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Bullboard - Stock Discussion Forum SSR Mining Ord Shs T.SSRM

Alternate Symbol(s):  SSRM

SSR Mining Inc. is a precious metals mining company with four producing assets located in the United States of America (USA), Turkey, Canada, and Argentina, combined with a global pipeline of development and exploration assets in the USA, Turkey, Mexico, and Canada. Its four operating assets produce more than 700,000 gold-equivalent ounces annually. The Company's gold and silver production is... see more

TSX:SSRM - Post Discussion

SSR Mining Ord Shs > Nice write up from a SeekingAlpha journalist…
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Post by JimmyD on Feb 20, 2024 12:51pm

Nice write up from a SeekingAlpha journalist…

Taylor Dart

NPV for other 3 mines is well above $1.0 billion unless one chooses to use much lower gold price assumptions. Marigold is ~$950 million alone at $1,875/oz gold which is 3-year average gold price and that excludes Buffalo Valley and Trenton Canyon, and significant opportunity to add to mine life and or increase production south of the mine. Seabee and Puna are $250 million combined, but that assumes no mine life extension with Porky targets nearby at Seabee, no upside from Cortaderas at Puna (new discovery) and no resource conversion at Santoy, so when including very achievable mine life upside for these three assets (Marigold, Puna, Seabee) and using an $1,875/oz long-term gold price you're at ~$1.55 billion NPV (5%) for these assets with $1,875/oz gold price assumptions and very modest value assigned to resources outside of reserves that will make it into mine plans with a very high probability.

 

I don't think it's unreasonable to assign $250 million to Hod Maden (down from my previous $480 million fair value) as this asset had nothing to do with this, does not use cyanide, and does not use heap leach, which is conservative as NPV (5%) on 100% basis is $1.2+ billion and you're at $1.80 billion total NPV for Marigold, Puna, Seabee, Hod Maden.

 

While I think it's fair to write off Copler at this stage due to uncertainty, I think it's a stretch to write off all the Turkish assets here. I'd also argue there's an outside possibility that Copler restarts by the end of 2025. Other producing assets like Oksut in Turkiye (mercury found in gold room in 2022) have had safety issues and while no tragic loss of life like here and certainly a much different situation, an amended EIA for Oksut was filed and approved and it took a year but it came back online. But to be conservative, I think placing a $250 million value on Turkish assets (current value of ~$2.0 billion attributable for 80%/40% of Hod Maden) is best here.

 

Finally, on Copler, it's possible that there are significant fines and an expensive clean-up, but that the compromise to restart is that heap-leaching is no longer allowed at the asset. Copler's primary production is sulfide production per its autoclave and it was already looking at adding an oxide mill, so while one can choose to value it at zero if they wish, I wouldn't rule out the potential that it restarts with purely autoclave production in 2026. This is a cash cow for Turkiye and I think it's early to assume it's shut down for good, but for conservatism we'll value it at $0 anyways and essentially a liability due to the clean-up cost. 

 

For cash, we can drop the value of the $250 million in net cash to $50 million as we can assume 80% of that net cash position is used for clean up to be extra conservative, though I think clean-up costs likely come in at less than $200 million. Then we can subtract $100 million in corporate G&A with Copler out of the picture and shorter mine lives across the portfolio.

 

Seabee + Marigold + Puna = $1,550 million
Hod Maden = $250 million
Copler = $0
Net Cash = $50 million (mostly offset by cleanup costs to be conservative)
Corporate G&A = [-] $100 million
Pitarilla NSR + Sunrise Lake NSR = $25 million
= $1,775 million

 

/ 201 M shares = US$8.83
Comment by Hopeful123 on Feb 20, 2024 1:35pm
We could be trading between 5 to 7 bucks if gold stays here...Gold at 3000 we could hit 10 to 12 bucks...I am a buyer here below 6 ....poss at 5.50...Rod may be gone and no dividends for years...Really sucks given 3 mos ago things were so much better..
Comment by Hopeful123 on Feb 20, 2024 1:37pm
We could be trading between 5 to 7 bucks if gold stays here...Gold at 3000 we could hit 10 to 12 bucks...I am a buyer here below 6 ....poss at 5.50...Rod may be gone and no dividends for years...Really sucks given 3 mos ago things were so much better..
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