Prepared remarks
Hello, everyone, and welcome to SSR Mining's Third Quarter 2025 Conference Call. This call is being recorded. At this time, for opening remarks and introduction, I would like to turn the call over to Alex Hunchak from SSR Mining. Please go ahead.
Thank you, operator, and hello, everyone. Thank you for joining today's conference call to discuss SSR Mining's Third Quarter Financial Results. Our consolidated financial statements have been presented in accordance with U.S. 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 U.S. dollars unless otherwise indicated. Today's discussion will include forward-looking statements, so please read the disclosures in 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 will now turn the line over to Rod.
Great. Thanks, Alex, and good afternoon to you all. Our third quarter results have us tracking to close out the year in the lower half of our production guidance, where we continue to expect a stronger fourth quarter. Our full year all-in sustaining costs are trending towards the high end of annual guidance, and this is largely due to the impacts of higher gold prices on royalties as well as the share price performance over the year-to-date impacting share-based compensation calculations. Generally, the third quarter results were in line with our expectations. Before working capital adjustments, we generated $72 million of free cash flow, and we maintain a very healthy cash and liquidity profile to support the continued investment in growth opportunities across the business. We also made great progress on a number of other initiatives in the quarter. The Cripple Creek & Victor technical report should be ready for publication in the coming weeks. This will provide our initial view of the potential at Cripple Creek, where the technical report will feature mineral reserves that are aligned with the already in progress Amendment 14 expansion permit. At Hod Maden, we have now spent $44 million advancing the project this year and remain on track for our full year growth capital guidance of $60 million to $100 million. A key milestone of the work this year will be the comprehensive update included with the new technical report. This will form the basis of the project and construction decision in the coming months. To this end, Hod Maden remains one of the most compelling undeveloped copper-gold projects in the entire sector and work completed to date reinforces our view of extremely attractive asset returns. Across the rest of the portfolio, we have continued to make great progress in advancing organic development projects, including Buffalo Valley at Marigold, Porky at Seabee and Cortaderas at Puna. We're seeing some very encouraging results from the summer drill campaigns across all of these targets, where we hope to emulate the initial success of adding the initial three years of mine life extension at Puna. Bill will speak more of this later in the call. And lastly, we continue to make good progress at Çöpler and remain fully committed to a restart. We are in close communication with the relevant government authorities as we seek approvals to bring the mine back online. Overall, it was a solid quarter and as expected with good progress made on a number of initiatives across the portfolio. So now I'm going to turn the call over to Michael to bring you through the quarter three financials, starting on Slide #4.
Thank you, Rod, and good afternoon, everyone. In the third quarter, we produced 103,000 gold equivalent ounces at an all-in sustaining cost of $2,359 per ounce or $2,114 per ounce, excluding costs incurred at Çöpler during the quarter. For the full year, production of 327,000 gold equivalent ounces is in line with plan, and we are on track to finish within our full year guidance of 410,000 to 480,000 gold equivalent ounces, albeit in the lower half of that range. As Rod noted, higher-than-forecasted royalty costs and share-based compensation, coupled with production in the lower half of guidance is pushing our AISC towards the top end of our full year cost guidance range. We ended the quarter in a strong financial position with $409 million in cash and total liquidity of over $900 million. Our strong balance sheet ensures capacity to fund our numerous growth initiatives across the portfolio, which includes Hod Maden, where we incurred another $17 million in capital during the quarter. We are very excited about the progress of Hod Maden and look forward to sharing an updated life of mine plan and construction decision for the project in the coming months. Let's move on to our quarterly financial results on Slide 5. In the third quarter, we sold 105,000 gold equivalent ounces at an average realized gold price above $3,500 per ounce. Net income attributable to SSR Mining shareholders was $65.4 million or $0.31 per diluted share, while adjusted net income was $68.4 million or $0.32 per diluted share. As highlighted in the table, free cash flow in this quarter was impacted by working capital movements, particularly inventory movements at Marigold and CC&V as well as prepayments associated with development activities at Hod Maden. Accordingly, free cash flow before changes in working capital was $72 million, highlighting our strong margins despite continued investment in growth initiatives across the portfolio. Now over to Bill for an update on the operations, starting on Slide 6.
