Acquisition of Nevada Properties ‘Extends Asset Growth Potential’

July 5, 2019

By The Gold Report

Source: Streetwise Reports   07/03/2019

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.”


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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.

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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 arrangements, as well as more specific disclosures set forth below, may at times give rise to potential conflicts of interest.

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.

( Companies Mentioned: SSRM:NASDAQ,
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