SSR Mining Inc (SSRM) 2021 Q3 法說會逐字稿

Hello everyone, and welcome to SSR Mining's Third Quarter 2021 Conference Call. This call is being recorded.

At this time, for opening remarks and introductions, I would like to turn the call over to Alex Hunchak from SSR mining.

Thank you, operator, and hello, everyone. Thank you for joining SSR Mining's Third Quarter 2021 Conference Call, during which we'll provide an update on our business and a review of our financial performance. Our financial statements and management's discussion and analysis have been filed on SEDAR, EDGAR, the ASX, and are also available on our website. To accompany our call, there is an online webcast, and you will find the information to access the webcast in our news release relating to this call. Please note that all figures discussed during the call are in U.S. dollars, unless otherwise indicated. All references to cash costs and all-in sustaining costs are per payable ounce of metal sold. We will be making forward-looking statements today, so please read the disclosures and the relevant documents. Joining us on the call today are Rod Antal, President and CEO; Alison White, CFO; and Stewart Beckman, COO.

Now I'd like to turn the call over to Rod for opening remarks.

Thanks, Alex, and good afternoon, good morning to you all, and thanks for joining us today. I'm going to speak first on our strong third quarter performance. Once again, we are performing at a high level and setting quarterly operating records across the portfolio. These operational milestones contributed to the gold equivalent production of 187,000 ounces of gold at an all-in sustaining cost of $1,006 per ounce. For the year-to-date period, we have produced 583,000 gold equivalent ounces and an all-in sustaining cost of $990 per ounce.

Given the strong year-to-date production and cost performance, we are lowering our all-in sustaining cost guidance to $1,000 to $1,040 per ounce. The fact that we are able to accomplish this outstanding cost performance amidst the well-documented industry cost pressures is a testament to the efforts of our team to deliver on a number of cost-saving initiatives this year.

With respect to production, we remain on track to deliver against our 720,000 to 800,000 gold equivalent ounce guidance range that is tracking between the midpoint and the higher end of guidance. We're extremely pleased with the operating performance today as we continue to showcase the quality of the combined operating assets. Our strong performance has directly translated to free cash flow generation of $129 million in the third quarter and $306 million in the year-to-date period -- sorry, my machine moved on -- in the year-to-date period -- sorry about that. We had a glitch on my computer.

The cash flow generation supports our capital returns program, we have returned nearly $150 million to shareholders through the share repurchase since April by our NCIB program. Additionally, our Board approved another quarterly base dividend, bringing our year-to-date capital returns to approximately $180 million, and we remain on track to deliver a total capital return yield in excess of 5.5% in 2021. In the third quarter, we announced a positive exploration update for both Ardich and Seabee and expect additional exploration updates from Marigold, Copper Hill, and Amisk by year-end. At Copler, the approval of the updated EIA included the Flotation plant. And in October is a significant and positive milestone.

Looking further ahead, we expect updated technical reports from Copler, Marigold and Seabee in 2022 that incorporate our recent exploration success and provide a welcome and comprehensive refresh for SSR. So turning to the next slide on ESG. The ESG is and has long been a core value and focus for SSR mining as it firmly underpins the success of our business. We continue to see positive health and safety trends at our operations, reflecting the efforts we have applied to improving the well-being of our employees, contractors, and communities.

We have successfully navigated the pervasive challenges of COVID globally and our mitigation efforts have enabled us to avoid any COVID-related shutdowns at our operations in 2021. We are committed to our communities and to the environment, and we continue to deliver against the priorities outlined in our 2020 sustainability report. This will lead us to review and refresh our priorities as we move into 2022, including our commitment to begin establishing an action plan to achieve net-zero greenhouse gas emissions by 2050. We've also begun to improve disclosures on climate and water and aligning our reporting with the requirements of task force on climate-related financial disclosures.

Moving on to Slide #5. We're proud to showcase our continuous efforts to improve our approach to ESG. And while it's not a driver of our ESG efforts, we are pleased to see our results are being recognized by some of the industry's leading ESG research providers. Notably, SSR mining was recently upgraded to an A rating by the MSCI and will remain ranked in the top quartile amongst our peers by ISS.

Moving on to the next slide. On top of our excellent operational and ESG performance, SSR mining has an established track record of adding value for our shareholders. This was most recently evidenced by the sale of our non-core royalty portfolio for $100 million, which was significantly higher than the consensus valuation of scribe to the portfolio by our analysts. SSR mining has a proven history of delivering complex capital projects on time and on budget as well as accretive and disciplined M&A, as shown in this slide. Our strategic review of the silver portfolio continues following on from the successful sale of our royalty portfolio with the recent operating and financial strength of Puna and the bright outlook ahead, we have recently determined that Puna will remain core to SSR. The review of the rest of the silver portfolio continues.

