EX-99.1 2 a2017q3fs.htm EXHIBIT 99.1 Exhibit



SSR Mining Inc. (formerly Silver Standard Resources Inc.)
Condensed Consolidated Interim Financial Statements
For the three and nine months ended September 30, 2017 and 2016
(unaudited)







SSR Mining Inc. (formerly Silver Standard Resources Inc.)
Condensed Consolidated Interim Financial Statements for the three and nine months ended
September 30, 2017

CONTENTS
 
Financial Statements
 
 
 
 
 
 
 
 
 
 
Notes to the Condensed Consolidated Interim Financial Statements
 
 
 
 
 
 
 
 
Statements of Financial Position
 
 
 
 
 
 
 
Statements of Income
 
 
 
 
Statements of Shareholders’ Equity
 
 
 
 
Additional Disclosures
 
 
 



 
 
2 | Page

SSR Mining Inc. (formerly Silver Standard Resources Inc.)
Condensed Consolidated Interim Statements of Financial Position
(expressed in thousands of United States dollars)
 
Note
September 30

December 31

 
 
2017

2016

 
 
$ 

$

Current assets
 
 
 
Cash and cash equivalents
 
424,025

327,127

Trade and other receivables
 
40,962

58,437

Marketable securities
 
109,721

148,944

Inventory
4
178,396

154,915

Held for sale
5
1,416

12,097

Other
 
2,211

2,720

 
 
756,731

704,240

Non-current assets
 
 
 
Property, plant and equipment
6
665,267

663,828

Deferred income tax assets
 
—

1,096

Goodwill
 
49,786

49,786

Other
 
27,436

19,738

Total assets
 
1,499,220

1,438,688

 
 
 
 
Current liabilities
 
 
 
Trade and other payables
 
53,959

61,500

Provisions
7
18,695

82,806

 
 
72,654

144,306

Non-current liabilities
 
 
 
Deferred income tax liabilities
 
113,852

116,887

Provisions
7
93,948

55,562

Debt
 
229,810

220,054

Total liabilities
 
510,264

536,809

 
 
 
 
Equity
 
 
 
Share capital
 
1,046,108

1,043,555

Other reserves
 
9,156

(1,014
)
Equity component of convertible notes
 
68,347

68,347

Deficit
 
(155,576
)
(209,009
)
Total equity attributable to SSR Mining shareholders
 
968,035

901,879

Non-controlling interest
 
20,921

—

Total liabilities and equity
 
1,499,220

1,438,688

 
 
 
 
Events after the reporting date (note 12)
 
 
 
The accompanying notes are an integral part of the condensed consolidated interim financial statements
Approved by the Board of Directors and authorized for issue on November 7, 2017
"Richard D. Paterson"
 
"Paul Benson"
Richard D. Paterson, Director
 
Paul Benson, Director

 
 
3 | Page

SSR Mining Inc. (formerly Silver Standard Resources Inc.)
Condensed Consolidated Interim Statements of Income
(expressed in thousands of United States dollars, except per share amounts)

 
Note
Three months ended September 30,
 

Nine months ended September 30,
 
 
 
2017

2016


2017

2016

 
 
$

$


$

$

 
 
 
 
 
 
 
Revenue
 
106,005

143,381

 
340,892

363,669

Cost of sales
10
(83,483
)
(84,191
)
 
(248,819
)
(237,119
)
Income from mine operations
 
22,522

59,190

 
92,073

126,550

General and administrative expenses
 
(7,043
)
(4,061
)
 
(18,225
)
(20,684
)
Exploration, evaluation and reclamation expenses
 
(5,086
)
(4,280
)
 
(16,810
)
(12,238
)
Impairment reversal
6
—

—

 
24,357

—

Business acquisition costs
 
—

(601
)
 
—

(4,529
)
Operating income
 
10,393

50,248

 
81,395

89,099

Interest earned and other finance income
 
1,664

508

 
3,965

1,247

Interest expense and other finance costs
 
(9,428
)
(6,461
)
 
(25,650
)
(19,571
)
Foreign exchange gain (loss)
 
129

(3,248
)
 
3,823

(6,535
)
Other
 
(583
)
(48
)
 
(2,882
)
(1,861
)
Income before income tax
 
2,175

40,999

 
60,651

62,379

Income tax expense
 
(354
)
(2,957
)
 
(6,035
)
(9,554
)
Net income

1,821

38,042


54,616

52,825

Attributable to:
 
 
 
 
 
 
Equity holders of SSR Mining
 
1,067

38,042

 
53,433

52,825

Non-controlling interests
 
754

—

 
1,183

—

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income per share attributable to equity holders of SSR Mining
 
 
 
Basic
8
$0.01
$0.32
 
$0.45
$0.54
Diluted
8
$0.01
$0.31
 
$0.44
$0.53


The accompanying notes are an integral part of the condensed consolidated interim financial statements


 
 
4 | Page
SSR Mining Inc. (formerly Silver Standard Resources Inc.)

