SSR Mining Inc.

Hello, everyone, and welcome to SSR Mining's third quarter 2024 financial results conference call. This call is being recorded. At this time, for opening remarks and introductions, I would like to turn the conference call over to Alex Honchak from SSR Mining.

Thank you, Operator, and hello, everyone. Thank you for joining today's conference call, during which we'll provide an update on the Tobler incident, as well as a review of our third quarter financial results. Our consolidated financial statements have been presented in accordance with U.S. GAAP. These financial statements have been filed on ADGAR, 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 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. 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 be joined by Michael Sparks, Chief Financial Officer, and Bill McNiven, EVP Operations and Sustainability on today's call. I will now turn the line over to Rod.

Thanks, Alex, and thanks, everyone, for joining us today. I'm going to start today's call with an update on Chirpler, summarising the work completed to date and the key areas of focus going forward. We will then provide an update on the third quarter financial results and operational highlights from Marigold, Seabee and Poona. At Chirpler, we've made good progress on the four key priorities since the incident. These have been, first, the recovery of our missing colleagues, Two, the containment and remediation of the site. Third, the investigation into the root cause of the heap leach failure. And fourth, preparing for the restart of the Chirpillar mine. With respect to our missing colleagues, all nine individuals have been recovered and returned to their families. We are continuing to support the families and the community members impacted by the Chirpillar incident. Second, all of the planned containment infrastructure has been successfully installed and are proving to be effective. Public statements from the Turkish government officials continue to reiterate that there has been no recordable contamination to local soil, water or air in the sampling locations. In partnership with the Turkish authorities, we have continued to progress the remediation at site. The progress has been made to date with over 16 million tonnes of the displaced heap leach material moved into temporary storage locations, including substantially all the displaced material from the Suburli Valley. As part of remediation work and as previously disclosed, the heap leach pad will be permanently closed and no future heap leach processing will take place at Czerpla. We're continuing discussions with the Turkish government officials around the final remediation plan, including the approval and construction of the storage facility, which will permanently store all of this displaced material. The Chirpilla remediation and containment work is estimated to cost between $250 to $300 million and take a total of 24 to 36 months to complete. In the third quarter of 2024, $48 million was spent on remediation activities at Chirpilla, bringing total remediation spend since April 1 to $103 million. Third, on the incident investigation, The initial design of the heap leach facility prepared prior to commencing production in 2010 and each subsequent expansion thereafter was engineered, reviewed and approved by independent third party engineering firms. Throughout the various stages of construction across the life of the heap leach facility, third party reviews were also conducted to ensure conformance with underlying engineering design parameters. The investigations into the cause of the Chirpler incident began shortly after the event. We commissioned independent experts to review the design, construction and operations of the Heapledge facility. To date, this review has not identified any material non-conformance with the construction or operation of the Heapledge facility relative to the third party engineered design parameters. The last point with respect to a potential restart. We continue to work closely with the relevant authorities to advance the required permits for the restart of the Chervla mine. Once all regulatory approvals, including the operating permits, are reinstated, it is anticipated that the initial operations at Chervla could restart within 20 days from that point. So now let's move on to slide four, where Michael will discuss the third quarter results.

