SSR Mining - Earnings Call - Q1 2025

Executive Summary

• SSR Mining delivered a strong start to 2025: revenue of $316.6M and diluted EPS of $0.28, with 103.8K GEO produced and AISC of $1,972/oz (or $1,749/oz excluding Çöpler costs).
• Bold beat versus consensus: Revenue beat by ~$20.5M and EPS beat by ~$0.14; EBITDA also exceeded estimates by ~$6.8M, supported by higher realized gold/silver prices and Puna volumes (consensus values marked * below).
• Liquidity remained robust at $819.6M, with cash of $319.6M after the $100M CC&V upfront payment; integration of CC&V was smooth and aligned with expectations.
• Çöpler restart remains the key uncertainty; management cannot predict timing, and cash care & maintenance continues to burden consolidated AISC.
• Near-term catalysts: CC&V technical report targeted for Q3, continued Hod Maden development ramp and financing work, and progress with Turkish regulators on Çöpler restart.

What Went Well and What Went Wrong

What Went Well

• Seamless CC&V integration with March production of ~11.3K oz at AISC $1,774/oz and consistent operations per plan; management emphasized the “extremely smooth” integration and reserve upside.
• Seabee delivered 26.0K oz at AISC $1,374/oz, aided by continued positive grade reconciliation at Santoy 9; “excellent start to the year” per management.
• Puna posted an “excellent” quarter with 2.5Moz silver, low AISC ($13.16/oz), and strong realized silver prices ($32.47/oz).

What Went Wrong

• Consolidated AISC was elevated at $1,972/oz, reflecting ~$35.8M care & maintenance at Çöpler; even cash care & maintenance of ~$20.6M is included in AISC metrics, pressuring margins.
• Çöpler remains suspended; management reiterated no estimate for timing or conditions for restart, sustaining uncertainty in narrative and consolidated cost metrics.
• Cost metrics per GEO increased year over year (cost of sales per GEO $1,312 vs $1,166; AISC per GEO $1,972 vs $1,569), despite the strong realized metal prices, underscoring care & maintenance drag and mix effects.

Transcript

Operator (participant)

Hello everyone and welcome to SSR Mining's first quarter 2025 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, for opening remarks and introductions, I would like to turn the call over to Alex Hunchak from SSR Mining. Please go ahead.

Alex Hunchak (Head of Investor Relations)

Thank you, Operator, and hello everyone. Thank you for joining today's conference call to discuss SSR Mining's first quarter financial results. Our consolidated financial statements have been presented in accordance with US GAAP. These financial statements have been filed on EDGAR and SEDAR, and they are also available on our website. There is an online webcast accompanying this call, and you will find the information to access the webcast in this afternoon's news release and on our corporate website. Please note that all figures discussed during the call are in US 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 Antal, Executive Chairman, will be joined by Michael Sparks, Chief Financial Officer, and Bill MacNevin, EVP Operations and Sustainability, on today's call. I'll now turn the line over to Rod.

Rod Antal (Executive Chairman)

Great, thanks Alex, and good afternoon to you all. The first quarter results marked a strong start to the year for SSR. All of our operations performed well against our plans, which drove the solid financial results, including nearly $40 million in free cash flow generation. The first quarter also included a month of production from Cripple Creek & Victor as we closed the transaction and formally welcomed the CC&V team into SSR at the end of February. It is pleasing to note that our efforts and planning for this transaction and transition have gone very well. The integration has been extremely smooth so far, and while there is still more work to be done, so far we are encouraged and confident we have added a core asset to the portfolio.

Following the CC&V transaction close, we issued our full year 2025 operating guidance showing a year-over-year increase in production. The guidance also outlined our plans for meaningful investment at Hod Maden as we progress this terrific asset towards a full construction decision. We ended 2025 focused on a strong start to the year through operational delivery, which we achieved, and we will continue to build from this over the remainder of 2025. In addition, we have a number of important priorities and catalysts on the horizon over the next 12 months.