Condensed Consolidated Interim Statements of Comprehensive (Loss) Income
(expressed in thousands of United States dollars)



 
 
Three months ended September 30,
 

Nine months ended September 30,
 
 
 
2017

2016


2017

2016

 
 
$

$


$

$

 
 
 
 
 
 
 
Net income

1,821

38,042


54,616

52,825

 
 
 
 
 
 
 
Other comprehensive (loss) income:
 
 
 
 
 
 
 
Items that will not be reclassified to net income
 
 
 
Change in value of investments at FVTOCI, net of tax $1,346, $1,969, ($1,638) and ($12,233), respectively
 
(9,483
)
(13,132
)
 
10,498

82,232

 
 
 
 
 
 
 
Items that may be subsequently reclassified to net income:
 
 
 
Cash flow hedges, net of tax ($140), $46, ($256) and ($207), respectively
 
240

108

 
363

578

Other comprehensive (loss) income
 
(9,243
)
(13,024
)
 
10,861

82,810

Total comprehensive (loss) income
 
(7,422
)
25,018

 
65,477

135,635

 
 
 
 
 
 
 
Attributable to:
 
 
 
 
 
 
Equity holders of SSR Mining
 
(8,176
)
25,018

 
64,294

135,635

Non-controlling interests
 
754

—

 
1,183

—

 
 
 
 
 
 
 
The accompanying notes are an integral part of the condensed consolidated interim financial statements


 
 
5 | Page

SSR Mining Inc. (formerly Silver Standard Resources Inc.)
Condensed Consolidated Interim Statements of Changes in Shareholders’ Equity
(expressed in thousands of United States dollars)

 
 
 
 
Equity

 
 
Non-

 
 
Note
Common Shares
Other

component of

 
Total

controlling

Total

 
 
Shares

Amount

reserves

convertible notes

Deficit

equity

interests

equity

 
 
000's

$

$

$

$

$

$

$

Balance, January 1, 2016
 
80,826

707,607

(54,805
)
68,347

(273,966
)
447,183

—

447,183

Shares and options issued pursuant to the acquisition of Seabee Gold Operation, net of share issuance costs
 
37,394

324,990

4,045



—

329,035

—

329,035

  Exercise of stock options
 
1,129

10,479

(4,115
)
—

—

6,364

—

6,364

Equity-settled share-based compensation
9
—

—

1,985

—

—

1,985

—

1,985

Total comprehensive income for the period
 
—

—

82,810

—

52,825

135,635

—

135,635

Balance, September 30, 2016
 
119,349

1,043,076

29,920

68,347

(221,141
)
920,202

—

920,202

 
 
 
 
 
 
 
 
 
 
Balance, January 1, 2017
 
119,401

1,043,555

(1,014
)
68,347

(209,009
)
901,879

—

901,879

Exercise of stock options
 
299

2,553

(1,004
)
—

—

1,549

—

1,549

Equity-settled share-based compensation
9
—

—

1,654

—

—

1,654

—

1,654

Recognition of joint venture
3
—

—

(1,341
)
—

—

(1,341
)
18,572

17,231

Funding from non-controlling interest
 
—

—

—

—

—

—

1,166

1,166

Total comprehensive income for the period
 
—

—

10,861

—

53,433

64,294

1,183

65,477

Balance, September 30, 2017
 
119,700

1,046,108

9,156

68,347

(155,576
)
968,035

20,921

988,956

The accompanying notes are an integral part of the condensed consolidated interim financial statements

 
 
6 | Page

SSR Mining Inc. (formerly Silver Standard Resources Inc.)

Condensed Consolidated Interim Statements of Cash Flows
(expressed in thousands of United States dollars)
 
Note
Three months ended September 30,
 
Nine months ended September 30,
 
 
2017

2016

 
2017

2016

 
 
$

$

 
$

$

Cash flows from operating activities
 
 

 

 
 
 
Net income for the period
 
1,821

38,042

 
54,616

52,825

Adjustments for:
 
 

 

 
 
 
Depreciation, depletion and amortization
 
24,206

19,103

 
72,911

51,777

Net non-cash finance expense
 
7,120

4,863

 
19,903

16,685

Impairment reversal
6
—

—

 
(24,357
)
—

Income tax expense
 
354

2,957

 
6,035

9,554

Non-cash foreign exchange loss
 
459

1,993

 
996

733

Net changes in non-cash working capital items
12
5,979

(7,020
)
 
(8,923
)
(21,994
)
Other items impacting operating activities
12
1,157

1,684

 
4,932

5,610

Cash generated by operating activities before interest and taxes
 
41,096

61,622

 
126,113

115,190

Tax moratorium paid
 
(1,909
)
—

 
(7,323
)
—

Interest paid
 
(6,294
)
(3,901
)
 
(12,895
)
(8,179
)
Income taxes paid
 
(2,601
)
(4,655
)
 
(6,345
)
(10,457
)
Cash generated by operating activities
 
30,292

53,066

 
99,550

96,554

Cash flows from and used in investing activities
 
 

 

 
 
