SSR Mining Inc

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SSR Mining Inc

Q3/17 Production Results – Slightly Below Expectations

Our Conclusion

SSRM reported Q3 production below our expectations. SSRM reported gold production of 56,757 ounces vs. our expectation of 65,000 ounces and down 26% QoQ. So what happened? Lower grades were stacked at Marigold resulting in lower production, while Seabee was partially impacted by some wild fires. We knew of both events but actuals still came in below our expectations.

Despite a weaker Q3, we expect full-year gold guidance of 280,000-300,000 ounces to be achievable. We are currently modelling Q4 production of 71,000 ounces to meet the lower end of guidance. We expect Q4 to benefit from previously stacked tonnes at Marigold, and
continued operational improvements at Seabee.

SSRM remains one of our top picks, recent tours have showcased the exploration upside at Seabee, and Marigold continues to be a significant cash flow generator.

What’s The Event?

At Marigold, given the leach kinetics of a dump leach operation, it is always challenging to directly calculate production from tonnage stacked within the timeframe of any single quarter. With that said, in Q3, Marigold stacked 7.162M tonnes at 0.31 g/t on the pad, with a
disclosed gold recovery of 72%. These numbers would usually point to a higher production level than the 38,699 ounces reported in Q3. We expect some of these stacked ounces to benefit future quarters.

At Seabee, the head grade was lower at 7.03 g/t in Q3 (vs. the 7.97 g/t in Q2). As stated by the company, underground mining activities at Santoy experienced operating interruptions as a result of forestfire- related power outages and smoke ingress. We expect grades to
improve in Q4. The reserve grade at the mine is 8.19 g/t.

As for the balance sheet, SSRM indicated that during Q3 (and in Oct.), the company sold 7.9M shares of Pretium for C$85.4M. SSRM continues to hold 9.04M shares.