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SSR Mining Inc. (NASDAQ: SSRM, TSX: SSRM): A Growing Intermediate Precious Metals Producer with Scale and Liquidity, Interview with John DeCooman Jr., VP Business Development and Strategy

on 2/21/2018
SSR Mining Inc. (NASDAQ: SSRM, TSX: SSRM) is a Canadian-based precious metals producer, with three operations including; the Marigold mine in Nevada, U.S., the Seabee Gold Operation in Saskatchewan, Canada and the 75%-owned and operated Puna Operations joint venture in Jujuy, Argentina. They also have two feasibility stage projects and a portfolio of exploration properties in North and South America. We learned from John DeCooman Jr., VP Business Development and Strategy of SSR Mining, that they have an excellent balance sheet with well over 400 million in cash and a net cash position. They have very consistent assets in very good political jurisdictions. According to Mr. DeCooman, SSR Mining has an investment team and a management team, with a track record of making good decisions demonstrated by our six consecutive years of meeting or exceeding guidance.



Dr. Allen Alper: This is Dr. Allen Alper, Editor-in-Chief of Metals News, interviewing John DeCooman Jr., VP Business Development and Strategy of SSR Mining. Could you give our readers/investors an overview of your company, your focus and current activities?

Mr. John DeCooman Jr: Sure, absolutely. Thank you for the opportunity to speak with you and your readers/investors. I think what differentiates SSR Mining, and we've continued to demonstrate this, is the consistent results from our three operations, two of which are in North America, with a solid precious metals base. We have growth over the next couple of years that is relatively low risk, in the sense that it's expansion of existing operations, with a low capital intensity. And near term in the sense that we will probably pick up close to 30-35 percent of production from by the year 2021 as compared to what see this year. You put that together with a balance sheet that has well over 400 million dollars of cash and we're well positioned, not just for internal growth but external growth. Maybe we can use that as a catalyst for some of your other questions, Doctor.



Dr. Allen Alper: That sounds great. Maybe you could go through the operations from Canada to the United States to Argentina, and what's significant about each. I know you have very low costs compared to many companies in the industry.

Mr. John DeCooman Jr: We have three operations, all of which are distinctly different, so we definitely manage a varied group of assets.

Seabee, in Saskatchewan, Canada, a very low risk jurisdiction in terms of political risk, is an underground mine, producing nearly 100% gold, a little silver, but primarily gold. It produced in 2017, nearly 85,000 ounces of gold. This year we’re projected to be in the neighborhood of closer to 85,000 to 90,000 ounces of gold. Seabee set operating records and production records in 2016 and again in 2017 and assuming that we achieve our production guidance in 2018, Seabee would have three years in a row of growth and a third year in a row of setting production records. It is relatively low cost, as you mentioned, our cash costs are in the sub 600 dollar range. We convert everything to U.S dollars, so whenever we refer to cash costs, capital, et cetera it is in U.S dollars. Our guidance for the year at Seabee is in the neighborhood of 575 dollars U.S.



At Marigold, our operation in Nevada, US. is a very large-scale asset. In less than one week at Marigold, we move more material than they move the whole year at Seabee. That just gives you a sense of the difference in scale of the two assets. Marigold is an open-pit mine. Last year it produced in the neighborhood of 200,000 ounces of gold. That was the third consecutive year of producing 200,000 plus ounces of gold, so a solid performer for us again and low political risk in the jurisdiction of Nevada. A lot of miners like that jurisdiction; it's still very competitive for assets in that area. This year in 2018, we’re guiding to the neighborhood of 200,000 ounces at roughly 750 dollar cash costs.



In Argentina, with the Chinchillas permit that we received at the end of 2017, we'll be investing capital for the extension of the operating life at, what we now call, Puna operations. Chinchillas is an open pit deposit to the south of our Pirquitas plant. The ore, from the Chinchillas joint venture, will then be trucked to the Pirquitas plant. Puna is a 75/25 joint venture. We're putting a total of 80 million dollars capital into that, which will be fully spent in 2018. Silver production in 2019 is expected to increase to nearly 6 million ounces to our credit in the subsequent years. There is about an 8 year operating life there with plenty of exploration potential.



That's all I have for a review of the operations, Dr. Alper.

Dr. Allen Alper: Thanks, very impressive operations that you have in place, outstanding operations. Could you tell us a bit about yourself, your executive team and your board of directors?

Mr. John DeCooman Jr: We definitely have an excellent balance, both on the management level and the board level, of capital markets experience, technical, and operating experience. It provides a very good platform to give the investment community a lot of confidence in what we can deliver. I think that's very well demonstrated.

We're now moving into the 6th consecutive year of having achieved production guidance. Later in February, if our costs come in line, that will be the 6th consecutive year of having met or exceeded expectations on our cost guidance. This is important to us, delivering on the promises we make to the investment community. I think it shows up in our track record of guidance and in how we've continued to add cash to the balance sheet. Over the last several years in our M&A activity, we deployed capital to purchase, in cash, the Marigold mine and with a 100 million dollar cash balance in 2014.



