Precious metals producer SSR Mining (NASDAQ:SSRM) on Tuesday retracted guidance, suspended dividend payments and stopped its share buyback plans two weeks after a landslide at its gold mine in Turkey left nine miners missing.
Efforts to locate the missing workers have resumed after being suspended because of stability concerns, and six mine employees have been detained and are facing charges, SSR executive chairman Rod Antal said in a conference call Tuesday afternoon.
Mining operations were suspended at SSR's 80%-owned Copler mine in eastern Turkey on Feb. 13 after tons of material slid down the side of a huge pile of ore where the company uses cyanide to extract gold.
Five days later, the company said authorities revoked the mine's environmental permit. The Turkish government has said its soil, water and air testing hasn't revealed any contamination in the area, which is near the Euphrates River.
"The company is not, at this time, able to estimate or predict when it will resume operations at Copler," SSR said in a statement Tuesday.
Copler is owned and operated by Turkey-based Anagold Mining, and SSR Mining controls 80% of the shares of Anagold through a joint venture. Turkey-headquartered Lidya Mining controls 18.5%, and a bank owned by a Turkish investing group holds the remaining 1.5%.
On Tuesday, SSR said it is evaluating estimated remediation costs and anticipates recording liability for that work during the first quarter. It also will likely record an impairment charge on inventory and assets directly impacted by the slide.
The leach pad where the slide occurred contained $73.3 million in gold inventory, representing 10% of the company's total inventory. The mine contributed more than 30% of the gold-equivalent ounces SSR sold last year.
For this year, SSR was expecting to produce 200,000 to 220,000 ounces of gold from the mine, out of a total production of 540,000 to 600,000 gold-equivalent ounces. Tuesday the company retracted that guidance, as well as a production outlook for the mine that stretched into 2028.
Last year, the company paid out $57.7 million in quarterly cash dividends and $56.3 million in stock buybacks. It has now suspended its dividend and share repurchase programs.
At the end of last year, the company had about $500 million in cash. Combined with cash flow from three mines operating in the United States, Canada and Argentina, SSR said it doesn't expect to have any near-term liquidity concerns.
RBC Capital Markets analyst Michael Siperco downgraded his rating for SSR Mining from Sector Perform to Underperform, while lowering the price target from $6 to $3.
"While an extended shutdown was expected (and reflected in the initial 50% discount we applied to Copler) the updates in our view reduce the prospect of SSRM realizing value from the mine, or obtaining construction permits for Hod Maden in Turkey," the analyst wrote.
SSR's shares have lost about half their value since the landslide, the stock was down 7.2% to $6.49 at the time of publication Wednesday.
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