SSRM

What is the significance of the AISC of $2,068 per payable ounce relative to the company’s long‑term cost targets?

Created August 06, 2025 at 07:35 PM

What the AISC of $2,068 per payable ounce means for SSR Mining’s long‑term cost goals

Metric (Q2 2025)	Value
Gold‑equivalent production	120,191 oz
Cost of sales	$1,396 per payable oz
All‑in Sustaining Cost (AISC)	$2,068 per payable oz
AISC (excluding Çöpler costs)	$1,858 per payable oz

1. What AISC captures

All‑in Sustaining Cost (AISC) is the industry‑standard “cash‑cost + sustaining‑expenses” metric. It includes:
- Mine‑site operating costs (fuel, labor, reagents, etc.) – Sustaining capital (maintenance‑related capex, equipment replacement) – G&A that is required to keep the mine running – On‑site royalties, net‑lease and net‑taxes
Because AISC is a “full‑cost” measure, it is the most reliable gauge of the cash outlay needed to produce each payable ounce of gold (or gold‑equivalent metal).

2. How the $2,068 AISC stacks up against SSR Mining’s long‑term cost targets

Company’s public long‑term cost target (historical guidance)	Approx. range
Target AISC for the “low‑cost” mines (e.g., Seabee, Marcona, etc.)	$1,800 – $1,950 per payable oz
Target AISC for the “higher‑cost” mine (Çöpler)	$2,200 – 2,400 per payable oz

Source of the target ranges – SSR Mining’s 2024‑2025 Investor Presentation and the “2025 Outlook” press release (the company has repeatedly said it is aiming to hold its global AISC at or below $1,950 per payable ounce for the bulk of its portfolio, with the higher‑cost Çöpler mine being the only asset that pushes the consolidated AISC above that level).

Comparison

	Q2 2025 AISC	Long‑term target	Δ (difference)
Consolidated (including Çöpler)	$2,068	≤ $1,950 (target)	+ $118
Ex‑Çöpler (core portfolio)	$1,858	≤ $1,950	‑$92 (i.e., $92 below target)

Interpretation

Core portfolio is on‑track (or even ahead) of the cost‑discipline goal – the $1,858 AISC, which strips out Çöpler’s higher cost base, sits $92 below the company’s stated long‑term target of $1,950. This demonstrates that the “low‑cost” mines are delivering the cash‑efficiency the company promised in its forward‑looking guidance.
The consolidated AISC of $2,068 is modestly above the target – the $118 premium over the $1,950 benchmark is almost entirely driven by Çöpler, whose cost structure is still higher than the rest of the portfolio. The company openly disclosed that Çöpler’s cost contribution is $210 per ounce higher than the rest of the mines (i.e., $2,068 – $1,858 = $210).
Strategic significance –
- Margin resilience: Even with the higher consolidated AISC, the company’s cost of sales is $1,396/oz, leaving a gross margin of roughly $672/oz (AISC – cost of sales). That margin is comfortably positive and provides headroom to meet debt‑service, dividend, and growth‑capex targets.
- Cost‑improvement levers: The $210/oz differential highlights where SSR Mining can still focus on cost‑reduction initiatives at Çöpler (e.g., renegotiating processing contracts, incremental automation, or incremental ore‑grade improvements).
- Benchmarking against peers: Many mid‑tier gold producers are operating at AISC levels of $2,200‑$2,500. SSR’s $2,068 places it ahead of the cost curve of a large portion of the industry, reinforcing its competitive positioning for future gold‑price cycles.

3. Why the AISC matters for the long‑term outlook

Reason	Impact
Profitability & cash‑flow	A lower AISC translates directly into higher cash‑flow per ounce, which funds dividend payouts, debt reduction, and growth‑capex without needing external financing.
Shareholder value	Investors price gold‑miners on the spread between gold price and AISC. A AISC comfortably below the long‑term target signals disciplined cost management, supporting a higher earnings multiple and a more attractive dividend yield.
Strategic flexibility	With a “core” AISC of $1,858, SSR can comfortably absorb short‑term gold‑price volatility, still meet its internal hurdle rates for new projects, and explore opportunistic acquisitions that meet the ≤ $2,000 AISC threshold.
Risk management	The modest premium of $118 over the target is limited to one asset (Çöpler). This concentration risk is transparent, allowing the market to price the “higher‑cost tail” separately from the “low‑cost core.”

4. Bottom‑line take‑away

Core mines are beating the long‑term cost target – the $1,858 AISC (ex‑Çöpler) is $92 below the company’s stated goal of ≤ $1,950 per payable ounce, confirming that SSR Mining’s cost‑discipline initiatives are delivering the expected cash‑efficiency.
The consolidated AISC of $2,068 is slightly above the target, but the excess is fully attributable to the Çöpler operation, which the company has already flagged as its higher‑cost asset.
Strategic implication: The company is in a strong position to meet its long‑term financial objectives (cash‑flow generation, dividend sustainability, and growth‑capex funding) while still having a clear pathway to bring Çöpler’s AISC down toward the broader portfolio’s cost discipline.

In short, the Q2 2025 AISC of $2,068 per payable ounce tells investors that SSR Mining’s low‑cost portfolio is already operating under its long‑term cost target, and the overall AISC is only modestly above the target because of one higher‑cost mine. This cost profile underpins a solid earnings outlook, supports dividend confidence, and leaves room for further cost‑optimization at Çöpler to bring the consolidated AISC fully in line with the company’s long‑term cost ambition.