VANCOUVER, May 9, 2019 /CNW/ - SSR Mining Inc. (NASDAQ: SSRM) (TSX: SSRM) ("SSR Mining") reports consolidated financial results for the first quarter ended March 31, 2019.
Paul Benson, President and CEO said, "Pleasingly, we had a strong first quarter with near-record consolidated production of over 112,000 gold equivalent ounces at lower cash costs, driven by solid performance at all three operations. Seabee achieved record production at near-record low cash costs, while Puna production and costs benefited from a full quarter of processing higher grade Chinchillas ore and increasing by-product credits. As a result, we delivered another quarter of solid financial performance and are well positioned to achieve record production for 2019."
First Quarter 2019 Highlights:
(All figures are in U.S. dollars unless otherwise noted)
• Increased production at lower costs: Achieved quarterly consolidated production of near-record 112,513 gold equivalent ounces at cash costs of $712 per payable ounce of gold sold.
• Solid financial performance: Reported positive income from mine operations at all three mines totaling $30.2 million, net income of $5.7 million and adjusted attributable net income of $17.2 million or $0.14 per share.
• Low-cost record production at the Seabee Gold Operation: Produced 31,183 ounces of gold at cash costs of $467 per payable ounce of gold sold, second lowest quarterly cash costs since acquiring the operation in 2016.
• Solid operating performance at the Marigold mine: Mined 17.3 million tonnes of material with strong gold production of 53,151 ounces at cash costs of $812 per payable ounce of gold sold.
• Doubled silver production with lower costs at Puna Operations: Produced 2.4 million ounces of silver at lower cash costs of $9.94 per payable ounce of silver sold, as we processed higher grade silver ore from the Chinchillas mine.
• Chinchillas mine ramp up substantially completed: The Chinchillas mine was substantially completed during the quarter on budget. Focus is now on achieving steady state production.
• Completed $230 million convertible notes offering: Issued $230 million aggregate principal amount of 2.50% unsecured convertible senior notes on March 19, 2019. A portion of the proceeds was used to repurchase $150 million of our outstanding $265 million 2.875% convertible notes.
• Maintained strong balance sheet: Quarter-end cash increased to $461 million.
Mine production
In the first quarter of 2019, the Marigold mine produced 53,151 ounces of gold, a 2% decline from the fourth quarter of 2018 mainly due to wet weather conditions during the period. Gold sales totaled 55,517 ounces, 10% higher than the previous quarter as we sold bullion inventory accumulated in the fourth quarter of 2018.
During the quarter, 17.3 million tonnes of material were mined, a 2% increase compared to the fourth quarter of 2018, as we commenced mining the next phase of the Mackay pit, which resulted in shorter haul distances and offset the weather events early in the quarter.
Approximately 5.5 million tonnes of ore were delivered to the heap leach pads at a grade of 0.34 g/t gold. This compares to 5.7 million tonnes of ore delivered to the heap leach pads at a grade of 0.34 g/t gold in the fourth quarter of 2018. The strip ratio was 2.1:1 for the quarter.
Mine operating costs
Cash costs and AISC per payable ounce of gold sold and realized gold price are non-GAAP financial measures. Please see "Cautionary Note Regarding Non-GAAP Measures".
Cash costs, which include all costs of inventory, refining costs and royalties, of $812 per payable ounce of gold sold in the first quarter of 2019 was 7% higher than the previous quarter primarily due to planned lower grades mined in the second half of 2018 and the first quarter of 2019. Total mining costs of $1.73 per tonne in the first quarter of 2019 were 7% less than in the previous quarter due to 2% more tonnes mined and lower maintenance costs. Processing unit costs were 6% lower in the first quarter due to a 17% reduction in cyanide costs that resulted from the start up of a new leach pad. This reduction in costs offset the 3% reduction in ore tonnes stacked. General and administrative unit costs were 6% higher in the first quarter of 2019 than in the fourth quarter of 2018 primarily due to lower ore tonnes stacked.
Despite the higher cash costs, AISC per payable ounce of gold sold decreased in the first quarter of 2019 to $984 from $995 in the fourth quarter due to decreased capital spending, partially offset by higher deferred stripping and capitalized exploration.
Mine sales
A total of 55,517 ounces of gold were sold at an average realized gold price of $1,303 per ounce during the first quarter of 2019, an increase of 10% from the 50,550 ounces of gold sold at an average realized gold price of $1,227 per ounce during the fourth quarter of 2018.
Exploration
The primary objective for exploration work in 2019 is to explore the north and south extensions of Red Dot, and the western area of the Mackay pit. Activities in these areas have the potential to discover additional Mineral Resources due to their proximity to existing Mineral Resources. During the first quarter, we completed 70 reverse circulation (RC) drillholes for 23,447 meters.
A limited amount of work during the period advanced the Mineral Resource to Mineral Reserve conversion at Red Dot through the completion of geotechnical and QA/QC core drilling. This work comprised 12 core holes for 4,893 meters.
During the period, results were received from 40 of the 70 RC holes, with 29 reporting resource grade intercepts. These results will be compiled later in the year with our existing data.
Looking ahead to the second quarter, RC drilling on the East Basalt and Valmy targets will commence once ground conditions improve from the wet weather conditions.
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