Full Year 2021 Highlights:
•Strong full year operating cost performance: The Company reported full year 2021 production of 794,456 gold equivalent ounces at all-in sustaining costs (“AISC”) of $955 per gold equivalent ounce. See "Non-GAAP Measure – Cash Costs and AISC" for an explanation of AISC and a reconciliation of this financial measure to net income and production costs, which are the comparable GAAP financial measures.
•Generated peer leading free cash flow: Full year free cash flow of $444.2 million resulted in a sector-leading free cash flow yield of 12%. Attributable net income in 2021 was $368.1 million, or $1.70 in net income per share. See "Non-GAAP Measure – Free Cash Flow" and "Non-GAAP Measure – Adjusted Attributable Net Income" for explanations of these measures and reconciliations to cash provided by operating activities and net income attributable to equity holders of SSR Mining (GAAP), respectively, which is the comparable GAAP financial measures.
•Delivered strong capital returns through initial dividends and inaugural share buy-back program: During 2021, the Company returned $191.3 million in capital to shareholders through dividend payments and the repurchase of 8,800,700 shares under the Normal Course Issuer Bid (“NCIB”) program announced on April 19, 2021. The inaugural dividend program was announced in February 2021, with a $0.05 quarterly per share dividend declared at the discretion of the Board of Directors. Subsequently, the Board has approved a 40% increase in the quarterly base dividend to $0.07 per share.
•Balance Sheet Remained a Key Strength: Closed 2021 with a cash and cash equivalent balance of $1,017.6 million despite the aforementioned $191.3M in capital returns to shareholders and $70.0 million in scheduled debt repayments.
•Increased gold mineral reserves by 14%: Mineral resource to reserve conversion at Ҫӧpler’s Çakmaktepe Extension (Ardich) and Seabee’s Gap Hanging Wall drove an increase to mineral reserves and offset depletion at Marigold and Puna, increasing gold mineral reserves by 14%. Total gold equivalent mineral reserves increased by 13%, or 1.2 million ounces, to 10.2 million total ounces.
•Delivered strong near-mine and greenfield exploration results across the portfolio: Delivered positive exploration updates from the Çakmaktepe Extension (Ardich), Seabee, Marigold, Copper Hill, and Amisk properties in 2021, showcasing SSR Mining's robust global exploration platform. See Item 2. Properties for further information.
•Expanded development portfolio in core jurisdictions and continued asset rationalizations: On December 2, 2021, the Company announced the proposed acquisition of Taiga Gold Corp. for $21.0 million. The transaction will consolidate a 100% interest in the Fisher properties contiguous to the Seabee mine, eliminated an existing 2.5% net smelter return (“NSR”) royalty on the majority of the Fisher properties, and added five new properties covering 30,480 hectares to complement the Company’s existing exploration platform. Earlier in the fourth quarter of 2021, the Company announced an agreement to increase its ownership in the joint venture covering the Copper Hill exploration target in Turkey to 70%. Additionally, the Company progressed its portfolio rationalization process with the announcement of the sale of its non-core royalty portfolio to EMX Royalty Corporation ("EMX") on July 29, 2021, for total consideration of $100.0 million.
•Updated Technical Report Summaries at all producing assets reiterate quality of longer-term platform: The Company has completed Technical Report Summaries for each of its operating assets in compliance with Subpart 1300 of Regulation S-K. These reports include refreshed operating and economic assumptions for each asset and provide a base case for further growth and optimization to support the Company's long-term production base.
SSR Mining is a precious metals mining company with four producing assets located in the United States, Turkey, Canada and Argentina. The Company is primarily engaged in the operation, acquisition, exploration and development of precious metal resource properties located in Turkey and the Americas. The Company produces gold doré as well as copper, silver, lead and zinc concentrates. SSR Mining's diversified asset portfolio is comprised of high-margin, long-life assets located in some of the world's most prolific metal districts. In 2021, the Company's four operating assets produced over 794 thousand gold equivalent ounces and generated over $440.0 million dollars of free cash flow. See "Non-GAAP Measure – Free Cash Flow" for an explanation of this measure and a reconciliation to cash provided by operating activities, which is the comparable GAAP financial measure.
The Company has an experienced leadership team with a proven track record of delivery and value creation. Across the organization, the Company has expertise in project construction, mining (open pit and underground), and processing (pressure oxidation, heap leach and flotation), with a robust commitment to health, safety, community engagement and environmental management.
The Company has a strong balance sheet, with over $1 billion in cash and cash equivalents as of December 31, 2021, to support its growth pipeline. The Company intends to leverage its balance sheet strength and proven track record of free cash flow generation to fund growth across its portfolio to facilitate superior returns to shareholders.
