EX-99.1 2 a2019q3fs.htm EXHIBIT 99.1 Exhibit
ssrmininglogonewa13.jpg








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






SSR Mining Inc.
Interim Financial Statements Q3 2019 | 1


Contents




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



SSR Mining Inc.
Interim Financial Statements Q3 2019 | 2


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

 
Note
At September 30, 2019

At December 31, 2018

Current assets
 
 
 
Cash and cash equivalents
 
$
474,479

$
419,212

Trade and other receivables
 
78,392

42,841

Marketable securities
 
51,132

29,542

Inventories
3
237,918

232,748

Other
 
8,038

8,776

 
 
849,959

733,119

Non-current assets
 
 
 
Property, plant and equipment
 
760,269

701,175

Deferred income tax assets
 
63

7,523

Goodwill
 
49,786

49,786

Other
 
28,366

29,535

Total assets
 
$
1,688,443

$
1,521,138

 
 
 
 
Current liabilities
 
 
 
Trade and other payables
 
$
89,895

$
78,466

Provisions
4
11,213

4,788

Current portion of debt
5
112,541

—

 
 
213,649

83,254

Non-current liabilities
 
 
 
Deferred income tax liabilities
 
121,697

107,909

Lease liabilities
2
3,141

—

Provisions
4
81,907

76,448

Debt
5
167,952

247,551

Total liabilities
 
588,346

515,162

 
 
 
 
Shareholders' equity
 
 
 
Share capital
 
1,080,255

1,055,417

Other reserves
 
8,823

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

68,347

Deficit
 
(95,478
)
(133,314
)
Total equity attributable to SSR Mining shareholders
 
1,100,097

974,147

Non-controlling interest
6
—

31,829

Total equity
 
1,100,097

1,005,976

Total liabilities and equity
 
$
1,688,443

$
1,521,138

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 5, 2019.
"Beverlee F. Park"
 
"Paul Benson"
Beverlee F. Park, Director
 
Paul Benson, Director

SSR Mining Inc.
Interim Financial Statements Q3 2019 | 3


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



 
Note
Three months ended
September 30
Nine months ended
September 30,
 
 
2019

2018

2019

2018

Revenue
7
$
147,848

$
115,033

$
429,247

$
316,963

Cost of sales

(95,942
)
(93,158
)
(317,277
)
(256,654
)
Income from mine operations
 
51,906

21,875

111,970

60,309

General and administrative expenses
 
(7,602
)
(5,985
)
(20,687
)
(20,833
)
Exploration, evaluation and reclamation expenses
 
(4,413
)
(5,670
)
(12,173
)
(12,642
)
Operating income
 
39,891

10,220

79,110

26,834

Interest and other finance income
 
3,994

3,226

10,241

8,559

Interest expense and other finance costs
 
(8,214
)
(8,157
)
(24,053
)
(25,425
)
Loss on redemption of convertible debt
5
—

—

(5,423
)
—

Other income (expense)
 
(1,556
)
(830
)
(4,168
)
(5,474
)
Foreign exchange gain (loss)
 
(1,134
)
2,173

(726
)
11,155

Income before income taxes
 
32,981

6,632

54,981

15,649

Income tax expense
 
(14,849
)
(4,404
)
(18,703
)
(13,136
)
Net income

$
18,132

$
2,228

$
36,278

$
2,513

Attributable to:
 
 
 
 
 
Equity holders of SSR Mining
 
$
20,741

$
6,374

$
37,836

$
9,865

Non-controlling interests
 
(2,609
)
(4,146
)
(1,558
)
(7,352
)
 
 
 
 
 
 
Net income per share attributable to equity holders of SSR Mining
 
 
Basic
8
$0.17
$0.05
$0.31
$0.08
Diluted
8
$0.17
$0.05
$0.31
$0.08

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


SSR Mining Inc.
Interim Financial Statements Q3 2019 | 4


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



 
 
