QUOTE AND NEWS
SeekingAlpha  7 hrs ago  Comment 
By Individual Trader: Firstly Silver Standard Resources Inc. ( ( USA)) (NASDAQ:SSRI) has a lot of projects on their books but really only one working mine, which is Pirquitas in Argentina. What I liked about this deal as an investor was there was...
SeekingAlpha  Sep 16  Comment 
By SomaBull: On February 4, 2014, Silver Standard Resources (NASDAQ:SSRI) announced it was purchasing the Marigold Mine from Goldcorp (NYSE:GG) and Barrick Gold (NYSE:ABX) for a price of $275 million. Silver Standard's shares soared on the news as...
SeekingAlpha  Sep 5  Comment 
By Jack Foley: Silver Standard Resources (NASDAQ:SSRI) is an attractive investment in my eyes for a number of reasons. Let's go through why I think will outperform silver in the months and years to come. Firstly, its second quarter 2014 results...
SeekingAlpha  Aug 23  Comment 
By Ben Kramer-Miller: Argonaut Gold (OTCPK:ARNGF) just announced the results of its resource estimate for its newly acquired San Agustin Project. You can see the results on the following table. (click to enlarge) The company reported that...
SeekingAlpha  Aug 11  Comment 
By Vladimir Zernov: Prior to the purchase of Marigold mine for $275 million from Goldcorp (NYSE: GG) and Barrick Gold (NYSE: ABX), Silver Standard Resources (NYSE: SSRI) had only one producing mine, Pirquitas in Argentina. With more than $400...
SeekingAlpha  Aug 11  Comment 
By Hard Asset Investments: Silver Standard Resources (NASDAQ:SSRI) is a precious metals mining company with operating mines in Nevada and Argentina, and development projects in Mexico and Peru. The company became a multi-mine precious metals...
SeekingAlpha  Aug 7  Comment 
ByBen Kramer-Miller: Silver Standard Resources (NASDAQ:SSRI) announced its second-quarter earnings. The company lost $7 million, or $0.09/share, on revenues of $64.3 million. It generated ($1 million) in operating cash flow, as both of its...
Motley Fool  Jul 17  Comment 
Heightened global tensions send the S&P 500 to its worst loss in more than three months as Silver Standard Resources, Burlington Stores, and Select Comfort shares all buck the trend.
SeekingAlpha  Jul 10  Comment 
ByBen Kramer-Miller: On Wednesday afternoon Silver Standard Resources (SSRI) released production results for its two producing mines--Pirquitas and Marigold. Pirquitas showed an increase in production of 6.5% for silver and 5.4% for zinc, thanks...
SeekingAlpha  Jun 26  Comment 
ByHebba Investments: Introduction Pretium Resources' (PVG) Brucejack project looks to be one of the few worldwide projects that is extremely high in grade, contains a large amount of gold reserves, and has initial capital costs that are extremely...




 

Silver Standard Resources TSX:SSO NASDAQ:SSRI is a mineral production and exploration company that holds interests in tin, zinc, silver, gold, lead and copper containing assets. The Vancouver, Canada based company was founded in 1946, known as Silver Standard Mines Limited until 1979, Consolidated Silver Standard Mines Limited until 1990 and Silver Standard Resources, Inc. since then. It oversees the development of projects in Argentina (Pirquitas), Peru (San Luis, Berenguela), Mexico (Veta Colorada, San Marcial both 100%, San Agustin), Canada (Sunrise Lake NWT 100%, Duthie Property), Chile (Challacollo), the United States (Maverick Springs 55%, Candelaria) and Australia (Bowdens, 100% through GSM Exploration) 2011. It started producing in the fourth quarter of 2010 when Pirquitas (mine and mill) began operating. In 2010 Silver Standard produced 6.302 million ounces of silver all at the Pirquitas mine, ended the year with 285.5 million ounces of proven and probable silver reserves at its 14 properties (993.3 million ounces measured and indicated, 403.6 million ounces inferred).[1][2]

Former CEO Robert Quartermain launched one of Canada's newest precious metals company (focused on gold), Pretium Resources Inc. on December 21, 2010 after raising US$260 million in its IPO. At the time Pretium's two main properties were ones that it purchased from Silver Standard for Cdn$215 million, Cdn$39.8 million promissory note and 32.5 million common shares.[3] Silver Standard currently owns 42.31% of Pretium Resources.[4]

As of January 2011 only one property was producing and three other ones were at advanced stages of exploration (in Argentina, Peru and Mexico). It had a market cap of $2.2 billion in January 2011.[1] In 2010 it produced 3 million pounds of zinc and 100,000 pounds of tin.

