UBS has initiated coverage on SSR post its merger with Alacer ((AQG)).
The broker expects group gold production to be 836koz in FY21. UBS highlights the company’s key assets are Copler and Marigold with Copler performing consistently through 2020 and Marigold processing ore below reserve grade.
The group production growth is lower than peers and UBS expects production to decline by circa -2% (5-year compounded annual growth rate). The key is to arrest a longer-term production decline, suggests UBS.
Looking at SSR’s attractive valuation and strong cashflow, UBS initiates coverage with a Buy rating and a target price of $33.
Target price is $33.00.Current Price is $26.06. Difference: $6.94 – (brackets indicate current price is over target). If SSR meets the UBS target it will return approximately 21% (excluding dividends, fees and charges – negative figures indicate an expected loss).