SSR Mining Q4 2023 Earnings Call Transcript

Quartr
Provided by Quartr
February 27, 2024

There are 4 speakers on the call.

Operator

Hello, everyone, and welcome to SSR Mining's 4th Quarter and Full Year 2023 Financial Results Conference Call. This call is being recorded. At this time, for opening remarks and introductions, I would like to turn the call over to Alex Honchick from SSR Mining. Please go ahead.

Speaker 1

Thank you, operator, and hello, everyone. Thank you for joining today's conference call. During which, we'll provide an update on the Copler incident as well as a brief review of our Q4 and full year financial results. Our 2023 consolidated financial statements have been presented in accordance with U. S.

Speaker 1

GAAP. These financial statements have been filed on EDGAR, SEDAR, the ASX and are also available on our website. To accompany our call, there is an online webcast, you will find the information to access the webcast in our news release related to this call. Please note that all figures discussed during the call are in U. S.

Speaker 1

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 lead today's call.

Speaker 1

Will now turn the line over to Rod for his opening remarks.

Speaker 2

Thank you, Alex. Going to speak to the ongoing situation at Chirfloe. Firstly, I want to pass on our deepest sympathies and condolences to the families, friends, colleagues and communities that the 9 personnel who remain missing. It is an incredibly difficult time for everyone who has been impacted by the incident and we are still processing this tragic loss and will be for some time. In this time of respect, I would like to take a moment silence.

Speaker 2

Thank you. I'm sure you can appreciate that the situation at Copler is dynamic. And while I will provide some detail today, there are many more questions you may have that I'm not able to answer at this time. I would appreciate your understanding during the Q and A. The focus of the discussion today will be on the incident itself and the activities and priorities of Copler at this time.

Speaker 2

So let's walk through the facts as they currently stand. At approximately 6:30 am Eastern Time on the 13th February, a significant slip occurred from the heap leach pad. With an estimated 18,000,000 to 20,000,000 tons, slight into the Suburly Valley and the Manganese pit. All operations at Copa were immediately suspended. It was confirmed that 9 personnel were out accounted for once the confirmatory headcounts were completed in the hours following the incident.

Speaker 2

Immediate efforts were focused on safely conducting search and rescue. Various government agencies were immediately deployed to Copler, including the search and rescue teams. Instead, we have been supporting the activities at site under the direction of the various government agencies. I would like to recognize and thank the Turkish authorities for the rapid response and overwhelming support today. Rather than repeat all the details contained in the press releases that are available on our website, let me summarize the current situation and focus at Copler.

Speaker 2

The immediate focus was on the search and rescue efforts. This was initially suspended due to the instability of the heap leach pad, but efforts to locate the personnel have since resumed. Our priority is to safely recover and return our people to their families. In addition, efforts have been focused on 3 other areas. 1st, to agree on and initiate a plan to stabilize the heap leach pad allowing work to safely continue on the recovery of our missing people.

Speaker 2

Initial work began on February 23 to stabilize portions of the heap leach pad and extensive monitoring is taking place using drones and radar. The work to determine the final overall plan and approach stabilize the pad, including the use of remote equipment is continuing to advance. 2nd priority has been on the containment of the Suburly Creek area. In this regard, the containment pond immediately constructed and the installation of the concrete curtain at the bottom of the valley is underway. Order diversion systems at the top of the Siborla Valley are also underway.

Speaker 2

The Turkish government is conducting environmental monitoring of surface water, groundwater, soil and air quality in the region. Public comments from the Turkish government to date indicate that test results have been negative with respect to potential contamination in the locations being monitored. These results are preliminary and additional testing will continue. Finally, in number 3 is the ongoing discussion with the various government ministries to determine the permanent storage location for the heap leach material. Moving on to just a few other facts.

Speaker 2

As a result of the incident, the Copler EIA has been revoked. 6 personnel are being detained and are facing charges in relation to the incident and we're ensuring they receive the necessary support while respecting the Turkish legal process. Investigations led by the Turkish government are underway to determine the causal factors leading to the slip. We expect this to take some time to complete and until then have no further comments to make. As we look ahead, we continue to work closely with government officials and regulators and we'll update the market as facts present themselves moving forward.