Three months ended
September 30
Nine months ended
September 30
 
 
2019

2018

2019

2018

Net income
 
$
18,132

$
2,228

$
36,278

$
2,513

Other comprehensive income (loss)
 
 
 
 
 
Items that will not be reclassified to net income:
 
 
 
 
 
Gain (loss) on marketable securities, net of tax of ($1,727), $446, ($2,862) and $6,378
 
10,025

(1,916
)
17,329

(39,759
)
Items that may be subsequently reclassified to net income:
 
 
 
 
Unrealized (loss) gain on effective portion of derivatives, net of tax of $Nil, ($209), ($504) and $181
 
(22
)
(187
)
1,607

(593
)
Total other comprehensive income (loss)
 
10,003

(2,103
)
18,936

(40,352
)
Total comprehensive income (loss)
 
$
28,135

$
125

$
55,214

$
(37,839
)
Attributable to:
 
 
 
 
 
Equity holders of SSR Mining
 
$
30,744

$
4,271

$
56,772

$
(30,487
)
Non-controlling interests
 
(2,609
)
(4,146
)
(1,558
)
(7,352
)
The accompanying notes are an integral part of the Condensed Consolidated Interim Financial Statements


SSR Mining Inc.
Interim Financial Statements Q3 2019 | 5


Condensed Consolidated Interim Statements of Changes in Shareholders' Equity
SSR Mining Inc.
(Expressed in thousands of United States dollars, shares in thousands)
(Unaudited)



 
 
Common Shares
Other reserves

Equity component of convertible notes

Deficit

Total equity attributable to equity holders of SSR Mining

Non-controlling interest

Total
equity

 
Note
Shares

Amount

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
 
391

3,543

(1,326
)
—

—

2,217

—

2,217

Equity-settled share-based compensation
9
—

—

1,590

—

—

1,590

—

1,590

Funding from non-controlling interest
 
—

—

—

—

—

—

6,396

6,396

Total comprehensive (loss) income for the period
 
—

—

(40,352
)
—

9,865

(30,487
)
(7,352
)
(37,839
)
Balance, September 30, 2018
 
120,232

$
1,050,776

$
(15,090
)
$
68,347

$
(129,828
)
$
974,205

$
22,087

$
996,292

 
 
 
 
 
 
 
 
 
 
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
 
1,064

6,620

525

—

—

7,145

—

7,145

Acquisition of non-controlling interest in Puna Operations
6
1,246

18,218

1,463

—

—

19,681

(33,981
)
(14,300
)
Equity-settled share-based compensation
9
—

—

2,896

—

—

2,896

—

2,896

Transfer of equity-settled Performance Share Units
9
—

—

1,284

—

—

1,284

—

1,284

Equity value of debt issued
5
—

—

—

42,975

—

42,975

—

42,975

Equity 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
 
—

—

18,936

—

37,836

56,772

(1,558
)
55,214

Balance, September 30, 2019
 
123,050

$
1,080,255

$
8,823

$
106,497

$
(95,478
)
$
1,100,097

$
—

$
1,100,097

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

SSR Mining Inc.
Interim Financial Statements Q3 2019 | 6


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


 
 
Three months ended
September 30
Nine months ended
September 30
 
Note
2019

2018

2019

2018

Cash flows from operating activities
 
 

 

 
 
Net income for the period
 
$
18,132

$
2,228

$
36,278

$
2,513

Adjustments for:
 
 

 

 
 
Depreciation, depletion and amortization
 
21,773

29,126

76,926

77,829

Net finance expense
 
3,868

4,536

12,759

15,649

Income tax expense
 
14,849

4,404

18,703

13,136

Non-cash foreign exchange loss (gain)
 
6,282

(2,874
)
4,712

(14,804
)
     Loss on redemption of convertible debt
5
—

—

5,423

—

Other
12
1,803

1,299

4,964

6,702

Net changes in non-cash working capital items
12
(9,388
)
7,621

(48,144
)
(8,649
)
Cash generated by operating activities before interest and taxes
 
