long-term 700,000-ounce production platform that forms the foundation of SSR. We have a proud history as explorers, mine builders, and operators, as well as a long track record of prudent value additive M&A. Our business is in a strong position, supported by our solid balance sheet, including the more than $700 million in total liquidity. I'm gonna move on to slide number four, and I'll talk about ESG. ESG is, and has long been, a core value and focus for the company as it firmly underpins our success.

We also have a number of key value driving catalysts on the horizon.

This includes the first production from the Checkmate <unk> extension and the technical report updates had showcased the future of Marigold shut blah and again called Madden NYC.

Technical report so the next step in our continued de risking the long term 700000 ounce production platform that forms a foundation of SSR.

We have a proud history as explorers mine builders and operators as well as our long track record of prudent value additive M&A.

Our business is in a strong position supported by a solid balance sheet, including the more than $700 million in total liquidity.

Let me now move on to slide number four and I'll talk about ESG.

ESG is and has long been a core value and focus for the company as a firmly underpins our success we.

Rod Antal: We continue to prioritize the health and safety of our employees and business partners, and on 14 April this year, we published our fifth annual ESG and sustainability report, marking another step in SSR Mining's continued efforts to operate responsibly and sustainably while maximizing the benefits to our stakeholders. In 2023, as an important improvement opportunity, we reinvigorated a focused and formal Leadership in the Field initiative to drive engagement and improve safety performance across the operations, which has been met with enthusiasm from our teams. Additional key initiatives this year include continued development of an action plan on our journey towards decarbonization, including evaluating options to incorporate renewable energy, and technologies into our operating platforms.

We continue to prioritize the health and safety of our employees and business partners and on the 14th of April . This year, we published Cfp's annual ESG sustainability report, marking another step in Ssi <unk> continued efforts to operate responsibly and sustainably while maximizing the benefits to us.

Stakeholders.

In 2023 and is an important improvement opportunity, we reinvigorated our focused informal leadership in the field initiative to drive engagement and improved safety performance across the operations, which has been met with enthusiasm for <unk> <unk>.

Additional initiatives. This year include continued development of an action plan on our journey towards decarbonization, including evaluating options to incorporate renewable energy and technologies into our operating platforms.

Rod Antal: We are progressing water management plans for each of our assets and finally progressing our efforts on integrated mine closure plans to ensure that we leave a positive and lasting legacy for our local communities. As we've done previously, we will work hard to advance our ESG initiatives and look forward to sharing continued updates on that journey throughout the year. So moving on to slide number 5. As I mentioned, we have established a pathway to maintaining a stable production platform of at least 700,000 ounces over the remainder of the decade. That platform was further supported by the acquisition of the Hod Maden project, adding one of the highest return development projects in the world to our near-term growth profile. We continue to advance drilling and technical work ahead of the updated technical reports for Marigold, Çöpler, and Hod Maden.

We are progressing water management plans for each of our assets and finally progressing our efforts on integrated mine closure plans to ensure that we leave a positive and lasting legacy for our local communities.

As we've done previously we will work hard to advance <unk> initiatives and look forward to sharing continued updates on that journey throughout the year.

So moving onto slide number five.

As I mentioned, we have established a pathway to maintaining a stable production platform of at least 700000 ounces over the remainder of the decade.

That platform was further supported by the acquisition that the Hot Madden project, adding one of the highest return development projects in the world to where it needed to and growth profile.

We continue to advance drilling and technical work ahead of the updated technical report for Marigold Sherpa and odd Madden. Additionally, exploration continues at Seabee and Puna with the goal of building reserves and extending mine lives at each one of those as well.

Rod Antal: Additionally, exploration continues at Seabee and Puna, with the goal of building reserves and extending mine lives at each one of those assets. We intend to convert these efforts into updated life and mine plans, providing a full refresh of each asset's long-term production profile, as well as highlighting opportunities for future growth. We're in a good position to build on the existing production profile demonstrated on this slide. By delivering low capital intensity, high-return organic growth, we aim to continue demonstrating our position as a strong and consistent operator with a commitment to free cash flow generation. So moving on to slide 6, and just to talk a little bit about Hod Maden. As I mentioned in Q2, we announced and closed a transaction that provided SSR Mining operatorship and up to a 40% interest in the world-class Hod Maden project in northeastern Türkiye.

We intend to convert these efforts into updated life of mine plans, providing a full refresh of each asset as long term production profile as well as highlighting opportunities for future growth.

We're in a good position to build on the existing production probably fall demonstrated on this slide.

By delivering low capital intensity high return organic growth, we aim to continue demonstrating our position as a strong and consistent operator with a commitment to free cash flow generation.

Moving onto slide six just to talk a little bit about called Madden.

As I mentioned in the second quarter, we announced and closed the transaction that provided SSR mining operator ship.

And up to a 40% interest in the World class Hog Madden project in northeast in Tokyo.

Rod Antal: Hod Maden perfectly complements our portfolio with best-in-class gold equivalent grades of over 11 grams per ton and an average life of mine, co-product, all in sustaining costs of less than $600 an ounce. We have a proven track record of success in the country and are advancing site preparation activities at the project as we speak. Our technical teams are hard at work, optimizing the design, project execution, and production plans developed by our partner, while also evaluating additional upside opportunities. This year, we're spending a total of $21 million and are working to arrange financing for the construction decision. Next year, we expect to issue an updated technical report for the project, which will inform the construction decision for our board.

