Howard Marks put it nicely when he declared that, rather than worrying about share price volatility, ‘The possibility of permanent loss is the risk I worry about… and every practical investor I know worries about.’ When we consider about how risky a company is, we always like to view at its utilize of debt, since debt overload can lead to ruin. We note that SSR Mining Inc. (TSE:SSRM) does have debt on its balance sheet. But the more important question is: how much risk is that debt creating?
When Is Debt A Problem?
Debt and other liabilities become risky for a business when it cannot easily fulfill those obligations, either with free cash flow or by raising capital at an attractive price. Ultimately, if the company can’t fulfill its legal obligations to repay debt, shareholders could walk away with nothing. However, a more frequent (but still costly) occurrence is where a company must issue shares at bargain-basement prices, permanently diluting shareholders, just to shore up its balance sheet. Of course, plenty of companies utilize debt to fund growth, without any negative consequences. When we consider about a company’s utilize of debt, we first view at cash and debt toreceiveher.
What Is SSR Mining’s Debt?
You can click the graphic below for the historical numbers, but it reveals that as of June 2025 SSR Mining had US$270.8m of debt, an increase on US$228.0m, over one year. However, it does have US$438.5m in cash offsetting this, leading to net cash of US$167.7m.
How Strong Is SSR Mining’s Balance Sheet?
Zooming in on the latest balance sheet data, we can see that SSR Mining had liabilities of US$480.8m due within 12 months and liabilities of US$1.23b due beyond that. Offsetting these obligations, it had cash of US$438.5m as well as receivables valued at US$117.1m due within 12 months. So it has liabilities totalling US$1.15b more than its cash and near-term receivables, combined.
SSR Mining has a market capitalization of US$4.59b, so it could very likely raise cash to ameliorate its balance sheet, if the required arose. But it’s clear that we should definitely closely examine whether it can manage its debt without dilution. Despite its noteworthy liabilities, SSR Mining boasts net cash, so it’s fair to state it does not have a heavy debt load!
View our latest analysis for SSR Mining
It was also good to see that despite losing money on the EBIT line last year, SSR Mining turned things around in the last 12 months, delivering and EBIT of US$486m. There’s no doubt that we learn most about debt from the balance sheet. But ultimately the future profitability of the business will decide if SSR Mining can strengthen its balance sheet over time. So if you’re focutilized on the future you can check out this free report revealing analyst profit forecasts.
Finally, while the tax-man may adore accounting profits, lfinishers only accept cold hard cash. While SSR Mining has net cash on its balance sheet, it’s still worth taking a view at its ability to convert earnings before interest and tax (EBIT) to free cash flow, to support us understand how quickly it is building (or eroding) that cash balance. Looking at the most recent year, SSR Mining recorded free cash flow of 33% of its EBIT, which is weaker than we’d expect. That weak cash conversion builds it more difficult to handle indebtedness.
Summing Up
While SSR Mining does have more liabilities than liquid assets, it also has net cash of US$167.7m. So we don’t have any problem with SSR Mining’s utilize of debt. When analysing debt levels, the balance sheet is the obvious place to start. But ultimately, every company can contain risks that exist outside of the balance sheet. To that finish, you should be aware of the 1 warning sign we’ve spotted with SSR Mining .
When all is declared and done, sometimes its clearer to focus on companies that don’t even required debt. Readers can access a list of growth stocks with zero net debt 100% free, right now.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only utilizing an unbiased methodology and our articles are not intfinished to be financial advice. It does not constitute a recommfinishation to purchase or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focutilized analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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