57,319

46,340

111,621

92,376

Moratorium paid
 
(901
)
(1,162
)
(3,031
)
(4,563
)
Interest paid
 
(2,278
)
(4,889
)
(8,361
)
(12,317
)
Income taxes paid
 
(1,638
)
(4,915
)
(14,663
)
(11,983
)
Cash generated by operating activities
 
52,502

35,374

85,566

63,513

Cash flows from investing activities
 
 

 

 
 
Purchase of plant and equipment
 
(14,687
)
(36,995
)
(36,979
)
(57,150
)
Capitalized stripping costs
 
(3,636
)
(2,529
)
(19,469
)
(6,281
)
Underground mine development costs
 
(3,352
)
(1,812
)
(10,076
)
(6,164
)
Chinchillas project costs
 
(3,252
)
(13,566
)
(14,214
)
(41,386
)
Capitalized exploration costs
 
(2,339
)
(3,681
)
(8,001
)
(10,902
)
Purchase of marketable securities
 
(3,435
)
—

(3,435
)
—

Acquisition of land
4
—

—

(22,000
)
—

Loan to joint venture partner
 
—

—

(1,967
)
—

Net proceeds from sale of marketable securities
 
1,744

—

2,982

63,445

Interest received
 
1,852

2,581

7,536

6,618

Acquisition of non-controlling interest
6
(2,415
)
—

(2,415
)
—

Other
 
212

(19
)
13

(1,083
)
Cash used in investing activities
 
(29,308
)
(56,021
)
(108,025
)
(52,903
)
Cash flows from financing activities
 
 

 

 
 
Proceeds from exercise of stock options
 
2,792

11

7,061

2,217

Funding from non-controlling interests
 
—

2,438

3,710

6,396

Redemption of convertible notes
5
—

—

(152,250
)
—

Issuance of convertible notes
5
—

—

230,000

—

Convertible notes issuance costs
5
—

—

(7,067
)
—

Lease payments
 
(220
)
—

(650
)
—

Cash generated by financing activities
 
2,572

2,449

80,804

8,613

Effect of foreign exchange rate changes on cash and cash equivalents
 
(3,447
)
(933
)
(3,078
)
(4,576
)
Increase (decrease) in cash and cash equivalents
 
22,319

(19,131
)
55,267

14,647

Cash and cash equivalents, beginning of period
 
452,160

493,642

419,212

459,864

Cash and cash equivalents, end of period
 
$
474,479

$
474,511

$
474,479

$
474,511

    

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

SSR Mining Inc.
Interim Financial Statements Q3 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)
(Unaudited)


1.
NATURE OF OPERATIONS

SSR Mining Inc. ("we", "us", "our", the "Company", 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 head office is at 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 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.
BASIS OF PRESENTATION

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. Accordingly, 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 statements were authorized for issue by our Board of Directors on November 5, 2019.

The accounting policies applied in the preparation of these condensed consolidated interim financial statements are consistent with those applied and disclosed in our audited consolidated financial statements for the year ended December 31, 2018, except for the following:

IFRS 16 Leases

We 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.

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.


SSR Mining Inc.
Interim Financial Statements Q3 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)
(Unaudited)

2.
BASIS OF PRESENTATION (continued)

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 the Company would be reasonably certain to exercise; lease payments in any optional renewal period if the Company is reasonably certain to exercise an extension option; and penalties for any early termination of a lease unless the Company is 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 recognized right-of-use assets of $4.3 million within property, plant and equipment and 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%.
(in thousands)
 

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
(881
)
Non-cash accretion
238

As at September 30, 2019
3,667

Less: current portion
(526
)
 
$
3,141


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 nine months ended September 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 Q3 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)
(Unaudited)


3.
INVENTORIES

 
September 30, 2019

December 31, 2018

Finished goods
$
23,404

$
23,433

Stockpiled ore
12,828

18,195

Leach pad inventory
168,127

162,335

Materials and supplies
35,668

30,791

 
240,027

234,754

Less non-current materials and supplies
(2,109
)
(2,006
)
Inventories - current
$
237,918

$
232,748


As at September 30, 2019, we have recognized total provisions of $3,283,000 (December 31, 2018 - $3,436,000) for obsolete materials and supplies inventory.