Moving on to Slide 7. As I noted, our year-to-date production of 583,000 gold equivalent ounces compared favorably to the full year guidance, while year-to-date all-in sustaining costs of $990 per ounce has allowed us to reduce the all-in sustaining cost guidance. At the asset level, we have received approval for the updated Copler EIA in October and will begin ramp-up of the flotation plan upon completion of the provincial level permitting by year-end. Copler remains on track to meet its full year production guidance with gold production tracking to the midpoint of the original guidance.

Marigold remains on track for full -- for the midpoint of full year production guidance, while Seabee is trending towards the upper end of its production guidance, and Puna is tracked on track to exceed the full year silver production guidance. We continue to invest in high-growth return opportunities across our business, including capital projects like Ardich, exploration drilling across the business and investing in the work to complete a number of technical reports, all designed to improve both the longevity and value of SSR. Stu's going to touch on these -- in all these initiatives in a minute.

And just moving on to Slide 8 on our quarterly highlights. We've already covered a number of the main quarterly highlights, so I'm not going to spend much time elaborating here. Alison and Stu will provide a more detailed overview in a minute. However, a few highlights that are relevant to consider this quarter. Our year-to-date safety performance remains on a positive trend. Operationally, we continue to deliver records across all our 4 assets with 5 consecutive quarters of delivery since the merger closed.

Financially, we delivered an adjusted EPS of $0.40 in the quarter, and our robust margins and low-cost production translated to $120 million in free cash flow. And despite the $150 million in year-to-date share repurchases and our quarterly dividend payments and continued debt servicing, we remain in a net cash position of over $500 million that provides us with the required flexibility to advance our large organic growth pipeline well into the future.

So with that, I'm going to hand the call over to Alison, who will discuss our financial performance in more details on Slide #9.

Thanks, Rod, and hello, everyone. I'm pleased to comment on another positive financial quarter for the business, as shown here on Slide 9. It was a solid quarter operationally as we produced 186,941 gold equivalent ounces during the quarter. Sales were impacted slightly towards the end of the quarter by a now resolved strike at a port in Uruguay, that delayed concentrate shipment from Puna.

We reported gold equivalent sales of 176,299 ounces for a total of $323 million in revenue for Q3. Year-to-date revenues now total $1.1 billion in 2021. We continue to deliver in all aspects of our business and are proud of the cash flow and returns that are generated as a result. Attributable net income for the quarter was $57 million or $0.27 per share and adjusted attributable net income was $85 million with adjusted attributable earnings per share of $0.40, demonstrating the continued strong operational performance, cost discipline and execution of the company's strategy.

In the first 9 months of the year, attributable net income was $164 million or $0.76 per share and adjusted attributable net income was $288 million or $1.33 per share. On the right side of the slide, I'd like to provide some commentary on our reported $0.40 in adjusted earnings per share that is calculated based on our definition of adjusted attributable net income per share.

We start with our attributable net income of $0.27 per share and then make adjustments to exclude the after-tax impact of specific items that are not reflective of the company's ongoing operations. Each of those items is outlined in the waterfall chart on the right of this slide, with the largest of the adjustments for $0.12 related to the amortization of fair value bump as a result of the adjustments to inventory and mineral properties at circler at the time of acquisition. Other adjustments include COVID '19 related costs and ForEx adjustments, along with the associated tax impact of those adjustments.

Additionally, I'm excited to be able to provide some information on our lowered AISC guidance in the face of pervasive inflationary pressures to date in 2021. As noted earlier in the call, we have lowered our 2021 AISC to $1000 -- sorry, $1000 to $1,040 per gold equivalent ounce from $1050 to $1,110, per gold equivalent ounce, incorporating the strong operational performance, which has cash costs trending to the lower end of guidance. To-date, we have managed costs in the business well, as demonstrated through the Q3 AISC of $1,006 per ounce.

As we noted in our second quarter call and are reiterating again today, we have managed inflationary headwinds in part through the continuous improvement practices that we have pushed forward since the closing of the merger in 2020. That work is ongoing within the business. And while it will continue into the future, we do anticipate that cost pressures for the U.S. and Canada will be higher, especially as we move forward into 2022.

In some other jurisdictions, we benefit where inflation is largely offset by currency devaluation, and we expect this trend to continue. Turning to Slide 10. We can talk about SSR's continued balance sheet strength. SSR Mining closed the quarter with $900 million in consolidated cash with continued debt servicing, quarterly dividend payments and execution of our share repurchases, bringing year-to-date capital returns to shareholders of more than $180 million.