Our madden perfectly complement to our portfolio with best in class gold equivalent grades of I have 11 grams per ton at an average life of mine co product or sustaining costs.

Less than $600 an ounce.

We have a proven track record of success in the country and are advancing salt preparation activities at the project as we speak.

Our technical teams are hard at work optimizing the design.

Project execution and production plans developed by our partner, while also evaluating additional upside opportunities.

This year, we're spending a total of $21 million and are working to arrange financing for the construction decision.

Next year, we expect to issue an updated technical report for the project, which will inform the construction decision for our board.

Rod Antal: This first quarter cost, Hod Maden is expected to generate in excess of $160 million in free cash flow annually or more than $65 million in attributable free cash flow using the $1,600 per ounce base case gold price. This structured transaction limited our upfront capital outlay, and we expect it will help preserve a better than 15% all-in acquisition internal rate of return for our shareholders by the time the project is in production. Overall, the transaction was a material positive for our business, our existing partnership with Lidya Mines, and our new partners, Horizon, and we look forward to updating you on the progress as we continue along that journey. Moving on to slide 7.

This first quarter costs at Madden is expected to generate in excess of $160 million in free cash flow annually or more than $65 million in attributable free cash flow using the <unk> hundred dollars per ounce base case gold price.

In structured transaction limited upfront capital outlay.

And we expect he will help preserve our better than a 15% all in acquisition internal rate of return for our shareholders by the time the project is in production.

Overall, the transaction was a material positive for our business for our existing partnership with Lydia mines, and our new partners Horizon, and we look forward to updating you on the progress as we continue along that journey.

Rod Antal: We are confident in our ability to deliver shareholder value with the Hod Maden transaction, because, as you can see, it is something we've done before. The same project development team and strategies that successfully delivered the Çöpler Sulfide plant project on time and under budget, is currently being deployed, well, redeployed to the Hod Maden project, further de-risking the project build. In addition to that experience as mine builders, we have a clear track record of adding value through M&A, and continue to see further upside across the portfolio that delivers additional values to our shareholders. Our approach to M&A remains unchanged. We will continue to actively consider and evaluate opportunities to add value to our business through transactions that fit our strategy of disciplined growth in core jurisdictions, and that complement our focus on free cash flow.

So it's moving on to slide seven.

We are confident in our ability to deliver shareholder value with augment and transaction because as you can see it is something we've done before.

The same project development team and strategies that successfully delivered the chip to the sulfide.

Playa project on time and under budget is currently being deployed.

We will redeploy to the <unk> project.

Other de risking the project build.

In addition to that experience as mine builders, we have a clear track record of adding value through M&A and continue to see further upside across the portfolio that delivers additional values to our shareholders.

Our approach to M&A remains unchanged we.

We will continue to actively consider and evaluate opportunities to add value to our business through transactions that fit our strategy of disciplined growth in core jurisdictions and that complement our focus on free cash flow.

Rod Antal: With that, I'm going to turn it over to slide number 8 and hand the presentation over to Alison.

So with that I'm going to turn now to slide number right in hand, the presentation I would allison. Thanks.

Alison White: Thanks, Rod, and good afternoon, everyone. I'd like to first focus on our capital returns program, which remained active in Q2 and is one of the three pillars of our capital allocation strategy, complemented by reinvesting in our business and ensuring balance sheet strength. Through the end of June, we have returned approximately $74 million to shareholders, and through our base dividend and share buyback program, we are on track to return over $100 million to shareholders for the third consecutive year. In total, we have returned more than $400 million over the last three years, which is something we are very proud of. The company is positioned for a minimum full-year capital returns yield of at least 3.4%, based on the activity that we've already had this year.

Thanks, Scott and good afternoon, everyone.

I'd like to first focus on our capital returns program, which remained active in the second quarter and it's one of the three pillars of our capital allocation strategy complemented by reinvesting in our business and ensuring balance sheet strength.

Through the end of June we have returned approximately $74 million to shareholders and to our base dividend and share buyback program. We are on track to return over $100 million to shareholders for the third consecutive year.

In total we have returned more than $400 million over the last three years, which is something we are very proud of.

The company is positioned for a minimum full year capital returns yelled at at least three 4% based on the activity that we've already had this year.

Alison White: As Rod mentioned, we see a number of positive and value-additive catalysts on the horizon, as well as positive operational tailwinds, and as such, we view the buyback as an accretive way to return capital to shareholders. During the last month of the quarter, we also renewed our share buyback program, enabling us to repurchase up to an additional 10.2 million shares over the next 12 months. Slide 9 will provide a review of the Q2, so let's turn to that and take a look at our results. Q2 production of 157,000 gold equivalent ounces and first half production of 304,000 gold equivalent ounces were in line with our expectations for a second half-weighted production profile. Sales in the Q2 were 148,000 gold equivalent ounces.

As Rod mentioned, we see a number of positives and value additive catalysts on the horizon as well as positive operational tailwind.

As such we view the buyback as an accretive way to return capital to shareholders.