4.
PROVISIONS

 
September 30, 2019
December 31, 2018
 
Current

Non-current

Current

Non-current

Moratorium (a)
$
3,493

$
6,797

$
4,570

$
14,487

Close down and restoration provision (b)
7,716

75,110

211

61,961

Other
4

—

7

—

 
$
11,213

$
81,907

$
4,788

$
76,448


(a)
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. The tax moratorium system outlined the terms of repayment, including the total amount of the obligation and the interest rate on outstanding amounts. Outstanding amounts are subject to interest at a minimum rate of 1.5% per month.

(b)
On June 27, 2019, we 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 related long-term environmental and reclamation obligations then valued at approximately $13 million.



SSR Mining Inc.
Interim Financial Statements Q3 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)
(Unaudited)

5.
DEBT

 
September 30, 2019

December 31, 2018

2013 Notes
$
112,541

$
247,551

2019 Notes
167,952

—

Total convertible debt
280,493

247,551

Less: current portion of debt
$
(112,541
)
$
—

Non-current portion of debt outstanding
$
167,952

$
247,551


At December 31, 2018, we had $265,000,000 of senior convertible unsecured notes (the “2013 Notes”) outstanding. At any time before February 1, 2020, we may redeem all or part of the Notes for cash, but only if the last reported sale 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. On or after February 1, 2020, we may redeem the Notes in full or in part, for cash.
Holders of the Notes have the right to require us to repurchase all or part of their Notes on February 1 of each of 2020, 2023 and 2028, or upon certain fundamental corporate changes. The repurchase price will be equal to 100% of the principal amount of the Notes being converted, plus accrued and unpaid interest to the repurchase date.
On March 19, 2019, the Company 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 (loss) along with the related tax recovery of $1,687,000 and the residual of $4,825,000 was allocated to equity. As holders of the 2013 Notes have the right to require us to repurchase all or part of the 2013 Notes on February 1, 2020, the expected life of the remaining 2013 Notes is considered to be less than one year as of September 30, 2019.
On March 19, 2019, the Company issued $230,000,000 of unsecured convertible senior notes due in 2039 (the “2019 Notes”) for net proceeds of $222,932,000 after payment of commissions and expenses related to the offering of $7,067,000. 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 the Company, 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.


SSR Mining Inc.
Interim Financial Statements Q3 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)
(Unaudited)


5.
DEBT (continued)

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.

The table below provides a summary of changes in the debt balance:

 
September 30, 2019

December 31, 2018

Balance, beginning of period
$
250,729

$
236,358

Accretion of discount
10,763

14,371

Interest accrued
6,446

7,619

Interest paid
(6,037
)
(7,619
)
Redemption of 2013 Notes
(141,982
)
—

Issuance of 2019 Notes
164,160

—

Balance, end of period
284,079

250,729

Accrued interest outstanding
(3,586
)
(3,178
)
Balance, end of period
$
280,493

$
247,551

 
 
 
Classified as:
 
 
   Current
$
112,541

$
—

   Non-current
167,952

247,551

 
$
280,493

$
247,551


6.
ACQUISITION OF NON-CONTROLLING INTEREST

On September 18, 2019, we acquired the remaining 25% interest in Puna Operations Inc. (“POI”) from Golden Arrow Resources Corporation ("Golden Arrow") for aggregate consideration totaling $32,364,000, consisting of $2,261,000 of cash, the extinguishment of the loan to Golden Arrow and related interest of $11,369,000, the issuance of $18,218,000 of our common shares, and the transfer of shares in Golden Arrow we owned, with a fair value of $516,000, for cancellation.