We remain well positioned to continue our capital allocation policy going forward, fully funding our portfolio of organic growth opportunities while maintaining our significant capital returns to shareholders. Our net cash to EBITDA ratio has increased to 0.7x, demonstrating our resolve and placing us in the top quartile of our peer group. Further, our cash balance is 95% held in U.S. dollars.

On Slide 11, we can talk more. about SSR's position as a free cash flow leader and our capital returns. Our continued operational outperformance translated to robust cash flows in Q3, including operating cash flows of $188 million and free cash flow of $129 million during the quarter. Year-to-date, we have generated free cash flow in excess of $300 million, reinforcing our full year consensus free cash flow yield of 11% that remains well above our peers. We have aligned that free cash flow performance with our capital returns initiatives, returning nearly $150 million to shareholders through share repurchases and an additional $33 million in year-to-date dividend payments. We are well on track to end 2021 with a capital return yield of 5.8%, given we are closing Q3 with returns that already exceeds 5%.

As we look ahead into 2022, our capital allocation priorities include: investing in growth, returning cash to shareholders and maintaining balance sheet strength. The combination of our leading returns and significant free cash flow generation differentiates SSR mining. We will continue to execute on our priorities, both financially and operationally as we move through the final quarter of 2021, while we also evaluate shareholder returns for 2022.

Lastly, before I turn the call over to Stu, I want to touch on another initiative for SSR mining that will lead to changes in 2022. Turning to Slide 12. Effective as of January 1, 2022, SSR mining will transition to U.S. GAAP reporting as a large, accelerated filer under the SEC. As a result, our full year 2021 financial results will be released under U.S. GAAP requirements and will be reported along with restated 2019 and 2020 financial results. This transition will also include the restatement of existing technical reports under SK 1,300 requirements, in addition to the current NI 43-101 report.

The updated Copler district master plan will be released under SK 1300 requirements, and it is important to note that the SK 1300 reports released for Marigold and Seabee will be followed by updated master plan technical reports at both assets later in 2022. What that means is that while the Copler technical report will incorporate the totality of the exploration success up to the last release, the initial reports for Seabee and Marigold will not represent the full value drivers that we believe exist for the properties, and updates will be forthcoming as the work is completed. We expect this transition will improve our assets to U.S. investors and view the change as an opportunity to strengthen our already robust shareholder base. A full review and analysis of the required changes to become an SEC filer remains ongoing and will be reported to the market as required.

Stu will now walk you through the operational highlights, starting on Page 13.

Thanks, Alison, and thanks, Rod. I'm going to lead off with ESG. Our sites continue to operate safely, each with bespoke COVID protocols tailored to their situation. Immunization rates at all of the sites are above that of their host communities and in the 80s and 90s at Copler, Seabee and Puna, but remains stubbornly low in Nevada. Following the merger a year ago, we focused our immediate efforts on updating our ESG policies in building out our integrated ESG management and information systems, in line with contemporary industry best practice. This, along with good old fashion line leadership is delivering good and improving results. As you know, the work and effort in the ESG space never eases as we expect and drive towards ever higher standards. Our improved operational discipline is delivering results that exceeded our expectations for improvement with recordable injury frequency rates year-to-date, but 2, which is about 60% of improvement on our 2020 figures. We strongly believe that driving and delivering better performance in ESG builds a stronger, more productive and profitable business.

Moving on to operations and growth. The third quarter continued the performance trend from H1 with throughput records at all of the mines and good cost control. We had reduced gold port at both Copler and Marigold for the quarter, but neither of these were the results of enduring issues. Marigold had a problem with the strip vessels. And so gold was held in inventory at the end of the quarter, and the delay in the EIA at Copler, method flotation plant commissioning was delayed. We managed the things that are in our control. And so all of the sites are focused on operational excellence, which includes productivity improvement and cost control. These improvements are being built into our plans and budgets for 2022, helping to offset some of the inflationary pressures.

Moving on to the slides with Copler on Slide 14. The Copler Sulfide plant delivered another record quarterly throughput. All the major shutdowns are complete to 2021. The delay of the float plant negatively impacted on production but was partially offset by higher throughput rates, positive mine reconciliation, and good mine planning to optimize sulfide ore presentation to the plant. The flotation plant construction and operational readiness activities were completed on time and on budget.

As mentioned previously, we have received the EIA, made the applications for the local permits, and expect to receive these before the end of the year. The start-up team is assembled and ready to go. The flotation plan allows us to take advantage of the latent capacity in the sulfide plant and increase the overall plant throughput. It will also reduce reagent consumption and lower the unit cost of ore treated. Released exploration results for Ardich in the quarter, and these very good results will be incorporated into the updated technical report, which we will issue in Q1 '22, which we will call the Copler District Master Plan 2022, abbreviated to CDMP22. Ardich will move to the reserve case and be the significant feature of CDMP22.

