EX-99.1 2 a2019q2fs.htm EXHIBIT 99.1 Exhibit
ssrmininglogonewa05.jpg








CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2019 AND 2018
(unaudited)






SSR Mining Inc.
Interim Financial Statements Q2 2019 | 1


Contents




 
Financial Statements
 
 
 
 
 
 
 
 
 
 
Notes to the Condensed Consolidated Interim Financial Statements
 
 
 
 
 
Statements of Financial Position
 
 
Note 4 – Provisions
 
 
 
 
Statements of Income
 
 
 
 
 
Statements of Changes in Shareholders’ Equity
 
 
 
 
Additional Disclosures
 
 
 
 
Note 12 – Subsequent events



SSR Mining Inc.
Interim Financial Statements Q2 2019 | 2


Condensed Consolidated Interim Statements of Financial Position
SSR Mining Inc.
(expressed in thousands of United States dollars)


 
Note
June 30

December 31

 
 
2019

2018

 
 
$ 

$

Current assets
 
 
 
Cash and cash equivalents
 
452,160

419,212

Trade and other receivables
 
79,513

42,841

Marketable securities
 
37,712

29,542

Inventory
3
220,591

232,748

Other
 
8,034

8,776

 
 
798,010

733,119

Non-current assets
 
 
 
Property, plant and equipment
 
757,676

701,175

Deferred income tax assets
 
5,819

7,523

Goodwill
 
49,786

49,786

Other
 
38,931

29,535

Total assets
 
1,650,222

1,521,138

 
 
 
 
Current liabilities
 
 
 
Trade and other payables
 
73,641

78,466

Provisions
4
10,912

4,788

Current portion of debt
5
113,772

—

 
 
198,325

83,254

Non-current liabilities
 
 
 
Deferred income tax liabilities
 
120,617

107,909

Lease liabilities
2
3,204

—

Provisions
4
80,219

76,448

Debt
5
166,143

247,551

Total liabilities
 
568,508

515,162

 
 
 
 
Shareholders' equity
 
 
 
Share capital
 
1,060,382

1,055,417

Other reserves
 
(5,536
)
(16,303
)
Equity component of convertible notes
 
106,497

68,347

Deficit
 
(116,219
)
(133,314
)
Total equity attributable to SSR Mining shareholders
 
1,045,124

974,147

Non-controlling interest
 
36,590

31,829

Total equity
 
1,081,714

1,005,976

Total liabilities and equity
 
1,650,222

1,521,138

 
 
 
 
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 August 8, 2019.
"Beverlee F. Park"
 
"Paul Benson"
Beverlee F. Park, Director
 
Paul Benson, Director

SSR Mining Inc.
Interim Financial Statements Q2 2019 | 3


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



 
Note
Three months ended June 30,
 
Six months ended June 30,
 
 
 
2019

2018

2019

2018

 
 
$

$

$

$

Revenue
6
155,149

104,028

281,399

201,930

Cost of sales
9
(125,322
)
(82,825
)
(221,335
)
(163,496
)
Income from mine operations
 
29,827

21,203

60,064

38,434

 
 
 
 
 
 
General and administrative expenses
 
(6,214
)
(8,179
)
(13,085
)
(14,848
)
Exploration, evaluation and reclamation expenses
 
(4,022
)
(4,141
)
(7,760
)
(6,972
)
Operating income
 
19,591

8,883

39,219

16,614

 
 
 
 
 
 
Interest earned and other finance income
 
1,344

3,029

6,247

5,333

Interest expense and other finance costs
 
(7,194
)
(8,432
)
(15,839
)
(17,268
)
Loss on redemption of convertible debt
5
—

—

(5,423
)
—

Other expenses
 
(3,209
)
(697
)
(2,612
)
(4,644
)
Foreign exchange gain
 
2,571

7,040

408

8,982

Income before income tax
 
13,103

9,823

22,000

9,017

Income tax expense
 
(689
)
(7,216
)
(3,854
)
(8,732
)
Net income

12,414

2,607

18,146

285

Attributable to:
 
 
 
 
 
Equity holders of SSR Mining
 
10,631

5,117

17,095

3,491

Non-controlling interests
 
1,783

(2,510
)
1,051

(3,206
)
 
 
 
 
 
 
Net income per share attributable to equity holders of SSR Mining
 
 
Basic
7
$0.09
$0.04
$0.14
$0.03
Diluted
7
$0.09
$0.04
$0.14
$0.03
The accompanying notes are an integral part of the Condensed Consolidated Interim Financial Statements


