UBS Maintains Buy on SSR Mining, Lowers Price Target to $39
UBS analyst George Eadie maintains SSR Mining (NASDAQ:SSRM) with a Buy and lowers the price target from $41 to $39.
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SSR Mining To Acquire Roxmore Resources For C$6.75/Share In Cash Plus Shares Of New SpinCo To Hold Interests In Roxmore’s Rattlesnake Hills Project, Shabu River Project, And Newton Property
Roxmore’s Converse Gold Project ("Converse", the "Project") is located 6 kilometers west of SSR Mining’s Marigold Complex ("Marigold") on the Battle Mountain – Eureka Trend in Nevada, USA.
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Shares of precious metals-related companies are trading lower after stronger-than-expected inflation data boosted expectations for a Federal Reserve rate hike in October. Gold and silver prices are declining amid a stronger U.S. dollar and rising Treasury yields, which make non-yielding precious metals less attractive to investors.
Why SSR Mining Stock Dropped Today
SSR Mining announced the acquisition of Canadian gold miner Roxmore Resources for $464 million in cash. The deal will allow SSR to operate the Converse Project and Marigold Complex as a single contiguous asset, potentially reducing operating costs by $200 million annually and adding 150,000-170,000 ounces to annual gold production. Despite the strategic benefits, SSR Mining stock dropped 7.8% as the complex transaction and cash drain may have concerned investors in the near term.
SSR Mining shares are trading lower after agreeing to buy Roxmore Resources for C$6.75 per share in cash, plus spin-off shares, as its Nevada project targets initial production in 2033 and requires $800 million-$900 million to build.