 
Purchase of plant and equipment
 
(8,864
)
(12,068
)
 
(24,871
)
(31,237
)
Capitalized stripping costs
 
(6,056
)
(13,787
)
 
(17,152
)
(22,453
)
Underground mine development costs
 
(1,314
)
(2,141
)
 
(5,994
)
(2,944
)
Capitalized exploration costs
 
(1,211
)
(1,564
)
 
(4,129
)
(4,392
)
Closing payment on formation of joint venture, net of cash acquired
3
—

—

 
(12,972
)
—

Net proceeds from acquisition and sale of marketable securities
 
54,397

—

 
54,397

4,422

Cash received from acquisition of Seabee Gold Operation, net of share exchange payment
 
—

—

 
—

16,908

Tax deposit received
 
—

18,243

 
—

18,243

Interest received
 
1,081

928

 
2,551

1,576

Other
 
537

(192
)
 
2,309

655

Cash generated (used) by investing activities
 
38,570

(10,581
)
 
(5,861
)
(19,222
)
Cash flows from and used in financing activities
 
 

 

 
 
 
Proceeds from exercise of stock options
 
608

2,599

 
1,493

6,364

Funding from non-controlling interests
 
1,166

—

 
1,166

—

Repayment of bank loan
 
—

—

 
—

(3,845
)
Repayment of Seabee Gold Operation credit facility
 
—

—

 
—

(13,707
)
Share issuance fees on Seabee Gold Operation acquisition
 
—

—

 
—

(212
)
Cash generated (used) by financing activities
 
1,774

2,599

 
2,659

(11,400
)
Effect of foreign exchange rate changes on cash and cash equivalents
 
(141
)
(159
)
 
550

(250
)
Increase in cash and cash equivalents
 
70,495

44,925

 
96,898

65,682

Cash and cash equivalents, beginning of period
 
353,530

232,619

 
327,127

211,862

Cash and cash equivalents, end of period
 
424,025

277,544

 
424,025

277,544

The accompanying notes are an integral part of the condensed consolidated interim financial statements

 
 
7 | Page
SSR Mining Inc. (formerly Silver Standard Resources Inc.)

Notes to the Condensed Consolidated Interim Financial Statements
For the three and nine months ended September 30, 2017
(tabular amounts expressed in thousands of United States dollars unless otherwise stated)


1.
NATURE OF OPERATIONS

SSR Mining Inc. ("we", "us", "our" or "SSR Mining"), formerly Silver Standard Resources Inc., is a company incorporated under the laws of the Province of British Columbia, Canada and our shares are publicly listed on the Toronto Stock Exchange in Canada and the NASDAQ Global Market in the United States. On May 4, 2017 our shareholders approved a name change to SSR Mining Inc., with the name change becoming effective on August 1, 2017. Together with our subsidiaries, we (the “Group”) are principally engaged in the operation, acquisition, exploration and development of precious metal resource properties located in the Americas. We have three producing mines and a portfolio of precious metal dominant projects located throughout the Americas. SSR Mining Inc. is the ultimate parent of the Group.

Our address is Suite 800, 1055 Dunsmuir Street, PO Box 49088, Vancouver, British Columbia, V7X 1G4.

Our focus is on safe, profitable gold and silver production from our Marigold mine in Nevada, U.S., Seabee Gold Operation in Saskatchewan, Canada and our 75% owned Puna Operations in Jujuy, Argentina, and to advance, as market and project conditions permit, our other principal development projects towards development and commercial production.


2.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The principal accounting policies applied in the preparation of these condensed consolidated interim financial statements are set out below.

a)
Basis of preparation
These condensed consolidated interim financial statements should be read in conjunction with our audited consolidated financial statements for the year ended December 31, 2016.
These condensed consolidated interim financial statements have been prepared in accordance with International Financial Reporting Standards ("IFRS") as issued by the International Accounting Standards Board ("IASB") applicable to the preparation of interim financial statements, including IAS 34, Interim Financial Reporting. The comparative information has also been prepared on this basis.
These statements were authorized for issue by our Board of Directors on November 7, 2017.

b)
Significant accounting judgments and estimates
The preparation of financial statements requires the use of assumptions, judgments and/or estimates that affect the amounts reported and disclosed in the consolidated financial statements and related notes. These assumptions, judgments and estimates are based on management’s best knowledge of the relevant facts and circumstances, having regard to previous experience, but actual results may differ materially from the amounts included in the financial statements. The critical judgments and estimates applied in the preparation of the unaudited condensed consolidated interim financial statements for the nine months ended September 30, 2017 are consistent with those applied and disclosed in note 2(u) to our audited consolidated financial statements for the year ended December 31, 2016 other than the following accounting estimates;

(i)
Export duties on Pirquitas mine
Following the resolution of the export duty claim (note 7), we have measured the resulting liability in Argentine pesos ("ARS") at net present value of estimated future cash outflows. This required an estimate of the most appropriate discount rate to use for such an ARS liability.




 
 
8 | Page
SSR Mining Inc. (formerly Silver Standard Resources Inc.)