In the last technical report, the Ardich PEA showed the potential to add about 1 million ounces of production starting 2023. Exploration continues at Ardich and we expect that the value of this project will continue to grow beyond what will be presented in '22. The Board approved funding to progress Copler Copper C2 order of magnitude study to a PEA level for inclusion into CDMP22 technical report. This work aims to leverage off the considerable copper driven mineral value within and immediately adjacent to the reserve and resource shells that the current mine plan does not exploit.

We'll jump to Slide 15 for Marigold. Mine tonnes were another record for Marigold. Gold production was delayed by unscheduled maintenance issues that resulted in an increase of gold in the circuit. In particular, repair work to the elution vessels in the carbon stripping circuit increased the carbon on -- sorry, the gold on carbon. The elution vessels were repaired late in the quarter and the gold will be poured from inventory in Q4. We also had some reduced flow rates on the heap leach, while some articulation blockages were cleaned. Work to drill and equip dewatering bores continued and the water drawdown rates are looking pretty good. This will provide access to higher-grade ores from the Mackay pits later in 2022, stripping off the 5 end pits to the north of the property continues and ore is starting to be accessed now. We plan to provide an exploration release for the grade of Marigold property before the end of the year. Exploration is mostly focused around the existing pits and is ramping up a trend in Canyon.

Overall, we drilled just over 24,000 meters for the quarter. As part of our SEC filings, we are required to provide an updated SK 1300 technical report based on our existing resources early in 2022. Unfortunately, this does not provide time for the development of some of the prospects, so we will aim to deliver a subsequent more comprehensive technical report later in 2022. Marigold will have a strong quarter for finishing well within guidance.

Move on to Slide 16 for Seabee. Seabee continues to improve its performance in both ESG and production. In the quarter, we replaced some gears on the mills in a major plant shutdown. The Seabee operation is mine limited. As a result of the planned shutdown in the plant, the mine moved further ahead of the plant, adding to the plant feed stockpile, which we built in Q2 as a result of the higher grades in Q2. After the shutdown, we operated at almost 40% above the average annual processing rate, a record monthly mill throughput, demonstrating the significant latent capacity in the plant, with the plant taking feed from both the mine and the stockpile for the quarter, we expect the mill will be mostly unconstrained in Q4 and a record quarterly processing throughput.

Underlying mine production metrics have also been steadily improving at Seabee. We have a positive view of the potential at Seabee and a beavering away on improving conditions for our team and on our production, continuous improvement projects across the whole site. The Q2 unexpected very high-grade zone all was at the edge of the resource model in the bottom of Santoy Lower 9 zone. Of course, we are exploring the area and working to regain access to mining operations, which we are targeting for early next year. We released an exploration update to Seabee during the quarter, highlighting the potential of the Greater Seabee property, including Fisher 80/20 JV to the south.

Drilling continues at Seabee Santoy and at additional exploration sites of Mac North, Joker and Fisher. Our exploration team are aiming to hand over the Joker and Mac North this year to the resource development team to further design the resources to the extent needed to allow development. The exploration team then continue on generative work and the long prioritized list of targets. Like Marigold, Seabee will be required to provide an updated SK 1300 technical report based on our existing resources in early 2022, which will be followed by a subsequent and more comprehensive Seabee technical report later in 2022. We are also preparing an exploration release in this quarter for Amisk, our other active Saskatchewan exploration site.

Move to Slide 17, and we'll discuss Puna. Puna is settling into quarter-on-quarter delivery above about 4,500 tonne a day rate, which was above our expectation when we started this year. Good production and cost control is keeping the AISC down. The changeover to own a haulage from the mine to the plant started in April, and the performance has been much better than expectation, helping to further reduce our operating costs. Planning for Puna is now being redone, assuming this better performance in the mine, higher throughput rates and lower cost base. Those parameters will form the basis of the SK 1300, which will also be issued in February 2022. Aiming to extend the life of the operations, the exploration team has been at cleaner reinterpreting and reanalyzing some of the targets and deposits around the current operations, along with the generative Soil Geochem program.

Please move to Slide 18 for the exploration. I'm not going to repeat the commentary from the previous slides and just draw your attention to a couple of points. We have considerable portfolio of exploration targets in the Americas and Western Europe. We also have some small generative programs in North America and Turkey and remain opportunistic and receptive to inbounds. Since the merger, we've been improving our active management of the portfolio, focusing on the higher probability and value opportunities and shedding the others. Near mine, projects and targets close to installed infrastructure offer the fastest, lowest cost development opportunities and are getting the lion's share of exploration efforts, which you can see clearly around Copler, Marigold and Seabee. That said, the concurrent greenfields exploration work is important.

