CDE - SSR Mining: A Dirt-Cheap Valuation For This Mid-Tier Producer

2024-02-09 13:45:56 ET

Summary

• SSR Mining Inc. reported strong Q4 and FY2023 production results, meeting its production guidance and delivering record production at its Marigold and Puna mines.
• The company plans to throttle back mining rates at its Copler Mine to build a grind leach circuit, which will significantly improve gold recoveries and potentially add over 300,000 ounces of gold to its reserves.
• SSR Mining's Hod Maden project in Turkey is another world-class asset in its portfolio, with high-grade intercepts and the potential to generate significant free cash flow once in production.

It's been a tough start to the year for the VanEck Gold Miners ETF ( GDX ) and for some of the better-run producers sector-wide like SSR Mining Inc. ( SSRM ), they've now found themselves over 60% off their all-time highs. This is despite the fact that the company has continued to grow resources, reserves, and NAV per share, but with the market focusing today on the decline in free cash flow and the stock being in an investment cycle and ignoring the quality and diversification that its portfolio offers. In this update, we'll dig into SSR Mining's Q4/FY2023 production results , and recent developments and see where the stock's updated low-risk buy zone lies.

Q4 & FY2023 Production Results

SSR Mining released its Q4 & FY2023 results last month, reporting quarterly production of ~211,100 gold-equivalent ounces, with this being its strongest quarter of the year and helping it to deliver within its guidance of 700,000 to 780,000 GEOs. The solid quarter was helped by a massive contribution from Marigold (~82,800 ounces vs. ~62,900 ounces), and a record year at ~278,500 ounces of gold. Meanwhile, Puna also had a solid Q4 and record year, with production of ~2.78 million ounces of silver and ~9.7 million ounces for the full year, contributing well over $200 million in revenue with additional zinc/lead credits. Finally, Seabee had a decent finish to the year, though production was down sharply on a full-year basis (~90,800 ounces vs. ~136,100 ounces), but this was largely due to difficult comparisons with the asset processing well above average grades in 2022....

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