During the last month of the quarter. We also renewed our share buyback program, enabling us to repurchase up to an additional $10 2 million shares over the next 12 months.

Slide nine I will provide a review of the second quarter.

Let's turn to that and take a look at our results.

Second quarter production of 157000 gold equivalent ounces in first half production at 304000 gold equivalent ounces were in line with our expectations for a second half weighted production profile.

Sales in the second quarter were 148000 gold equivalent ounces.

Alison White: The approximately 9,000 ounces produced, but not sold in the quarter, was driven by a closure of the banks and metal markets during the last week of June for a Turkish holiday, and a late arrival of a vessel at our port, where we ship concentrates for Puna. These are timing differences, and the ounces were sold in Q3. All-in sustaining costs of $1,633 an ounce is slightly high, but in line with expectations, and reflects our guidance of a first half-weighted sustaining capital profile, where we placed four new haul trucks into service at Marigold.

The approximately 9000 ounces produced but not sold in the quarter was driven by a closure of the bank and metal markets. During the last week of Jan for Turkish holiday.

And the late arrival of a battle.

At our core where we ship concentrate.

These are timing differences and the ounces were sold in the third quarter.

All in sustaining cost of $1633, an ounce is slightly high but in line with expectations and reflects our guidance of a first half weighted sustaining capital profile, where we placed four new haul trucks into service at Marigold.

Alison White: Our first half of sustaining capital at Seabee is also always high due to purchases made for transport on the ice road that supports operations at that location for the entire year. The all-in sustaining cost denominator was also impacted by the 9,000 ounces in unsold inventory at Çöpler and Puna, which decreased the ounces sold for the calculation and would have improved our overall AISC. Earnings per share was $0.35 per diluted share. Attributable net income and adjusted attributable net income were both approximately $75 million. Deferred tax benefits were net at about $46 million during the quarter, after considering the non-controlling interest. With the acquisition of Kartaltepe late last year and Hod Maden this year, our deferred tax liabilities increased by more than $200 million.

Our first half.

First half of sustaining capital at Seabee is also always high due to purchases made per transport on the ice road that supports operations at that location for the entire year.

The all in sustaining cost of nine denominator with also impacted by the 9000 ounces in unsold inventory at <unk>, which decreased the ounces sold for the calculation and would have improved our overall all in sustaining costs.

Earnings per share was <unk> 35 per diluted share attributable net income and adjusted attributable net income were both approximately $75 million.

Deferred tax benefit where net at about $46 million during the quarter after considering the noncontrolling interests with.

With the acquisition of Cartel tap a late last year and hard Madden this year, our deferred tax liabilities increased by more than $200 million.

Alison White: This increase in the total base value of liabilities is then subject to the currency devaluation that has occurred thus far in 2023, driving the net benefit after consideration of non-controlling interest reductions. In the quarter, we delivered positive free cash flow of $22 million, or $46 million before working capital adjustments. Over the remainder of 2023, our production remains relatively evenly split between Q3 and Q4, with a decline in the pace of the spend on sustaining capital, driving improved free cash flow throughout the rest of the year. With respect to inflation, we have seen an improvement in diesel and power prices across the portfolio, but note that consumable pricing and labor cost pressures do remain a headwind. Overall, however, we may remain on track for our full year consolidated capital and cost guidance.

This increase in the total base value of liabilities has been subject to the currency devaluation that has occurred thus far in 2023 driving the net benefit after consideration of Noncontrolling interest reduction.

In the quarter, we delivered positive free cash flow of $22 million or $46 million before working capital adjustments.

Over the remainder of 2023, our production remains relatively evenly split between the third and the fourth quarters with a decline in the pace of the spend on sustaining capital driving improved free cash flow.

The rest of the year.

With respect to inflation, we have seen an improvement in diesel and power prices across the portfolio, but note that consumable pricing and labor cost pressures do remain a headwind.

Overall however.

We remain on track for our full year consolidated capital and cost guidance.

Alison White: On 15 July, Türkiye announced a 5% increase in the corporate tax rate from 20% to 25%, that is retroactive to 1 January 2023. While we are still working to evaluate the financial impact of the change, deferred tax expense will increase during Q3 when we record the 5% increase. For cash taxes, we do not anticipate a material change in the short term, due to existing incentive tax credits in the country that are currently in use. Any additional benefits, such as the one we had in Q2 resulting from devaluation, will continue to offset additional expense expected as a result of the rate change to 25%. Now, turning to Slide 10, we can talk about SSR Mining's financial position. Our balance sheet remains another of our key strengths and a pillar of our capital allocation strategy.

On July 15th.

<unk> announced a 5% increase in the corporate tax rate from 20% to 25% that is retroactive to January one 2023.

While we are still working.

To evaluate the financial impacts of the change deferred tax expense will increase during Q3, when we recorded the 5% increase.

For cash taxes, we do not anticipate a material change in the short term due to the existing incentive tax credits in the country that are currently in use any.

Any additional benefit such as the one we had in the second quarter, resulting from devaluation will continue to offset additional expense expected as a result of the rate change to 25%.

Now turning to slide 10, we can talk about SSR mining financial position.

Our balance sheet remains another of our key strengths and a pillar of our capital allocation strategy.

