SSR Mining Inc. SSRM is slated to report third-quarter 2024 results on Nov. 6, after market close. SSRM is anticipated to deliver a year-over-year decline in earnings in the quarter.

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The Zacks Consensus Estimate for SSR Mining’s earnings for the third quarter is pegged at 15 cents per share, suggesting a 42% plunge from that reported in the third quarter of 2023. The estimate has moved down 28.57% over the past 60 days.

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SSR Mining’s Earnings Surprise History

SSR Mining’s earnings beat the Zacks Consensus Estimates in three of the trailing four quarters but missed in one. The company has a trailing four-quarter earnings surprise of 202.55%, on average. The trend is shown in the chart below.

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What the Zacks Model Unveils for SSRM Stock

Our proven model does not conclusively predict an earnings beat for SSR Mining this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that is not the case here.

Earnings ESP: SSRM has an Earnings ESP of -20.00%. You can uncover the best stocks before they are reported with our Earnings ESP Filter.

Zacks Rank: The company currently carries a Zacks Rank of 3. You can see the complete list of today’s Zacks #1 Rank stocks here.

Factors Likely to Have Shaped SSR Mining’s Q3 Performance

A major slip on the heap leach pad occurred at SSRM’s Çöpler mine on Feb. 13, 2024, and operations have since been suspended. Considering that Cöpler contributed around 31% of SSR Mining’s total production in 2023, this incident was a huge setback. SSR Mining has taken the necessary steps to ensure the containment of the incident.  The investigations into the cause of the Çöpler incident are ongoing. 

SSR Mining produced 177,691 gold equivalent ounces in the first half of 2024. This marked a 41% plunge from the 303,518 gold equivalent ounces produced in the first half of 2023. The decline was blamed on a 79.6% year-over-year decrease at Çöpler due to the suspension.

To add to the company’s woes, it had to suspend operations at Seabee due to forest fires near the mine with effect from Aug. 21, 2024. Per the last update provided by the company, operations were expected to resume in the second half of October. Seabee contributed around 15% of SSR Mining’s gold production in 2023.

Prior to this incident, SSRM’s production guidance for Seabee was 75,000-85,000 ounces of gold. The company will likely revise the mine’s production and cost guidance during the third-quarter 2024 earnings call.  

Meanwhile, Marigold is expected to produce 155,000-175,000 ounces of gold in 2024, suggesting a decline from the record 278,488 ounces produced in 2023. Results are expected to reflect the impacts of planned waste stripping at Red Dot to boost the mine’s gold production.

Puna remains on track to achieve the 2024 production guidance of 8.75-9.50 million ounces of silver, lower than the 9.69 million ounces produced in 2023.
We expect SSRM’s third-quarter production to have been lower year over year due to the impacts of lost production at Seabee for most of the quarter, as well as expected declines at Marigold and Puna. The Çöpler suspension is likely to have led to unfavorable year-over-year comparisons in the quarter under review.

Gold prices averaged $2,491 per ounce in the third quarter, up 29% from the prior-year level. Throughout the quarter, gold prices have been fueled by increasing expectations of interest rate cuts and rising tensions in the Middle East. The Fed’s announcement of a 50-basis-point rate cut at the Sept. 17-Sept. 18 meeting lifted gold prices, which ended the quarter at above 2,600 per ounce. Silver prices were also high, averaging at $29.64 in the third quarter, up 25% year over year.

However, the gains from higher prices on SSR Mining’s third-quarter performance are anticipated to have been offset by the lower production.

SSRM’s Price Performance & Valuation

The SSR Mining stock has plunged 50.7% year to date against the industry’s decline of 1.7%. Meanwhile, the Zacks Basic Materials sector and the S&P 500 have gained 9% and 31.6%, respectively.

SSRM’s Price Performance Against Industry & Broader Market

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SSRM is trading at a 12-month forward price-to-earnings of 19.62, much higher than the industry average of 12.88X.

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Peers Hudbay Minerals HBM and Silvercorp Metals SVM are cheaper options, trading at 12-month forward price-to-earnings of 10.24 and 14.45, respectively.

Investment Thesis on SSR Mining

With a strong cash flow and low debt, the company is well-equipped to invest in growing its diversified portfolio of high-quality assets.  The gold production profile at Marigold is expected to increase to more than 270,000 ounces annually in 2027, seeing an 18% CAGR from 2024 and reaching above 300,000 ounces by 2029. Costs are expected to improve significantly in 2026 as stacked grades rose due to increased ore contribution from Red Dot. Over 2024-2028, Seabee’s production is expected to average 75,000 ounces annually. At Puna, mining from the Chinchillas open pit is expected to be completed in 2026. Technical work continues to evaluate opportunities to extend the Puna mine’s life.

Gold prices have gained 33% year to date and are currently at $2,740 per ounc and demand remains strong. The favorable environment for gold presents a promising outlook for SSRM.

Should You Buy SSRM Stock Right Now?

SSR Mining is anticipated to deliver a lackluster quarter due to the lower production. No matter how earnings play out, investors already owning SSRM shares should retain the stock in their portfolios to benefit from its solid long-term fundamentals. However, given SSRM’s premium valuation and lack of clarity on the timing of a potential restart at Copler, new investors can wait for a better entry point.

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