Operating properties and projects, revenue, assets

Financials key data
(qtrly reports via company&g.finance)

USD $ mil

2010[4] 9M'10[5] 2009 ('09,'10) 2008 2007
Revenue 112.26 67.179 5.44 1964% 0 0
Oper.income (23.832) (55.04) (21.8) (9.2)% (42.08) (37.1)
Earnings before
taxes underlying
369.54 (37.98) (17.5) na 12.02 (34.5)
Net income 346.239 (30.336) (13.19) na (5.95) (35.61)
total assets 1,262.017 828.81 749.92 68.29% 567.90 504.26
long trm debt 118.2 116.78 110.74 6.74% 104.05 0
current debt 38.21 37.38 50.68 (24.80)% 45.33 15.88
total op expenses 136.33 101.784 27.24 400.5% 42.08 37.10
earnings/share 444c (9)c (18)c na (18)c (45)c

As of January 2011 the company had five significant projects going all in South America (2 in Argentina and 1 in Peru) and Mexico (2).[2] In addition there are other key assets in Canada and Australia which are at advanced stages of development.

San Luis in Peru is a joint venture in which it has a 55% interest. The property which has significant gold and silver resources, covers over 33,000 hectares of land in Central Peru.

Argentina - Pirquitas and Diablillos (100%, northern Argentina)

  • Pirquitas Mine is a 100% owned, US$233 million (initially) major silver resource, located in Argentina. It has been producing since December 5, 2009. Oxide, transitional ore and sulphide ore are processed at the mill there (6,000 tonnes.d).[6]

It is Argentina's biggest silver mine with over 190 million ounces of silver (2P reserves, up from 140 million in '09) and a mine life of 14.5 years. Tin is also produced there (2,500 T annually) and zinc (11 million pounds annual production).[7] Over 65% of 2010 silver production happened in the 2nd half of the year.

Canada - Snowfield and Bruceback in northern British Columbia as well as Sunrise Lake, NWT and Duthie.

Business & Financials

2010 - In the 4th quarter of 2010 Silver Standard earned $23.949 million from mine operations, a complete reversal from the losses incurred in the same quarter of 2009 and other quarters since (losses in the other 3 quarter of 2010 brought down total mine operation earnings to just under $10 million). Total net earnings were very strong ($376.57 million in the 4th quarter alone) reflecting higher realized silver prices (up to $20.92 million for the fiscal year; sales of silver totalled 5.94 million ounces 94.2% of total production), lower production and operating costs (per ounce $29.32 and $36.61 respectively in the first quarter, significant decreases in subsequent quarters lowered that to $12.16 and $18.13 for the year). Results were also boosted by higher silver recovery rates (increasing consecutively each quarter in 2010, reaching a high of 76.2% in the last quarter (65.2 was the average for the year) and higher silver grades (267 grams/ton in the 4th quarter compared to 129 grams/ton in the first quarter of 2010: averaged 233 for the year). Ended the year with cash and cash equivalents nine times higher than it began with ($232.3 million versus $26.7 million).[4]

Main projects

Silver Produced & Sold (oz)

ounces

2010[4] 9M'10[5] 3QFY10
Production 6,302,000 4,234,702 1,932,978
Sales 5,940,000 4,311,259 2,316,447
Realized price 20.92 18.66 19.43
Cash Cost (total) 30.19 24.04(3q) 20.76
Royalties, ex.taxes/oz 1.90 1.88

Pirquitas, Argentina, a silver, zinc and tin open pit mine that is on track to produce 8.5 million ounces of silver in 2011. San Luis, Peru, 70% owned gold and silver underground mine with a relatively short mine life (3.5 years), but over those three and a half years it is expected to churn out 78,000 ounces of gold and 1.9 million ounces of silver annually. Pitarilla, Mexico, major silver asset owned since 2002 when the company discovered it. Although 2P reserves are only about 92 million ounces silver resources (indicated/inferred) are 634 million ounces. Diablillos Salta, Argentina, silver gold mine that could be operated both as an underground and open pit operation; resources are over 600,000 ounces for gold and 77 million ounces for silver. San Agustin, Mexico is a gold and silver project.