Thanks, Rod, and good afternoon, everyone. Third quarter 2024 production was 97,000 gold equivalent ounces at all outstanding costs of $2,065 per ounce, which includes cash, care, and maintenance costs incurred at both Turfler and Seagate, representing approximately $252 an ounce. CB was placed into temporary care and maintenance due to forest fires on August 21st, and operations were subsequently restarted on October 11th. Year to date, Marigold, CB, and Puna have combined to produce 249,000 gold equivalent ounces. During the quarter, we continue to advance brownfield exploration programs at Marigold, CB, and Puna, which Bill will discuss later. Additionally, site establishment and engineering activities at Haughton Madden continue to progress. On to slide five for a brief look at the financial results. We recorded a tributable net income of $0.05 per share in the third quarter, while adjusted net income per share was $0.03, largely reflecting the exclusion of minor tax and foreign exchange gains according to the quarter. As a reminder, we do not adjust for care and maintenance costs, and the full impact of these expenses of both CHRPLR and CB are included in our adjusted net income, including the radiation spend at CHRPLR, Third quarter cash generated by operating activities was negative $1 million, while free cash flow was negative $34 million. We finished the quarter with $334 million in total cash and a net cash position of $104 million and total liquidity of $834 million. With our existing liquidity and an outlook for improved production and free cash flow generation in the fourth quarter, We remain in a strong position financially and are well positioned to manage the remediation costs at Chirpler, as well as continue our reinvestment needs across the business. On to slide seven to discuss the operations, where Bill will start with Marigold.

Thanks, Michael. Marigold's third quarter production of 48,000 ounces was in line with expectations. As the 2024 mine plan calls for, the fourth quarter has the lowest production and highest costs of the year. Marigold remains on track to meet its full-year production guidance of 155,000 to 175,000 ounces. However, we now expect increased full-year costs to predominantly to increase royalty costs and higher than expected maintenance component costs. Of the increase to Marigold's ASIC guidance, approximately 60% is associated with higher royalty costs resulting from the strong gold price in 2024. We expect both of these cost pressures to persist into 2025. Ground-filled exploration and desktop studies at Buffalo Valley advanced during the quarter, as we look to continue to replace mine depletion and potentially further expand Marigold's operating life. Now on to CB. At Seabee, third quarter production of 10,000 ounces reflected the temporary suspension of operations on August 21st due to forest fires in the vicinity of the mine. Thankfully, none of our employees were injured by these fires and the process plant and sand time mine were not materially impacted. While some remote equipment, including power poles, piping and exploration equipment was damaged, Operations were fully restarted on October 11th. Due to the suspension, CB's full year 2024 guidance is now 65,000 to 70,000 ounces at ASIC of $17.25 to $17.55 per ounce. CB continues to focus on evaluating and drilling near mine extensions to existing underground mineralization as well as the continued advancement of the Palki and Palki West targets. The Palki targets represent a potential mine life extension opportunity, and the CB team is aggressively advancing technical studies to better delineate the opportunity. While the surface drilling program was impacted by forest fires in the third quarter, the vegetation cover cleared by the fires had provided our exploration team with new opportunities to evaluate surface targets in the coming field seasons. Now on to Berna. Berna produced 2.9 million ounces of silver in the third quarter, reflecting a second consecutive quarter of record throughputs for the Paquitas Processing Facility. Owing to strong operating results over the last two quarters, Berna is now expected to produce 10 to 10.5 million ounces of silver in 2024, an increase of more than one million ounces of silver on a midpoint basis. While Puna's full year cost expectations are unchanged, the ASIC of 1537 per ounce in the third quarter demonstrated Puna's significant free cash flow margins in the current silver price environment. In addition, exploration and technical work continues to evaluate opportunities to extend operations at Puna through potential extensions at Chinchillas, and continued advancement of the Cotaderas target through near-mine drilling. Now we'll turn back to Rod for closing remarks.

Great. Thanks, Michael, and thanks, Bill. As I mentioned, we set out four commitments following the Chirpler incident. These commitments are important milestones in the path towards a potential restart of the operation. And I mentioned we continue to make good progress on all the fronts. We are looking forward to a strong close to the year at each of Marigold, Seabee and Poona and will continue to advance opportunities to improve our business through operational excellence, initiatives and brownfields growth projects as we move into 2025. As Michael mentioned, we have continued to advance Hod Madden and we expect to provide an update on our anticipated 2025 capital spend at the project with our normal guidance update early next year. To date, our work continues to demonstrate an exceptionally high-quality asset that will be a key contributor to our portfolio going forward. So with that, I'm going to turn over the call to the operator for any questions you may have. Thank you.

