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Why SSR Mining Stock Rallied 11% in Morning Trading Today

By Reuben Gregg Brewer - May 6, 2021 at 3:19PM

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Shares of the precious metals miner got a boost from earnings ... and a little extra help from commodity markets.

What happened

Shares of SSR Mining (SSRM -0.27%) rose roughly 11% in early trading on May 6, and at roughly 2 p.m. EDT, they were still holding on to most of that gain. The company's premarket earnings release was one important factor, but commodity markets were accommodating as well.

So what

SSR Mining produces gold, silver, lead, and zinc. The two precious metals are the main drivers of top- and bottom-line performance, but all of the materials are commodities -- which is notable in a couple of ways today. For starters, both gold and silver prices were on the rise, which generally leads to increasing stock prices for miners (miners are leveraged to such price movements). So the price advance today had a bit of tailwind from the commodity markets.  

A pan being used to pan for gold.

Image source: Getty Images.

That said, SSR Mining also reported earnings. Its realized prices for gold and silver in the first quarter of 2021 were higher by 12.5% and a whopping 49%, respectively, compared to the same period in 2020. That helped to boost adjusted earnings from $0.19 per share in the first quarter last year to $0.47 this year. Add in solid production numbers and declining production costs, on the operational front, and the story gets even better. All in, it makes sense that investors were upbeat here today.  

Now what

Long-term investors shouldn't read too much into one day's worth of trading, particularly for a precious metals company like SSR Mining. Gold and silver stocks tend to be fairly volatile. While there's no question that the earnings results were pretty good here, it's still probably best for investors to think of precious metals stocks as diversification tools. Trying to time the short-term ups and downs of gold and silver, and the companies that mine for them, is a venture best left to far more aggressive investors. 

Reuben Gregg Brewer has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

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