SSR Mining's Q2 2024 Financial Results and Çöpler Mine Recovery Update
SSR (SSR) Share Update July 2024 Wednesday 31st
SSR Mining Reports Second Quarter 2024 Results Amid Çöpler Incident Recovery
SSR Mining Inc. (Nasdaq/TSX: SSRM, ASX: SSR) has announced its financial results for the second quarter of 2024, alongside an update on the recovery efforts following the February 13, 2024 incident at the Çöpler mine in Türkiye.
Instant Summary:
- Second quarter 2024 production: 76,102 gold equivalent ounces.
- Cost of sales: $1,357 per payable ounce; AISC: $2,116 per payable ounce.
- Çöpler mine incident recovery: All missing colleagues recovered, ongoing remediation efforts.
- Total cash: $358 million; total available liquidity: $850 million.
- Full-year 2024 production guidance: 340,000 to 380,000 gold equivalent ounces.
Çöpler Incident Update
The primary focus following the Çöpler Incident was the recovery and return of the missing colleagues. All nine individuals have now been recovered, and SSR Mining continues to support the affected families and community members. Several containment measures were implemented immediately after the incident, including the installation of a grout curtain, coffer dam, and buttress, along with pumping systems and the Sabırlı Creek diversion. Turkish authorities have confirmed no recordable contamination to local soil, water, or air.
Over 13 million tonnes of displaced heap leach material have been moved since the incident, with more than 9 million tonnes relocated from the Sabırlı Valley. The cost of site remediation is estimated between $250 to $300 million, with $55 million spent in the second quarter. Investigations into the incident's cause are ongoing, and SSR Mining is cooperating fully with Turkish authorities. Independent reviews have not identified any material non-conformance with the heap leach pad's design and operation.
Financial Results
In the second quarter of 2024, SSR Mining produced 76,102 gold equivalent ounces at a cost of sales of $1,357 per payable ounce and an all-in sustaining cost (AISC) of $2,116 per payable ounce. The company's net income for the quarter was $9.7 million, or $0.05 per diluted share, while adjusted net income was $7.5 million, or $0.04 per diluted share. Operating cash flow was negative $78.1 million, and free cash flow was negative $116.3 million.
SSR Mining's cash and cash equivalents totaled $358.3 million as of June 30, 2024, with a net cash position of $128.4 million. The company also has an undrawn revolving credit facility, providing total liquidity of $858.4 million.
Operational Highlights
Marigold operations produced 25,691 ounces of gold in Q2 at a cost of sales of $1,542 per payable ounce and an AISC of $2,065 per payable ounce. Seabee operations produced 16,709 ounces of gold at a cost of sales of $1,150 per payable ounce and an AISC of $1,626 per payable ounce. Puna operations produced 2.7 million ounces of silver at a cost of sales of $16.10 per payable ounce and an AISC of $15.19 per payable ounce.
Full-year 2024 production guidance remains unchanged, with expectations of producing 340,000 to 380,000 gold equivalent ounces from Marigold, Seabee, and Puna.
The Çöpler Incident has had a significant impact on SSR Mining's operations and financial performance. The recovery and remediation efforts have been costly, but the company's strong liquidity position and ongoing cash flow generation from other operations provide a buffer. The incident's long-term impact will depend on the successful completion of remediation work and the resumption of operations at Çöpler.
Investor Reaction:
Analysts are likely to have mixed reactions to SSR Mining's Q2 results. While the production and cost metrics are in line with expectations, the ongoing costs and uncertainties related to the Çöpler Incident may weigh on investor sentiment. The company's strong liquidity position and unchanged full-year guidance are positive signs, but the market will be closely watching for updates on the Çöpler mine's recovery and restart plans.
Conclusion:
Investors should keep a close eye on SSR Mining's progress in recovering from the Çöpler Incident and its ability to meet full-year production guidance. The company's strong financial position provides some reassurance, but the long-term impact of the incident remains uncertain. Staying informed about further updates and developments will be crucial for making informed investment decisions.