Notes to the Condensed Consolidated Interim Financial Statements
For the three and nine months ended September 30, 2017
(tabular amounts expressed in thousands of United States dollars unless otherwise stated)

(ii)
Mine life extension of the Pirquitas mine
Following our exercise of the option to form the Puna Operations joint venture, and subsequent closure of the transaction (note 3), during the nine months ended September 30, 2017 we re-assessed our estimates for: (a) the recoverable amount of plant assets that were previously impaired; (b) depreciable lives of remaining plant assets; (c) value added tax ("VAT") collectability; (d) supplies inventory usage; and (e) timing of cash flows for our close down and restoration provision. The result of these changes in estimates was an impairment reversal of $24,357,000 (note 6) and a reduction to our close down and restoration provision of $5,377,000 (note 7).

(iii)
Recognition of Puna Operations joint venture
As a result of the formation of the Puna Operations joint venture we were required to recognize the acquired Chinchillas mineral property asset at fair value (note 3). The valuation required significant management judgment in determining an appropriate valuation approach, and furthermore significant estimation to determine appropriate assumptions for planned metal production and costs (operating and capital), metal prices, discount rate, VAT recoveries and other working capital movements.

3.
PUNA OPERATIONS JOINT VENTURE

On March 31, 2017, we exercised our option on the Chinchillas project and on May 31, 2017 formed a jointly owned company with Golden Arrow Resources Corporation ("Golden Arrow") called Puna Operations Inc. ("Puna Operations") for the development of the property. The jointly owned company, holding the Pirquitas and Chinchillas properties, is owned 75% by SSR Mining and we are the operator. This transaction is expected to extend the Puna Operations operating life by approximately eight years.

Under the terms of the arrangement we paid the option exercise payment to Golden Arrow of $12,972,000, net of cash acquired.

At May 31, 2017 we recognized an asset of $28,839,000 representing the fair value of the Chinchillas mineral property acquired. In addition, we recognized a non-controlling interest of $18,572,000. As we retain control of Puna Operations, the difference between the carrying value of the assets acquired and liabilities assumed and the non-controlling interest, was recognized in equity attributable to our shareholders; this totaled $1,341,000.

4.
INVENTORY
 
September 30, 2017

December 31, 2016

 
$ 

$

Current:
 
 
Finished goods
11,177

11,627

Stockpiled ore
15,360

30,574

Leach pad inventory
125,293

86,696

Materials and supplies
26,566

26,018

 
178,396

154,915

Non-current materials and supplies
1,803

1,811

 
180,199

156,726


The cost of supplies inventory held at its net realizable value at September 30, 2017 was $4,807,000 (December 31, 2016 - $7,246,000).



 
 
9 | Page
SSR Mining Inc. (formerly Silver Standard Resources Inc.)

Notes to the Condensed Consolidated Interim Financial Statements
For the three and nine months ended September 30, 2017
(tabular amounts expressed in thousands of United States dollars unless otherwise stated)

5.
ASSETS HELD FOR SALE

On May 2, 2017, we completed the sale of our 100% interest in the Berenguela project in Peru to Valor Resources Limited ("Valor") for consideration in deferred payments and a 9.9% equity interest in Valor.

The carrying value of the asset was reclassified from an asset held for sale of $8,098,000 to marketable securities received of $1,098,000, and deferred consideration of $7,246,000. A gain on sale of $246,000 was recorded in other income.

In addition, during the period we also sold one ball mill that had been classified as held for sale, and wrote down the carrying value of a second mill to reflect its fair value based upon sales proceeds received for the first mill.

6.
PROPERTY, PLANT AND EQUIPMENT

 

 
Plant and equipment (1)

Mineral properties subject to depreciation

Mineral properties not yet subject to depreciation  (2)

Exploration and evaluation assets (3)

Total

 
$

$

$

$

$

Cost
 
 
 
 
 
Balance, January 1, 2017
509,008

306,277

89,288

136,992

1,041,565

Additions
21,051

31,398

31,597

500

84,546

Disposals
(6,741
)
—

—

(1,000
)
(7,741
)
Impairment reversal
24,357

—

—

—

24,357

Property write downs
—

(747
)
—

(899
)
(1,646
)
Change in estimate of close down and restoration provision
(8,954
)
(501
)
—

—

(9,455
)
Balance, end of period
538,721

336,427

120,885

135,593

1,131,626

 
 
 
 
 
 
Accumulated depreciation
 
 
 
 
 
Balance, January 1, 2017
(276,170
)
(101,567
)
—

—

(377,737
)
Charge for the year
(40,250
)
(54,215
)
—

—

(94,465
)
Disposals
5,843

—

—

—

5,843

Balance, end of period
(310,577
)
(155,782
)
—

—

(466,359
)
 
 
 
 
 
 
Net book value at September 30, 2017
228,144

180,645

120,885

135,593

665,267

Net book value at December 31, 2016
232,838

204,710

89,288

136,992

663,828


(1) Includes assets under construction of $19,138,000 at September 30, 2017 (December 31, 2016 - $6,113,000).