Alison White: Our cash position currently stands at more than $410 million, reflecting our continued delivery of peer-leading capital returns and $120 million in upfront consideration paid as a part of the Hod Maden transaction, which was also paid during the quarter. Total liquidity is currently more than $700 million, and we expect positive free cash flow into the end of 2023 that will further reinforce our financial position. We are committed to maintaining a robust balance sheet to weather volatility in the commodity price environment, ensuring all of our capital commitments, debt servicing requirements, and base dividend payments are fully funded, even in the event of a potential downturn in the gold price. As such, the quarterly base dividend of $0.07 a share is payable to our $1,350 an ounce gold reserve price.

Our cash position currently stands at more than $410 million.

Reflecting our continued delivery of peer leading capital returns and $120 million in upfront consideration paid as a part of the Heartland transaction, which was also paid during the quarter.

Total liquidity is currently more than $700 million and we expect positive free cash flow into the end of 2023 that will further reinforced our financial position.

We are committed to maintaining a robust balance sheet to weather volatility in the commodity price environment and sharing all of our capital commitment that's everything requirement and base dividend payments are fully funded even in the event of a potential downturn in the gold price.

As such our quarterly based dividend of seven cents a share.

As payable to our $1350 an ounce gold reserve price.

Alison White: Our third key pillar of the capital allocation strategy is that we will continue to reinvest in growth, including our internal exceptionally high return, Çakmaktepe extension, Seabee expansion, and Hod Maden projects, as well as the exciting exploration programs across the portfolio that we have dedicated more than $80 million in spend to this year. We will remain dynamic in our approach to our share buybacks and have capacity to repurchase up to 10.2 million additional shares on the recently announced buyback program before its expiration in June 2024. Our company remains in a strong financial position, and we expect further improvement into year-end. And now I'll turn the call over to Bill, our Executive Vice President of Operations and Sustainability, to review the operations.

Our third key pillar of the capital allocation strategy is that we will continue to reinvest in growth <unk>.

Including our internal exceptionally high return check marked hefei extension sharply expansion and hard Madden projects as well as the exciting exploration programs across the portfolio that we have dedicated more than $80 million and spend too this year.

We will remain dynamic in our approach to our share buyback and have capacity to repurchase up to $10 2 million additional shares.

The recently announced buyback program before its expiration in June of 2024.

Our company remains in a strong financial position and we expect further improvement into year end.

Alison White: And now I'll turn the call over to Bill, our Executive Vice President of Operations and Sustainability, to review the operations.

And now I'll turn the call over to Bill <unk>, our executive Vice President of operations and sustainability to review the operations.

Bill MacNevin: Thanks, Alison. It's a pleasure to be here with you today on my first conference call with SSR Mining. Since joining the company at the beginning of the year, I've been focused on operational improvement and efficiency, and I've spent the majority of my time at each of our four core operations. Already, I've come to respect the impressive talent and diversity of skill we have throughout the company, and very appreciative of all the hard work that has brought SSR Mining where it stands today. At the same time, I see areas for improvement, and we will continue to define and prioritize these as we update our operating practices going forward. Before I dive into the individual assets, I want to start with a brief discussion about safety. Most important thing we do each and every day is getting our people home safe.

Thanks Allison.

It's a pleasure to be here with you today on my first conference call. This morning.

Since joining the company at the beginning of the year have been focused on operational improvement and efficiency and we spent the majority of <unk> at each fab full color operations.

Already have come to respect the impressive talent and diversity of skill we have throughout the company.

I'm very appreciative of all the hard work that has broad SSR minds, where it stands today.

At the same time see areas for improvement and we will continue to define and prioritize these as we update our operating practices going forward.

Before I dive into the individual assets I want to start.

<unk> with a brief discussion about psyche.

Most important thing we do each and every day is getting people on site.

Bill MacNevin: As a core SSR value, this has always been a, a focus. Now we are driving increased leadership engagement and implementing simple tools to enable our people. While this is improving safety, it is also improving the quality of work and results in the field, as safe production delivery is an integral approach to our long-term success. So now under Çöpler, the mine delivered Q2 production of 52,000 ounces at an AISC of $1,384. The sulfide plant delivered another strong quarter of production, with throughputs averaging nearly 7,500 tons per day, showcasing the continued optimization of this asset. The planned autoclave maintenance currently underway is on track to be completed this month. As usual, we continued to operate the secondary oxide at higher capacity during the maintenance period, limiting the impact to production in the third quarter.

As a core asset value. This has always been a focus.

Now we are driving increased latest shipping government and implementing simple tools to enable our people.

Whilst this is improving safety. It is also improving the quality of work and results in the field.

Our site production delivery as an integral approach to our long term success.

So now on the chopper.

Demand demand delivered Q2 production of 52000 ounces and a nice tick of $30 94 per ounce.

The sulfide plant delivered another strong quarter production throughput, averaging nearly 7500 ton per day.

Showcasing the continued optimization of this asset.

The planned order cloud maintenance currently underway is on track to be completed this month.

As usual, we continued to operate second order clave at Hawaiian capacity during the maintenance period.

Limiting the impact to production in the third quarter.