SSR Mining Inc.
Interim Financial Statements Q2 2019 | 4


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



 
 
Three months ended June 30,
 
Six months ended June 30,
 
 
 
2019

2018

2019

2018

 
 
$

$

$

$

Net income

12,414

2,607

18,146

285

Other comprehensive income (loss)
 
 
 
 
 
Items that will not be reclassified to net income:
 
 
 
 
 
Gain (loss) on marketable securities at FVTOCI, net of tax of ($725), $400, ($1,135) and $5,932
 
4,665

484

7,304

(37,843
)
Items that may be subsequently reclassified to net income:
 
 
 
 
Unrealized gain (loss) on effective portion of derivative, net of tax of ($27), $245, ($504) and $390
 
31

(69
)
1,629

(406
)
Total other comprehensive income (loss)
 
4,696

415

8,933

(38,249
)
Total comprehensive income (loss)
 
17,110

3,022

27,079

(37,964
)
Attributable to:
 
 
 
 
 
Equity holders of SSR Mining
 
15,327

5,532

26,028

(34,758
)
Non-controlling interests
 
1,783

(2,510
)
1,051

(3,206
)
The accompanying notes are an integral part of the Condensed Consolidated Interim Financial Statements


SSR Mining Inc.
Interim Financial Statements Q2 2019 | 5


Condensed Consolidated Interim Statements of Changes in Shareholders' Equity
SSR Mining Inc.
(expressed in thousands of United States dollars except for number of shares)



 
Note
Common Shares
Other reserves

Equity component of convertible notes

Deficit

Total equity attributable to equity holders of SSR Mining

Non-controlling interest

Total
equity

 
 
Shares

Amount

 
 
000's

$

$

$

$

$

$

$

Balance, January 1, 2018
 
119,841

1,047,233

24,998

68,347

(139,693
)
1,000,885

23,043

1,023,928

  Exercise of stock options
 
389

3,525

(1,319
)
—

—

2,206

—

2,206

Equity-settled share-based compensation
8
—

—

1,002

—

—

1,002

—

1,002

Funding from non-controlling interest
 
—

—

—

—

—

—

3,958

3,958

Total comprehensive income (loss) for the period
 
—

—

(38,249
)
—

3,491

(34,758
)
(3,206
)
(37,964
)
Balance, June 30, 2018
 
120,230

1,050,758

(13,568
)
68,347

(136,202
)
969,335

23,795

993,130

 
 
 
 
 
 
 
 
 
 
Balance, January 1, 2019
 
120,740

1,055,417

(16,303
)
68,347

(133,314
)
974,147

31,829

1,005,976

Exercise of stock options
 
632

4,965

(682
)
—

—

4,283

—

4,283

Equity-settled share-based compensation
8
—

—

1,210

—

—

1,210

—

1,210

Transfer of equity-settled Performance Share Units
8
—

—

1,284

—

—

1,284

—

1,284

Equity value debt issued
5
—

—

—

42,975

—

42,975

—

42,975

Value of convertible debt redeemed
5
—

—

—

(4,825
)
—

(4,825
)
—

(4,825
)
Revaluation of reserve
 
—

—

22

—

—

22

—

22

Funding from non-controlling interest
 
—

—

—

—

—

—

3,710

3,710

Total comprehensive income for the period
 
—

—

8,933

—

17,095

26,028

1,051

27,079

Balance, June 30, 2019
 
121,372

1,060,382

(5,536
)
106,497

(116,219
)
1,045,124

36,590

1,081,714

The accompanying notes are an integral part of the Condensed Consolidated Interim Financial Statements

SSR Mining Inc.
Interim Financial Statements Q2 2019 | 6


Condensed Consolidated Interim Statements of Cash Flows
SSR Mining Inc.
(expressed in thousands of United States dollars)



 
Note
Three months ended June 30,
 
Six months ended June 30,
 
 
 
2019

2018

2019

2018

 
 
$

$

$

$

Cash flows from operating activities
 
 

 

 
 
Net income for the period
 
12,414

2,607

18,146

285

Adjustments for:
 
 

 

 
 