(2) Includes assets under construction of $1,833,000 at September 30, 2017 (December 31, 2016 - $nil).

(3) On January 16, 2017, we entered into an option agreement with Silver One Resources Inc. ("Silver One") in respect of our Candelaria project in the United States for consideration consisting of $1,000,000 worth of Silver One shares issued on January 20, 2017, and three further optional annual installments of $1,000,000 worth of Silver One shares. Under the terms of this agreement, Silver One will have three years to evaluate the Candelaria project.






 
 
10 | Page
SSR Mining Inc. (formerly Silver Standard Resources Inc.)

Notes to the Condensed Consolidated Interim Financial Statements
For the three and nine months ended September 30, 2017
(tabular amounts expressed in thousands of United States dollars unless otherwise stated)

Impairment reversal of non-current assets

On May 31, 2017 we formed the Puna Operations joint venture (note 3), which is estimated to have an operating life of approximately eight years. As a result of this transaction the operating life extension was considered to be an indicator of reversal of previous impairments that had been recognized against Pirquitas plant assets.

The maximum impairment reversal that is permitted is to return the asset balance to the carrying value at which it would have been had no previous impairments been recorded, which was $24,357,000 higher than the existing carrying value.

We determined that the fair value less cost to dispose of the cash generating unit significantly exceeded the maximum permitted impairment reversal. A discounted cash flow analysis was performed using a discount rate of 10% and the following estimated metal prices;

 
2017
2018
2019
2020
LT
Silver / oz
$17.93
$18.72
$19.14
$19.53
$19.65
Lead / lb
$1.01
$1.03
$1.02
$0.99
$0.94
Zinc / lb
$1.27
$1.31
$1.24
$1.18
$1.06

As a result we recognized an impairment reversal of $24,357,000 in the three and nine months ended September 30, 2017.
7.
PROVISIONS
 
September 30, 2017
December 31, 2016
 
Current

Non-current

Current

Non-current

 
$

$

$

$

Moratorium (1)
9,425

41,949

67,130

—

Restructuring provision (2)
—

—

7,329

—

Close down and restoration provision (3)
8,318

51,999

8,347

55,562

Other provisions
952

—

—

—

 
18,695

93,948

82,806

55,562


(1) 
We entered into a fiscal stability agreement with the Federal Government of Argentina in 1998 for production from the Pirquitas mine. In December 2007, the National Customs Authority of Argentina (Dirección Nacional de Aduanas) ("Customs") levied an export duty of approximately 10% from concentrate for projects with fiscal stability agreements pre-dating 2002 and Customs had asserted that the Pirquitas mine was subject to this duty. We had previously challenged the legality of the export duty applied to silver concentrate.

On March 31, 2017, we entered into the tax moratorium system in Argentina to resolve the export duty dispute. Under the conditions of the moratorium, which converts the export duty liability to ARS, we have agreed to pay ARS 1,057,444,000 ($68,621,000 undiscounted) with a 5% down payment initially and the balance in installments over 60 months. Outstanding ARS amounts are subject to interest at a minimum rate of 1.5% per month.

With our entry into the tax moratorium for resolution of our export duty dispute, we are no longer challenging the legality of the application of the export duty other than with respect to our right for reimbursement of the $6,646,000 of export duty that we paid. Export duties were removed effective February 12, 2016. At December 31, 2016 we had accrued a provision for $67,130,000 for unpaid duties but had not accrued for potential interest and penalties.

Entering the tax moratorium resolves the existing liability, and we have recognized the new ARS liability at estimated net present value of future cash outflows by discounting expected future payments using a discount rate of 20% per annum over the 60-month period. We paid 5%, or $3,431,000, when entering the moratorium on March 31, 2017 and recognized the reduction in the liability of $4,303,000 within cost of sales. We subsequently paid principal and interest of $9,168,000

 
 
11 | Page
SSR Mining Inc. (formerly Silver Standard Resources Inc.)

Notes to the Condensed Consolidated Interim Financial Statements
For the three and nine months ended September 30, 2017
(tabular amounts expressed in thousands of United States dollars unless otherwise stated)

under the moratorium and recognized interest expense of $5,763,000 in the period from March 31, 2017 to September 30, 2017.

(2) 
As at September 30, 2017, all employee termination benefits as a result of the Pirquitas pit closure in 2017 were paid, and the remaining provision of $1,105,000 was released in the period.

(3) 
Following notice of our intent to exercise our option on the Chinchillas project (note 3), we re-assessed the estimated timing of reclamation cash flows for the Pirquitas property. The extension of the life of the Pirquitas plant has resulted in cash flows related to decommissioning the plant, being delayed by approximately eight years. The impact was a net reduction of our close down and restoration provision of $5,377,000, of which there was a reduction recorded against the carrying value of the plant of $8,954,000, and an increase in other costs of reclamation due to inflation in our cost estimates of $3,577,000.

