Shares of SSR Mining (SSRM 2.50%) are building on a massive pop that started last week. The gold stock jumped 5.4% higher as of 1:45 p.m. ET Wednesday, and is up 36% in just one week, as of this writing.
The miner is about to get a windfall from an asset sale, and it has announced something that should make its shareholders happy. Gold, meanwhile, is trending higher.
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Why are investors buying SSR Mining stock?
SSR Mining has made the most of the surge in gold prices. It recently delivered a blowout first quarter, ending it with $600 million in cash, low debt, and $211 million in free cash flow.
After already burning through $300 million to buy back its own stock, the company just announced it's dropping another $500 million on stock buybacks.
That's not all: The gold miner is also reinstating its dividend.
I fully expected SSR Mining to resume share buybacks and dividends. It suspended dividends after a fatal accident at its Copler mine in Turkey in 2024, but now has a firm deal to sell that unproductive mine for $1.5 billion before the end of the third quarter. A good portion of that money is going to go back to shareholders.
NASDAQ: SSRM
Key Data Points
SSR Mining stock could fall if this happens, but should you worry?
Although $0.03 per share every quarter is a modest payout, the symbolism is huge. A dividend reinstatement and accelerated share buybacks reveal how confident management is about the company's prospects.
And why not? SSR Mining has rarely looked this strong financially. Dumping Copler removes a major overhang, leaving it a much leaner company.
Meanwhile, macro tailwinds are doing their part. Gold has picked up momentum after a precipitous fall. The yellow metal bounced back over $4,300 per ounce today after dropping to a six-month low and almost hitting $4,000 per ounce on June 10. Investors expect a U.S.-Iran peace agreement to help restore oil flows and cool off inflation and interest rate concerns.
Investors, however, should remember that the peace agreement hasn't been finalized. If it falls through, gold could easily slide back.
That, however, shouldn't hurt SSR Mining much unless gold absolutely craters. SSR Mining is in a fantastic spot, using its cash pile to reward shareholders – and that is exactly what investors should focus on.