These include the delivery of a technical report and life-of-mine plan for Cripple Creek & Victor, the advancement of Hod Maden towards a construction decision, the continued progress on an updated and extended life-of-mine for Puna towards the end of the decade through the potential layback at Chinchillas and evaluation of the longer-term potential at Cordaderos, the advancement of the Buffalo Valley deposit at Marigold, which now hosts more than 500,000 ounces in its Maiden Reserve, and of course, our top priority is continuing to advance Çöpler to a restart. This is a package of work that we are actively engaging and progressing with regulators and various government departments. This includes the approval of the e-storage facility design, as well as closure and remediation plans for the heap leach pad. We anticipate that once these plans are agreed, we will then seek appropriate permits to restart the operation.

Good progress is being made, and while we remain confident of a restart, I am unable to provide any more detail of when and if these permits will be received. All of these efforts are focused on one key goal, delivering additional value for our shareholders, and I look forward to providing further updates on these initiatives throughout the year. I am going to turn the call over to Michael onto the financial results, which are on Slide Four.

Michael Sparks (CFO)

Thank you, Rod, and good afternoon, everyone. The first quarter of 2025 was well aligned to our expectations, with 104,000 gold equivalent ounces produced at all-in sustaining costs of $1,972 per ounce or $1,749 per ounce excluding costs incurred at Çöpler during the quarter. These results drove operating cash flow of $85 million and free cash flow of $39 million during the quarter. Following the $100 million cash payment made upon the close of the CC&V acquisition, we ended the quarter with $320 million in cash on hand. We also spent approximately $12 million advancing Hod Maden in the first quarter as we progressed engineering and initial site development activities. Brownfield exploration and development work continued at Marigold, CC&V, and Puna, and Bill will provide more details on these initiatives in a few minutes. Now moving on to our financial results on Slide Five.

We recorded a trivial net income of $0.28 per diluted share in the first quarter and adjusted net income of $0.29 per diluted share. Both figures include approximately $36 million in care and maintenance costs at Çöpler during the quarter, as these costs are not adjusted for under SEC rules. As previously noted, first quarter free cash flow of $39 million was a strong result to start 2025. This strong free cash flow generation maintains our total liquidity position of over $800 million. With continued free cash flow generation forecasted through 2025, we remain in a very strong position financially and are well positioned to manage all capital requirements across the business. We have plenty of work in front of us, but we are proud of the strong start to the year and look forward to building on this momentum in the coming months.

Now, if you turn to Slide Seven, I'll hand over to Bill.

Bill MacNevin (EVP Operations and Sustainability)

Thanks, Michael. It was a great start to the year, and I want to walk through some of the successes at each of our operations. First, though, I will start with a brief refresh on our 2025 guidance as shown on this slide. We expect to produce between 410,000 and 480,000 gold equivalent ounces this year at an AISC of $2,090-$2,150 per ounce, or $1,890-$1,950 per ounce when excluding care and maintenance costs at Çöpler. This production forecast is a 10% increase over 2024 on a midpoint basis and includes 10 months of production from CC&V. Our guidance also includes an initial capital spend forecast of $60 million-$100 million for Hod Maden as we advance the project toward a construction decision. Now let's move on to Slide Eight for operational updates, starting with Marigold.

Marigold produced 39,000 ounces in the first quarter at an AISC of $765 per ounce, a solid start to the year with grades to trend upwards towards the end of the second quarter, delivering strongest production in Q3 and driving a 55%-60% H2 weighted production profile. Sustaining capital trended below expectations in Q1, with this spend now expected in the second quarter. We are continuing to focus our exploration and growth efforts on oxide mineral reserve additions at Buffalo Valley and New Millennium. We look forward to providing further updates on these initiatives as they progress. Now on to CC&V on Slide Nine. I want to start by acknowledging the hard work from our teams that helped enable a very successful start to the integration process for CC&V.