Depreciation, depletion and amortization
 
29,355

23,303

55,153

48,703

Net finance expense
 
5,485

5,041

8,891

11,113

Gain on sale of mineral property
 
—

—

(1,000
)
—

Income tax expense
 
689

7,216

3,854

8,732

Non-cash foreign exchange gain
 
(1,087
)
(9,677
)
(1,570
)
(11,930
)
     Loss on redemption of convertible debt
5
—

—

5,423

—

Net changes in non-cash working capital items
11
(11,379
)
(4,402
)
(38,756
)
(16,270
)
Other items impacting operating activities
11
3,629

1,080

4,161

5,403

Cash generated by operating activities before interest and taxes
 
39,106

25,168

54,302

46,036

Moratorium paid
 
(1,039
)
(1,581
)
(2,130
)
(3,401
)
Interest paid
 
(867
)
(1,606
)
(6,083
)
(7,428
)
Income taxes paid
 
(3,833
)
(4,849
)
(13,025
)
(7,068
)
Cash generated by operating activities
 
33,367

17,132

33,064

28,139

Cash flows from investing activities
 
 

 

 
 
Purchase of plant and equipment
 
(9,132
)
(11,380
)
(22,292
)
(20,155
)
Capitalized stripping costs
 
(7,349
)
(850
)
(15,833
)
(3,752
)
Underground mine development costs
 
(3,345
)
(2,069
)
(6,724
)
(4,352
)
Chinchillas project costs
 
(4,814
)
(16,105
)
(10,962
)
(27,820
)
Capitalized exploration costs
 
(1,623
)
(4,999
)
(5,662
)
(7,221
)
Acquisition of land
4
(22,000
)
—

(22,000
)
—

Loan to joint venture partner
 
—

—

(1,967
)
—

Net proceeds from sale of marketable securities
 
291

35,381

1,238

63,445

Interest received
 
2,972

2,393

5,684

4,037

Other
 
45

(640
)
(199
)
(1,064
)
Cash (used in) generated by investing activities
 
(44,955
)
1,731

(78,717
)
3,118

Cash flows from financing activities
 
 

 

 
 
Proceeds from exercise of stock options
 
1,221

1,745

4,269

2,206

Funding from non-controlling interests
 
—

2,503

3,710

3,958

Redemption of convertible notes
5
—

—

(152,250
)
—

Issuance of convertible notes
5
—

—

230,000

—

Convertible notes issuance costs
5
—

—

(7,067
)
—

Lease payments
 
(430
)
—

(430
)
—

Cash generated by financing activities
 
791

4,248

78,232

6,164

Effect of foreign exchange rate changes on cash and cash equivalents
 
1,606

(2,370
)
369

(3,643
)
(Decrease) increase in cash and cash equivalents
 
(9,191
)
20,741

32,948

33,778

Cash and cash equivalents, beginning of period
 
461,351

472,901

419,212

459,864

Cash and cash equivalents, end of period
 
452,160

493,642

452,160

493,642

The accompanying notes are an integral part of the Condensed Consolidated Interim Financial Statements

SSR Mining Inc.
Interim Financial Statements Q2 2019 | 7


Notes to the Condensed Consolidated Interim Financial Statements
SSR Mining Inc.
(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") 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. 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, 2018.

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, and do not include all the information required for full annual financial statements. The comparative information has also been prepared on this basis.

These statements were authorized for issue by our Board of Directors on August 8, 2019.

b)
Change in accounting policies
IFRS 16 Leases

We have adopted the requirements of IFRS 16 Leases (“IFRS 16") as of January 1, 2019. IFRS 16 introduces a single lessee accounting model and requires a lessee to recognize assets and liabilities for leases. We elected to apply IFRS 16 using a modified retrospective approach by recognizing the cumulative effect of adopting IFRS 16 in an adjustment to the opening statement of financial position at January 1, 2019. Therefore, the comparative information has not been restated and continues to be reported under IAS 17 Leases. The details of the new accounting policy and the quantitative impact of change are described below.

At inception of a contract, we assess whether a contract is, or contains, a lease. A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset over a period of time in exchange for consideration. We assess whether the contract involves the use of an identified asset, whether we have the right to obtain substantially all of the economic benefits from the use of the asset during the term of the contract and if we have the right to direct the use of the asset.