As the acquisition did not result in a change of control, the acquisition was accounted for as an equity transaction whereby the non-controlling interest of $33,981,000 in POI recognized by the Company prior to the acquisition was adjusted to nil in the Company’s Condensed Consolidated Interim Statements of Financial Position. Further, the difference of $1,617,000 between the carrying value of the non-controlling interest in POI at the time of acquisition and the fair value of the consideration paid by the Company to Golden Arrow of $32,364,000 million was recognized in equity. In addition, transaction costs incurred by the Company in connection with the transaction of $154,000 were recognized as a reduction of equity.


7.
REVENUE

 
Three months ended September 30,
 
Nine months ended September 30,
 
 
2019

2018

2019

2018

Gold doré and bullion sales
$
116,259

$
107,118

$
335,167

$
277,259

Concentrate sales
28,193

9,237

90,654

42,326

Other revenue
3,396

(1,322
)
3,426

(2,622
)
 
$
147,848

$
115,033

$
429,247

$
316,963



SSR Mining Inc.
Interim Financial Statements Q3 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)
(Unaudited)

8.
INCOME PER SHARE

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

2018

2019

2018

Net income
$
18,132

$
2,228

$
36,278

$
2,513

Net loss (income) attributable to non-controlling interests
(2,609
)
(4,146
)
(1,558
)
(7,352
)
Net income used in the calculation of basic and diluted net income per share
$
20,741

$
6,374

$
37,836

$
9,865

 
 
 
 
 
Weighted average number of common shares issued (thousands)
121,742

120,233

121,337

120,064

Adjustments for dilutive instruments:
 
 
 
 
Stock options (thousands)
1,099

742

777

785
Weighted average number of common shares for diluted income per share (thousands)
122,841

120,975

122,114

120,849

 
 
 
 
 
Basic net income per share attributable to equity holders of SSR Mining
$0.17
$0.05
$0.31
$0.08
Diluted net income per share attributable to equity holders of SSR Mining
$0.17
$0.05
$0.31
$0.08



SSR Mining Inc.
Interim Financial Statements Q3 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)
(Unaudited)

9.
SHARE-BASED COMPENSATION

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

2018

2019

2018

Equity-settled
 
 


Cost of sales
$
129

$
36

$
177

$
125

General and administrative expenses
1,540

543

2,689

1,436

Exploration, evaluation and reclamation expenses
17

9

30

29

Cash-settled
 
 


Cost of sales
371

194

873

730

General and administrative expenses
1,869

39

4,785

3,750

Exploration, evaluation and reclamation expenses
32

14

38

42

 
$
3,958

$
835

$
8,592

$
6,112


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 our 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 periods.

SSR Mining Inc.
Interim Financial Statements Q3 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)
(Unaudited)

10.
OPERATING SEGMENTS

Operating results of operating segments are reviewed by the Company's chief operating decision maker ("CODM") to make decisions about resources to be allocated to the segments and to assess their performance. The Company considers each individual operating mine site as a reportable operating segment for financial reporting purposes. In addition, exploration and evaluation projects have been aggregated into a single reportable segment as they all have similar characteristics and do not exceed the quantitative thresholds for individual disclosure.

The following is a summary of the reported amounts of income from mine operations, operating income (loss), income (loss) before income taxes and the carrying amounts of assets and liabilities by operating segment:
Three months ended
September 30, 2019
Marigold mine

Seabee Gold Operation

Puna Operations

Exploration evaluation and development properties

Other reconciling items (i)

Total

Revenue
$
74,820

$
41,331

$
31,697

$
—

$
—

$
147,848

Cost of inventory
(41,551
)
(10,426
)
(22,638
)
—

—

(74,615
)
Depletion, depreciation and amortization
(11,205
)
(8,771
)
(1,351
)
—

—

(21,327
)
Cost of sales
(52,756
)
(19,197
)
(23,989
)
—

—

(95,942
)
Income from mine operations
$
22,064

$
22,134

$
7,708

$
—

$
—

$
51,906

 
 
 
 
 
 