8.
NET INCOME PER SHARE

The calculations of basic and diluted earnings per share are based on the following:
 
Three months ended September 30,
 
 
Nine months ended September 30,
 
 
2017

2016

 
2017

2016

 
 
 
 
 
 
Net income
1,821

38,042

 
54,616

52,825

Net income attributable to non-controlling interests
754

—

 
1,183

—

Net income attributable to equity holders of SSR Mining
1,067

38,042

 
53,433

52,825

 
 
 
 
 
 
Adjustment for dilutive instruments:
 
 
 
 
 
Interest saving on convertible notes, net of tax
—

3,646

 
—

—

Net income used in the calculation of diluted net income per share
1,067

41,688

 
53,433

52,825

 
 
 
 
 
 
Weighted average number of common shares issued (thousands)
119,591
119,163
 
119,512
97,851
Adjustments for dilutive instruments:
 
 
 
 
 
Stock options (thousands)
952

1,923

 
1,190
1,294
Convertible notes (thousands)
—

13,250

 
—

—

Weighted average number of common shares for diluted net income per share (thousands)
120,543
134,336
 
120,702
99,145
 
 
 
 
 
 
Basic net income per share attributable to equity holders of SSR Mining
$0.01
$0.32
 
$0.45
$0.54
Diluted net income per share attributable to equity holders of SSR Mining
$0.01
$0.31
 
$0.44
$0.53



 
 
12 | Page
SSR Mining Inc. (formerly Silver Standard Resources Inc.)

Notes to the Condensed Consolidated Interim Financial Statements
For the three and nine months ended September 30, 2017
(tabular amounts expressed in thousands of United States dollars unless otherwise stated)


9.
SHARE-BASED COMPENSATION

Total share-based compensation, including all equity and cash-settled arrangements, for the three and nine months ended September 30, 2017 and 2016 has been recognized in the condensed consolidated interim financial statements as follows:
 
Three months ended September 30,
 
 
Nine months ended September 30,
 
 
2017

2016

 
2017

2016

 
$

$

 
$

$

Equity-settled plans
 
 
 


Cost of inventory
54

33

 
137

64

General and administrative expenses
407

648

 
1,487

1,893

Exploration, evaluation and reclamation expenses
11

9

 
30

28

Cash-settled plans
 
 
 


Cost of inventory
351

833

 
(1,155
)
2,364

General and administrative expenses
1,447

(218
)
 
4,736

7,867

Exploration, evaluation and reclamation expenses
22

30

 
(24
)
102

 
2,292

1,335

 
5,211

12,318



 
 
13 | Page
SSR Mining Inc. (formerly Silver Standard Resources Inc.)

Notes to the Condensed Consolidated Interim Financial Statements
For the three and nine months ended September 30, 2017
(tabular amounts expressed in thousands of United States dollars unless otherwise stated)

10.
OPERATING SEGMENTS

Following the formation of the joint venture with Golden Arrow (note 3), the Pirquitas property was combined with the Chinchillas project into the Puna Operations operating segment and the segment has been amended accordingly. The following is a summary of the reported amounts of income or loss, and the carrying amounts of assets and liabilities by operating segment:
Three months ended September 30, 2017
Marigold mine

Seabee Gold Operation

Puna Operations (i)

Exploration and evaluation properties

Other reconciling items (ii)

Total

 
$ 

$ 

$

$

$

$

Revenue
49,395

27,652

28,958

—

—

106,005

Cost of inventory
(26,507
)
(13,799
)
(20,445
)
—

—

(60,751
)
Depletion, depreciation and amortization
(11,699
)
(10,210
)
(1,928
)
—

—

(23,837
)
Restructuring costs
—

—

1,105

—

—

1,105

Cost of sales
(38,206
)
(24,009
)
(21,268
)
—

—

(83,483
)
Income from mine operations
11,189

3,643

7,690

—

—

22,522

 
 
 
 
 
 
 
Exploration, evaluation and reclamation expenses
(524
)
(1,102
)
(96
)
(3,364
)
—

(5,086
)
Operating income (loss)
10,665

2,540

6,658

(3,570
)
(5,900
)
10,393

Income (loss) before income tax
10,907

2,655

3,028

(7,245
)
(7,170
)
2,175

 
 
 
 
 
 
 
Interest expense and other finance costs
(321
)
(46
)
(3,569
)
—

(5,492
)
(9,428
)
Income tax (expense) recovery
(2,366
)
608

(84
)
—

1,488

(354
)
 
 
 
 
 
 
 
As at September 30, 2017
 
 
 
 
 
 
Total assets
444,934

419,305

142,676

74,021

418,284

1,499,220

Non-current assets
227,906

353,176

46,764

95,367

849

724,062

Total liabilities
(75,913
)
(89,065
)
(84,639
)
(10,924
)
(249,723
)
(510,264
)


 
 
14 | Page
SSR Mining Inc. (formerly Silver Standard Resources Inc.)

