SSR Mining Inc. Financial Report Analysis: Q4 2024

Key Insights

• Recommendation: Hold
• Reason: SSR Mining Inc. has faced significant operational challenges reflected in its financial performance, particularly due to the Çöpler incident and other impairments. While the company maintains a solid asset base and liquidity position, the increasing losses and operational issues warrant caution for potential investors.

Snapshot of Key Financial Metrics

• Total Revenue (2024): $995.6 million
• Net Income (Loss) (2024): $(352.6) million
• Operating Income (Loss) (2024): $(521.2) million
• EBITDA (2024): Not disclosed but calculated based on adjustments.
• Total Assets (2024): $5,271.7 million
• Cash and Cash Equivalents (2024): $492.4 million

Revenue and Financial Performance Overview

SSR Mining Inc. reported a total revenue of $995.6 million for the year ended December 31, 2024, a slight decrease from the previous year, indicating a decline in operational performance. The cost of sales rose significantly, resulting in an operating loss of $(521.2) million, primarily driven by substantial impairment charges linked to the Çöpler mine incident.

Revenue Breakdown by Segment

• Çöpler Mine: Revenue decline due to operational suspension and impairment charges.
• Marigold Mine: Stable revenue performance, but overall contribution diminished.
• Seabee Mine: Faced challenges but showed resilience in revenue generation.
• Puna Mine: Underperformed compared to expectations, impacting total revenue.

Cost of Sales and Impairments

The cost of sales for SSR Mining increased, leading to a gross loss that exacerbated the company's financial situation. The impairment charges in 2024 totaled $114.2 million, which included:

• $76 million for inventories related to the Çöpler incident.
• $38.2 million for mineral properties and equipment. These impairments reflect the company's ongoing struggles with operational efficiency and asset management.

Profitability Analysis

EBITDA Analysis

Although specific EBITDA figures are not disclosed, the operational loss and impairment charges suggest that the company's EBITDA is significantly negative. This decline indicates a pressing need for operational restructuring and cost management.

Net Income Analysis

SSR Mining reported a net loss of $(352.6) million for 2024, deteriorating from previous years. The increase in losses is attributed to:

• Rising operational costs.
• Impairments and care/maintenance costs during the operational suspension of mines.
• Increasing interest expenses from convertible notes and lease liabilities.

Asset Position and Cash Flow

Asset Overview

• Total Assets: SSR Mining's total assets stood at $5,271.7 million, slightly increasing from the previous year.
• Current Assets: Cash and cash equivalents were reported at $492.4 million, providing a buffer against operational disruptions.
• Liquidity: The company maintains liquidity with cash reserves, but its increasing liabilities pose risks.

Lease and Debt Obligations

• Lease Liabilities: Total lease liabilities amount to $107.2 million, reflecting significant commitments to operational leases.
• Debt Obligations: The company has a convertible note obligation of $228.6 million with a maturity in 2039, alongside a $400 million credit facility expiring in 2027.

Future Outlook and Risks

Operational Risks

The ongoing challenges at the Çöpler mine, including environmental and operational risks, continue to impact SSR Mining's financial health. The management's ability to navigate these risks will be crucial for future performance.

Market Conditions

Commodity prices remain volatile, and the company's dependency on precious metals exposes it to market fluctuations. In light of increasing inflation and geopolitical tensions, the overall market landscape presents both risks and opportunities for SSR Mining.

Strategic Initiatives

The company needs to focus on:

• Streamlining operations to reduce costs.
• Enhancing its asset management strategy.
• Evaluating potential divestitures or partnerships to strengthen its market position.

Conclusion

In conclusion, SSR Mining Inc. is facing significant operational and financial challenges, as evidenced by its declining revenues, increasing losses, and substantial impairments. While the company has a strong asset base and liquidity position, the ongoing issues require careful monitoring. Investors are advised to hold their positions while observing the company's strategic responses to current challenges and market conditions.