SSR Mining Inc.: Let The Mania Begin

May 20, 2020 12:38 PM ETSSR Mining Inc. (SSRM), SSRM:CASILV, ALIAF, SIL:CA44 Comments
Bob Kirtley profile picture
Bob Kirtley
2.74K Followers

Summary

  • This merger with Alacer Gold Corp. has effectively doubled the market capitalization of SSR Mining as it develops into one of this sector's major players.
  • The current drill results suggest that there is potential for this company to grow organically without making any further purchases as mergers and acquisitions are rarely easy to secure.
  • A strong balance sheet positions the company well for making more good quality acquisitions as and when the opportunities present themselves.
  • In my view, this is a strong buy, but I do own shares in this stock and so must be considered biased towards them, so do your homework and do it fast as this sector is going places.

Introduction

On the 14th May 2020 SSR Mining Inc. (NASDAQ:SSRM) issued some very interesting updates which included an Exploration Update, the Divesting of SilverCrest Equity Position for C$90 Million of Gross Proceeds, a merger with Alacer Gold Corp. (OTCPK:ALIAF) and the First Quarter 2020 Results.

Source: SSR Mining Inc.

There is a lot to digest here but the important point is that the markets received this update very well indeed and pushed the stock price up by 13.71% in just one trading session.

Today we will take a quick look at the factors driving the SSR Mining Inc. stock price.

News Flow

The Exploration Update focused on the Marigold and the Seabee Gold Operations. Paul Benson, President and CEO said, “For 2020, we are planning significant investment in our exploration and the results reported here justify the investment.” I have no wish to repeat all of their data here, but the drill results look very encouraging to me.

The Divesting of SilverCrest (SILV) Equity Position for C$90 Million secured a pre-tax gain of C$55 million on an investment of C$35 million over an 18-month period. Today this looks like a good piece of business with a tremendous profit achieved in a relatively short time. In years to come, we might think differently but that’s hindsight and for now, I am happy with this move.

The First quarter 2020 results were good despite the difficulties caused by the coronavirus with 107,000 gold-equivalent ounces being produced at cash costs of $824 per ounce of gold. The balance sheet looks healthy with almost $400 million in cash. As forward guidance has been suspended, I think it is prudent to wait for a little more clarity before conducting a detailed financial analysis of this stock.

Source: SSR Mining Inc.

There was also 1.8 million

This article was written by

Bob Kirtley profile picture
2.74K Followers
Bob Kirtley has traded options and stocks since 1980. Bob Kirtley spent many years working on Oil projects including some in Alberta, such as the tar sands installations in Fort McMurray. He lived and worked in many different countries, as that is the nature of the construction business. Planning and cost control are key to a projects success and he tries to apply those disciplines on a daily basis when dealing with investments. His training in such areas as SWOT and Risk analysis can be applied from time to time. His qualifications include being chartered in the United Kingdom, which is similar to that of a Professional Engineer in Canada, along with a Masters Degree in Project Management from South Bank University, London, England. He has been working for a number of years on a full time basis representing a group of investors in England.

Disclosure: I am/we are long SSRM. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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