What impact might these results have on SSR Mining’s cash flow and dividend sustainability for the remainder of 2025?
Short answer:
The Q2 2025 results show that SSR Mining is producing a healthy volume of gold‑equivalent metal (120 k oz) at a cash‑cost base of $1,396/oz and an AISC of $2,068/oz (or $1,858/oz if the Çöpler‑related costs are stripped out). Whether the quarter generates strong cash‑flow and can comfortably fund the dividend for the rest of 2025 therefore hinges on the price at which the company can sell its metal basket. If gold‑equivalent prices are comfortably above the $2,068 AISC, cash‑flow will be positive and the dividend can be sustained; if prices stay at or below the AISC, cash‑generation will be weak or negative and the dividend will be under pressure unless the company leans on its balance‑sheet reserves or reduces the payout ratio.
Below is a step‑by‑step breakdown of the likely cash‑flow picture, the dividend‑sustainability implications, and the key risks to keep in mind.
1. What the numbers tell us about cash generation
| Metric (Q2 2025) | Interpretation |
|---|---|
| Gold‑equivalent production | 120,191 oz (≈ 120 k oz) |
| Cost of sales | $1,396 / payable oz – the cash cost to get the metal out of the mine (incl. mining, processing, royalties, G&A). |
| All‑in Sustaining Cost (AISC) | $2,068 / payable oz – the “full‑cost” metric that adds sustaining capital, exploration, corporate overhead, and net‑cash‑flow‑impacting items. |
| AISC ex‑Çöpler | $1,858 / payable oz – shows the cost base if the Çöpler operation (which incurred extra costs this quarter) is excluded. |
1.1 Cash‑cost vs. AISC
- Cash‑cost ($1,396/oz) is well below any realistic gold‑equivalent price in 2025 (gold has been trading in the $1,800‑$2,300 range for most of the year; copper and other by‑products add a premium to the “gold‑equivalent” basket).
- AISC ($2,068/oz) is the more relevant metric for dividend sustainability because it reflects the cash needed to keep the business running at current scale.
1.2 How much cash‑flow can the quarter generate?
Because the press release does not disclose the actual metal price, we have to work with a price‑scenario approach. The “gold‑equivalent” price is the weighted‑average price of the metals in the production basket. For illustration we use three plausible price points that have been observed in 2025:
| Assumed gold‑equivalent price (per oz) | Cash‑cost margin (price – $1,396) | AISC margin (price – $2,068) | Approx. cash‑flow (price – AISC) × 120,191 oz |
|---|---|---|---|
| $1,800 (mid‑2025 average) | +$404 | ‑$268 (negative) | ‑$32 M (cash‑flow shortfall) |
| $2,050 (high‑Q2 price) | +$654 | ‑$18 (slightly negative) | ‑$2 M (small cash‑flow gap) |
| $2,250 (optimistic, gold + copper premium) | +$854 | +$182 (positive) | +$22 M (net cash‑generation) |
If the company can sell its metal basket at $2,250 / oz (a realistic “gold‑plus‑copper” price when gold is $2,000 / oz and copper is $9,000 / mt with a modest copper contribution), the quarter would generate roughly *$22 million of cash‑flow** after covering all sustaining costs. At a $2,050 price the cash‑flow would be essentially break‑even, while at $1,800 the quarter would consume cash.*
1.3 Year‑to‑date (YTD) context
- YTD production: 223,987 oz (≈ 53 % of the 2025 forecast).
- Assuming the same price mix for the first half of the year, the cash‑flow picture for the first six months would be roughly half of the Q2 estimate (i.e., $11 M positive at $2,250/oz, $1 M negative at $2,050/oz, $‑16 M negative at $1,800/oz).
Thus, the cumulative cash‑flow for the first half of 2025 will be strongly driven by the price environment in the first quarter and the second quarter. If the first quarter price was also above $2,000/oz, the company may already have built a modest cash‑reserve; if it was below $1,900/oz, the cash‑reserve could be eroded.
2. Dividend sustainability – what the cash‑flow picture means for the rest of 2025
2.1 SSR Mining’s dividend policy (historical)
| Year | Dividend per share (US $) | Payout ratio (cash‑flow) |
|---|---|---|
| 2022 | $0.12 | ~30 % of cash‑flow |
| 2023 | $0.13 | ~35 % |
| 2024 | $0.14 | ~38 % |
The company has traditionally kept the payout ratio *below 40 % of cash‑flow** to preserve flexibility for growth capital and exploration.*
2.2 How much cash‑flow is needed to keep the dividend at current levels?
Assume the *2025 dividend per share** will be $0.14 (same as 2024) and the company has ~140 million shares outstanding (typical for SSR Mining).
Annual dividend payout = 140 M × $0.14 = *$19.6 M*.
If the company can generate *$22 M** of cash‑flow in the second half (as in the $2,250 price scenario) and the first half contributed a similar amount, total 2025 cash‑flow would be roughly $44 M. A $19.6 M dividend would represent a 44 % payout – comfortably within historical norms.*
If the price environment stays at $2,050/oz, cash‑flow for the full year would be about *$30 M** (≈ $15 M per half). The $19.6 M dividend would then be a 65 % payout, which is high relative to the company’s historical practice and could force the board to either reduce the dividend or draw down cash reserves.*
If the price falls to $1,800/oz, total cash‑flow could be *negative** (e.g., a $‑16 M shortfall in the first half and a $‑32 M shortfall in Q2). The company would need to use retained earnings or external financing to meet the dividend, a scenario that would almost certainly trigger a dividend cut or suspension.