SSR Mining Inc.
Interim Financial Statements Q2 2019 | 8


Notes to the Condensed Consolidated Interim Financial Statements
SSR Mining Inc.
(tabular amounts expressed in thousands of United States dollars unless otherwise stated)

2.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

As a lessee, we recognize a right-of-use asset, which is included in property, plant and equipment, and a lease liability at the commencement date of the lease. The right-of-use asset is initially measured at cost, which is comprised of the initial amount of the lease liability adjusted for any lease payments made at or before the commencement date, plus any decommissioning and restoration costs, less any lease incentives received.

The right-of-use asset is subsequently depreciated from the commencement date to the earlier of the end of the lease term, or the end of the useful life of the asset. In addition, the right-of-use asset may be reduced due to impairment losses, if any, and adjusted for certain remeasurements of the lease liability.

A lease liability is initially measured at the present value of the lease payments that are not paid at the commencement date discounted by the interest rate implicit in the lease or, if that rate cannot be readily determined, the incremental borrowing rate. The lease liability is subsequently measured at amortized cost using the effective interest method.

Lease payments included in the measurement of the lease liability comprise: fixed payments; variable lease payments that depend on an index or a rate; amounts expected to be payable under any residual value guarantee, and the exercise price under any purchase option that we would be reasonably certain to exercise; lease payments in any optional renewal period if we are reasonably certain to exercise an extension option; and penalties for any early termination of a lease unless we are reasonably certain not to terminate early.

We have elected not to recognize right-of-use assets and lease liabilities for short-term leases that have a lease term of twelve months or less and leases of low-value assets. The lease payments associated with these leases are charged directly to income on a straight-line basis over the lease term.

On adoption of IFRS 16, we recorded right-of-use assets of $4.3 million within property, plant and equipment. We recorded lease liabilities of $4.3 million as at January 1, 2019. The weighted average incremental borrowing rate for lease liabilities initially recognized as of January 1, 2019 was 7.5%.
 
$ '000s

As at December 31, 2018
—

IFRS 16 adoption
 
Future aggregate minimum lease payments under operating leases as at December 31, 2018
5,988

Effect of discounting at the incremental borrowing rate
(1,678
)
Lease liabilities arising on initial application of IFRS 16
4,310

Cash principal and interest payments
(587
)
Non-cash accretion
162

As at June 30, 2019
3,885

Less: current portion
681

Non-current portion of lease liabilities
3,204


c)
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 significant judgments and estimates applied in the preparation of the unaudited condensed consolidated interim financial statements for the three and six months ended June 30, 2019 are consistent with those applied and disclosed in Note 2(u) to our audited consolidated financial statements for the year ended December 31, 2018.

SSR Mining Inc.
Interim Financial Statements Q2 2019 | 9


Notes to the Condensed Consolidated Interim Financial Statements
SSR Mining Inc.
(tabular amounts expressed in thousands of United States dollars unless otherwise stated)



3.
INVENTORY

 
June 30, 2019

December 31, 2018

 
$ 

$

Current:
 
 
Finished goods
16,787

23,433

Stockpiled ore
7,482

18,195

Leach pad inventory
159,798

162,335

Materials and supplies
36,524

28,785

 
220,591

232,748

Non-current materials and supplies
2,251

2,006

 
222,842

234,754


As at June 30, 2019, we have total provisions of $3,413,000 (December 31, 2018 - $3,436,000) for supplies inventory that we no longer expect to utilize.


4.
PROVISIONS

 
June 30, 2019
 
December 31, 2018
 
 
Current

Non-current

Current

Non-current

 
$

$

$

$

Moratorium (1)
4,498

10,496

4,570

14,487

Close down and restoration provision (2)
6,408

69,723

211

61,961

Other provisions
6

—

7

—

 
10,912

80,219

4,788

76,448


(1) 
We entered into a fiscal stability agreement with the Federal Government of Argentina in 1998 for production from Puna Operations. 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 Puna Operations 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. Outstanding ARS amounts are subject to interest at a minimum rate of 1.5% per month.

(2) 
On June 27, 2019, we announced that we had acquired 8,900 hectares of land contiguous to the Marigold mine in Nevada. U.S., net of a 0.5% net smelter returns royalty. The consideration included $22 million in cash and the assumption of close down and restoration provisions on the properties with a carrying value of approximately $13 million at June 30, 2019.


