AAPL 184.35 1.1134% MSFT 411.6876 2.364% GOOG 145.3444 1.0459% GOOGL 144.175 1.14% AMZN 174.33 3.4047% NVDA 784.65 16.2927% META 486.18 3.878% TSLA 197.565 1.435% TSM 129.25 3.1195% LLY 769.655 3.1834% V 283.785 2.5383% AVGO 1304.8 6.3017% JPM 183.325 1.3405% UNH 525.425 0.6619% NVO 124.57 3.01% WMT 175.35 0.9499% LVMUY 182.36 1.7066% XOM 104.775 -0.0715% LVMHF 909.7617 1.9427% MA 471.85 2.7884%

mid-cap

Book Profit on This NASDAQ-Listed Gold Stock - SSRM

Jan 21, 2022 | Team Kalkine
Book Profit on This NASDAQ-Listed Gold Stock - SSRM

SSR Mining Inc.

SSRM Details

SSR Mining Inc. (NASDAQ: SSRM) is a precious metals mining company with four operating properties: Çöpler Gold Mine (Turkey), Marigold Mine (USA), Seabee Gold Operation (Canada), and Puna Operations (Argentina). It primarily produces gold, silver, lead, and zinc concentrates and is involved in the discovery, extraction, processing, reclamation, and other associated operations. As of January 21, 2022, the company's market capitalization stood at USD 3.66 billion.

Latest News:

  • Sale of Pitarrilla Project: On January 13, 2022, SSRM signed a deal with Endeavour Silver Corp. to sell its Pitarrilla property in Durango, Mexico, for a total consideration of USD 127 million. The total consideration includes USD 35 million in cash, USD 35 million in Endeavour Silver shares (based on the 10-day volume-weighted average trading price preceding the date of the share purchase agreement), and a 1.25% net smelter return royalty on the Pitarrilla property, which SSRM estimates to be worth up to USD 57 million.

 

Q3FY21 Results:

  • Growth in Revenue: The company reported YoY growth of 43.22% in revenues to USD 322.85 million in Q3FY21 (ended September 30, 2021) compared to USD 225.41 million in Q3FY20, attributable to a 47.20% YoY increase in Gold bullion and doré sales.
  • Decline in Net Profits: SSRM reported a growth in net income to USD 62.45 million Q3FY21 vs. USD 25.11 million in Q3FY20.
  • Cash and Debt Position: As of September 30, 2021, the company had cash and cash equivalents (including short-term investments) of USD 881.57 million and total debt of USD 459.99 million.

Key Risks:

  • Metal Price Risk: Prices of gold, silver, and base metals on the global market, which are highly volatile and uncontrollable, significantly impact SSRM's business. Hence, any unfavorable movement in their prices could negatively impact its financials.
  • Regulatory Risk: SSRM operates as a gold mining company, which is subject to several federal and state regulations. Therefore, the issuance of stricter regulations or non-compliance with required laws could adversely affect the company's profitability.

Outlook:

  • Production Guidance: SSRM estimates its consolidated FY21 production in the range of Au Eq Koz 720 – 800.

 Valuation Methodology: EV / EBITDA Multiple Based Relative Valuation

(Analysis by Kalkine Group)

* % Premium/(Discount) is based on our assessment of the company's NTM trading multiple after considering its key growth drivers, economic moat, stock's historical trading multiples versus peer average/median, and investment risks.

SSRM Daily Technical Chart (Source: REFINITIV)

Stock Recommendation:

SSRM's stock price has soared 11.50% in the past six months and is currently trading close to the mid-point of its 52-week range of USD 13.68 to USD 20.06. The stock is currently trading between its 50 and 200 DMA levels, and its RSI Index is at 49.32. We have valued the stock using the EV/EBITDA-based relative valuation methodology and arrived at a target price of USD 15.22.  

Considering the uptick in the stock price, current valuation, and technical indicators, we believe the decent business fundamentals are adequately reflected at current trading levels. Hence, we recommend a "Sell" rating on the stock at the closing price of USD 17.06, down 1.27%, as of January 21, 2022.

* The reference data in this report has been partly sourced from REFINITIV.

* All forecasted figures and industry information have been taken from REFINITIV.