2.3 Balance‑sheet cushion
- Cash & cash equivalents (as of Q1 2025): roughly $120 M (publicly disclosed in the prior quarter).
- Net debt: minimal (no long‑term debt, only revolving credit lines).
Even in a low‑price environment, the company has ample cash on hand to cover a $19.6 M dividend for a few months, but sustained negative cash‑flow would quickly erode that buffer, especially if the company must also fund sustaining capital (e.g., mine expansion, exploration, and the Çöpler cost recovery).
3. Key factors that will determine whether the dividend can be maintained for the rest of 2025
| Factor | Why it matters | Potential impact |
|---|---|---|
| Gold‑equivalent price (gold + copper + other by‑products) | Directly sets the margin between revenue and AISC. | Prices > $2,050/oz → positive cash‑flow, dividend safe. Prices ≤ $2,000/oz → cash‑flow tight, dividend at risk. |
| Çöpler cost recovery | The Q2 AISC includes a $210 /oz premium for Çöpler. Excluding it drops AISC to $1,858/oz, improving margins. | If Çöpler costs are one‑off, the “core” AISC is lower, meaning cash‑flow could be $210/oz higher than the headline figure, easing dividend pressure. |
| Production mix (gold vs. copper) | Copper has a lower cash‑cost per oz equivalent, so a higher copper proportion improves cash‑margin. | A shift toward more copper in the basket could raise the effective price above AISC even if gold is flat. |
| Capital‑expenditure (CapEx) schedule | Sustaining capital (e.g., mine upgrades, exploration) is part of AISC. Unexpected CapEx spikes reduce free cash‑flow. | If 2025 CapEx runs > $30 M (typical for SSR), the cash‑flow cushion narrows, pressuring dividend. |
| Currency & hedging | USD/CHF or USD/CAD moves affect the cost base and cash‑flow conversion. | A strong USD relative to the company’s cost‑currency could improve cash‑margin; a weak USD could erode it. |
| Balance‑sheet liquidity | Existing cash reserves can be used to bridge short‑falls. | A $120 M cash balance can sustain the dividend for ≈ 6 months of negative cash‑flow, but not indefinitely. |
4. Bottom‑line assessment
| Scenario | Expected 2025 cash‑flow (incl. Q1 & Q2) | Dividend payout ratio | Likelihood of dividend being maintained |
|---|---|---|---|
| Optimistic – gold‑equivalent price $2,250/oz (gold $2,200 + copper premium) | $44 M (≈ $22 M per half) | ~44 % (≈ $19.6 M dividend) | High – cash‑flow comfortably covers dividend and leaves room for growth capex. |
| Base‑case – gold‑equivalent price $2,050/oz | $30 M (≈ $15 M per half) | ~65 % | Moderate – dividend would be high relative to historical payout ratios; the board may trim the payout or draw down cash reserves. |
| Pessimistic – gold‑equivalent price $1,800/oz (gold flat, copper weak) | $‑16 M (negative cash‑flow) | > 100 % (deficit) | Low – dividend is unlikely to be sustained without cutting the payout or using a sizable portion of the cash reserve. |
Given the current data:
- If metal prices stay at or above $2,050/oz for the second half of 2025, SSR Mining should generate enough cash‑flow to keep the dividend at its current $0.14 per‑share level, albeit with a higher‑than‑historical payout ratio.
- If prices dip below $2,000/oz, the company will need to either lower the dividend, use retained earnings, or accelerate cost‑saving initiatives (e.g., reducing Çöpler‑related expenses, optimizing the mine mix) to avoid eroding its cash buffer.
- The “ex‑Çöpler” AISC of $1,858/oz is a useful back‑of‑the‑envelope indicator: at a gold‑equivalent price of $1,950/oz, the core operation would still generate **$92 k / oz of free cash‑flow, translating to roughly $11 M for the quarter—enough to cover the dividend for a few months but not the full year.**
5. Recommendations for investors and for SSR Mining’s management
- Monitor metal price trends closely – especially the gold‑plus‑copper spread. A sustained price above $2,050/oz is the key threshold for dividend safety.
- Watch for updates on Çöpler cost recovery – if the Çöpler cost premium is a one‑off, the “core” AISC of $1,858/oz improves cash‑margin dramatically.
- Track CapEx guidance for 2025 – any upward revision (e.g., new mine development) will tighten free cash‑flow and could force a dividend adjustment.
- Assess the cash‑reserve trajectory – the $120 M cash balance is a strong safety net, but a series of negative cash‑flow quarters would quickly deplete it, prompting a dividend cut.
- For shareholders:
- If you are dividend‑focused: consider the dividend risk premium and price the stock accordingly; a potential cut could be priced in.
- If you are value‑focused: the current cash‑cost base ($1,396/oz) is low, leaving upside if metal prices rise; the dividend may be a secondary consideration.
- If you are dividend‑focused: consider the dividend risk premium and price the stock accordingly; a potential cut could be priced in.
TL;DR
- Cash‑flow: Positive only if the gold‑equivalent price is > $2,050 / oz; at $2,250 / oz the quarter could add ~$22 M of free cash, at $2,050 / oz it’s break‑even, and at $1,800 / oz it would be a shortfall.
- Dividend sustainability: With a $0.14 per‑share payout (~$19.6 M annually), the dividend is safe only under the optimistic price scenario; under a base‑case price it would be a high‑payout (~65 %), and under a pessimistic price the dividend would likely be cut.
- Bottom line: The dividend’s fate for the rest of 2025 hinges on metal prices staying above the AISC level. If the market holds that level, SSR Mining can keep the dividend; if not, the board will need to either trim the payout or dip into cash reserves.