Bill MacNevin: Other key work programs, Çöpler, continue as scheduled, including first production from Çakmaktepe extension, where pre-stripping was initiated in the second quarter, and first gold production of 10,000 to 15,000 ounces is expected this year. We're also advancing work on the updated technical report. Work to date has built on the TRS, published in 2022. With work significantly advanced, we are now awaiting assay results to support this technical report update, which means we will be in the position to publish the report in Q1 2024, rather than late in Q4 of this year. Exploration work continues across Çöpler district, including the regional targets, where we expanded our ownership to 80% in Q4 2022.

Other key work programs Jetblue continue at schedule, including first production from jackpot tip extension, where pre stripping was initiated in the second quarter.

And first gold production of 10 to 15000 ounces is expected this year.

We're also advancing work on the updated.

Technical report.

Work to date has built on the Trs published in 2022.

With significant advance with words significantly ban we are now awaiting assay results to support this technical report update which means we will be in a position to publish the report in the first quarter of 2020 full rather than light in fourth quarter of this year.

Exploration work continues across each of the district, including the regional targets, where we expanded our ownership to 80% in Q4 2002.

Bill MacNevin: We have a full suite of near and long-term growth opportunities across the district that we will continue to advance. Now on to slide 14. Marigold produced 60,000 ounces in Q2, in line with the planned production profile. At an AISC of $1,656 per ounce in Q2, reflected the planned spend on new haul truck purchases to support waste stripping activities. Sustaining capital will trend downwards significantly in Q3 and Q4, in line with full-year guidance. Marigold remains on track for 2023, with leach cycles now returned to normal as the mine continues stacking more durable ore that was typical for the operation. We're advancing technical work ahead of an updated life of mine plan for Marigold, where we aim to capture upside.

We have a full suite of near and long term growth opportunities across the district that we will continue to advance.

Now on to slide 14.

Marigold produced 60000 ounces in the second quarter in line with the planned production profile at.

And I think of $16 56 per ounce in the second quarter.

Reflected the planned spend on U haul truck purchases to support wide stripping activities.

Sustaining capital will trend downward significantly in the third and fourth quarters in line with full year guidance.

<unk> remains on track for 2023 with late cycle has now returned to normal as demand continues stacking more durable that was typical for the operation.

We're advancing technical work ahead of an updated life of mine plan for Merry go where we aim to capture upside.

Bill MacNevin: This includes incorporating more than two years of drilling, in particular at New Millennium, into updated resource models for Marigold. Work is also underway to evaluate potential longer-term production pathways at the Trenton Canyon and Buffalo Valley targets at the southern end of the Marigold property. Now, moving on to slide 15, Seabee. Seabee's Q2 production was below plan as the mine worked to overcome the Q1 mining shortfall, resulting from the unplanned maintenance outage. Accordingly, grades remain below our original expectations of the mine, focused on getting the stoping sequence on plan to open up access to high-grade stops for the second half. Positively, in the month of July, Seabee's head grade increased, and the mine produced just under 8,000 ounces, positioning the operation for a much stronger solid second half.

This includes incorporating more than two years of drilling.

In particular at new Millennium into updated resource models for America.

Work is also underway to evaluate potential longer term production pathways.

The Trenton Canyon, and Buffalo Valley targets at the southern end of the <unk> property.

Now moving on to slide 15.

David.

<unk> second quarter production was below plan as demand work to overcome the first quarter mining shortfall, resulting from the unplanned maintenance outage.

Accordingly grades remained below our original expectations of demand focused on getting the stoping sequence on plan to open up access to higher grade status in the second half.

Positively in the month of July Cvs head grade increased in the mine produced just under 8000 ounces.

Positioning the operation for a much stronger second half.

Bill MacNevin: In addition to improved mine performance, we expect costs to improve in the second half, given the completion of spend on the winter road in the second quarter. We continue to advance our near mine exploration at Seabee, as we prioritize mineral resource conversion activities to ensure growth and mine life extensions in the future. Moving on to slide 16, Puna. Puna delivered another strong quarter in with 2.3 million ounces of production at AISC of $17.40 per ounce. Puna remains well on track for its full-year guidance, and we anticipate improving cost performance in the second half. Near mine exploration continued in the second quarter, predominantly focused on resource and reserve expansion efforts as we aim to extend the life of mine plan.

In addition to improved mine performance, we expect cost to improve in the second half given the completion of spend on the winter road in.

In the second quarter.

We continue to advance our near mine exploration at Seabee, as we prioritize mineral resource conversion activities to ensure growth and mine life extensions in the future.

And moving on to slide 16.

Turner delivered another strong quarter and.

With $2 3 million ounces of production that hiseq of $17 40 per ounce per.

<unk> well on track for its full year guidance, and we anticipate improving cost performance in the second half.

Mnemon exploration continued in the second quarter predominantly focused on resource and reserve expansion efforts as we aim to extend the life of mine plan.

Bill MacNevin: We've also returned additional exploration success at Cortaderas target, near the Pirquitas mill, presenting a potential longer-term growth target for the operation. Moving on to slide 17. Handing back to Rod, I want to reiterate my optimism for our portfolio and longer-term trajectory. We have an accomplished team and a very solid portfolio of operations and growth opportunities. I'm thrilled to have a role in helping further improve and grow SSR Mining.

