SSR Mining: The Sale Closed, But Now Costs Set the Ceiling
Summary
I am downgrading SSRM from a STRONG BUY to BUY. The balance sheet and capital returns were strengthened. But the operating margin of safety weakened because costs and second-half execution now carry more weight.
Q2 revenue increased 9.5% y/y to $443.8Mn, but production fell 15.2% to 101,959 GEOs and AISC rose to $2,622/oz. My probability-weighted present value is $44 per share. The upside is still attractive, but no longer wide enough for a Strong Buy
I believe that the most important thesis change is now complete: SSR Mining sold Çöpler for about $1.49Bn, exited Hod Maden for an uncapped 4% NSR, and ended Q2 with $1.783Bn of cash and no long term debt.
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