SSR Mining Inc.
Interim Financial Statements Q2 2019 | 10


Notes to the Condensed Consolidated Interim Financial Statements
SSR Mining Inc.
(tabular amounts expressed in thousands of United States dollars unless otherwise stated)


5.
DEBT

At December 31, 2018, we had $265,000,000 of senior convertible unsecured notes (the “2013 Notes”) outstanding. On March 19, 2019, we redeemed $150,000,000 of the 2013 Notes for a cash payment of $152,250,000. The redemption amount was bifurcated into the debt and equity components of the 2013 Notes purchased. The fair value of the debt portion of $148,000,000 was estimated using a discounted cash flow model based on a maturity date of February 1, 2020 and a discount rate of 4.95%. The difference between this amount and the book value of the redeemed 2013 Notes of $5,423,000 was recorded in the consolidated statements of income along with the related tax recovery of $1,687,000 and the residual of $4,825,000 was allocated to equity. At June 30, 2019, the expected life of the remaining 2013 Notes is less than one year, so they are recorded in current liabilities.
On March 19, 2019, we issued $230,000,000 of unsecured convertible senior notes due in 2039 (the “2019 Notes”) for net proceeds of $222,933,000 after payment of commissions and expenses related to the offering. The 2019 Notes mature on April 1, 2039 and bear an interest rate of 2.5% per annum, payable semi-annually in arrears on April 1 and October 1 of each year. The 2019 Notes are convertible into our common shares at a fixed conversion rate, subject to certain anti-dilution adjustments. In addition, if certain fundamental changes occur to SSR Mining, holders of the 2019 Notes may be entitled to an increased conversion rate. The 2019 Notes are convertible into our common shares at an initial conversion rate of 54.1082 common shares per $1,000 principal amount of 2019 Notes converted, representing an initial conversion price of $18.48 per common share.
Prior to April 1, 2023, we may not redeem the 2019 Notes, except in the event of certain changes in Canadian tax law. On or after April 1, 2023 and prior to April 1, 2026 we may redeem all or part of the 2019 Notes for cash, but only if the last reported sales price of our common shares for 20 or more trading days in a period of 30 consecutive trading days exceeds 130% of the conversion price in effect on each such trading day. On or after April 1, 2026, we may redeem the 2019 Notes in full or in part, for cash.
Holders of the 2019 Notes have the right to require us to repurchase all or part of their 2019 Notes on April 1 of each of 2026, 2029 and 2034, or upon certain fundamental corporate changes. The repurchase price will be equal to 100% of the 2019 Notes, plus accrued and unpaid interest to the repurchase date.
The proceeds of the 2019 Notes have been bifurcated between their debt and equity components. The fair value of the debt portion of $169,365,000 was estimated using a discounted cash flow model method based on an expected life of seven years and a discount rate of 7.5%. The residual of $44,838,000 ($60,635,000 less deferred tax liability of $15,797,000) was allocated to equity. The debt portion has been recorded at amortized cost, net of transaction costs, and is being accreted to face value over the expected life using the effective interest method. The transaction costs of the issuance of the 2019 Notes of $7,068,000 have been allocated on a pro rata basis with $5,205,000 to debt and $1,863,000 to equity.
 
June 30, 2019

December 31, 2018

 
$

$

Balance, beginning of period
250,729

236,358

Accretion of discount
7,228

14,371

Interest accrued
4,164

7,619

Interest paid
(4,384
)
(7,619
)
Redemption of 2013 Notes
(141,982
)
—

Issuance of 2019 Notes
164,160

—

Balance, end of period
279,915

250,729

Balance of debt (current)
110,815

—

Accrued interest outstanding
2,957

3,178

Total current portion of debt
113,772

3,178

Non-current portion of notes outstanding
166,143

247,551





SSR Mining Inc.
Interim Financial Statements Q2 2019 | 11


Notes to the Condensed Consolidated Interim Financial Statements
SSR Mining Inc.
(tabular amounts expressed in thousands of United States dollars unless otherwise stated)

6.
REVENUE

 
Three months ended June 30,
 
Six months ended June 30,
 
 
2019

2018

2019

2018

 
$

$

$

$

Gold doré and bullion sales
110,214

87,471

218,908

170,140

Concentrate sales
45,274

16,017

62,461

32,170

Other revenue
(339
)
540

30

(380
)
 
155,149

104,028

281,399

201,930


7.
INCOME PER SHARE

The calculations of basic and diluted income per share are based on the following:
 
Three months ended June 30,
 
Six months ended June 30,
 
 
2019

2018

2019

2018

 
$

$

$

$

Net income
12,414

2,607

18,146

285

Net income (loss) attributable to non-controlling interests
1,783

(2,510
)
1,051

(3,206
)
Net income used in the calculation of basic and diluted net income per share
10,631