As a pathway to step change the business value by organically building out the portfolio of operating mines. Drilling at Copper Hill in the Black sea region of Turkey is delivering more encouraging results. In April 2020, we released exploration results 8 holes, a number of which had very clean high-grade copper mineralization intercepts close to surface, including 40 meters at 2.6% copper. We aim to release this year's drill results within this quarter. Wrapping up, it was another solid quarter for the business and the operations and growth teams. Thank you very much.

And back to you, Rob.

Well, thank you, Stu, and thank you, Alison. So to summarize, 2021 has been an impressive year, reiterating the strength of our business and our commitment to shareholder returns. Since the merger, we have delivered record productivity across the portfolio, reinforcing SSR mining's appeal as a leading mid-tier gold producer. We have an exceptional portfolio of organic growth opportunities and expect to provide additional exploration updates to the market through the remainder of the year. It is our belief that our strong free cash flow, peer-leading capital returns and significant growth optionality will continue to be a key positive differentiator for SSR moving forward.

So with that, I'll pass the line now to the operator to take any questions you may have.

(Operator Instructions) Your first question is from Tyler Langton with JPMorgan.

So maybe just to start, can you talk about the levels of inflation that you're seeing now, kind of what items are coming from? And then for 2022, you mentioned that those pressures could accelerate a little bit. I guess, could you maybe give a little bit more detail kind of to what level you kind of expect inflation to be at? And then I guess if you still sort of have some room that's offset them with sort of the items like continuous improvement that are benefiting you now. And I guess it's more geared towards the U.S. and Canada.

Yes. Taylor, thank you for the question. Certainly appreciate it. And we are definitely seeing some -- I'm sorry, I said Taylor and I meant Tyler. So apologies. I'm sorry. So anyhow, to answer your question primarily to focus on the U.S. and Canadian and inflationary pressures that we've seen. Most of those, particularly in the Canadian market, have come through as a result of some labor cost increases that we've seen within the business.

And we -- the offset to those are coming from other areas within the business in terms of our continuous improvement activities that we have, primarily in the supply chain area overall. And so we are anticipating, as I had mentioned, in 2022, we will likely see some additional cost -- or inflationary pressures really primarily in the supply chain area based on inputs for diesel and other large consumables that we use. And we will continue to try and offset those in other areas where we can, but we are still working through what some of those offsets might look like for 2022.

Perfect. And then I guess, second question, I guess, for Rod. I guess you've kind of largely completed the share buyback. Just as you kind of look forward. Can you just talk about your thoughts and preferences for capital allocation in terms of returning cash to shareholders, sort of organic growth projects, M&A, just kind of how you're thinking about those right now?

Yes. Look, I think what we've been able to do this year is actually execute against what we said, which I think was an important placeholder for the company to do. There's too many times, you see capital returns, promised in the form of share buybacks. I don't ever executed against. And I think what we've done this year is not only continue to pay our base dividend, but also execute against the share buyback program at the rate that you've seen released today. So I think that was an important sort of start for us as a business.

Our approach to capital allocation holistically hasn't changed, totally in terms of the way we're going to approach it. It's a continuation of reinvesting in the business. Some of the exciting options that Stu outlined in the presentation around growth that we have within the portfolio around all of our assets actually will continue to be a key focus for us as well as one of the key areas where we'll have capital allocation put to. We'll continue to look at and evaluate supplementing our base dividend, which is set around that $0.20 per share per annum. And we'll look at the methods of supplementing that as the time comes around.

So next year, as we're resetting it, we'll have a look at whether it's a more of -- adding to the base dividend in terms of the dividend and/or a share buyback. So we haven't said that yet. But in principle, the framework hasn't changed, and that's why we're very clear to put it out there as a holistic approach to capital allocation for SSR going forward. But it will feature part of it. We want to be seen as a company that can really do it all, continue to invest in growth and return yield to our shareholders.

The next question comes from Cosmos Chiu with CIBC.

Congrats on a very good Q3. Maybe my first question is on the -- as you talked about, larger silver portfolio. As you said, you've reviewed your silver portfolio and Puna is now core. I don't know how much you can share with us, but what criteria are you using in terms of looking at your silver portfolio and one asset that I get asked quite a bit of late in your sort of growth portfolio and our silver -- on your silver side as Pitarrilla, and I did a Ctrl F on your MD&A. I couldn't -- I was kind of surprised I couldn't find Pitarrilla in it. Could you maybe give us an update on that as well?

Yes, Cos. Look, I think what we've said from day 1 is across the portfolio, we'll continue to be very disciplined around the way that will manage the extensive holdings that we have. And the first cat of the rank in that regard was obviously the sale of the royalty portfolio. We've made no secret of the fact that as we go through even our exploration assets that we will remove things from the portfolio that don't belong and replace it as time goes on.