In this report, "SSR Mining," the "Company," "our" and "we" refer to SSR Mining Inc. together with its affiliates and subsidiaries, unless the context otherwise requires. All currency references herein are in United States dollars ("USD") unless otherwise indicated. References to "CAD" or the use of the symbol “C$” refers to Canadian dollars. References to “TL” are to the lawful currency of Turkey, the Turkish Lira. References to “ARS” are to the lawful currency of Argentina, the Argentine peso.
All share data in this report refers to consolidated shares/data, unless otherwise indicated.
The Company's operations consist of four operating mine sites - Çöpler Gold Mine, located in Erzincan Province, Turkey ("Çöpler"), Marigold Mine, located in Nevada, United States ("Marigold"), Seabee Gold Operations, located in Saskatchewan, Canada ("Seabee" or "SGO"), and Puna Operations, located in Jujuy Province, Argentina ("Puna") - each of which is a reportable operating segment and which are also referred to as producing assets. The contributions to our revenue by reportable operating segment for the year ended December 31, 2021 were 41% from Çöpler (2020 – 24%; 2019 – nil), 29% from Marigold (2020 – 48%; 2019 – 52%), 15% from Seabee (2020 – 16%; 2019 – 24%) and 15% from Puna (2020 – 12%; 2019 – 24%). See Note 4 to the Consolidated Financial Statements for further information relating to our reportable operating segments.
In addition to current mine production, the Company also operates exploration and development activities at properties located in Canada, Turkey, Peru and Mexico. See Item 2, Properties, for further information about the Company's production and exploration properties.
Çöpler, Marigold and Seabee produce gold doré. Doré is unrefined gold bullion bars usually consisting of in excess of 90% gold, which is subsequently refined by a third party to gold bullion. The Company sells gold doré primarily to bullion banks, however all of the gold doré produced at Çöpler is delivered to the Istanbul Gold Refinery. Puna produces silver, lead and zinc concentrates, which are sold to smelters or traders for further refining.
During 2021, sales of gold doré accounted for 84% of revenue, with 41% sold to Istanbul Gold Refinery, 30% to CIBC. During 2020, sales of gold doré to CIBC, Istanbul Gold Refinery, and Bank of Montreal accounted for 45%, 24%, and 14% of the Company's total revenues, respectively. During 2019, sales of gold doré to CIBC, Bank of Nova Scotia, and Bank of Montreal accounted for 37%, 22%, and 17% of the Company's total revenues, respectively.
The Company sells lead and zinc concentrate with high silver content, through contractual arrangements with smelters and traders located in Asia and Europe. The concentrates are sold under supply contracts updated annually or as needed through spot sales, with processing fees based on the demand for the concentrates in the global marketplace.
The Company’s revenue by product category for the years ended December 31 was as follows:
Years Ended December 31,
Product Revenue (1)
(1) The Company also realizes de minimus revenue from copper.
As of December 31, 2021, the Company had attributable proven and probable gold reserves of 9,154 koz. For information on the mineral resources and mineral reserves for each operating asset, see Item 2, “Proven and Probable Reserve Estimates" and "Resource Estimates”.
The market prices of gold and silver are key drivers of the Company’s profitability. The prices of gold and silver can fluctuate widely and are affected by a number of macroeconomic factors, including global or regional consumption patterns, the supply of, and demand for gold and silver, interest rates, exchange rates, inflation or deflation, global economic conditions resulting from the COVID-19 pandemic, and the political and economic conditions of major gold- and silver-producing and gold- and silver-consuming countries throughout the world. Importantly, the price of gold and silver can be impacted by their role as safe havens during periods of market turmoil and as defense against the perceived inflationary impacts and currency depreciation caused by the responses of governments and central banking authorities to various economic threats. See Item 1A. Risk Factors, for further information.
During 2021, the gold price, based on the London Bullion Market Association (“LBMA”) averaged $1,799 per ounce, which was $29 per ounce, or 2%, higher than the 2020 annual average of $1,770 per ounce and $409 per ounce, or 29%, higher than the 2019 annual average of $1,393 per ounce. During 2021, the price of silver, based on the LBMA silver price, averaged $25.14 per ounce, which was $4.59 per ounce, or 22%, higher than the 2020 annual average of $20.55 per ounce and $8.93 per ounce, or 55%, higher than the 2019 annual average of $16.21 per ounce. See Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations, below, for further information relating to metal prices. For further details, see "Consolidated Results" and "Results of Operations" in Item 7, Management's Discussion and Analysis.
The precious and base metals mineral exploration and mining business is competitive. Competition is primarily for: mineral properties that can be developed and produced economically; technical experts that can find, develop and mine such mineral properties; labor to operate the mineral properties; and capital to finance exploration, development and operations.