SSR Mining Corporation (Nasdaq: SSRM) 2023 Fourth Quarter Earnings Conference Call February 27, 2024, 5:00 PM ET
corporate participants
Alex Hunchak – Director of Corporate Development and Investor Relations
Rodney Antar – Executive Chairman
conference call participants
Don DeMarco – National Bank Financial
operator
Hello, everyone, and welcome to SSR Mining’s fourth quarter and full year 2023 financial results conference call. This call is being recorded. Now I’d like to turn the call over to Alex Hunchak of SSR Mining for his opening remarks and introduction. please continue.
Alex Hanchak
Thank you operator, hello everyone. Thank you for joining today’s conference call, during which we will provide an update on the COPLER incident and a brief review of our fourth quarter and full year financial results.
Our 2023 consolidated financial statements have been prepared in accordance with U.S. Generally Accepted Accounting Principles (US GAAP). These financial statements are filed with EDGAR, SEDAR, ASX and are also available on our website. To accompany our call, we also conducted an online webcast. Information about accessing the webcast can be found in our press release related to this conference call.
Please note that all numbers discussed during the call are in U.S. dollars unless otherwise stated. Today’s discussion will contain forward-looking statements, so please read the disclosures in the related documents. Additionally, we will refer to non-GAAP financial measures during our discussion and on the accompanying slides. Please see our press release for information on comparable GAAP measures. Executive Chairman Rod Antar will host today’s conference call.
I will now turn to Rod for his opening remarks.
Rodney Antal
Thank you, Alex. I want to talk about the current status of COPLER. First of all, I would like to express my deepest sympathy and condolences to the families, friends, colleagues and communities of the nine missing persons.It is a This is an extremely difficult time for everyone affected by this incident and we are still dealing with this tragic loss and will be for some time to come.
To show my respect, I would like to observe a moment of silence. Thanks.I believe you can Recognize that the COPLER situation is dynamic. While I will provide some details today, you may have many questions that I cannot answer at this time. Thank you for your understanding during the Q&A period.
Today’s discussion will focus on the event itself, COPLER’s current activities and priorities. So let’s look at the current facts. At approximately 6:30 a.m. Eastern Time on February 13, a major slide occurred from the heap leach pad, sliding an estimated 18 million to 20 million tons into the Sabirli Valley and manganese pits. Full COPLER operations are suspended immediately.
After a head count was completed within hours of the incident, nine people were confirmed to be unaccounted for. The top priority is to conduct search and rescue operations safely. Multiple government agencies, including search and rescue teams, were immediately deployed to Copler. Since then, we have been supporting events on site under the guidance of various government agencies.
I would like to thank the Turkish authorities for their quick response and strong support for (the website). Rather than repeat all the details contained in the press release on our website, let me summarize the current status and focus of COPLER.
The top priority is search and rescue efforts. The operation was initially suspended due to instability in the pad, but efforts to find personnel later resumed. Our top priority is getting our people safely recovered and reunited with their families.
In addition, work is focused on three other areas. First, a plan to stabilize the heap leach pad was agreed and launched so that the search for the missing persons can safely continue. Preliminary work began on February 23 to stabilize a portion of the heap leach pad, with extensive monitoring using drones and radar.
Work is continuing to determine the final master plan and methods for stabilizing the launch pad, including the use of remote equipment. The second priority was to control the Sabirli Creek area. For this purpose, a safety pool was immediately built and a concrete curtain was installed on the valley floor.
An order transfer system at the top of the Sabirli Valley is also under construction. The Turkish government is conducting environmental monitoring of surface water, groundwater, soil and air quality in the region. Several comments from the Turkish government today indicated that the test results were negative in terms of potential contamination at the monitored sites. These results are preliminary and additional testing will continue.
Finally, the third point is ongoing discussions with various government departments to identify permanent storage locations for heap leach materials. Moving on to some other facts. The AIA has been revoked due to the COPLER incident. Six individuals were detained and face charges related to the incident, and we ensured they received the necessary support while respecting Turkish legal processes.