In terms of the silver assets, again, they were in the same category in that review. And we look at a number of factors in terms of their longevity in the portfolio, do they belong? How do they contribute to the success of SSR? Do they contribute free cash flow, obviously, importantly as well as any upside potential that might exist within the assets themselves. So having a look at Puna and in particularly, it's obviously clearly in right now a cash harvesting mode.

Many years of hard work have turned that asset around to where it is today. It's been a significant outperformance for us. Through the hard work of the team in 2021. And we do expect that to continue into '22 and beyond. So from that perspective, it's a valuable asset. It has meaningful cash contributions, and we like the -- the look at the full potential of what that asset might be for us.

When we look at other assets like Pitarrilla, as you mentioned, some of the other criteria that we look at is new jurisdictions, taking a step out into new countries, size, scale, fit and to the rest of the portfolio. And obviously, clearly, Pitarrilla is a new jurisdiction for us in Mexico. And size and scale is probably not of the type that we'd want to keep it into the portfolio. So part of the review that we'll look at is to understand whether there would be a number that we will be willing to part ways with that asset in the future. So -- and we'll continue to look at that. And if we have any more information as that process unfolds, we'll obviously keep the market informed.

Of course. That's great. Maybe switching gears a little bit. As you mentioned, 2022 will be fairly busy in terms of technical reports. I think 2 sets each for Marigold and also Seabee likely, as you said, the first set will not incorporate some of the upside potential here. But how about the second set, more specifically, say, Marigold, there's a lot of exploration potential. You have pointed out trench in Canyon. You pointed out Buffalo Valley. You pointed out the Millennium model. And at Seabee, there's the Gap Hanging Wall, there's Fisher, there's Joker at this point in time, like, do you know how much of that exploration upside could potentially be incorporated into your technical reports?

Okay. I'll answer that Cos, it's Stu. Yes. So obviously, I can't quantify because that would be a guess, way too early, but I could give you an outline of what it is that we're looking to achieve. So at Marigold, we'll be looking to pull the materials around the Valmy pit and the other operating pits, where it's within the operating permitted areas into sort of the production as early as we can.

And then stepping out to subsequent to that, the sort of the new millennium and those areas that we're drilling out and providing some sort of indicative timeline of what we're trying to achieve there, where we can't actually pull them in yet, but we'll be able to describe what we can. And then out of Buffalo and Trenton Crenten valley -- Trenton Canyon and Buffalo Valley. We're still looking at what levels of definition we've got across the resources and the work that we've got.

And we're obviously out there drilling at the moment. Our ambition is to where we can pull some of it in sort of at a PFS level, and then some of it may come into the PEA, but certainly be able to describe what our plans are for the whole of the property. And the intent of the market development plans like we did at Copler is sort of to map the longer-term strategies out for the properties for all of the properties. Unfortunately, in the timing of the SEC, we'll probably call a few pits in where it's close to the existing resource and reserves like we normally would do on an annual basis, but we won't get the big chunks.

At Seabee it will maybe get the Gap Hanging Wall as much as possible into the reserve where we haven't managed to do that already. Probably some extensions where we're drilling at the Santoy 9, get the Santoy Hanging wall better defined and pull that in, and then be able to start to define the story down along down towards Fisher. So Joker and then into the top of Fisher and then some of the other deposits there. So we're pretty excited about that. But we just won't get as much of the work done and completed by -- really, at the end of this year to be able to get it into a technical report for publishing in the first month or 2 of next year. Does that help.

Yes and Stu -- yes, for sure. It's been a while since I've been to Seabee Santoy. Can you remind me in terms of like Joker and some of those other exploration targets. Are they reachable from the current decline? Or do you need additional infrastructure here?

So Joker looks like it's the expansion sort of on the Santoy. So we are hoping to be able to access it from there. We may need to put a decline in further down. We are still pretty early. So we're still -- it's still exploration drilling. We haven't really done the resource definition drilling yet. So it just -- it's going to take us a little while to be able to answer that comprehensively.

And the other thing I would say about that, when you look at those results, we've only really drilled those down to about 200 meters. And the experience in Santoy was that the grade went up at net. So we hope that we see the same trend in Joker and Mac North. But it's going to take us a little while to find out whether that holds up or not.

Great. And then maybe one last question, saving the best for last, on accounting here. Alison, as you mentioned, you're switching over to U.S. GAAP. Maybe it's too early at this point in time. But I'm trying to figure out what are some of the key differences you use IFRS right now versus U.S. GAAP?

And my understanding is that IFRS might be more flexible and more room for interpretation versus U.S. GAAP, which is more rules-based. I think I seem to remember that IFRS is also more balance sheet focused versus U.S. GAAP, which is more earnings focused. And so I guess, hopefully, it doesn't take too long and to the level that you can, what are some of the key differences that we should be looking for?

