SSR Mining reports consolidated financial results for the first quarter ended March 31, 2024, as well as an update on the February 13, 2024 incident at the Çöpler mine.
According to the report, cleanup of the Çöpler site will take 24-36 months
Our primary focus at Çöpler continues to be the return of our missing colleagues to their families. Following the recovery of four of our missing colleagues, recovery efforts for the five remaining individuals continue. 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 4.2 million tonnes from the Sabırlı Valley.
SSR Mining currently expects the completion of the removal of all displaced heap leach material resulting from the Çöpler Incident out of the Sabırlı Valley and into temporary storage locations in the third quarter of 2024. Concurrently, containment efforts have been completed alongside the removal of the displaced material with the installation of a grout curtain, coffer dam and buttress as well as the ongoing installation of pumping systems and diversion channels in the Sabırlı Valley.
In parallel with the recovery and containment work, the Company is progressing a remediation plan following comprehensive consultation and evaluations with various Turkish government agencies, ministries, independent experts and external consultants. The remediation plan will be submitted for government approval in the second quarter of 2024 and will include, among other things, the construction of a permanent storage facility for the displaced heap leach material. The design of the storage facility is capable of containing the approximately 18 to 20 million tonnes of displaced material in an area referred to as the East Storage Facility.
The remediation work is expected to cost between $250 to $300 million on a 100% basis, in addition to the approximately $22.5 million incurred as of March 31, 2024. The remediation efforts are expected to be implemented over a period of 24 to 36 months. With a total cash position of $467 million at the end of the first quarter 2024, ongoing cash flow from three operations, and access to an additional $400 million revolving credit facility, the Company remains well positioned to fund these remediation commitments.
As part of the remediation plan, the heap leach pad will be permanently closed and no further heap leach processing will take place at Çöpler. In order to restart the operations, the Company will require the necessary operating permits and approvals. Once all necessary regulatory approvals, including the Environmental Impact Assessment (EIA) and operating permits, are reinstated, it is anticipated that initial ore processing at Çöpler will occur exclusively through the sulfide plant, which will process stockpiled material while Çöpler’s mining team remains focused on completing the recovery and remediation work. As of the end of 2023, sulfide stockpiles totaled 10.8 million tonnes of ore at a grade of 2.0 grams per tonne gold, or approximately 706,000 contained ounces. At this time, the Company is not able to estimate when and under what conditions operations will resume at Çöpler.
In the first quarter of 2024, SSR Mining produced 101,873 gold equivalent ounces at cost of sales of $1,166 per payable ounce and AISC of $1,569 per payable ounce, which includes care and maintenance costs incurred at Çöpler. Excluding any production from Çöpler, and in line with existing guidance, SSR Mining expects Marigold, Seabee and Puna will produce a consolidated total of 340,000 to 380,000 gold equivalent ounces in 2024.
More information related to the Çöpler Incident is included in the Company’s Annual Report on Form 10-K filed on February 27, 2024 and in the Company’s Quarterly Report on Form 10-Q filed on May 8, 2024. Further updates on the Çöpler Incident, as and when available, will continue to be provided through press releases and posts to the Company’s website.
First Quarter 2024 Summary:
- Çöpler Incident: On February 13, 2024, the Company suspended operations at Çöpler as a result of a significant slip on the heap leach pad.
- Operating results: First quarter 2024 production was 101,873 gold equivalent ounces at cost of sales of $1,166 per payable ounce and AISC of $1,569 per payable ounce. Production from Marigold was 34,680 ounces of gold at cost of sales of $1,331 per payable ounce and AISC of $1,430 per payable ounce. At Seabee, production was 23,773 ounces of gold at cost of sales of $859 per payable ounce and AISC of $1,416 per payable ounce. Puna produced 1.9 million ounces of silver at cost of sales of $16.87 per payable ounce and AISC of $15.61 per payable ounce. Combined, these three assets produced 80,046 gold equivalent ounces in the first quarter of 2024, in line with expectations.
- Financial results: Attributable net loss in the first quarter of 2024 was $287.1 million, or $1.42 per diluted share, reflecting approximately $272.9 million in incurred and anticipated reclamation and remediation costs, $114.2 million in non-cash impairment charges, and approximately $15.3 million in contingency and other costs related to the Çöpler Incident. Adjusted attributable net income in the first quarter of 2024 was $22.5 million, or $0.11 per diluted share. In the first quarter of 2024, operating cash flow was $24.6 million, or $32.3 million before working capital adjustments, and free cash flow was negative $9.4 million, or negative $1.8 million before working capital adjustments.
- Cash and liquidity position: As of March 31, 2024, SSR Mining had a cash and cash equivalent balance of $467.0 million and a non-GAAP net cash position of $236.2 million. In addition, at the end of the first quarter 2024, the Company had no borrowings outstanding on its $400 million revolving credit facility.
- Marigold operations: Gold production was 34,680 ounces in the first quarter of 2024 at cost of sales of $1,331 per payable ounce and AISC of $1,430 per payable ounce. As planned, first quarter 2024 results included increased waste stripping to support near-term development activities at Red Dot, which is a key focus for 2024 and 2025. Marigold’s 2024 production remains approximately 70% weighted to the second half of 2024.
- Seabee operations: Gold production was 23,773 ounces in the first quarter of 2024 at cost of sales of $859 per payable ounce and AISC of $1,416 per payable ounce. Milled grades of 6.5 g/t in the quarter included the processing of some material stockpiled from the fourth quarter of 2023, and grades are expected to average between 5.0 and 6.0 g/t for the remainder of the year.
- Puna operations: Silver production was 1.9 million ounces in the first quarter of 2024 at cost of sales of $16.87 per payable ounce of silver and AISC of $15.61 per payable ounce of silver. Production in 2024 remains 55% weighted to the second half of the year, largely driven by grades that are expected to peak in the fourth quarter.
- Hod Maden: During the first quarter of 2024, development activities at Hod Maden were temporarily reduced as the Company’s staff in Türkiye focused on the Çöpler Incident. The Company has continued to advance engineering, execution planning activities and technical studies for the project. More details on the projected timelines for Hod Maden will be provided at a later date.