Ladies and gentlemen, at this time, we'll begin the question and answer session. To ask a question, you may press star and then one using a touch-tone telephone. To withdraw your question, you may press star and two. If you are using a speaker phone, we do ask that you please pick up your handset prior to pressing the keys to ensure the best sound quality. Once again, in order to ask a question, please press star and one. Our first question today comes from Oves Rabib from Scotiabank. Please go ahead with your question.

Hi, Rod and SSR team. Just a couple of questions from me. Starting off just on the chopler remediation, You've talked about, you know, obviously this temporary storage facility right now, and then obviously you're going to go to a more permanent storage facility at one point. What kind of, you know, I mean, in terms of, you know, you're waiting for, I guess, approvals. What kind of approvals do you need? Are the permits required? Anything else that you need kind of to go forward with that? Any sort of follow-up on that would be appreciated.

Okay, thanks, Avais. Look, I think the pleasing status of where we are right now from a remediation perspective is the key point is substantially all the materials out of Suburly Valley. So that's really the good news. And of course, you know, when the incident happened, we didn't have a final sort of design for what the ultimate storage facility would be, and nor did we expect that we'd have to recreate one. So since that date, we've been... in consultation with the government going through the various options that we had to not only locate the permanent storage facility, but also define it from an engineering perspective, as well as meeting the commitments from the Turkish regulations of what the requirements are for a foreclosure. So all of that work's been ongoing, Obeyes. And the location was chosen, which was good, which is we've termed the storage facility. The engineering has progressed. The discussions are going on with the regulators to ensure that we have met all of the requirements. as well. And remember, this will be the first closure of this type in country. So we're making sure that we're taking all the right steps. And once that's all done, the approvals will be forthcoming. So we do expect that early next year. And then from that point, we'll start the efforts around the construction and then moving the materials in the temporary locations to the permanent one.

Thanks for that, Raj. And just in terms of the EIA, in terms of now you're kind of reverting back, I believe, to the 2012 EIA. And it's kind of talking about 6,000 tons per day versus the 9,000 tons per day that was in the 2021 EIA. Assuming you get all the necessary approvals to restart, would you be looking at a restart at that 6,000 tonnes per day then versus the 9,000? Just some clarity there.

Yeah, that's correct, Obeis. I think the cancellation, as we've disclosed, was an administrative appeal in the courts. There is efforts going on in-country to appeal those cases in conjunction with the appropriate government departments. So that is continuing in the background. But the default position is back to the 2014 EIA, which limits the triple rates to 6,000 tonnes per day. So that'll be the... Assuming all things being equal, as we know it today, that would be the fallback position. And we'll plan on those accordingly. And then in the future, we would... We have to anyway do a EIA refresh in the future, and that will just accelerate those efforts moving into next year.

Thanks for that, Rod. And just a last question for me. In terms of any sort of restart over here, with your discussions that you're having with the regulators, does the restart have to wait till all remediation is complete, or can you restart while the remediation is taking place?

It's not dependent on all of the remediation or other efforts around it. It's the discussions that we've had, and as I sort of mentioned, I think all of the efforts that we've had underway and are currently underway, and some are completed, some are still ongoing, at Chirpeler are really a precursor to those conversations. And as you can imagine, actively... And continually, there's many levels of government that those conversations are continuing to evolve. So it's not necessarily all on the condition that we finish all this work, but it helps while we're having those conversations because we're acting out our commitments to make good post the Chirpler incident. And we'll continue to have the dialogue with the the various government departments to ultimately achieve a restarted CHRPLA.

Perfect. Thanks for that, Rod. That's all my questions.

Appreciate it. Thanks, everyone.

And once again, if you would like to ask a question, please press star and then one. To withdraw your question, you may press star and two. Ladies and gentlemen, in showing no additional questions, at this time we'll close today's question and answer session, as well as today's conference call. We do thank you for joining the presentation. You may now disconnect your lines.