It is a pleasure to bring a team of this caliber into our portfolio, and we are continuing to integrate the asset into our portfolio as we plan for the future. A trivial first production from CC&V covers the month of March following the transaction's close. Production in March was 11,000.3 ounces at an AISC of $1,774, aligned with our expectations. Inclusive of the January and February production, CC&V produced 39.3 thousand ounces of gold in Q1. As a reminder, you might report CC&V mineral reserves of 2.4 million ounces as of the end of 2024 in their year-end results. This is an 85% year-on-year increase. This expanded reserve demonstrates the potential upside of what we believe will be a long-lived and significant contributor to our portfolio for many years to come.

To that end, we're advancing technical work to inform an updated life-of-mine plan and accompanying technical report for CC&V. With a large existing reserve, setting the stage for a long mine life at CC&V. These initiatives will help further define and showcase some of the upside we identified during the due diligence process. Now on to Seabee. Seabee had an excellent start to the year, producing 26,000 ounces at an AISC of $1,374 per ounce as a result of continued positive grade reconciliation in the Santoy 9 ore body. While grades averaged 9 grams per ton in Q1, we expect this to be normalized towards reserve grades for the remainder of the year and have left full year guidance assumptions unchanged as a result. The recent grade outperformance has certainly been welcome.

We should not diminish the hard work our teams have put in to drive continuous improvement at the asset as we seek to deliver improved underground productivity and maintenance practices going forward. With respect to growth and exploration, we are continuing to advance drilling campaigns at both Santoy and Porky targets as we evaluate potential opportunities to extend the mine life at CB. This work has been productive so far, and we look forward to providing further updates with our year-end reserves and resources. Now on to Puna, Slide 11. Puna produced 2.5 million ounces of silver in the first quarter at an AISC of $13.16 per ounce, an excellent result to start the year. Our current focus at Puna is on mine life extension opportunities, particularly on layback at Chinchillas to support near-life mine extension deeper into the decade as we advance engineering work on the Cordaderos target.

Puna has been an exceptional contributor to our portfolio, and we're keen to see its continued production and growth for many years to come. On Slide 12, Turkey. At Hod Maden, we spent approximately $12 million on initial site establishment efforts and technical work in the quarter, while infill drilling also continues at site with the aim of de-risking the first four years of the mine. Simultaneously, we continue to progress efforts on financing options for Hod Maden as we approach a construction decision. As Rod mentioned, we have continued to advance discussions with regulators and various government departments around the potential restart of operations at Çöpler . In the meantime, care and maintenance costs have remained aligned with guidance, and we spent approximately $5 million in the first quarter on remediation and reclamation activities. Overall, a lot of positive efforts and progress in Turkey to start the year.

Now I will turn back to Rod for closing remarks.

Rod Antal (Executive Chairman)

Right, thanks, Bill. Thanks, Michael. We ended 2025 with a focus on operational delivery as we continue to rebuild our track record of being a reliable producer and adding shareholder value through various initiatives. As you have heard, we are pleased with our results out of the gating quarter one, and we'll build on this momentum over the course of the year. We're thrilled that we have closed and integrated CC&V into SSR, with this steady production and cash flows expected to contribute meaningfully to our business for many years to come. Overall, our business is in excellent shape, and we are focused on delivering on a number of operational improvements and growth initiatives during the year. We believe the company has significant upside and look forward to progressing the various drivers to realize this potential during 2025.

With that, I'm going to turn the call over to the operator for any questions you may have. Thank you.

Operator (participant)

Thank you, Mr. Antal. We will now begin the question and answer session. To join the question queue, you may press star, then one on your telephone keypad. You will hear a tone acknowledging your request. If you're using a speakerphone, please pick up your handset before pressing any keys. To withdraw your question, please press star, then two. The first question comes from Cosmo Xu with CIBC. Please go ahead.

Cosmo Xu (Analyst)

Hi, thanks, Rod and team. Maybe my first question is on Cripple Creek & Victor here. Congrats on closing the deal. I know we kind of touched on it, but I'm just wondering, you know, what's the next steps in terms of what you can show us, what you can do at Cripple Creek & Victor? I know you're going to spend the next 12 months in terms of a new life-of-mine plan, but as you mentioned, it's increased more than 80% in terms of reserves to 2.4 million ounces. I'm just wondering how, you know, between now and the next 12 months, how we can use some of this information that's been given to us in terms of how we can optimize the model that we've built into your valuation.

