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SSR Mining Updates on Production & Cost Guidance for 2020

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SSR Mining Inc. SSRM has provided an updated outlook for the current year after the successful completion of its merger with Alacer Gold Corp. (Alacer) on Sep 16. The updated guidance reflects the coronavirus pandemic’s impact on the company’s Seabee and Puna operations. Previously, the company revoked its current-year operating guidance due to the unfavorable impact of the pandemic on the company’s mine operations.

SSR Mining expects to end the year on an impressive note, particularly in the fourth quarter, as Çöpler and Marigold mine continue to operate, while Seabee and Puna are resuming normal operations without any interruptions. The company is focused on completing its integration efforts, and assessing growth and development portfolio.

The company now expects to produce consolidated gold equivalent ounces (GEOs) of 680,000 to 760,000 from its four operating mines in the ongoing year. Total all-in sustaining costs (AISC) is expected between $965 per ounce and $1,040 per ounce.

Gold production from the Çöpler mine is now expected between 310,000 ounces and 360,000 ounces in the current year. Mine site AISC is projected in the band of $710-$760 per ounce. Sustaining capital expenditures are expected to total $40 million, which includes ongoing construction of the tailings storage facility (TSF) lifts as well as few other expansion projects.

For the ongoing year, gold production from the Marigold mine is expected between 225,000 ounces and 240,000 ounces. Mine site AISC is projected in the range of $1,170-$1,230 per ounce. Sustaining capital expenditures are estimated to total $55 million, considering the construction of a new leach pad and the purchase of two new haul trucks. Exploration expenditure for 2020 is anticipated to be $16 million, focusing on expanding oxide Mineral Resources across the Marigold, Valmy, and Trenton Canyon properties, as well as discovery of higher-grade sulfides at Trenton Canyon.

The Seabee mine is expected to produce 80,000-90,000 ounces of gold in the current year. AISC are estimated in the band of $770-$820 per ounce. Sustaining capital spending are planned to total $15 million, including underground infrastructure, mining equipment and tailings facility expansion. In June, mining operations and underground development re-commenced in the Seabee ore mine, following the temporary suspension of operations due to the pandemic. Ore extraction and development rates ramped up through July and milling operations at the mine started in early August.

The Puna mine is expected to produce between 4.9 ounces and 5.3 million ounces of silver in 2020. Mine site AISC is estimated in the range of $15.00 to $17.00 per ounce. Sustaining capital expenditures are projected to total $15 million, focused on maintenance of the mine, mill and power-generating equipment. Following the COVID-19-related suspension of mining operations in March, the Puna mine resumed production in the back half of the June-end quarter with restarting of mining, hauling and milling operations. As infection rates have escalated in Argentina and travel restrictions remain in place, the Puna mine had to reduce and suspend operations periodically in the ongoing quarter, in order to reduce transmission of the virus.

Price Performance

The company’s shares have appreciated 42.7% over the past year, outperforming the industry’s growth of 19%.

Zacks Rank & Key Picks

SSR Mining currently carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the basic materials space include Kinross Gold Corporation KGC, Eldorado Gold Corporation EGO and Yamana Gold Inc. AUY, each carrying a Zacks Rank #2 (Buy) currently. You can see the complete list of today’s Zacks #1 (Strong Buy) Rank stocks here.

Kinross has an expected earnings growth rate of 100% for the current year. The company’s shares have surged 71.7% over the past year.

Eldorado Gold has an anticipated earnings growth rate of 2.33% for the ongoing year. Its shares have rallied 14.5% in the past year.

Yamana has an estimated earnings growth rate of 76.9% for 2020. The stock has soared 73.6% in the past year.

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