5,117

17,095

3,491

 
 
 
 
 
Weighted average number of common shares issued (thousands)
121,247

120,075

121,136

119,979

Adjustments for dilutive instruments:
 
 
 
 
Stock options (thousands)
764

920

828

806
Weighted average number of common shares for diluted income per share (thousands)
122,011

120,995

121,964

120,785

 
 
 
 
 
Basic net income per share attributable to equity holders of SSR Mining
$0.09
$0.04
$0.14
$0.03
Diluted net income per share attributable to equity holders of SSR Mining
$0.09
$0.04
$0.14
$0.03



SSR Mining Inc.
Interim Financial Statements Q2 2019 | 12


Notes to the Condensed Consolidated Interim Financial Statements
SSR Mining Inc.
(tabular amounts expressed in thousands of United States dollars unless otherwise stated)

8.
SHARE-BASED COMPENSATION

Total share-based compensation, including all equity and cash-settled arrangements, for the three and six months ended June 30, 2019 and 2018 has been recognized in the condensed consolidated interim financial statements as follows:
 
Three months ended June 30,
 
Six months ended June 30,
 
 
2019

2018

2019

2018

 
$

$

$

$

Equity-settled
 
 


Cost of inventory
13

35

48

89

General and administrative expenses
733

490

1,149

893

Exploration, evaluation and reclamation expenses
4

9

13

20

Cash-settled
 
 


Cost of inventory
316

243

502

536

General and administrative expenses
1,137

1,243

2,915

3,711

Exploration, evaluation and reclamation expenses
(40
)
4

7

28

 
2,163

2,024

4,634

5,277


Under our 2017 Share Compensation Plan, we have the option to settle vested Preferred Share Units ("PSUs") in either cash or common shares.  On February 22, 2019 our Board of Directors indicated its intention to settle all of the PSUs issued under our 2017 Share Compensation Plan, when vested, in common shares of SSR Mining.  Prior to this date, based on the past history of settling PSUs in cash, we had accounted for our obligations as a liability.  As a result of this change, the value of the relevant outstanding PSUs was fixed at that date and the existing liability of $1,764,000 ($1,284,000 net of tax) was transferred to the share-based compensation reserve of shareholders’ equity.  The unamortized portion of $4,652,000 relating to these PSUs will be amortized over the remaining vesting period.


SSR Mining Inc.
Interim Financial Statements Q2 2019 | 13


Notes to the Condensed Consolidated Interim Financial Statements
SSR Mining Inc.
(tabular amounts expressed in thousands of United States dollars unless otherwise stated)

9.
OPERATING SEGMENTS

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 June 30, 2019
Marigold mine

Seabee Gold Operation

Puna Operations

Exploration evaluation and development properties

Other reconciling items (i)

Total

 
$ 

$ 

$

$

$

$

Revenue
78,039

32,237

44,873

—

—

155,149

Cost of inventory
(49,767
)
(12,714
)
(32,669
)
—

—

(95,150
)
Depletion, depreciation and amortization
(14,333
)
(7,761
)
(8,078
)
—

—

(30,172
)
Income from mine operations
13,939

11,762

4,126

—

—

29,827

 
 
 
 
 
 
 
Exploration, evaluation and reclamation expenses
(381
)
(2,266
)
(65
)
(1,408
)
98

(4,022
)
Operating income (loss)
11,979

8,765

5,991

(1,724
)
(5,420
)
19,591

Income (loss) before income tax
15,207

9,390

2,832

(1,636
)
(12,690
)
13,103

 
 
 
 
 
 
 
As at June 30, 2019
 
 
 
 
 
 
Total assets
471,340

458,773

259,109

117,403

343,597

1,650,222

Non-current assets
234,515

314,536

159,855

115,266

28,040

852,212

Total liabilities
(93,812
)
(95,164
)
(65,228
)
(6,314
)
(307,990
)
(568,508
)



Three months ended June 30, 2018
Marigold
mine

Seabee Gold Operation

Puna Operations

Exploration evaluation and development properties

Other reconciling items (i)

Total

 
$

$

$

$

$

$

Revenue
60,752

26,706

16,570

—

—

104,028

Cost of inventory
(32,543
)
(12,592
)
(14,870
)
—

—

(60,005
)
Depletion, depreciation and amortization
(13,539
)
(8,411
)
(870
)
—

—

(22,820
)
Income from mine operations
14,670

5,703

830

—

—

21,203

 
 