 
Exploration, evaluation and reclamation expenses
(893
)
(2,131
)
(230
)
(768
)
(391
)
(4,413
)
Operating income (loss)
21,118

20,019

8,301

(660
)
(8,887
)
39,891

Income (loss) before income taxes
16,879

21,123

3,555

(702
)
(7,874
)
32,981

As at September 30, 2019
 
 
 
 
 
 
Total assets
$
494,950

$
478,509

$
257,422

$
117,069

$
340,493

$
1,688,443

Non-current assets
237,013

313,960

152,398

115,406

19,707

838,484

Total liabilities
(103,725
)
(100,735
)
(62,172
)
(6,312
)
(315,402
)
(588,346
)




















SSR Mining Inc.
Interim Financial Statements Q3 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)
(Unaudited)


10. OPERATING SEGMENTS (continued)
Three months ended
September 30, 2018
Marigold
mine

Seabee Gold Operation

Puna Operations

Exploration evaluation and development properties

Other reconciling items (i)

Total

Revenue
$
71,848

$
35,270

$
7,915

$
—

$
—

$
115,033

Cost of inventory
(42,328
)
(12,993
)
(9,877
)
—

—

(65,198
)
Depletion, depreciation and amortization
(16,266
)
(11,216
)
(478
)
—

—

(27,960
)
Cost of sales
(58,594
)
(24,209
)
(10,355
)
—

—

(93,158
)
Income (loss) from mine operations
$
13,254

$
11,061

$
(2,440
)
$
—

$
—

$
21,875

 
 
 
 
 
 
 
Exploration, evaluation and reclamation expenses
(165
)
(2,328
)
(38
)
(499
)
(2,640
)
(5,670
)
Operating income (loss)
13,108

8,579

(4,563
)
(500
)
(6,404
)
10,220

Income (loss) before income taxes
8,842

8,738

(4,057
)
(456
)
(6,435
)
6,632

As at September 30, 2018
 
 
 
 
 


Total assets
$
470,096

$
443,602

$
150,486

$
71,370

$
368,163

$
1,503,717

Non-current assets
234,803

328,371

98,408

68,726

20,464

750,772

Total liabilities
(77,359
)
(93,174
)
(65,453
)
(6,519
)
(264,920
)
(507,425
)

Nine months ended September 30, 2019
Marigold mine

Seabee Gold Operation

Puna Operations

Exploration evaluation and development properties

Other reconciling items (i)

Total

Revenue
$
225,122

$
109,999

$
94,126

$
—

$
—

$
429,247

Cost of inventory
(136,310
)
(36,187
)
(68,134
)
—

—

(240,631
)
Depletion, depreciation and amortization
(39,828
)
(26,244
)
(10,574
)
—

—

(76,646
)
Cost of sales
(176,138
)
(62,431
)
(78,708
)
—

—

(317,277
)
Income from mine operations
$
48,984

$
47,568

$
15,418

$
—

$
—

$
111,970

 
 
 
 
 
 
 
Exploration, evaluation and reclamation expenses
(1,380
)
(7,300
)
(295
)
(2,790
)
(408
)
(12,173
)
Operating income (loss)
47,257

40,173

18,737

(2,682
)
(24,375
)
79,110

Income (loss) before income taxes
42,745

42,558

7,757

(1,636
)
(36,443
)
54,981










SSR Mining Inc.
Interim Financial Statements Q3 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)
(Unaudited)


10. OPERATING SEGMENTS (continued)
Nine months ended September 30, 2018
Marigold
mine

Seabee Gold Operation

Puna Operations

Exploration evaluation and development properties

Other reconciling items (i)

Total

Revenue
$
188,402

$
88,857

$
39,704

$
—

$
—

$
316,963

Cost of inventory
(105,067
)
(35,189
)
(40,680
)
—

—

(180,936
)
Depletion, depreciation and amortization
(43,177
)
(30,140
)
(2,401
)
—

—

(75,718
)
Cost of sales
(148,244
)
(65,329
)
(43,081
)
—

—

(256,654
)
Income (loss) from mine operations
$
40,158

$
23,528

$
(3,377
)
$
—

$
—

$
60,309

 
 
