The third quarter dividend surprised UBS and more capital returns are flagged. The results are not indicative that the underlying strength, the broker suggests, because the acquisition of Alacer Gold has meant Copler only contributed two weeks of financials.
A maiden dividend of 5c was announced. Management has also indicated that buybacks may form part of capital returns, which would make sense in the broker’s view given the large share price discount to valuation.
Buy rating and $33 target retained. Guidance for 2020 is for 680-760,000 ounces of production at an all-in sustainable cost of US$965-1040/oz.
Sector: Materials.
Target price is $33.00.Current Price is $27.15. Difference: $5.85 – (brackets indicate current price is over target). If SSR meets the UBS target it will return approximately 18% (excluding dividends, fees and charges – negative figures indicate an expected loss).
