After rising by as much as 10.9% on Thursday, shares of gold and silver miner SSR Mining (NASDAQ:SSRM) closed the trading day up by a still-impressive 9.2%. The big driver was the company's third-quarter earnings release.
There were a lot of moving parts for SSR in the third quarter. For starters, it completed its merger with Alacer Gold, which management noted was consummated at no premium. Thanks to this transaction, the miner has increased its full-year production guidance and stated that it's on pace to meet its new target range of 680,000 to 760,000 gold equivalent ounces. Meanwhile, the board of directors announced plans to start paying a $0.05 per share quarterly dividend in early 2021, and held out the potential for special dividends based partially on the price of gold. All very positive items, and probably enough to drive the stock higher on their own.
However, there was plenty of additional good news. For example, SSR sold roughly 20% more gold equivalent ounces in the third quarter than it did a year prior. (Production, however, was up just 2% or so.) Meanwhile, the realized price per ounce of gold was nearly 30% higher year over year, while the realized silver price jumped by just over 50%. It shouldn't be too surprising that revenues were up materially, rising by roughly 50%. Adjusted net income per share also advanced nicely, rising by just shy of 70%. SSR was firing on all cylinders in the quarter, and investors were rightly pleased.
After Thursday's gain, SSR Mining stock is up 3% or so for the year. However, at the nadir of the COVID-19 bear market in early 2020, the stock was down by more than 40%, so it has recovered a lot of ground. And while the earnings news was positive, one of the biggest takeaways should be just how much of an impact the rising prices of gold and silver had on its top and bottom lines. Precious metals prices are notoriously volatile, and they can fall just as easily as they rise. That's why one day's gain, or even a months-long rally, isn't really a great reason to buy SSR Mining. It's better for long-term investors to think about gold and silver miners as diversifying assets that fill a specific niche with the framework of a broader portfolio. That said, it's still nice to read an earnings report filled with good news.