Today we are now looking to exceed over 425 million dollars of cash and that's not through any equity issuance, any debt issuance in that time period. That's through assets sales and/or operating cash flows that have been a demonstrable bit of evidence that the management team is good at execution and delivering on promises. It’s important to note that our near-term growth is fully funded from our balance sheet. We don't need to change the capital structure in order to make these investments.

Dr. Allen Alper: That's excellent! Could you update our readers/investors, on your background, and also Paul's background and maybe Gregory and Alan a bit more?

Mr. John DeCooman Jr: Paul Benson’s been with us for about 2 years. He has a lot of operating experience, as he came out of school as a mining engineer and a geological engineer. He certainly has international experience, has worked with major companies such as BHP Billiton and Rio Tinto before he came here, as well as smaller companies, a more junior developer and producer, immediately prior to joining SSR. I think that gives us a very good balance. He's able to communicate and convey, both at the board level and with the management team, the structure and discipline that comes along with a larger company and the entrepreneurial thinking process that comes along with a smaller company.



Alan Pangbourne has also had tremendous impact on the business with project development experience, notably with large companies like BHP Billiton and Kinross. But after about 30 years of experience, he's seen a lot of operating assets during close to 10 years in the consulting business as a turn key builder of gold processing plants. He brings a lot of very practical entrepreneurial experience, along with the structure and discipline that comes with a larger company.

Greg Martin's in the same category, having worked for Placer Dome in the past, and a Caterpillar Subsidiary Finning. He is extremely diligent and disciplined regarding investment decisions leading to good outcomes for our deployment of capital and investment processes.

My background is related to M&A, both in banking and financing, prior to having joined SSR. So I have a bit of corporate experience and a bit of banking experience, a good combination of knowledge around valuation, deal structures, and also the importance of networking for the business development activities, for which I'm responsible. This also brings with it a keen awareness of the capital markets.

At the board level, we have a tremendous amount of expertise technically. We have geological experience with Brian Booth. We have operating experience with both our chairman and one of our other board members Steve Reid. We have a tremendous amount of investment analysis experience with some of the new members of the board level. Dick Patterson, who’s been a part of the board for a number of years has venture capital experience. We have a tremendous amount of depth and experience that translates consistently into performance in our ability to achieve guidance, our balance sheet strength, and corporate governance.

Dr. Allen Alper: Excellent! That's one very, very strong executive team and board. Could you tell our readers/investors a little bit about your capital structure?



Mr. John DeCooman Jr: We have about 119 million shares outstanding. Our market cap's in the neighborhood of 1.1 billion U.S. We trade in the neighborhood of 20 million dollars’ worth of value on any day. When you combine our trading listings, in both the NASDAQ with the US and the TSX in Toronto, we have very good trading liquidity. We also have very good financial liquidity. As of the September quarter, we have in the neighborhood of 425 million in cash. We have marketable securities to the tune of nearly 100 and an undrawn and available credit facility of about 65 million. So our financial liquidity is in the neighborhood of 600 million dollars, which is just incredible for a company of our size and nature. That, along with the 265 million dollar convertible note that's due in February of 2020, illustrates the net cash position that we have and look to deploy for good return opportunities like the Chinchillas development and some of the work that we're doing up at Seabee.

Dr. Allen Alper: That's excellent! What are the primary reasons our high-net-worth readers/investors should consider investing in SSR Mining Inc.?



Mr. John DeCooman Jr: It’s a simple, consistent growth story. We have an investment team and a management team, with a track record of making good decisions and growing the business. Whether it be at the operating level or the M&A level so I think it should give people confidence that they're buying into good hands. They're buying into an excellent balance sheet, with well over 400 million in cash and a net cash position. They're also buying into assets that have been consistent and are in very good political jurisdictions. When you look at that, relative to the valuation that the market puts on this company, this is an excellent opportunity to get in and grow with the company.

Dr. Allen Alper: Sounds excellent! Those are very compelling reasons for our high-net-worth readers/investors to consider investing in SSR Mining. Is there anything else you'd like to add John?

Mr. John DeCooman Jr: We have liquidity, near-term growth, low capital intensity, low-risk growth and excellent exploration potential. The assets have continued to demonstrate a track record of not only reserve replacement but also resource growth. The investors are not just getting what they see today, there's a lot of underlying option value in the portfolio around both the earnings and the exploration potential that really give stocks like ours a lot of sizzle, when it comes to movements in the market, when people are more interested in the gold space.

Dr. Allen Alper: Sounds exciting!

http://www.ssrmining.com/

W. John DeCooman, Jr.
Vice President, Business Development and Strategy
SSR Mining Inc.
Vancouver, BC
Toll free: +1 (888) 338-0046
All others: +1 (604) 689-3846
E-Mail: invest@ssrmining.com





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