Rod Antal (Executive Chairman)

Yeah, good question, Cosmo. I'm going to pass over to Bill for some comments, and then if there's anything else, I'll wrap it up.

Bill MacNevin (EVP Operations and Sustainability)

Yeah, after that

Cosmo Xu (Analyst)

Hi, Bill.

Bill MacNevin (EVP Operations and Sustainability)

One of the key things that is part of our first piece of work, we obviously are collecting a lot more information. Key to that, we're compiling and we're going to build out that new life-of-mine report, and most importantly, a technical report. That technical report will have our best understanding where we currently stand. At the same time, we'll be continuing a lot more work looking at what we can do with the business in the future. In terms of handing something across, that technical report later this year will be our best and most immediate update.

Cosmo Xu (Analyst)

When's that? What's the timing of that technical report? If there's a timing at this point in time?

Bill MacNevin (EVP Operations and Sustainability)

Yeah, we're working to get that out in Q3. That is when we'll be pulling that together. Everyone's feverishly working away at the moment and obviously engaging with the site team and gathering more information face to face. That is helping immensely. We look forward to getting that out to everyone.

Rod Antal (Executive Chairman)

Yeah, I think, Cosmo, the truth is we're well aware that when we acquired the asset and have acquired the asset now, of course, that there's a bit of a dearth of information in the market around CC&V, given Newmont hadn't published a technical report on the asset for many, many years. That's really been the priority for us to reacquaint the market with the asset, but on the back of publishing a new tech report. It feels like a long time, but it's not. I think it's important we take the steps Bill's outlined to really demonstrate what we see as a deep value for the asset moving forward. As you rightly point out, you know, I think the new reserve basis that Newmont published just before their transaction closed should drive a level of excitement for its potential.

I think beyond that, you know, that's our job is to keep on describing what other value we think we might be able to eke out of the asset moving forward. Early days, things have gone really well, as we mentioned, and nothing that we've seen so far has really disappointed us.

Cosmo Xu (Analyst)

Yeah, I'm just, I guess the genesis of my question is that I've seen other companies, some of your competitors that have also acquired assets from Newmont. Broadly speaking, they talk about different areas where they can optimize. I'm just wondering if, broadly speaking, I know the actual numbers won't come out until later on in hopefully Q3, as you mentioned, but broadly speaking, are there areas that we can focus on, that we should focus on, that you can share with us, or maybe not at this point in time?

Rod Antal (Executive Chairman)

I think right now, of course, I think it's just that we'll leave it as is as an open question.

Cosmo Xu (Analyst)

Understood.

Rod Antal (Executive Chairman)

Mainly because I think what you've described is in other cases where assets are a little bit better understood. We're obviously in that regard a little bit further behind because of the other publications around Cripple Creek in the market. We're going to catch that up. I think, you know, for us to be able to take it over, work through all the technical detail for our team and our CPs to be able to sign off on that in the timeframe that Bill's talking about, it's pretty fast. That's really a priority for us.

Cosmo Xu (Analyst)

Yeah, I perfectly understand. Maybe switching gears to Turkey, Hod Maden. As you mentioned, you spent $12.2 million in development CapEx in Q1. Your target's $60 million-$100 million. Could you maybe talk about the velocity of the increase that we're expecting? I guess number one, $60 million-$100 million, that's a fairly large range. That's number one. If I look at it, if I were to annualize $12.2 million, I get to the lower end, but I don't think I should do that. Maybe if you can talk about how we should look at the potential velocity of increase.

