SSR Mining SSRM Business Risk Report

Risk Report Outline for SSR Mining (Ticker: SSRM)

I. Financial Risks

A. Fluctuating commodity prices

SSR Mining is exposed to volatility in the prices of gold, silver, and other metals which can significantly affect the company’s profitability and revenue. Changes in commodity market conditions, driven by global economic factors and investor sentiment, can rapidly alter price levels.

B. Foreign exchange rate exposure

As a company operating mines in various countries, including Argentina, Turkey, and Canada, SSR Mining faces risks associated with fluctuations in foreign currency exchange rates. Such currency fluctuations can influence operational costs and affect the profitability of sales in foreign markets.

C. Capital structure risks

SSR Mining’s approach to funding its operations, including debt and equity financing, subjects it to capital structure risks. Adverse changes in credit markets or investor sentiment can increase costs or limit the availability of necessary capital.

II. Operational Risks

A. Supply chain disruptions

SSR Mining could face disruptions in its supply chain for critical resources such as machinery, parts, or chemicals needed in mining operations. Such disruptions, possibly caused by global pandemics, trade conflicts, or local issues, can impede production capability.

B. Regulatory compliance challenges

The mining industry is highly regulated, and non-compliance with regulations in any of the countries where SSR Mining operates can result in fines, penalties, or operational shutdowns. Constant changes in regulations, particularly related to environmental and safety standards, pose ongoing compliance challenges.

C. Technology failures

Reliance on technology in mining operations exposes SSR Mining to risks of critical technology failures. Such failures can lead to operational disruptions, increased costs, and reduced production efficiency.

III. Strategic Risks

A. Exploration and development risks

Exploration and development activities are inherently uncertain and can significantly impact SSR Mining’s future growth. Inadequate resource estimates or unforeseen geological challenges can lead to project delays or increased costs.

B. Mergers and acquisitions risks

SSR Mining engages in mergers and acquisitions to grow its business, which includes risks such as overvaluation of assets or integration issues. Poorly executed acquisitions can dilute shareholder value and strain financial resources.

C. Market competition risks

The highly competitive nature of the mining industry means that SSR Mining must continually improve efficiency and resource extraction capabilities to maintain its market position against both larger multinational and smaller, more agile mining companies.

IV. Environmental Risks

A. Climate change impacts

Climate change poses physical risks to SSR Mining’s operations, including increased frequency and severity of extreme weather events, which can damage infrastructure or disrupt operations. Regulatory and reputational risks associated with greenhouse gas emissions also need to be managed.

B. Reclamation and closure obligations

Mining operations are subject to stringent reclamation and closure requirements aimed at minimizing environmental impact post-mining. SSR Mining must allocate substantial financial and operational resources to meet these obligations, impacting long-term profitability.

C. Environmental incidents

SSR Mining operates in environmentally sensitive areas, making it susceptible to incidents such as spills or unplanned releases of pollutants. Such incidents can result in significant remediation costs and damage to the company’s reputation.

Mitigation Strategies

I. Financial Risks

A. Hedging strategies for commodity prices

SSR Mining employs hedging strategies to mitigate the financial impact of volatile commodity prices. Through forward sales, options, and other derivative instruments, the company seeks to stabilize cash flows and protect margins.

B. Diversification of currency exposure

To manage foreign exchange rate risks, SSR Mining diversifies its currency exposure by maintaining a balance in its currency holdings and engaging in currency hedging where necessary. This approach helps stabilize earnings translated from foreign operations.

C. Regular financial health assessments

Constant monitoring and regular assessment of its financial health allow SSR Mining to respond proactively to any emerging capital structure challenges. This includes maintaining a balanced debt-to-equity ratio and ensuring sufficient liquidity to fund operations and growth.

II. Operational Risks

A. Establishing robust supplier relationships

By building strong, long-term relationships with key suppliers and diversifying its supplier base, SSR Mining aims to mitigate the risk of supply chain disruptions and secure the continuous availability of essential resources.

B. Continuous monitoring and adherence to regulations

SSR Mining implements comprehensive compliance programs to ensure adherence to all applicable regulations. Ongoing training and audits help prevent regulatory breaches that can lead to financial or reputational damage.

C. Implementing backup systems for technology

To combat the risk of technology failures, SSR Mining invests in robust backup systems and disaster recovery plans. This ensures continuity of operations, even during unforeseen technology disruptions.

III. Strategic Risks

A. Thorough due diligence for exploration projects

SSR Mining conducts extensive due diligence before committing to new exploration projects. This includes geologic and financial assessments to verify the viability of projects and mitigate the inherent risks associated with exploration and development.

B. Rigorous evaluation criteria for potential acquisitions

To minimize the risks from acquisitions, SSR Mining uses rigorous evaluation criteria to assess potential targets. This includes thorough financial, legal, and operational due diligence to ensure strategic alignment and value creation.

C. Market research and innovation to stay competitive

Continuous market research and investments in innovation enable SSR Mining to adapt to changing market conditions and technologies, hence maintaining a competitive edge in the mining sector.

IV. Environmental Risks

A. Implementing sustainable practices

SSR Mining is committed to sustainable mining practices, which include reducing environmental impact, using water and energy efficiently, and prioritizing the well-being of local communities around its operations.

B. Adequate provisions and funds for reclamation

The company ensures that sufficient provisions and funds are set aside for reclamation and closure activities. Financial planning and operational practices incorporate these costs to comply with environmental standards and obligations.

C. Comprehensive training and protocols to prevent incidents

SSR Mining implements rigorous environmental safety training and protocols. This proactive approach is designed to minimize the incidence of environmental accidents and ensure a quick, effective response when incidents do occur.