Thanks, Michael. I'll first start with EHSS. We continue to advance initiatives aimed at ensuring our purpose and values are reflected in everything we do. I'll share some examples of this. We've seen improvements in how we're applying risk review and mitigation in both our planning and field execution. There's also been great progress on integrating progressive closure into our life of mine plans, which has the potential to reduce overall cost to the business. Now on to Slide 7 for Marigold. In the third quarter, Marigold produced 36,000 ounces of gold at an AISC of $1,840 per ounce. These results were in line with plan, and we continue to expect a strong fourth quarter, albeit slightly below our initial expectations for the period. As we have advanced mining at Red Dot Phase 2, we have encountered a consistent grade profile aligned with our internal models. However, the ore has had more fines than expected, resulting in the need for additional blending to ensure pad recovery performance. Our technical teams at both Marigold and CC&V have been working collaboratively this year to improve ore body knowledge, focusing on processing planning. Through these efforts, we're improving our approach to ore blending at Marigold to ensure that we appropriately deal with the final ore we are encountering. With respect to growth, we're advancing work on the Buffalo Valley deposit with the goal of fully integrating the project into the Marigold life of mine plan. This work is progressing positively so far, and we expect Buffalo Valley will provide a meaningful mine life extension opportunity for Marigold and potentially complement our Mineral Reserve growth at New Millennium. Now on to Slide 8 for CC&V. CC&V had a solid quarter, producing another 30,000 ounces of gold with an AISC of $1,756 per ounce. Key to highlight is the mine has now generated nearly $115 million in asset-level free cash flow since acquisition, an incredible result given the $100 million in upfront consideration we paid to the asset earlier this year. The CC&V technical report is well on track for completion within the fourth quarter, and we're excited to showcase the initial mineral reserve life of mine plan, for which CC&V has clearly established itself as a core operation in our portfolio. We expect this technical report will showcase a 10-plus year life of mine and also highlight significant mineral resource upside to further extend the mine life. The key bottleneck to converting these mineral resources to reserves is the advancement of permitting for additional heap leach capacity. Our teams are working hard to set us on the right path for success for decades to come. Now on to Seabee. Seabee had a challenging quarter, producing 9,000 ounces at an AISC of $3,003 per ounce. These results reflected our continued focus on underground development as we noted in quarter two as well as some lower grades than expected. We expect production to improve incrementally in the fourth quarter, but we remain focused on prioritizing underground development into year-end as we aim to improve available stope inventory moving forward. Work at Porky targets continues, and we had some good success with the drill this summer as we aim to improve confidence in the existing mineral resources at the project and also test further opportunities for growth. We're excited about the potential here and look forward to providing updates to the market next year. On to Puna on Slide 10. Puna continued its track record of solid performance in the third quarter, producing 2.4 million ounces of silver, at an AISC of just $1,354 per ounce. With the initial extension to Chinchillas operations announced in the third quarter, we are working to advance other opportunities to extend mining at Chinchillas while also continuing to evaluate the Cortaderas target. We're excited about the potential here, and we'll provide further updates as warranted. On to Slide 11. Lastly, at Hod Maden, we spent $17 million on engineering and site establishment work in the quarter. Year-to-date, we have spent $44 million advancing preconstruction activities of the project and remain on track for our full year guidance range of $60 million to $100 million in growth capital. Our technical teams have continued to advance an updated technical report for the project as we move towards a construction decision in the coming months. The results continue to demonstrate an incredibly compelling project that could represent one of the highest margin projects in the sector once in production. We look forward to providing more detail on these initiatives to the market in the coming months. Now I'll turn back to Rod for closing remarks.
Great. Thanks, Michael. Thanks, Bill. Progress in the quarter was solid on a number of fronts, and we're well positioned for a strong close to the year with consolidated production aligned to our full year guidance. We're making great progress at key projects across the portfolio and with updated technical reports for Cripple Creek & Victor and Hod Maden on the horizon, where we are keen to showcase a bright future for each of those assets and their upside potential. And of course, with continued efforts towards a restart of Çöpler, we firmly believe SSR Mining still represents a compelling value proposition moving forward. So with that, I'll turn the call over to the operator for any questions.
Questions and answers
The first question comes from Ovais Habib with Scotiabank.
Congrats on a pretty good quarter. A couple of questions from me. Just first one, starting off with your expectations of Q4. As you guys said, Q4 is expected to be a strong quarter. Is this basically strength coming from Marigold and CC&V? And then just a follow-up question to that, in terms of Marigold and the fines you are encountering at Red Dot, based on how much you can blend, could some of that production expected in Q4 spill into Q1 of next year?
Thanks, Ovais. I'll address some of your questions, and Bill and Michael may also add their insights. Regarding your first question about the fourth quarter, yes, that is correct. The improvement primarily comes from Marigold. As we've mentioned before, a stronger fourth quarter was anticipated to differentiate it from the third quarter. Cripple Creek will maintain the same performance as you've previously seen. As for your question about the fines, we definitely need to manage them differently in terms of their placement and ensure we have more durable material available for blending. We are currently working on how to optimize results for Marigold in the last quarter by managing ore placement. When durable ore isn't available, we will place it on the upper parts of the leach pad. Conversely, where durable ore is available, we're stacking it on the new leach cell that Bill referenced last quarter. This strategy will be crucial for finishing strong at Marigold in the fourth quarter.
At Seabee, the grade was lower than expected. Was this due to a negative reconciliation issue, or were you unable to access the stope or stopes you intended to mine in Q3? I did not fully grasp the reasoning behind the lower grade.
I'll hand that one over to Bill.
Yes, Ovais, Seabee had a successful quarter, with an increase in our development efforts, which is our main focus. We have more stope material available now. However, we also received a larger portion of material from the Gap Hanging Wall, and some of that came in at a lower grade than we anticipated. This can occur at times, but these were the main factors.