We have also returned additional exploration success at <unk> target near the Pirquitas mill.

Presenting a potential longer term growth target for the operation.

Moving on to slide <unk>.

Before I hand back to Rod I want to reiterate my optimism for our portfolio and longer term trajectory.

We have an accomplished team and a very solid portfolio of operations and growth opportunities I am thrilled to have a role in helping further improve and grow SSR mining.

Rod Antal: Great. Thanks, Bill, and thanks, Alison. As you've heard, we're in a good position as we move into the second half of 2023. Generally, Q2 was aligned to expectations, and positively also included the highly accretive acquisition of up to 40% interest in the Hod Maden project. While we're tracking to the lower end of our consolidated production guidance due to the first half results at Seabee, we expect significant improvement in our operating and financial results in the second half of the year. We're also keen to share the updated technical reports to showcase the organic growth potential across the portfolio. So in short, with a key number of value-enhancing catalysts on the horizon and the anticipation of improving production and free cash flow in the coming quarters, we remain extremely optimistic about the business.

Thanks, Bill and thanks, Allison as you've heard.

We're in a good position as we move into the second half of 'twenty three.

Generally the second quarter was aligned to expectations and positively also included the highly accretive acquisition.

Up to 40% interest in the <unk> project.

While we are tracking to the lower end of our consolidated production guidance two to the first half results at Seabee, We expect significant improvement in our operating and financial results in the second half of the year.

We're also keen to share the updated technical reports to showcase the organic growth potential across the portfolio.

So in short with a key number of value enhancing catalysts on the horizon.

The anticipation of improving production and free cash flow in the coming quarters, we remain extremely optimistic about the business.

Rod Antal: So with that, I'm going to hand the call back over to the operators for any questions you may have. Thank you, operator.

So with that again.

I'll hand, the call back over to the operator for any questions you might have thank you operator.

Operator: Thank you, Mr. Antal. To join the question queue, you may press Star, then one on your telephone keypad. You'll hear a tone acknowledging your request. If you're using a speakerphone, please pick up your handset before pressing any keys. To withdraw your question, press Star, then two. Our first question is from Cosmos Chiu with CIBC. Please go ahead.

Thank you Ms Jones.

He joined the question queue. You May Press Star then one on your telephone keypad, you'll hear a tone acknowledging your request if youre using a speakerphone. Please pick up your handset before pressing any Keith.

To withdraw your question Chris Star then two.

Our first question is from Cosmos <unk> with CIBC. Please go ahead.

Cosmos Chiu: Thank you, Rod, Alison, Bill, and Alex. Maybe my first question is on your guidance. Rod, you've maintained your guidance at 700 to 780 thousand ounces GEOs, but you've also said you're now trending towards the lower end. I just wanna confirm, I think you've already kind of answered my question here, but, you know, the one sort of factor that you had not anticipated would have been the slower start to Seabee. Is that why it's now trending to a lower end? Everything else is on target, all the other assets, just really Seabee?

Thank you Alison Bill Alex.

Maybe my first question is on your guidance.

Rod you've maintained your guidance at 700 to 780000 ounces.

Deals, but you've also said you are now trending towards the lower end I just wanted to confirm I think you've already kind of answered my question here, but.

The one sort of factor that you had not anticipated would have been the slower start to see is that why it's now trending to a lower and everything else is on target all the other assets just wondering Steven.

Rod Antal: Yeah, I think that's right, Cos. I think if you remember in Q1, we talked about the underperformance at Seabee and the reasons why. Clearly, that put us on the back foot. And if you remember, I can't remember if you actually asked the question, but I did say it would probably be difficult for us to call back to the original guidance for Seabee, and that's held true during Q2 as well. So, as we look across the assets and how they're performing, you know, we're actually quite fortunate, I think, that we're in the position we're in, given that performance at Seabee. We're right on track for the first half.

Yes, I think that dry cargo if you remember in the first quarter, we talked about.

The underperformance at Seabee and the reasons why.

And clearly that put us on the on the back fully if you remember if you actually ask a question, but I did say.

It would probably be difficult for us to claw back to the original guidance for soybean and Thats held true.

During the second quarter as well so.

As we look across the assets.

How they're performing.

Hum we were actually quite fortunate I think that we're in the position. We're in given that performance I'd say, we're right on track for the first half.

Rod Antal: And expect, if we can maintain that sort of momentum moving into half two, we'll be able to meet our production guidance at the lower end.

If we can maintain that sort of momentum moving into half two we will be able to meet our production guidance the lower end.

Cosmos Chiu: Mm-hmm. Great. And maybe more specifically on the, on Çöpler, you know, you've done 107,000 ounces now in the first half. You're targeting 240,000 to 270,000 ounces for the year. You know, if I work it out correctly, the math, it looks like, you'll have to improve in Q3 and also Q4 as well. You've said Q4 is gonna be 55% of the second half of production, but if I work it out, Q3 has to improve as well. I guess my question is, Rod, you know, it sounds like there's some maintenance that still needs to be completed in Q3. Can you help me understand how Q3 is gonna be better than Q2? Is it a combination of, you know, Çakmaktepe coming in, or is it, you know, higher throughput?

Okay, great and maybe more specifically on.

Sure.