Rod Antal (Executive Chairman)

Yeah, look, I think the progress that we're making at site at the moment is we're actually tendering out some of the early works around the infrastructure. That is progressing well. Once those contracts are let, these are civil works and tunnel access, et cetera, into site, the spend will escalate accordingly beyond the sort of $12 million in the quarter, which has been primarily owners' costs and engineering fees. That'll start to ramp up, particularly from Q3 onwards, Cosmo, as we start to execute that contract. You know, if we let them now, there's still that sort of lag by the time folks get mobilized and contractors get mobilized, but that'll start to really uplift itself in quarter three, quarter four.

I think we did leave that range in there mainly around the timing of that ramp up, but as we move through the year and we get a bit more fidelity around it, if we need to tighten that up, we will be coming into quarter three. Things are progressing quite well there, actually.

Cosmo Xu (Analyst)

Maybe a follow-up. As you mentioned, you know, with the work that you're doing, you're trying to get more confidence, at least around the first four years of production. As you talked about the technical report for Cripple Creek & Victor, for Hod Maden, there is a technical report as well dated 2022, I believe. I guess my question is, number one, you know, the first four years, are you trying to gain more confidence around what was disclosed in that most recent feasibility study? Number two, should we still use that feasibility as a basis in terms of the economics around Hod Maden?

Rod Antal (Executive Chairman)

Yes. The work we're doing, I think we sort of described it after we acquired the asset, was more around ensuring that we had the fidelity in the infill drilling, particularly in those early years because they're important from an economic return perspective, but also from us being able to describe to the market, you know, what the early years of production will be. That's what we spent a lot of time on, shoring up the flow sheets around that work with the drilling that we've got, the engineering, and all of the other pieces that go with it. That has continued. At the moment, yes, I would suggest using 2022 as still your basis. It's the best basis out there.

As we obviously get closer to making a project decision, we'll get closer to then republishing the tech report with all the outcomes of that work and also progressing the financing options around the project. The other thing, though, that we did note on the acquisition, Cosmo, was the inflation that we'd been experiencing in Turkey with the project. As you rightly point out, the last project estimate was 2022. You know, we're now three years beyond and four years by the time we get to this year. What we suggested and guided folks to do was to compound it at sort of a 10%-15% inflation rate to the capital number to bring it up to today's dollars. We haven't seen any relief from that inflationary pressure either. I think that's still valid.

Cosmo Xu (Analyst)

Great. Yeah, I think we've inflated our numbers as well as suggested. Maybe one last question, as you mentioned, you know, Hod Maden's in Turkey, Çöpler is also in Turkey. Maybe I'm just, I don't know if you can answer this, Rod, but is there any kind of connection in terms of those two in terms of a potential restart at Çöpler and how there is any kind of connection to what might be a construction decision at Hod Maden, or are they completely separate?

Rod Antal (Executive Chairman)

No, we've purposely kept them separate because that's the way we would have run the project anyway, to be honest with you. You know, this is a greenfields project, as you know. It's not a brownfields project. It's not a natural extension of Çöpler as we did with the sulfide project, for instance. It was actually set up that way and purposely set up that way at any rate. You know, it has its own project team. It has its own infrastructure. There are some linkage points into the anchor routine in terms of, you know, HR, finance, community relations, and other things. Beyond that, the project's sort of considered a Greenfields project of sorts. We had structured it that way anyway. As it turns out, when we think about Çöpler and Hod Maden, we consider them separately.

There's no link to them from a government perspective. There's no link to them in terms of the success of us getting the permits to restart Çöpler. They're sort of both marching on their own drumbeat with different priorities and different sense of urgency. That's how we're running it. Of course, as time goes on and Hod Maden goes into construction and goes through its normal construction phases, there'll be more of an integration into the current infrastructure we have around the Anagol team for taking it over because ultimately, you know, we'll leverage off that overhead we've already got set up in country. At this stage, there's a separate project team set up.

Cosmo Xu (Analyst)

Great. Thanks again, Rod, Bill, Michael, and Alex. Those are all the questions I have. Thank you.

Rod Antal (Executive Chairman)

Thanks, Cosmo.

Operator (participant)

This concludes the question and answer session and today's conference call. You may disconnect your lines. Thank you for participating and have a pleasant day.