SSR Mining Inc.

Hello, everyone, and welcome to SSR Mining's first quarter 2024 financial results conference call. Please be advised that this call is being recorded. Should anyone need assistance during the conference call, they may signal an operator by pressing star, then zero. At this time, I would like to, for opening remarks, I would like to turn the call over to Alex Huncheck from SSR Mining. Please go ahead.

Thank you, operator, and hello, everyone. Thank you for joining today's conference call, during which we'll provide an update on the Topler incident, as well as a brief review of our first quarter financial results. Our consolidated financial statements have been presented in accordance with U.S. GAF. These financial statements have been filed on EDGAR, CDAR, 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 related 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 and the relevant documents. Additionally, we will refer to non-GAAP financial measures during our discussion and in the accompanying slides. Please see our press release for information about the comparable GAAP measures. Rod Antle, Executive Chairman, will lead today's call, and members of our executive team, including Michael Sparks, Chief Financial Officer, Eddie Farid, Chief Strategy Officer, and Bill McNevin, EVP Operations Sustainability, are also present on the call. I will now turn the line over to Rod. Great. Thanks, Alex.

I'm going to speak first about CHIRPLA and provide all our stakeholders with an update on both our immediate priorities and on our path forward in Turkey. I will then provide an update on our ongoing operations in the Americas. The current priorities for CHRPLA can be distilled into four clear categories. One, the recovery efforts for our five remaining colleagues. Two, the containment efforts. Three, the remediation plan. And four, planning for next steps. So first, with respect to the recovery efforts. I would like to start by offering our sincere condolences to the families of our missing colleagues as well as the community members who are impacted by the Chirpler incident. The primary focus at Chirpler has and continues to be the return of the remaining missing colleagues to their families. Our teams in consultation with the relevant Turkish authorities have been diligently working on finding the missing individuals and will continue to do so. All recovery activities are currently focused in the Suburly Valley. To date, over 6.7 million tonnes of heap leach material has been relocated as part of the ongoing recovery, containment and remediation activity, including the removal of 4.2 million tonnes from the Suburli Valley. Second, the containment efforts. Since the incident, our containment efforts have advanced alongside the removal of the displaced material. This work includes activities such as the installation of a grout curtain, copper dam and buttress which are substantially complete. There is also the ongoing installation of pumping systems and diversion channels. We currently expect the removal of all the displaced heat bleach material from the Suburli Valley and into temporary storage locations to be completed in the third quarter of 2024. Third, the permanent remediation planning. While our teams on the ground have advanced the recovery and containment work, we have also worked with the Turkish Government independent experts and external consultants to develop a remediation plan. This plan includes, among other things, permanent closure of the heap leach pad and construction of a long-term storage facility for the displaced heap leach material. This facility will be designed to permanently store the approximately 18 to 20 million tonnes of displaced material. The future remediation work is expected to cost between $250 to $300 million on a 100% basis. This is in addition to the approximately $25 million already spent since the incident in February. We expect work to be completed over a two to three year period. With the company's total cash position at $467 million at the end of the first quarter, cash flow from our three ongoing operations and no balance outstanding on our revolving credit facility, we are well positioned to fund this remediation work in the future. This transitions us to the initial plans for the next steps. In order to restart the operations, the company will require the reinstatement of the previously suspended environmental impact assessment and operating permits. At this time, it remains too early to provide guidance of if and when the mine will restart. But for future planning purposes, we anticipate the sulphide plant will initially process the more than 700,000 ounces of gold from the sulphide stockpiles while remediation work is completed. Then let's move on to slide five, and discuss the 2024 operating results. First quarter 2024 production was 102,000 gold equivalent ounces at an all in sustaining cost of $1,569 per ounce, including 80,000 gold equivalent ounces from Marigold, CB and Puna. The results from these three operations were in line with our expectations for a back half weighted production profile and each asset remains well on track for the full year production and cost guidance. As a reminder, Marigold's 2024 production profile remains 70% weighted to the second half of the year, while Puna's production is 55% weighted to half too. Accordingly, we expect the second quarter to be our highest cost at lowest production period of the year. However, over 2024, we expect the three operations will deliver solid asset free cash flow. On the development side, while the scope of the planned activities for 2024 at Hop Madden have been reduced, we have continued to advance engineering and project execution planning and the technical studies. We will provide additional updates at a later date. Moving on to slide six and a brief look at the financial results. We recorded an attributable net loss of $1.42 per share in the first quarter, reflecting the financial impacts of the Chirpler incident, which we will discuss shortly. Adjusted net income per share was 11 cents, and we generated $25 million in operating cash flow in the quarter. Free cash flow was a negative $9 million. As noted, our total cash position is $467 million with an additional undrawn revolving credit facility available. We continue to have a solid liquidity position to manage remediation costs at Chirpler and reinvestment needs across the business going forward. Moving on to slide seven and shed some more colour on the non-cash and cash impacts of the Chirpler incident. As I mentioned, our first quarter of financial results were significantly impacted by the Chirpler incident. We recorded charges totaling $288 million including costs incurred to date plus future remediation costs and legal contingencies. These reclamation and remediation work will include the construction of the east storage facility, displaced heap leach material movement, heap leach pad remediation and all containment infrastructure. In addition, we recorded an impairment of $76 million for all heap leach inventory, which contained an estimated 44,000 ounces of recoverable gold. and an impairment of $38 million for the now obsolete heat bleach equipment and infrastructure, given the heat bleach pad facility will be permanently closed. On to slide nine, a discussion on the operating results beginning with Marigold. Marigold's first quarter production of 35,000 ounces was in line with our expectations. The 2024 mine plan called for the first quarter to feature the lowest quarterly stacked oil grades, reflecting the focus on waste stripping at Red Dot in the first half of this year. Despite this, the all-in sustaining costs of $1,430 per ounce were better than expected, largely due to the timing of the capital spent. Quarter two all-in sustaining costs are expected to be above four-year guidance as a result of the deferral the capital spend from quarter one. Marigold remains well on track for its full year production and cost guidance. Moving on to CB on slide number 10. At CB the first quarter production was 24,000 ounces and an all in sustaining cost of $1,416 per ounce. Production and costs were slightly better than planned reflecting the processing of higher grade material stockpiled in the fourth quarter of 2023. The remainder of the year, CB expects mine and process grades to average between five and six grams per tonne. CB remains on track for its full year production and cost guidance as well. The exploration activities at CB continues to focus on near mine extensions, to existing underground mineralisation as well as continued advancements of Pawki and the Pawki West targets. The Pawki targets represent a potential mine life extension opportunity and the CB team is aggressively advancing the technical studies to better delineate this opportunity. Finally, let's move on to Pooner on slide 11. Pooner produced 1.9 million ounces of silver in the first quarter. slightly lower than expected due to a significant rainfall that impacted the mining rates. Despite this, PETA remains well on track for full year production guidance of 8.75 to 9.5 million ounces of silver at an oil and sustaining cost of $14.75 to $16.25 per ounce. Exploration and technical work continues to evaluate opportunities to extend operations of Puna through potential extensions of Chinchillas and the continued advancement of the Corte de Aristarga through near-vine drilling. Our team at CHIRPLA remains focused and steadfast as we continue with the overall recovery efforts. This has been supported by the strong operating results of Marigold, Seabee and Puna And I want to recognise our team's focus and commitment during a difficult time. Before I open up for questions, I would like to remind folks there are certain topics around legal matters and ongoing investigations that I cannot comment on at this time. So Operator, if we can open up the call now to any questions people might have. Thank you.