A Turkish government-led investigation is underway to determine the factors that led to the decline. We expect this will take some time to complete and until then we will have no further comment. Going forward, we will continue to work closely with government officials and regulators and provide timely updates on market conditions based on the facts.
About our financial performance. Given that a lot of information has been pre-released with the February 13 technical report, I just want to highlight a few key points. First, the business has a strong liquidity position with $492 million in total cash as of 2023, no short-term debt maturities, and continued cash flow generation from our three other businesses. Looking forward, the COPLER incident will have an impact on our financial performance in 2024. We will continue to evaluate and evaluate these potential impacts outlined in today’s 10-K filing.
As stated in the 10-K, in the first quarter of 2024, we expect to record an impairment of the heap leach inventory directly affected by the COPLER event and will evaluate whether there is any additional impairment on the COPLER long-term asset group. Given the uncertainty surrounding these projects, we are taking a number of steps to preserve our cash position until we are more true to the forward-looking cash needs of the business. As a result, we have suspended our quarterly dividend and automatic stock purchase plans that were implemented last year.
Given that our focus is on Turkiye, which is COPLER, we have temporarily shelved (unclear) further investments. We will revisit the timetable and approach in due course. This is obviously a very difficult time for everyone affected by the events of February 13 and we are doing everything we can to support our colleagues and various stakeholders on the ground in Turkey.
Clearly, we are in a period of great uncertainty, and there is no doubt that we will face some challenges as we focus on COPLER’s recovery efforts. Meanwhile, operations at Marigold, Seabee and Puna continue. When I turn the call back to the operator for any questions, I will again note that we will proceed with my prepared remarks regarding the incident.
That said, we will do our best to answer questions related to the 2023 operating and financial performance of other properties. So operator, please continue with the questions.
question Time
operator
(Operator Instructions) The first question comes from Don DeMarco of National Bank Financial Corporation.
don demarco
First of all, I would like to express my condolences to everyone in the company, especially the missing person, his family and colleagues. Rod, I don’t want to get beyond the purpose of this call. But maybe you could clarify that you don’t want to raise any questions about the COPLER incident? Or can I ask a few questions to understand more about some of the points you made?
Rodney Antal
Yes, Don, you can ask questions. Please respect the fact that this incident only happened two weeks ago. Obviously, our focus is on those areas that I mentioned on the call, but I’ll try to answer other questions.
don demarco
Is it possible that this could happen—can you talk about your insurance? Is it possible to insure a slip and fall?
Rodney Antal
As per normal procedure, we have notified our insurance company of this failure and we will continue to work with them per normal procedure as the investigation is finalized and the facts are known. But at this stage, they have been notified.
don demarco
OK As you describe, a major effort is currently to control the levels of contamination and there is a major earthworks project underway. Do you know the shipping cost per ton of materials? Are materials easily available? Or, are there some slip piles that might be difficult to reach, given the steep slopes and other factors?
Rodney Antal
Yes. Don, there really is no fidelity to the numbers at this stage. I’m just telling you what our focus areas are and we continue to be aggressively working on the stabilization of the heap leach pad. This is truly the most important priority so we can continue our efforts to find missing persons and reunite them with their families.
As I mentioned, the containment zone around the Sabirli Valley is particularly advanced and will continue until we complete this work. And then, actually, the last part of the discussion with the various government authorities about the final areas to put the material in has actually not really started yet. It’s too early to say more about this.
don demarco
OK fair enough. And then maybe just one last question. In a press release this afternoon, it mentioned potential impairment charges in the first quarter, noting $73 million and mentioning that this represents 19% of COPLER’s total gold inventory. I just want to clarify, does this represent 19% of heap leach gold stocks, or 19% of heap leach and sulphide gold stocks?
Rodney Antal
It’s the sum of oxides and sulfides, Don. This is all COPLER (images), we are referring to the number of sites.
operator
This concludes the Q&A session. I would now like to turn the call back to Mr. Antar for his closing remarks. please continue.
Rodney Antal
great. Thank you, operator. Thanks again to everyone for joining us, and see you now.
operator
This concludes the conference call. You can disconnect the line. Thank you for participating and have a nice day.