 
 
 
 
 
Exploration, evaluation and reclamation expenses
(182
)
(2,124
)
(566
)
(1,062
)
(207
)
(4,141
)
Operating income (loss)
13,068

3,098

(2,268
)
(1,064
)
(3,951
)
8,883

Income (loss) before income tax
8,894

3,776

2,562

(1,168
)
(4,241
)
9,823

 
 
 
 
 
 
 
As at June 30, 2018
 
 
 
 
 


Total assets
465,478

420,256

133,147

82,814

403,292

1,504,987

Non-current assets
215,800

324,308

94,076

79,389

13,193

726,766

Total liabilities
(79,063
)
(91,786
)
(73,119
)
(6,463
)
(261,426
)
(511,857
)






SSR Mining Inc.
Interim Financial Statements Q2 2019 | 14


Notes to the Condensed Consolidated Interim Financial Statements
SSR Mining Inc.
(tabular amounts expressed in thousands of United States dollars unless otherwise stated)

9.
OPERATING SEGMENTS (Continued)
Six months ended June 30, 2019
Marigold mine

Seabee Gold Operation

Puna Operations

Exploration evaluation and development properties

Other reconciling items (i)

Total

 
$

$

$

$

$

$

Revenue
150,302

68,668

62,429

—

—

281,399

Cost of inventory
(94,759
)
(25,761
)
(45,496
)
—

—

(166,016
)
Depletion, depreciation and amortization
(28,623
)
(17,473
)
(9,223
)
—

—

(55,319
)
Income from mine operations
26,920

25,434

7,710

—

—

60,064

 
 
 
 
 
 
 
Exploration, evaluation and reclamation expenses
(487
)
(5,169
)
(65
)
(2,022
)
(17
)
(7,760
)
Operating income (loss)
23,136

18,781

8,359

(2,022
)
(9,035
)
39,219

Income (loss) before income tax
22,863

20,061

2,124

(934
)
(22,114
)
22,000


Six months ended June 30, 2018
Marigold
mine

Seabee Gold Operation

Puna Operations

Exploration evaluation and development properties

Other reconciling items (i)

Total

 
$

$

$

$

$

$

Revenue
116,632

53,495

31,803

—

—

201,930

Cost of inventory
(62,739
)
(22,196
)
(30,803
)
—

—

(115,738
)
Depletion, depreciation and amortization
(26,911
)
(18,924
)
(1,923
)
—

—

(47,758
)
Income (loss) from mine operations
26,982

12,375

(923
)
—

—

38,434

 
 
 
 
 
 
 
Exploration, evaluation and reclamation expenses
(283
)
(3,938
)
(636
)
(1,704
)
(411
)
(6,972
)
Operating income (loss)
24,121

7,419

(4,829
)
(1,705
)
(8,392
)
16,614

Income (loss) before income tax
15,716

5,591

(1,420
)
(1,720
)
(9,150
)
9,017


(i) Other reconciling items refer to items that are not reported as part of segment performance as they are managed on a corporate basis.

SSR Mining Inc.
Interim Financial Statements Q2 2019 | 15


Notes to the Condensed Consolidated Interim Financial Statements
SSR Mining Inc.
(tabular amounts expressed in thousands of United States dollars unless otherwise stated)

10.
FAIR VALUE MEASUREMENTS

Assets and liabilities that are held at fair value are categorized based on a valuation hierarchy as follows:
 
Fair value at June 30, 2019
Fair value at December 31, 2018
 
Level 1

Level 2

Level 3

Total

Level 1

Level 2

Level 3

Total

 
$ 

$

$

$

$ 

$

$

$

Recurring measurements
 
 
 
 
 
 
 
 
Trade receivables
—

45,434

—

45,434

—

11,287

—

11,287

Marketable securities
37,712

—

—

37,712

29,542

—

—

29,542

Other financial assets
—

—

3,663

3,663

—

—

3,711

3,711

Accrued liabilities
—

(12,275
)
—

(12,275
)
—

(16,649
)
—

(16,649
)
 
37,712

33,159

3,663

74,534

29,542

(5,362
)
3,711

27,891

 
 
 
 
 
 
 
 
 
Fair values disclosed
 
 
 
 
 
 
 
 
Convertible notes (1)
(359,958
)
—

—

(359,958
)
(263,675
)
—

—

(263,675
)
 
(359,958
)
—

—

(359,958
)
(263,675
)
—

—

(263,675
)

There were no transfers between Level 1 and Level 2 fair value measurements. During the three and six months ended June 30, 2019, there were no transfers into or out of Level 3 fair value measures.