And based on the development that you've done, obviously, you're expecting a better kind of Q4 and better understanding of the stopes that you have in hand kind of going into 2026?
Yes. We still have a lot of development focus ahead of us for Q4 as well. We will continue to work diligently in both Gap Hanging Wall and Santoy to maximize the ore body. There were no surprises in what we found.
I have one last question regarding Çöpler. Rod, you mentioned that discussions with the regulatory bodies are progressing. Is the focus primarily on remediation or restarting operations? I'm assuming you're working hard on the restart, but I'm also trying to understand if there is any community support you are receiving that might encourage the regulators to reach a decision as we move towards 2026.
Yes, it's less about the last part of your question, Ovais. If you take a step back since the incident, our initial focus was on securing the site and reuniting our lost team members with their families. We then transitioned to remediation, which primarily involved clearing out the Sabirli Valley, and that has been completed. Over the past six months, our efforts have centered on providing all necessary technical information to the regulators for the approval of the storage facility and finalizing the closure of the heap leach pad. This has followed a normal sequence of events. We've been in continuous dialogue with the regulators since day one of the incident. We're now finalizing some technical elements for the regulators to approve, which is crucial for obtaining permission to resume operations. Recently, there has been an increase in public support for reopening, with many local leaders expressing their backing through various media. This uptick seems to have happened naturally, as the local community is feeling the economic impact of the mine being closed. While it does help, this community support isn't the primary factor driving the government's approval.
The next question comes from Don DeMarco with National Bank Financial.
First off, yes, encouraging to hear what you just mentioned about the high level of public support for the reopening. But to my first question, I think I'll turn to Hod Maden. Of course, as you mentioned, there's a go-forward decision that's pending in the coming months. Looking at the guidance, you've reiterated guidance, but it seems like you might be tracking the low end of the range. Are there any items that may have been in the scope this year that's going to be carried into 2026?
You're talking in particular in terms of the spend of Hod Maden.
Yes, that's right. You're at $44 million year-to-date. I think guidance is $60 million to $100 million. So it seems that you're on a pace to kind of hit the lower end of that range.
I believe that we will likely end up near the midpoint of our guidance range. There’s a typical ramp-up in spending, which is expected. However, the committed spending for the work we aimed to complete this year is progressing well. We are on track to spend what we had planned for the project; it's just a matter of when the cash will flow out. The work has actually gone along very well. The effort that we put in this year was all predicated on using that information for the comprehensive update to the tech report, which is all coming together. That is really the basis of what we'd be using to make a project approval decision to move forward. So everything is moving along on track in those regards and very pleased with the work that's been done at the site.
So we'll look forward to that go-forward decision. Will there be a mine plan that's published at around the same time? And is the go-forward decision tied into Çöpler in any way? Like do you first want to see the Çöpler mine restarted before you commit to building another mine in the country? So just two parts to that question asking about the report and the potential connection with Çöpler.
Yes. We will provide a comprehensive update on the technical report, Don, which will be published. When we acquired the asset, there was a technical report available, but we wanted to conduct further work to ensure that it outlines a project we can successfully deliver. Since acquiring the asset, we have been reviewing all technical aspects, including flow sheets, process flow sheets, met models, geomet models, and geotechnical studies related to the site, which is complex. We are also progressing with initial earthworks and civil works to ensure that we can meet critical path tasks and keep the project on schedule once we release the new timeline. This effort includes updating market research to obtain current pricing for the project. Everything is going well, as I mentioned. Regarding the project decision related to Çöpler, I have consistently stated that we see these as separate projects. Hod Maden is in a different region of Turkey and engages a different set of stakeholders. Importantly, the Hod Maden project is fully permitted, so we are not waiting for any permits. We are actively working on building strong community relations and social support, which are critical for the project's success, and this is separate from the Çöpler project. Therefore, the decision regarding Hod Maden is not dependent on developments at Çöpler.
And then just as a final question, if we just take a step back, a question about your strategy. I mean, certainly, you've got a lot of organic opportunities within the portfolio and then there's potential other growth levers with respect to M&A. Can you share any bias whether for potential growth or how your strategy looks ahead over the next, say, five or so years?
Really no change, Don. I think we've always been fairly transparent around the criteria that we look at from an M&A perspective. M&A can be everything from strategic to bolt-on acquisitions like we had with Cripple Creek & Victor. There are a number of criteria that we look for, and it needs to fit within those criteria for it to be a strategic fit, and we've always been very true to that. And we'll continue to follow that because I think it does provide a discipline to the way we look at the business. So no change at all, building on the core jurisdictions we have, building on the platforms that we've got in Canada, the U.S., Argentina, and Turkey is sort of a first-order priority for us, and then looking for those value-accretive opportunities that might be available from time to time. So look, we'll stay true to that. I think it's good practice. And it means that when we bring something to market that we like, you know that it has gone through a fairly rigorous due diligence process, and it fits on strategy.
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.