So look, we are working through our valuation right now to understand all the different implications. In general, as you look across IFRS in comparison to U.S. GAAP, 3 of the areas that we might see some -- the biggest changes are in deferred stripping taxes and then also in relation to some of the share-based compensation accounting. And so we don't yet have numbers on that. But when we do, we'll be providing that out to everyone at the same time and be sharing what that looks like. But at the end of the day, we've got a lot of work to do between now and when those financials go out. So we need a little bit more time to work through that at this point.

Just to finish it, you actually feel like you're well versed on accounting standards anyway, so you might be in the wrong industry. But we will, as soon as we've got the clarity and Alison and the team have done the work will come out and spend time with folks to take them through those changes or whatever changes end up happening just to make sure everyone's well aware of what they are and what they might be to ensure everyone is on the same page moving into 2022.

For sure. And maybe just one quick follow-up. In terms of being an SEC registrant and then using U.S. GAAP, do you foresee any changes in terms of how you disclose, say, non-GAAP measures. I'm just wondering if there's additional restrictions on how you can present, just say, adjusted earnings, production guidance, cost guidance or anything like that? Or do you anticipate that not being an issue.

So I do think that we're going to have to revisit all of those items as a part of the review, and we're currently, again, just working through that right now.

The next question comes from Ovais Habib with Scotiabank.

Congrats on a good quarter and the receipt of the Copler EIA. Just a couple of questions from me. Just starting off with the Copler EIA. Now that obviously includes the flotation circuit. Now from what I understand, you need some additional provincial permits to start commissioning of the flotation plant. Are you looking to get these permits in the next couple of weeks? And if so, would you look to start the plant in mid Q4? Or should we expect a start-up in early 2022?

Yes. Ovais, it's Stewart. So we applied for the permits immediately on getting the EIA. If this is sort of pretty typical. You get your EIA and then you have to apply to the local municipality to be able to operate your facility. They were on-site last week, and we're expecting it imminently, and our team is there ready to go. So as soon as we get the permit, we will start, and we expect to get it sometime in this quarter. We never know exactly because it's a permit with a municipality or in this case, the local problems.

And in terms of the ramp-up, how long are you looking at the ramp-up of -- to get the plant commissioned?

Yes, it will be pretty quick. It's a very simple plant. So it's just a simple flotation plan. We've had lots of time to complete all the water testing and have that ready to go. So we do have it, of course, when we put these in, we had it for the first quarter, reduced to about 70% impact. And we're pretty confident it will come up quickly. But like always, with commissioning, it's the thing that you don't expect that always gives you a surprise. So we've made allowances for those things.

Good luck on that. Just moving on. So just on the production side. So year-to-date, you guys have produced approximately 583,000 gold equivalent ounces, essentially implying Q4 production of 177,000 ounces to achieve the midpoint of guidance. Now how should we look at Q4 compared to Q3? I mean are you expecting similar quarter to Q3? And maybe if you could just give us some color on how you expect the mines to go and operate in Q4.

We don't normally break it down individually, but I'll just give you sort of generic terms. So we expect a good finish from Marigold given that we had what we had in free coming out. We've got -- Seabee has a clear run to the end of the period, has stockpiles in front of the mill, and whereas normally is mill limited waiting on the mine. It's not going to be waiting on the mine.

So as I said earlier, we're expecting sort of production throughput there at Seabee. And at Copler we'll be commissioning the flotation circuit during the period and have benefited a little bit from some positive reconciliation in the mine and good work by the mine planning crude to mitigate a little bit the impact on the business. And then Puna, it has been, as I said, it's really settled into the sort of around 4,500 tonnes a day or a little bit north of that production, and we would expect that to continue.

Now I believe you're looking to release a 3-year guidance in early 2022. I just want to be clear that I believe this guidance is looking to include the new Copler mine plant, but is it the plan to also include Marigold and CB plans as well or technical reports as well?

Yes. So we'll issue the guidance. We'll be issuing at about same time or slightly later the technical reports and obviously, those numbers for the first few years we're going to a launch of each other.

So we're still on the back, Rodney -- so as to 3-year guidance and so yes, to answer question.

The next question comes from Michael Siperco with RBC Capital Markets.

So going back to the balance sheet and capital allocation. Can you expand a bit about how you think about things going forward here, maybe aside from M&A? I mean obviously, you've returned a lot of cash, visibility into more subject to the buyback limits. But longer term, given the cash you should be generating, how are you thinking about deploying or managing it in a very first-class problem to have, I guess? So should we be thinking about a higher payout or paying down more debt and does growing cash concern you at all from a capital efficiency perspective?