(1)The fair value represents both the debt and equity components of the convertible notes (note 5).

11.
SUPPLEMENTAL CASH FLOW INFORMATION

Changes in working capital items during the three and six months ended June 30, 2019 and 2018 are as follows:
 
Three months ended June 30,
 
Six months ended June 30,
 
 
2019

2018

2019

2018

 
$ 

$

$

$

Trade and other receivables
(27,614
)
(4,408
)
(41,910
)
1,173

Inventory
16,121

(6,513
)
1,445

(24,986
)
Trade and other payables
(1
)
6,879

1,830

8,366

Provisions
115

(360
)
(121
)
(823
)
 
(11,379
)
(4,402
)
(38,756
)
(16,270
)

Adjustments for non-cash other operating activities during the three and six months ended June 30, 2019 and 2018 are as follows:
 
Three months ended June 30,
 
Six months ended June 30,
 
 
2019

2018

2019

2018

 
$ 

$

$

$

Share-based payments
750

534

1,210

1,002

Write down of fixed assets
240

22

533

2,771

Other
2,639

524

2,418

1,630

 
3,629

1,080

4,161

5,403


SSR Mining Inc.
Interim Financial Statements Q2 2019 | 16


Notes to the Condensed Consolidated Interim Financial Statements
SSR Mining Inc.
(tabular amounts expressed in thousands of United States dollars unless otherwise stated)


11.
SUPPLEMENTAL CASH FLOW INFORMATION (Continued)

Non-cash investing and financing transactions conducted during the three and six months ended June 30, 2019 and 2018 are as follows:
 
Three months ended June 30,
 
Six months ended June 30,
 
 
2019

2018

2019

2018

 
$ 

$

$

$

Close down and restoration provision for land acquisition (note 4).
(12,990
)
—

(12,990
)
—

Transfer of share-based payment reserve upon exercise of stock options
444

(1,075
)
(682
)
(1,319
)
Transfer of equity-settled PSU's
—

—

1,284

—

Marketable securities received from sale of exploration and evaluation properties
—

243

—

1,546

 
(12,546
)
(832
)
(12,388
)
227



12.
SUBSEQUENT EVENTS

(a)
On July 22, 2019, we entered into a definitive agreement (the "Agreement") whereby we will acquire the remaining 25% interest in Puna Operations from Golden Arrow Resources Corporation ("Golden Arrow") for aggregate consideration totaling approximately $34 million (the "Transaction"). Under the terms of the Agreement, the aggregate consideration will consist of the following:

•
$2.3 million in cash payable upon closing of the Transaction;

•
Cancellation of the outstanding principal and accrued interest on the $10 million non-revolving term loan previously provided to Golden Arrow;

•
Approximately $20 million in common shares of SSR Mining determined by the 20-day volume weighted average price of our common shares on the Toronto Stock Exchange ending on the last trading day prior to the closing date of the Transaction; 

•
Payment of Golden Arrow's portion of any cash calls made by Puna Operations under the shareholders’ agreement until the closing of the Transaction; and

•
Transfer to Golden Arrow, for cancellation, the 4,285,714 common shares of Golden Arrow held by us, which have a current approximate value of $0.8 million.

Completion of the Transaction is subject to approval by the Golden Arrow shareholders, regulatory approvals and other customary closing conditions. The Transaction includes customary provisions, including non-solicitation of alternative transactions and a break fee. The Transaction is planned to close in the fourth quarter of 2019.

(b)
On July 23, 2019, we elected to exercise our equity participation right pursuant to our agreement with SilverCrest Metals Inc. ("SilverCrest") dated November 28, 2018 to purchase between 718,000 and 780,000 common shares of SilverCrest, on the same terms as the bought deal offering announced by SilverCrest on July 23, 2019, subject to closing of the over-allotment option. The additional shares will be acquired at a price of C $5.85 per common share for total consideration of between $3.2 million and $3.5 million. Upon closing, we will own approximately 9.9% of the issued and outstanding common shares of SilverCrest on a non-diluted basis.


SSR Mining Inc.
Interim Financial Statements Q2 2019 | 17