Notes to the Condensed Consolidated Interim Financial Statements
For the three and nine months ended September 30, 2017
(tabular amounts expressed in thousands of United States dollars unless otherwise stated)

Three months ended September 30, 2016
Marigold mine

Seabee Gold Operation

Puna Operations (i)

Exploration and evaluation properties

Other reconciling items (ii)

Total

 
$

$

$

$

$

$

Revenue
62,831

29,214

51,336

—

—

143,381

Cost of inventory
(29,928
)
(16,723
)
(18,573
)
—

—

(65,224
)
Depletion, depreciation and amortization
(9,747
)
(8,365
)
(855
)
—

—

(18,967
)
Cost of sales
(39,675
)
(25,088
)
(19,428
)
—

—

(84,191
)
Income from mine operations
23,156

4,126

31,908

—

—

59,190

 
 
 
 
 
 
 
Exploration, evaluation and reclamation expenses
(64
)
(758
)
(32
)
(3,237
)
(189
)
(4,280
)
Operating income (loss)
23,068

3,344

32,074

(3,524
)
(4,714
)
50,248

Income (loss) before income tax
21,664

3,293

28,984

(6,814
)
(6,128
)
40,999

 
 
 
 
 
 
 
Interest expense and other finance costs
(336
)
(14
)
(857
)
(21
)
(5,233
)
(6,461
)
Income tax (expense)
(5,342
)
(509
)
—

—

2,894

(2,957
)
 
 
 
 
 
 
 
As at December 31, 2016
 
 
 
 
 
 
Total assets
394,963

420,796

130,466

77,138

415,325

1,438,688

Non-current assets
253,373

370,141

26,007

71,441

994

721,956

Total liabilities
(75,101
)
(91,627
)
(117,091
)
(7,146
)
(245,844
)
(536,809
)

 
 
15 | Page
SSR Mining Inc. (formerly Silver Standard Resources Inc.)

Notes to the Condensed Consolidated Interim Financial Statements
For the three and nine months ended September 30, 2017
(tabular amounts expressed in thousands of United States dollars unless otherwise stated)

10.
OPERATING SEGMENTS (Cont'd)

Nine months ended September 30, 2017
Marigold mine

Seabee Gold Operation

Puna Operations (i)

Exploration and evaluation properties

Other reconciling items (ii)

Total

 
$ 

$ 

$

$

$

$

Revenue
185,608

77,762

77,522

—

—

340,892

Cost of inventory
(93,423
)
(37,218
)
(50,682
)
—

—

(181,323
)
Depletion, depreciation and amortization
(38,296
)
(27,824
)
(6,249
)
—

—

(72,369
)
Export duty (note 7)
—

—

4,303

—

—

4,303

Restructuring costs
—

—

570

—

—

570

Cost of sales
(131,719
)
(65,042
)
(52,058
)
—

—

(248,819
)
Income from mine operations
53,889

12,720

25,464

—

—

92,073

 
 
 
 
 
 
 
Exploration, evaluation and reclamation expenses
(1,529
)
(3,922
)
(3,689
)
(7,398
)
(272
)
(16,810
)
Impairment reversal (note 6)
—

—

24,357

—

—

24,357

Operating income (loss)
52,313

8,798

44,613

(8,021
)
(16,308
)
81,395

Income (loss) before income tax
52,281

8,800

39,470

(11,607
)
(28,293
)
60,651

 
 
 
 
 
 
 
Interest expense and other finance costs
(1,086
)
(153
)
(8,184
)
(12
)
(16,215
)
(25,650
)
Income tax (expense) recovery
(9,623
)
2,347

(102
)
—

1,343

(6,035
)

Nine months ended September 30, 2016
Marigold mine

Seabee Gold Operation

Puna Operations (i)


Exploration and evaluation properties

Other reconciling items (ii)

Total

 
$

$

$

$

$

$

Revenue
179,770

43,651

140,248

—

—

363,669

Cost of inventory
(95,991
)
(29,944
)
(58,462
)
—

—

(184,397
)
Depletion, depreciation and amortization
(31,755
)
(8,365
)
(11,090
)
—

—

(51,210
)
Export duties
—

—

(1,512
)
—

—

(1,512
)
Cost of sales
(127,746
)
(38,309
)
(71,064
)
—

—

(237,119
)
Income from mine operations
52,024

5,342

69,184

—

—

126,550

 
 
 
 
 
 
 
Exploration, evaluation and reclamation expenses
(304
)
(809
)
(104
)
(9,880
)
(1,141
)
(12,238
)
Operating income (loss)
51,726

4,476

68,343

(9,922
)
(25,524
)
89,099

Income (loss) before income tax
46,335

4,649

58,307

(12,886
)
(34,026
)
62,379

 
 
 
 
 
 
 
Interest expense and other finance costs
(1,051
)
(30
)
(2,859
)
(75
)
(15,556
)
(19,571
)
Income tax (expense)
(11,363
)
(471
)
—

—

2,280

(9,554
)

(i) We fully consolidate Puna Operations which includes non-controlling interest portion of revenues, and income from mine operations for the three months ended September 30, 2017 of $7,020,000 and $1,892,000, respectively, (2016: $nil and $nil) and the nine months ended September 30, 2017 of $9,466,000 and $2,544,000, respectively, (2016: $nil and $nil)
(ii) Other reconciling items refer to items that are not reported as part of segment performance as they are managed on a corporate basis.