In 2010 69% of the 6.302 million ounces of silver production happened during the second half of the year (1st quarter was less than half of the 2nd). In the second half of the year the average realized price was higher (4% higher in the 3rd quarter than the overall nine month period) while total production costs decreased (cash production cost down 20.2% to $10.42/oz in the 3rd quarter, cash operating cost down 12.1% to $16.94/oz, bringing total costs down 13.64%).[5]

Silver Standard Sells Bowdens to Kingsgate

Bowdens (200 km northwest/240 km west of Sydney, Australia in NSW) was sold on August 1, 2011 (offer accepted not closed) to gold mining company, Kingsgate Consolidated for US$ 75 million in cash considerations/shares. Bowdens, which has measured/indicated resources of 79.5 million ounces and another 17.6 million ounces inferred, has a mine life of 10 years.[8] Silver Standard realizes a US$ 60 million pre tax gain. The deal was initially said to be worth US$ 83 million.[9] At the time, Kingsgate had a market value of $1.2 billion. Kingsgate operates Thailand's Chatree mine, its last major acquisition was Chile company Laguna Resources in 2010.[8]

Reserves & Resources by mine

mil oz Silver Gold
mil oz[1] % share 2P indicated infer 2P ind infer
Pirquitas100%195.126.118.8000
Pitarilla100%91.7551.682.8000
San Luis70%5.1000.21na
Diabillos100%077.16.300.630.19
San Agustin100%047.836.901.591.06
Berenguela100%066.121.6000
Maverick
Springs
55%069.685.6000
Candelaria100%044.182.800.040.03
Bowdens100%079.517.6000
Sunrise Lake100%012.813.900.030.04
Chalacollo100%018.623.6000
Totalna291.9993.3389.90.212.291.32

Mexico is where most of the company's gold and silver is, 69% of its 3.6 million ounces of gold resource and 49% of its 1.397 billion ounces of silver. Argentina is second, 22% of gold and 19% of silver resources. The company's silver is located in 7 countries, gold in 5 countries (properties in Australia and chile have silver but not gold)[1]

Operating financials by year

The company began reporting revenues when its first operating mine began production in late 2009/early 2010. Though the consecutive quarterly increases in cash flow didn't offset costs related to project and development financing until the fourth quarter of 2010, when net income climbed into positive territory. Revenue comes primarily from the 6-8 million ounces of silver the company mines in Pirquitas, Argentina.

In 2010 the company's bottom line was helped by lower production and operating costs (per ounce $29.32 and $36.61 respectively in the first quarter, significant decreases in subsequent quarters lowered that to $12.16 and $18.13 for the year). Results were also boosted by higher silver recovery rates (increasing consecutively each quarter in 2010, reaching a high of 76.2% in the last quarter (65.2 was the average for the year) and higher silver grades (267 grams/ton in the 4th quarter compared to 129 grams/ton in the first quarter of 2010: averaged 233 for the year). Ended the year with cash and cash equivalents nine times higher than it began with ($232.3 million versus $26.7 million).[4]

Spring 2011 silver futures/option contracts moved to late June/July

The move over to mid summer from spring for silver options contracts to end moved spot silver lower especially when compared to gold the price of which was propped up by heavy demand by central banks in Russia, Mexico and Thailand among others (Canada's BNN interview with a silver anaylist from New York), Russia's central bank purchased about 1 million ounces of gold in the first four months of 2011 up from over 400,000 in the second half of 2010; Russia's last major purchase was in May 2010 when it bought 1.1 million ounces of gold during the month which represented 16.6% of global production that month.[10] Speculators short on silver should boost the price come late June/early July.

Competition

In 2010 silver production for its largest pure play-direct competitors was as follows: Pan American Silver:24.3 mil oz, Silvercorp Metals:4.6 mil oz, Silver Standard Resources:6.302 mil oz (up 48%), First Majestic Silver:6.5 mil oz (up 62%) compared to Hecla Mining Company:10.566 mil oz (down); among diversified industry players Rio Tinto (RIO) was down 20% to 6.862 mil oz, BHP Billiton and Fresnillo led the industry at 45 and 38 million ounces respectively, [[Goldcorp (GG)]|Goldcorp]] was the largest silver producer among gold companies (23 million ounces).

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References

  1. 1.0 1.1 1.2 1.3 Silver Standard Resources 2010 Annual Report (2011).
  2. 2.0 2.1 Silver Standard 2011 January Factsheet (January 2011).
  3. New gold explorer Pretium Resources debuts on TSX.
  4. 4.0 4.1 4.2 4.3 4.4 Silver Standard Reports Fourth Quarter And Year-End 2010 Results (2011-03-02).
  5. 5.0 5.1 5.2 Silver Standard Resources, Inc. 2010 Third Quarter Financial Report (2010).
  6. Silver Standard declares commercial production at Pirquitas (2009-12-05).
  7. Silver Standard nears commercial production at Pirquitas (2009-10-14).
  8. 8.0 8.1 Kingsgate buys NSW gold miner (August 6, 2011).
  9. Silver Standard sells Australian Bowdens project (July 31, 2011).
  10. Russia's Central Bank Purchases 1.1 Million Ounces of Gold in May

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