A description of the properties and how this
precious metals company will benefit from their addition are provided in a
CIBC report.
In a June 27 research note, CIBC analyst Cosmos Chiu reported that SSR Mining
Inc. (SSRM:NASDAQ) acquired two past-producing mines adjacent to its Nevada
project Marigold for $22 million in cash plus the assumption of $23.1 million
in long-term environmental and reclamation requirements and a 0.5% net
smelter royalty.
"We view today's transaction favorably from SSR Mining's perspective
as a lower risk and a lower cost way to grow the company's assets," Chiu
commented. "We expect the company to be able to leverage its existing
infrastructure to grow its production n while lowering costs in the Marigold
region."
The analyst described the two acquired properties, including their size,
location and past production history. Together spanning 8,900 hectares, they
take the SSR Mining's total land ownership in the region to 19,800 hectares.
One of the assets, Trenton Canyon, 7,350 hectares in size and immediately
south from Marigold, was previously run by Newmont Goldcorp Corp. (NEM:NYSE)
as an open-pit run of mine, heap-leach operation from 1996 to 2001. Past
production totaled about 290,000 ounces of gold.
The other asset, Buffalo Valley, comprises 1,550 hectares and sits to the
southwest of Marigold. Production, which occurred there from 1989 to 1991,
amounted to about 50,000 ounces of gold. The project was a joint venture
between Newmont and Fairmile Gold Mining.
Both Trenton Canyon and Buffalo Valley "host the same rock formations
as the Marigold mine while displaying more intense host rock
alteration," Chiu highlighted.
He noted that upcoming potential catalysts for SSR Mining's stock include
a technical study, expected mid-year, determining whether Red Dot can expand
or extend production at Marigold. Others are a successful ramp-up at
Chinchillas and a possible decision by SSR Mining on whether to divest of or
increase its 9.7% ownership stake in SilverCrest Metals Inc. (SIL:TSX.V) and
its Las Chispas project in Mexico.
CIBC has an Outperformer rating and a $16.25 per share target price on SSR
Mining, whose stock is now trading at around $13.56 per share.
[NLINSERT]
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Disclosures from CIBC, SSR Mining Inc., Company Update, June 27,
2019
Analyst Certification:
Each CIBC World Markets Corp./Inc. research analyst named on the front page
of this research report, or at the beginning of any subsection hereof, hereby
certifies that (i) the recommendations and opinions expressed herein
accurately reflect such research analyst's personal views about the company
and securities that are the subject of this report and all other companies
and securities mentioned in this report that are covered by such research
analyst and (ii) no part of the research analyst's compensation was, is, or
will be, directly or indirectly, related to the specific recommendations or
views expressed by such research analyst in this report.
Analysts employed outside the U.S. are not registered as research
analysts with FINRA. These analysts may not be associated persons of CIBC
World Markets Corp. and therefore may not be subject to FINRA Rule 2241
restrictions on communications with a subject company, public appearances and
trading securities held by a research analyst account.
Potential Conflicts of Interest:
Equity research analysts employed by CIBC World Markets Corp./Inc. are
compensated from revenues generated by various CIBC World Markets Corp./Inc.
businesses, including the CIBC World Markets Investment Banking Department.
Research analysts do not receive compensation based upon revenues from
specific investment banking transactions. CIBC World Markets Corp./Inc.
generally prohibits any research analyst and any member of his or her
household from executing trades in the securities of a company that such
research analyst covers. Additionally, CIBC World Markets Corp./Inc.
generally prohibits any research analyst from serving as an officer, director
or advisory board member of a company that such analyst covers.
In addition to 1% ownership positions in covered companies that are
required to be specifically disclosed in this report, CIBC World Markets
Corp./Inc. may have a long position of less than 1% or a short position or
deal as principal in the securities discussed herein, related securities or
in options, futures or other derivative instruments based thereon.
Recipients of this report are advised that any or all of the foregoing
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Important Disclosure Footnotes for SSR Mining Inc. (SSRM)
• SSR Mining Inc. is a client for which a CIBC World Markets company has
performed investment banking services in the past 12 months.
• CIBC World Markets Inc. has received compensation for investment banking
services from SSR Mining Inc. in the past 12 months.
• CIBC World Markets Inc. expects to receive or intends to seek compensation
for investment banking services from SSR Mining Inc. in the next 3 months.