 
 
16 | Page
SSR Mining Inc. (formerly Silver Standard Resources Inc.)

Notes to the Condensed Consolidated Interim Financial Statements
For the three and nine months ended September 30, 2017
(tabular amounts expressed in thousands of United States dollars unless otherwise stated)

11.
FAIR VALUE MEASUREMENTS

Assets and liabilities that are held at fair value are categorized based on a valuation hierarchy as follows:
 
Fair value at September 30, 2017
Fair value at December 31, 2016
 
Level 1

Level 2

Level 3

Total

Level 1

Level 2

Level 3

Total

 
$ 

$

$

$

$ 

$

$

$

Recurring measurements
 
 
 
 
 
 
 
 
Trade receivables
—

19,552

—

19,552

—

35,590

—

35,590

Marketable securities
109,721

—

—

109,721

146,887

—

2,057

148,944

Other financial assets
—

—

17,511

17,511

—

—

5,873

5,873

Accrued liabilities
—

12,095

—

12,095

—

12,170

—

12,170

 
109,721

31,647

17,511

158,879

146,887

47,760

7,930

202,577

 
 
 
 
 
 
 
 
 
Fair values disclosed
 
 
 
 
 
 
 
 
Convertible notes
266,357

—

—

266,357

245,515

—

—

245,515

 
266,357

—

—

266,357

245,515

—

—

245,515


There were no transfers between Level 1 and Level 2 fair value measurements. During the three and nine months ended September 30, 2017 we transferred $2,057,000 from Level 3 to Level 1 following the reverse take-over ("RTO") of Huayra Minerals Corporation ("HMC"), as discussed below; the shares of a previously private company that we classified as Level 3 became publicly traded and the fair value is now based upon observable market data. There were no reclassifications during 2016.

Reverse takeover of HMC
On April 24, 2017, HMC completed a RTO with AbraPlata Resource Corp. ("AbraPlata"). As a result of the RTO, our shares in HMC were exchanged on a one-for-one basis for 11,295,000 common shares of AbraPlata, representing 19.9% of the total issued and outstanding common shares of AbraPlata as of April 24, 2017. We also received a cash installment of $500,000 on April 30, 2017.

12.
SUPPLEMENTAL CASH FLOW INFORMATION

Changes in working capital items during the three and nine months ended September 30, 2017 and 2016 are as follows:
 
Three months ended September 30,
 
 
Nine months ended September 30,
 
 
2017

2016

 
2017

2016

 
$ 

$

 
$

$

Trade and other receivables
7,814

(13,593
)
 
17,293

(37,008
)
Inventory
1,948

9,502

 
(6,427
)
15,354

Trade and other payables
(3,519
)
1,273

 
(12,335
)
3,061

Provisions
(264
)
(4,202
)
 
(7,454
)
(3,401
)
 
5,979

(7,020
)
 
(8,923
)
(21,994
)

Subsequent to September 31, 2017 we sold 1.5 million shares of Pretium Resources Inc. realizing pre-tax cash proceeds of $14,244,000.
Other items impacting operating cash flows during the three and nine months ended September 30, 2017 and 2016 are as follows:

 
 
17 | Page
SSR Mining Inc. (formerly Silver Standard Resources Inc.)

Notes to the Condensed Consolidated Interim Financial Statements
For the three and nine months ended September 30, 2017
(tabular amounts expressed in thousands of United States dollars unless otherwise stated)

 
Three months ended September 30,
 
 
Nine months ended September 30,
 
 
2017

2016

 
2017

2016

 
$ 

$

 
$

$

Share-based payments
472

690

 
1,654

1,985

Export duty adjustment in cost of sales
—

—

 
(4,303
)
—

Change in estimate of close down and restoration provision
—

—

 
3,577

—

Other
685

994

 
4,004

3,625

 
 
 
 
 
 
 
1,157

1,684

 
4,932

5,610



During the three and nine months ended September 30, 2017 and 2016 we conducted the following non-cash investing and financing transactions:
 
Three months ended September 30,
 
 
Nine months ended September 30,
 
 
2017

2016

 
2017

2016

 
$ 

$

 
$

$

Common shares issued pursuant to the acquisition of Seabee Gold Operation
—

—

 
—

(325,202
)
Options issued pursuant to the acquisition of Seabee Gold Operation
—

—

 
—

(4,045
)
Transfer of share-based payment reserve upon exercise of stock options
(358
)
(2,090
)
 
(1,004
)
(4,115
)
Marketable securities provided as consideration for exploration and evaluation expenses
—

—

 
—

(388
)
Shares received from sale of mineral properties
323

—

 
1,992

—

 
 
 
 
 
 
 
(35
)
(2,090
)
 
988

(333,750
)



 
 
18 | Page