So I think it's as you said, Michael, it's a fantastic problem to have. And I think as we think about it, we don't look at it as a problem. We actually look at it as an opportunity. So the business clearly within it has a number of new and informative growth opportunities. And some of these things will require us to think about capital investments in the future, new mines, new territories, in fact, on the outside of our current districts surrounding the mine. So there's clearly a portfolio that's starting to come to life here and for us to ensure that we would keep the integrity in the balance sheet to tackle those opportunities in the future is very important to us.

The other thing that I'd say is we will assess it on a yearly basis, like we always said. The framework set, the capital allocation strategy won't change, will stay fairly consistent throughout. Yearly we may change the mix of what we do in terms of either it's more dividends or more share buybacks. I mean in some years, then we might actually even pull back. If we had a big capital allocation in front of us, we'll just go back to the base dividend. So I think that flexibility within is very important.

And the only thing I'll say, Alison might want to add something to it is I always remind folks, this is a cyclical business and maintaining some balance sheet strength through cycles is very important to us. So while folks might say, well, you've got net cash above $500 million now, is there more to come? Clearly, yes, with the free cash flow generation we have, but we also want to maintain that balance sheet strength, so we can survive through those cycles. And in some cases, there's sometimes the best time to look at other opportunities outside our current portfolio as well. So it's a very holistic approach, it's flexible, and it provides us with an ability to shift and adapt.

Well, that's great. That's a good answer. Maybe just one follow-up for me. Maybe more philosophically, maybe too philosophically for a Wednesday afternoon. But in terms of the Kirkland-Agnico transaction and more consolidation at the top of the sector or in general, how the sector continues to evolve, can you talk a bit about how you position yourselves and differentiate yourselves in the market and to investors or in fairness is whatever anyone else does completely irrelevant to you and the business plan?

Look, I don't think we can put an end to gen and ignore what's going on in the markets, I think that would be wrong. I think we've proven over a long time now that we are a dynamic group, not only in terms of our operational performance, but the way that we think our strategy and the way we execute against our strategy. I'd like to think in yellow mine, Michael, that we're actually probably one of the first ones to do it with the merger of Alacer and SSR in a very meaningful way when we brought the companies together with no value leakage toward the shareholder groups is probably paved the way for others and one that you've just mentioned. Clearly, there's other folks thinking around the same. So in our mindset, it's right. The industry does -- my view in the consolidation. There are still too many stranded assets, single assets, and too many management companies running smaller portfolios. So I think with that backdrop, I think there is clearly an opportunity there for industry consolidation.

But I think it's really going to come down to what's right. And when you sit down and you put companies together on paper and look at them, sometimes it doesn't make sense because there is no strategy to work or that it might be outside of what's core strategy from one company to another company going forward. Or indeed, there could be the fact that some folks are quite happy to keep on managing the businesses. So for us, it's on a -- we'll keep looking. We'll keep on reviewing the opportunities as they come along. And if they have anything -- is interesting to us, we'll obviously pursue it, but it's some of these strategic deals are much harder to do than say.

The next question comes from Michael Jalonen with Bank of America.

I just -- Rod, just had a question this transition to SEC reporter, being analyst of 34 years. I've actually -- I can't remember for a corporate company that I've covered seen this done before. Does this mean SSR is going to be redomiciled as a U.S. corporation?

No. It doesn't Jalonen. Look, I think it's simply -- it's a couple of things. So there's -- there are tests that you have to run around retaining your FPI status, you find private issuer status in the U.S. where your shareholder base is where management are where decisions are made. And clearly, there's coming a point for us with our U.S. shareholder base being plus 50% and the fact that we've got the management team in the U.S. There's a point where we're probably going to fail that test.

So part of that for us was actually looking at as an opportunity for us to become a full issuer in terms of IFRS and U.S. GAAP that we can actually probably service our U.S. investors better and hopefully open up the market to us for some of those U.S. investors who can't invest in companies that don't have full issuer compliance. So it might be unusual, but it doesn't mean we're re-domicile. It doesn't mean we lose our Canadian entity basis. It just means that we're going to be reporting under SEC rules as our primary focus.

Okay. Maybe you're setting a 10-point here for other Canadian gold producers to do the same thing. And just looks very interesting.

I agree with you Jal. Look, from our perspective, while there's obviously a heavy lift here, and there's a lot of things that need to be done as you can understand, and you heard us describe today. Having the opportunity for us to really tackle and get visibility into the U.S. investor market with the fact that we've got this full compliance to our U.S. GAAP and others is fantastic actually. So we're actually looking forward to it. I think it is a real opportunity for us and our shareholders.

This concludes the question-and-answer session. I will now turn the call back to Mr. Antal.

Great. Thank you. Thanks, everyone, and thanks for joining us today. Another solid quarter, and look forward to the next update in the new year until then. Thank you.