Uncertain Çöpler Restart And Rising Costs Will Strain Outlook

Key Takeaways

• Prolonged operational uncertainty, rising costs, and regulatory pressures threaten earnings, limit cash flow recovery, and erode long-term profitability.
  
• Shifting global energy trends and environmental scrutiny increase risks around demand, delays, and margin compression for SSR Mining's core business.
  
• Strategic acquisitions, mine life extensions, operational efficiencies, and disciplined capital allocation position SSR Mining for sustained production growth, financial resilience, and enhanced shareholder value.

Catalysts

Engages in the acquisition, exploration, and development of precious metal resource properties in the United States, Türkiye, Canada, and Argentina.

• The continued uncertainty regarding the restart of Çöpler, with no clear timeline or guarantees on permitting, creates a persistent risk of prolonged lost production, which will drag on future revenue growth and limit near-term cash flow recovery.
  
• Significant and mounting reclamation and remediation obligations related to the Çöpler incident, now projected as high as 312.9 million dollars and likely to increase as plans are refined, will pressure future net margins and result in higher ongoing capital outlays that erode profitability.
  
• Steadily rising all-in sustaining costs across legacy operations-especially Marigold and Seabee, where costs are well above current gold prices and trending upward due to adverse events and royalties-signal long-term structural margin compression and heightened risk of earnings deterioration.
  
• The accelerating global transition toward renewable energy and metal substitution threatens to reduce future demand for precious metals, undermining both top-line revenue potential and price appreciation prospects for SSR Mining's core gold and silver production.
  
• Heightened scrutiny on environmental and social practices, coupled with increased regulatory barriers and resource nationalism in key jurisdictions like Turkey, raises the likelihood of further delays, cost overruns, and higher financing costs, all of which will weigh on earnings power and diminish long-term cash flow visibility.

SSR Mining Future Earnings and Revenue Growth

Assumptions

• This narrative explores a more pessimistic perspective on SSR Mining compared to the consensus, based on a Fair Value that aligns with the bearish cohort of analysts.
• The bearish analysts are assuming SSR Mining's revenue will grow by 13.3% annually over the next 3 years.
• The bearish analysts assume that profit margins will increase from 12.7% today to 36.0% in 3 years time.
• The bearish analysts expect earnings to reach $680.9 million (and earnings per share of $3.27) by about August 2028, up from $165.0 million today. The analysts are largely in agreement about this estimate.
• In order for the above numbers to justify the price target of the more bearish analyst cohort, the company would need to trade at a PE ratio of 3.9x on those 2028 earnings, down from 21.6x today. This future PE is lower than the current PE for the CA Metals and Mining industry at 17.2x.
• Analysts expect the number of shares outstanding to grow by 0.2% per year for the next 3 years.
• To value all of this in today's terms, we will use a discount rate of 7.03%, as per the Simply Wall St company report.

SSR Mining Future Earnings Per Share Growth

Risks

• The successful integration and strong cash flow generation from the Cripple Creek & Victor acquisition, along with the potential for meaningful mine life extension and production growth at this core asset, could drive increases in revenue and strengthen long-term earnings for SSR Mining.
  
• The ongoing extension of mine life at existing operations such as Chinchillas at Puna, combined with active exploration and feasibility work at Buffalo Valley, New Millennium, and other targets, position the company for sustained organic production growth and support higher future revenue streams.
  
• SSR Mining's strong balance sheet, with over $900 million in liquidity and robust free cash flow generation even during periods of operational disruption, bolsters its ability to navigate reclamation costs, invest in growth, or deliver increased shareholder returns, potentially supporting stable or improved net profits.
  
• Advancements in the permitting and restart process at Çöpler, highlighted by tangible engineering progress and collaboration with Turkish authorities, create a path to significant production restoration and operating cash flow recovery, which could enhance overall company earnings if realized.
  
• The company's continuous emphasis on operational efficiencies, cost controls, and prudent capital allocation, along with ongoing investments in future-facing projects such as Hod Maden, suggest improving net margins and long-term cash flow that may positively impact shareholder value over the coming years.

Valuation

• The assumed bearish price target for SSR Mining is CA$14.72, which represents the lowest price target estimate amongst analysts. This valuation is based on what can be assumed as the expectations of SSR Mining's future earnings growth, profit margins and other risk factors from analysts on the more bearish end of the spectrum.
  
• However, there is a degree of disagreement amongst analysts, with the most bullish reporting a price target of CA$27.11, and the most bearish reporting a price target of just CA$14.72.
  
• In order for you to agree with the bearish analysts, you'd need to believe that by 2028, revenues will be $1.9 billion, earnings will come to $680.9 million, and it would be trading on a PE ratio of 3.9x, assuming you use a discount rate of 7.0%.
  
• Given the current share price of CA$24.28, the bearish analyst price target of CA$14.72 is 64.9% lower. Despite analysts expecting the underlying buisness to improve, they seem to believe the market's expectations are too high.
  
• We always encourage you to reach your own conclusions though. So sense check these analyst numbers against your own assumptions and expectations based on your understanding of the business and what you believe is probable.