I'm Shoveling Into This Mining Stock
As the market needs a rest after a long run, I'm getting into this technically solid stock that should enjoy a strong tailwind.
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Dip buyers jumped on a weak open for the second day in a row, but have much more work to do if they are going to push the indexes into positive territory. Strength in the Magnificent Seven MAGS is helping the bullish cause, but the Russell 2000 IWM is lagging again, and there is little speculative energy. Breadth is running poorly at more than 2-to-1 negative.
The primary problem is that the market needs a rest after a very big run, and the news flow isn’t particularly positive. Interest rates continue to rise, and the dollar is weak again. There is no major economic data or trade news expected soon. The passage of a tax and spending bill in the House is positive, but the lack of spending cuts is not helping the bond market.
With the market showing signs of a shift due to concerns about higher interest rates and inflation, I’m taking a closer look at gold mining stocks. Gold GLD pulled back to its 50-day simple moving average last week and has bounced, but it may need to consolidate further before it resumes its uptrend.
One gold mining stock that caught my eye is SSR Mining SSRM. The chart is developing nicely, and the earnings per share growth looks exceptional. If gold resumes its uptrend, it will provide a very strong tailwind to a stock that already looks technically strong.
SSR Mining Inc. SSRM is a precious metals mining company focused on the acquisition, exploration, development, and operation of gold and silver mines. The company primarily produces gold, with silver as a secondary output, and operates as a free cash flow-focused intermediate gold producer.
SSR Mining has four production assets: Çöpler Gold Mine (Turkey) is a significant gold-producing mine, but operations were suspended in February 2024 due to a heap leach pad failure. Marigold Mine (Nevada) is a large-scale open-pit gold mine. Seabee Gold Operation (Saskatchewan, Canada) is an underground gold mine that was reopened after closing due to forest fires. Puna Operations (Jujuy, Argentina) includes a silver mine with additional gold byproducts. On Nov. 7, 2024, SSR Mining announced the acquisition of the historic Cripple Creek & Victor (CC&V) gold mine in Colorado from Newmont Corporation. This acquisition is boosting production, lowering costs, and improving revenues and margins, which were reflected in a solid beat in first-quarter earnings.
SSR Mining focuses on generating free cash flow, maintaining a strong balance sheet, and returning value to shareholders through dividends and share buybacks when feasible. EPS is expected to be $1.14 in 2025, which is a 300% increase from $0.28 in 2024. Current estimates for 2026 are an increase of 79% to $2.04. With a trailing price-to-earnings of just 24, the company is trading at a very low ratio of price-to-earnings to growth (PEG).
Guidance for the SSRM Çöpler gold mine in Turkey is suspended after nine workers were killed due to an accident caused by a deficient design by a third party. In late 2024, SSR Mining announced that the environmental permit for this mine was revoked, but the mine’s operating license remains intact, suggesting potential for restarting activities. If it is reopened, there is substantial upside to the estimates.
Technically, the stock has been in a trading range for about six weeks and is testing overhead resistance. Better action in gold will likely trigger a breakout. I’ve taken an initial position and will be trading it as it develops.
At the time of publication, DePorre was long SSRM.