You've done 107000 ounces in the first half, we're targeting kind of 40% to 270000 ounces for the year.

If I work it out correctly.

It looks like you will have to improve in Q3 and also Q4 as well as we've said Q4 is going to be 45% of the SEC.

Half of production, but if I work. It out Q3 has to improve as well I guess my question is what it sounds like there is some maintenance that still needs to be completed in Q3.

Can you help me understand how Q3 is going to be better than Q2 is it a combination of checkmate <unk> coming in or is it.

Cosmos Chiu: Could you just give me a bit more color?

Higher throughput.

Rod Antal: Cos, I'm gonna, since we've got Bill in the room now, and I can deflect some of these questions to the team, I'm gonna deflect this one to Bill.

Could you just give me a bit more color.

So I'm going to since we got bill in the room now and I can reflect some of these questions to the tune of you I'm going to deflect these wanted to bill.

Cosmos Chiu: Thank you. Thank you.

Bill MacNevin: Yeah, appreciate the question. So we have several drivers heading into Q3 and then into Q4. We've done some work with the autoclaves on the throughput rate, so we've been improving there. The other thing that impacted the first half of the year was our oxide performance that we didn't actually end up stacking as much material as we planned for. Moving forward, we've got plans to have that material be stacked, and that will help increase as well. And also, we've got some very good work going on in terms of improving the operating time in the autoclaves.

Thank you.

Okay.

I appreciate the question so that we have several drivers.

Heading into Q3, and then into Q4.

We've done some work with aortic cloud hubs on the throughput right. So.

We have been improving there the other thing that impacted the first half of the year was the.

Our oxide performance.

We didn't actually end up stacking as much materials, we plan for moving forward with plans to have that material be stacked and that will help increase as well and also we've got some very good work going on in terms of.

Bill MacNevin: So that's the maintenance I talk about is going to be finished this month, but it's gonna come in on a less time than we've traditionally done, and there's also been some changes in what we do with maintenance with that oxidation circuit. So several things there. So it is an increase, but we're very focused on working to deliver against it.

Improving the operating Tom in the order class.

That's.

The maintenance, so I'd talk about sky.

It'd be finished this month, but it's going to come in or not.

Less time than we've traditionally done and Theres also been some changes in what we do with maintenance with that oxidizer.

So several things there. So it is a it is an increase but we're very focused on.

Cosmos Chiu: Great. And I don't know if this is related, you know, from other companies, we've heard there was heavy rainfall in Türkiye, in parts of Türkiye in Q2. Is that part of why your stacking of the oxides was impacted, or is Çöpler a bit different?

Working to deliver against it.

Great.

And I don't know if this is related.

From other companies, we incurred there was heavy rainfall in Turkey.

And parts of Turkey. In Q2 is that part of why we're stacking of the oxides was impacted or Chuck a little bit different.

Bill MacNevin: We didn't, we weren't heavily impacted by the weather in Q2. Our oxide stack was purely about blending and having the right material at the right time, so weather wasn't an impact for us.

Great.

We didn't we were heavily impacted by the weather in Q2.

Al oxide stack was purely about blend blending and having the right material brought Tom So where there wasn't an impact for us.

Cosmos Chiu: Got it. Maybe switching gears a little bit, same question on Marigold. You know, solid quarter, solid Q2, as expected. You've done 112,000 ounces now in the first half, slightly over. You're targeting 260 to 290. Once again, you know, it sounds like the leach cycle is now more normalized without some of the fines that you saw last year. But what's driving that increase again into Q3 and Q4? Is it stacking rates? Is it, you know, the recovery that's coming out from what you've already stacked in Q1 and Q2? Could you maybe, again, give us a bit more color in terms of the increase-

Got it.

Maybe switching gears a little bit the same question on Marigold solid quarter solid Q2 as expected.

101000 analysis now in the first half slightly over you were targeting $2 60 to $2 90.

Once again, it sounds like the the leach cycle.

Cycle is now more normalized without some of the fines that you saw last year.

But what's driving that increased again into Q3 and Q4 as it is the stacking rate is it the recovery that's coming out from what you've already stacked in Q1 and Q2 could you maybe again give us a bit more color in terms of that.

Bill MacNevin: Stacking.

Cosmos Chiu: - that we're anticipating?

Bill MacNevin: Stacking rate's the big driver, so obviously, Q3 is very important to us. So it's mining through and the material we're getting coming towards us. As you say, that we've normalized, we're through. We, we had a positive, return relative to the... We were challenged with that area that needed, work with the fines material. We're virtually through that. So now it's just really about the timing of the ore lease and the stacking rates.

Thank you.

Got it.

Stacking rights the big driver. So obviously Q3 very important tourist sites mining through the material, we're getting coming towards us as you cite that we've normalized we're through.

We had a positive return relative to we were challenged with that area that needed.

Work with the funds material, we're virtually through that so now it's just really about the timing of the oil related and the stacking right.

Cosmos Chiu: Great. And maybe one last question, again, on something else here. Puna, you know, I've, I've always said, I think that's a very complimentary acquisition that you've made, Rod. I know you're looking, you know, working on the technical report. It's gonna come out next year, alongside a decision in terms of, you know, building it or not. But in the meantime, should we anticipate, Rod, any kind of news flow between now and then? And that maybe, you know, again, specifically, you know, you talked about financing options. Could you give us some insight in terms of what some of those options might be?