 
 
 
 
 
Exploration, evaluation and reclamation expenses
(448
)
(6,266
)
(674
)
(2,203
)
(3,051
)
(12,642
)
Operating income (loss)
39,536

17,071

(7,714
)
(2,205
)
(19,854
)
26,834

Income (loss) before income taxes
26,865

15,402

(3,798
)
(2,176
)
(20,644
)
15,649


(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 Q3 2019 | 17

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

11.FAIR VALUE MEASUREMENTS

(a)Fair values of financial assets and liabilities measured at fair value

Assets and liabilities that are held at fair value are categorized based on a valuation hierarchy as follows:
 
Fair value at September 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
$
—

$
43,416

$
—

$
43,416

$
—

$
11,287

$
—

$
11,287

Marketable securities
51,132

—

—

51,132

29,542

—

—

29,542

Other financial assets
—

—

3,674

3,674

—

—

3,711

3,711

Accrued liabilities
—

(14,284
)
—

(14,284
)
—

(16,649
)
—

(16,649
)
 
$
51,132

$
29,132

$
3,674

$
83,938

$
29,542

$
(5,362
)
$
3,711

$
27,891


There were no transfers between Level 1 and Level 2 fair value measurements. During the nine months ended September 30, 2019, there were no transfers into or out of Level 3 fair value measures.
 
(b)Fair values of financial assets and liabilities not already measured at fair value

At September 30, 2019, the fair value of the Company's convertible notes as compared to the carrying amounts were as follows:
 
Level

 
Carrying amount

Fair value

Convertible notes (1)
1

 
$
284,079

$
376,632


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

12.
SUPPLEMENTAL CASH FLOW INFORMATION

Changes in working capital items during the three and nine months ended September 30, 2019 and 2018 are as follows:
 
Three months ended
September 30
Nine months ended
September 30
 
2019

2018

2019

2018

Trade and other receivables
$
(7,389
)
$
(172
)
$
(49,299
)
$
1,001

Inventory
(8,854
)
(3,933
)
(7,409
)
(28,919
)
Trade and other payables
7,270

11,795

9,100

20,162

Provisions
(415
)
(69
)
(536
)
(893
)
 
$
(9,388
)
$
7,621

$
(48,144
)
$
(8,649
)


SSR Mining Inc.
Interim Financial Statements Q3 2019 | 18

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

12.
SUPPLEMENTAL CASH FLOW INFORMATION (continued)

Adjustments for non-cash other operating activities during the three and nine months ended September 30, 2019 and 2018 are as follows:
 
Three months ended
September 30
Nine months ended
September 30
 
2019

2018

2019

2018

Share-based payments
$
1,686

$
588

$
2,896

$
1,590

Gain (loss) on sale of mineral property
434

—

(566
)
—

Write down of fixed assets
275

—

808

2,771

Other
(592
)
711

1,826

2,341

 
$
1,803

$
1,299

$
4,964

$
6,702


Non-cash investing and financing transactions during the three and nine months ended September 30, 2019 and 2018 are as follows:
 
Three months ended
September 30
Nine months ended
September 30
 
2019

2018

2019

2018

Close down and restoration provision for land acquisition (note 4)
$
—

$
—

$
(12,990
)
$
—

Transfer of share-based payment reserve upon exercise of stock options
1,207

(7
)
525

(1,326
)
Transfer of equity-settled PSU's
—

—

1,284

—

Marketable securities received from sale of exploration and evaluation properties
 
205

—

1,751

Extinguishment of loan receivable in connection with the acquisition of non-controlling interest (note 6)
11,369

—

11,369

—

Non-cash consideration for acquisition of non-controlling interest (note 6)
(30,103
)
—

(30,103
)
—

 
$
(17,527
)
$
198

$
(29,915
)
$
425




SSR Mining Inc.
Interim Financial Statements Q3 2019 | 19