What happened

SSR Mining (SSRM -4.23%) the stock jumped on Tuesday and was trading up 9.8% at 12:40 p.m. ET before hitting a high of 12% earlier in the day. A strong first quarter and strong dividend hike drove the gold stock higher today.

So what

Here are the key figures from SSR Mining’s first quarter earnings report (all year-over-year changes):

• Revenue down 3% to $355 million
• Net income down 38% to $67.6 million
• Earnings per share (EPS) down 35% to $0.31 per share
• All-in sustaining cost (AISC) per gold equivalent ounce (GEO) up 12.7% to $1,093 per ounce.

Those numbers look awful, so why did the stock soar today? There are three reasons for this.

First, SSR Mining’s adjusted EPS — which excludes one-time charges such as depreciation and foreign exchange impact — of $0.30 per share beat analysts’ estimates. Second, the gold miner reiterated its full-year GEO production forecast of 700,000-800,000 ounces and its AISC forecast of $1,120-$1,180 per GEO.

Third, and most importantly, SSR Mining announced a hefty 40% increase in its dividend.

SSR Mining has already announced its intention to increase its dividend by 40% this year in January. Still, investors are excited to see the company go through with its plan, as they are now guaranteed to receive a bigger dividend check from SSR Mining. Additionally, the gold miner only started paying a dividend in 2021, so this increase is even more noticeable. SSR Mining stock is currently yielding 1.3%.

Now what

SSR Mining also provided a long-term perspective that got investors excited. The gold miner previously projected annual GEO production in excess of 700,000 ounces each for the years 2022, 2023 and 2024. Now, SSR Mining expects to maintain that GEO level for “at least the rest of the decade.”

These production forecasts give investors excellent visibility into what the future holds for SSR Mining, while the increased dividend reflects management’s confidence in the company’s ability to generate steady cash flow.

SSR Mining is, in fact, one of the few free cash flow (FCF) positive gold mining companies and describes itself as an “intermediate free cash flow focused gold company”. Investors are right to feel excited about a company that focuses so intensely on FCF – especially when it operates in a highly volatile industry like precious metals.