Great.

And maybe one last question.

Again on something else here.

Half of that at all.

I've always said I think that's a very complementary acquisition that you've made.

I know you're looking at or working on the technical report it is going to come out next year.

Long side a decision in terms of.

Building it or not.

But in the meantime should.

Should we anticipate any kind of news flow between now and then.

And then maybe against specifically you talked about financing options could you give us some insight in terms of what some of those options.

Rod Antal: Yeah, because it's really the work that we're doing to put us into a position to make a go decision on the project is just improving the fidelity that we have around the project itself. So, we are doing some infill drilling. We're doing the work around the flow sheets, validation work. We're also looking at validating our own thoughts on ways to improve the flow sheets, et cetera. So, there won't really be a lot of news flow to talk about here in the next little while moving into next year, because it will all be pieces of work that will be running in parallel together to come to a conclusion for us.

Yes, because it's really the work that we're doing.

Put us into a position to make a.

Go decision on the project is is just improving the fidelity that we have around the project itself.

Doing some infill drilling we're doing the work around the flow sheets validation work rules are looking at.

Validating your own thoughts on ways to improve the <unk>.

<unk> shows et cetera. So.

Not really be a lot of news flow to talk about here in the next.

The next little while moving into to next year, because it will all be places of work that will be running in parallel together to come to a conclusion for us but.

Rod Antal: But, it really is just simply thinking about as confirmatory work from our DD, that we overlay our experience of building the Çöpler sulfide plant, and the approach that we took to building that plant with the same team that we've now deployed in some, some positions, over to Hod Maden, et cetera, et cetera, et cetera. So, you know, when we get going, and start to bring it out of the ground, we have a high level of confidence to be very successful for it. So, that's really what the emphasis will be. There'll be some small works going on. As we sort of mentioned, there is some early stage infrastructure works.

It really is just simply thinking about as confirmatory work from <unk>.

That we overlay our experience of building the triple a sulfide plant.

And the approach that we took to building that plan with the same team that wherever they are deployed in some some physicians.

It's all Madden et cetera, et cetera, et cetera, so when we get going.

Start to to bring it out of the ground, we have a high level of confidence to be very.

Very successful for us.

That's really what the emphasis will be there'll be some some small works going on.

Rod Antal: We've got some tunneling going on to access the site, some tunneling work that will be going on at site itself to put the access over to the TSF area. But beyond that, there won't be a whole lot more activity. So, it's ramping up. It's getting the teams in place, some drilling, et cetera. So, really look forward to next year. From a financial perspective, Alison's really busy at the moment, as you can imagine. I think she's made a couple of trips to London already to pick up on the work that was already sort of underway by our joint venture partners.

We sort of mentioned there is.

Some early stage infrastructure works, we've got some tunneling going on.

To access the site.

Some tunneling work that will be going on that sort itself too.

To put.

The access.

Over to the <unk> area.

But beyond that there won't be there.

There won't be a whole lot more activity. So it's ramping up it's getting the teams in place.

Some drilling et cetera. So.

Really look forward to next year from a financial perspective.

Allison's really busy at the moment as you can imagine of issues by a couple of trips to.

Two to London more ready to pick up on the work that was already sort of underway.

Rod Antal: We expect to pick that work up, to try to progress through to a project financing. If there's obviously any news flow coming from that, between now and the actual decision time, we'll obviously let you know. But that work will just quietly progress here to try to get the best terms as possible for the partners that we now have on the Hod Maden project. I don't expect anything to come out of that here in the next couple of months. It will probably be, at best, late in the year or probably early next year.

By our joint venture partners and.

We expect to to to pick that work out to try to progress through to our project financing.

And if there is obviously any news flow coming from that between now and the actual decision to our mom will obviously.

Let you know, but that work will just this quality progress here to try to try to get the best terms as possible for the partners that we now have on the hot metal projects.

But don't expect anything to come out of that here in the next couple of months it will probably be.

Cosmos Chiu: Mm-hmm. Of course. Thanks, Rod and team. Understood. Thanks again for answering all my questions.

Best life.

In the year, we'll probably early next year.

Of course, thanks, Rod and team understood and thanks again for answering all my questions.

Rod Antal: Good on you. Thanks, Cos.

Operator: Once again, if you have a question, please press star, then one. This concludes the question and answer session. I'll turn the call back over to Mr. Antal for any closing remarks.

So don't you think cost.

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

This concludes the question and answer session I'll turn the call back over to Mr. John <unk>.

Rod Antal: Great. Thank you. And, thanks everyone again for joining us today and participating in our call. Have a great day, and look forward to talking again in another quarter. Thank you. Bye-bye.

For any closing remarks.

Great. Thank you and thanks, everyone again for joining us today and participating in our call.

Right.

Look forward to talking to you again in another quarter. Thank you bye bye.

Operator: This concludes your conference call. Please feel free to disconnect.

This concludes your conference call. Please feel free to disconnect.

Okay.

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Hum.

[music].

Hum.

[music].

Yeah.

Hum.

Q2 2023 SSR Mining Inc Earnings Call

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