Speaker 2

With respect to our financial results, given a lot of the information was pre released with the technical reports on the February 13, I intend only to highlight a couple of key points. First, the business ended 2023 with a strong liquidity position with total cash of $492,000,000 no near term debt maturities and continued cash flow generation from our 3 other operations. Looking forward, the Copler incident will have an impact on our financial results in 2024. We continue to evaluate and assess these potential impacts as laid out in today's 10 ks filings. In the Q1 of 2024 and as noted in the 10 ks, we anticipate recording an impairment of the heap leach inventory directly impacted by the Copler incident and we'll also evaluate the Copler long lived asset group for any additional impairment.

Speaker 2

Given the uncertainty surrounding these items, we are taking some steps to preserve our cash position until we have more fidelity around the forward looking cash requirements of the business. As a result, we have suspended our quarterly dividend and automatic share purchase plan we put in place last year. Given our focus is on Turkiye, is on Sherpa, we've also temporarily placed further investment at Hod Madon on hold at this time. We will revisit the timeline and approach in due course. This has obviously been a very difficult time for everyone impacted by the events of February 13, And we are doing everything we can to support our colleagues and the various stakeholders on the ground in Turkey.

Speaker 2

Clearly, we are in a period of some uncertainty and there is no doubt that we have some challenges ahead as we focus on the recovery efforts at Copler. In the meantime, operations are continuing at Marigold, Seabee and Cunha. As I turn the line back to the operator for any questions, I will again note that we'll keep the discussions on the incident to my prepared remarks. That said, we will do our utmost to answer questions related to the 2023 operating and financial results of the other properties. So operator, please go ahead with questions.

Operator

Thank you, Mr. Antal. We will now begin the question and answer session. The first question comes from Don DeMarco with National Bank Financial. Please go ahead.

Speaker 3

Thank you, operator, and good afternoon, Rod and team. First, my condolences to everyone with the company and in particular the missing personnel and their families and colleagues. Now Rod, I don't want to overstep what your intentions were for this call, but maybe if you could just clarify, did you want no questions on the Tripler incident? Or am I able to ask a few questions to get additional color on some of the points that you made?

Speaker 2

Don, you can ask questions. I'll just be respectful to the fact that the incident is only 2 weeks old and clearly we're focused on those areas that I mentioned in the call, but I'll do my best to answer anything else.

Speaker 3

Thank you. Is there any chance that the slip could you talk about your insurance? Is it the potential that the slip might be insured?

Speaker 2

As normal course, we have notified our insurers of this slip and we'll continue to work with them in the ordinary course as the final investigations and facts come to hand, but at this stage you've been notified.

Speaker 3

Okay. And so as you described, there's one of the big efforts right now is in containing the extent of the contamination is a big earthworks process underway. Do you have any sense about the cost per tonne to move the material? And is the material accessible? Or is there parts where some of the slipped heap might be difficult to reach given steep slopes and other factors?

Speaker 2

Yes. At this stage, Don, there's really no fidelity around the numbers. I'll just tell you what the areas of focus are for us is. We continue to work actively on the heap leach pad stabilization. That's really the key priority.

Speaker 2

So we can continue with those efforts to recover the missing people to return to their families. The containment area around the Sibirley Valley in particularly is well advanced, as I mentioned, And we'll continue until we've finished that work. And then really the last piece around the discussions with the various government authorities around the final area for the material to be placed is really only just got underway. So too early to put any more color on that.

Speaker 3

Okay, fair enough. And then maybe just as a final question. In the release this afternoon, it mentioned that there's a potential impairment charge in Q1 and it stated $73,000,000 and it referenced that that makes up 19% of the Sherpa total gold inventory. So I want to clarify, does that represent 19% of the heap leach gold inventory or the total heap leach and sulfide gold inventory?

Speaker 2

It is the total of both the oxide and sulfides done. Done. It's all the imagery at Cebuah. And the amount that we're referring to is the oxides.

Speaker 3

Okay. Thank you for that. And once again, my condolences to the SSRM team and everyone involved. Put it back to the operator.

Speaker 2

We appreciate that. Back to

Speaker 3

the queue.

Speaker 2

Thank you, Don.

Operator

This concludes the question and answer session. I would now like to turn the call back over to Mr. Antal for any closing remarks. Please go ahead.

Speaker 2

Great. Thank you, operator. And again, thank you all for joining us. Goodbye for now.

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