http://at.marketwire.com/accesstracking/AccessTrackingLogServlet?docid=0788853001&sourceType=1http://www.ccnmatthews.com/logos/20080221-SILVERLOGO.JPG
VANCOUVER, BRITISH COLUMBIA -- (Marketwire) -- 05/09/12 -- Silver Standard Resources Inc. (TSX:SSO)(NASDAQ:SSRI) ("Silver Standard" or the "Company") reports consolidated financial results for the first quarter ended March 31, 2012.
"One of our goals in 2012 is to demonstrate strong quarter-on-quarter performance at the Pirquitas mine. Record production and stable mine cost performance in the first quarter provides a strong start to build on for the rest of the year," said John Smith, President and CEO. "The Pitarrilla feasibility study is progressing well and will be presented to the Board in the second half of 2012. With the recent proceeds from the exercised Pretium warrants, Silver Standard is financially strong to develop our substantial project portfolio and continue aggressive exploration."
First Quarter 2012 Highlights:
(All figures are in U.S. dollars unless otherwise noted)
-- Record production of 2.2 million ounces of silver, a 24% quarter-on-
quarter increase.
-- Lowered direct mining costs to $11.86 per ounce of silver produced, a
21% quarter-on-quarter improvement.
-- Operated the debottlenecked plant at an average of 4,567 tonnes per day
throughput, a rate 14% above nominal design.
-- Recorded revenues of $38.4 million on the sale of 1.5 million ounces of
silver and 1.8 million pounds of zinc.
-- Entered into two long-term silver concentrate sales contracts with
smelters for 60% of monthly production commencing April 2012.
-- During and subsequent to the quarter, enhanced corporate liquidity by
realizing gross cash proceeds of C$71.0 million from exercised Pretium
Resources Inc. ("Pretium") share purchase warrants pursuant to the
secondary offering completed last year.
Pirquitas Mine, Argentina
Summary Mine Operating Statistics (1)
----------------------------------------------------------------------------
Q1 Q4 Q3 Q2 Q1
2012 2011 2011 2011 2011
----------------------------------------------------------------------------
Total Material Mined Kt 4,297 4,640 4,185 4,483 4,172
----------------------------------------------------------------------------
Ore Processed Kt 416 241 245 295 308
----------------------------------------------------------------------------
Silver Mill Feed Grade g/tonne 221 274 250 261 233
----------------------------------------------------------------------------
Recoveries % 77.3 82.4 82.9 80.0 73.6
----------------------------------------------------------------------------
Silver Produced '000 oz. 2,172 1,751 1,631 1,976 1,697
----------------------------------------------------------------------------
Direct Mining Cost US$/oz. $11.86 $14.97 $16.20 $11.57 $12.26
----------------------------------------------------------------------------
Total Cash Cost US$/oz. $20.30 $17.72 $20.60 $22.06 $23.23
----------------------------------------------------------------------------
1. The Company reports non-GAAP cost per ounce of silver produced to manage
and evaluate operating performance at the Pirquitas mine. For a better
understanding and a reconciliation of these measures to cost of
inventory, as shown in the Company's consolidated interim statement of
income please refer to 'Non-GAAP Financial Measures' in item 13 of the
MD&A.
Mine production
The Pirquitas mine recorded its highest quarterly production of 2.2 million ounces of silver during the first quarter of 2012. This is compared with silver production of 1.8 million ounces in the fourth quarter of 2011 and 1.7 million ounces in the first quarter of 2011. The stronger production was the result of improvements made to the crusher, the ball mill gearbox and several operating processes in 2011 and 2012 which increased plant throughput and operating performance. The mine also produced 3.3 million pounds of zinc in the first quarter of 2012 compared to 0.8 million pounds in the fourth quarter of 2011 and 3.2 million pounds in the first quarter of 2011.
During the quarter, 416,000 tonnes of ore were processed at an average milling rate of 4,567 tonnes per day, compared to 241,000 tonnes at an average of 2,618 tonnes per day in the fourth quarter of 2011, and 308,000 tonnes at an average of 3,419 tonnes per day in the first quarter of 2011. The average milling rate of 4,567 tonnes per day in the first quarter of 2012 is 14% higher than the plant's nominal design. The first quarter of 2012 plant performance resulted from continuous improvement initiatives including improved crushing, milling circuit efficiencies, improved preventive maintenance practices and proper mill feed selection. At these higher operating rates, the plant achieved near design silver recoveries.
Ore milled during the first quarter of 2012 contained an average silver grade of 221 g/t and an average silver recovery of 77.3% was achieved. This compared to an average silver grade of 274 g/t and recovery of 82.4% in the fourth quarter of 2011, and an average silver grade of 233 g/t and recovery of 73.6% in the first quarter of 2011. The lower silver grade during the first quarter of 2012 compared to the fourth quarter of 2011 was due to feeding the crusher average reserve grade material versus above-average grade material in the fourth quarter of 2011. Operating results were in-line with expectations for the quarter.
Mine operating costs
Direct mining costs in the first quarter of 2012 were $11.86 per ounce of silver compared to $14.97 per ounce in the fourth quarter of 2011 and $12.26 per ounce in the first quarter of 2011. The reduction in unit cost in 2012 compared to the fourth quarter of 2011 was primarily driven by the higher production volumes achieved and improvements in cost management.
Total cash cost in the first quarter of 2012, which includes by-product credits, treatment and refining costs, royalties and production taxes, was $20.30 per ounce of silver compared to $17.72 per ounce of silver in the fourth quarter of 2011 and $23.23 per ounce in the first quarter of 2011. Treatment and refining costs, as well as royalties and production taxes all vary as a function of sales prices and are recorded for the actual ounces of silver sold. Consequently, on a per ounce basis, the variability in total cash cost from period to period is partially due to sales prices and the difference between production and sales volumes. The higher incremental per ounce impact of these costs in the first quarters of both 2012 and 2011 compared with the fourth quarter of 2011 is due primarily to the fact that sales volumes were significantly higher in those quarters and, correspondingly, treatment and refining costs and royalties and production taxes incurred were significantly higher.
Exploration drilling program
Diamond drilling began in March in the Cortaderas Valley where two zones of silver-zinc mineralization were partially outlined in 2011. The 2012 drilling program is focused on expanding the Cortaderas Breccia and Cortaderas Valley Inferred mineral resources and upgrading significant portions of these resources to the Indicated mineral resource category. In addition, several drillholes will be testing new target areas identified immediately south and southwest of the San Miguel open pit from gravity and induced polarization surveys that were conducted earlier in the first quarter of the year. To date, six drillholes have been completed for a combined length of 2,716 meters, or about 12% of the planned 2012 drilling campaign of 22,350 meters. The assay results of these six, and subsequent, drillholes are expected in the second quarter of 2012.
Financial Results
Net Income
-- Net loss of ($1.1) million or ($0.01) per share in the three months
ended March 31, 2012, compared to net earnings of $9.9 million or $0.12
per share in the three months ended March 31, 2011.
Mine Operations
-- Mine operating income at Pirquitas of $6.2 million in the three months
ended March 31, 2012, from revenues of $38.4 million which were net of
deductions, treatment and refining charges.