VANCOUVER, BRITISH COLUMBIA -- 08/05/10 -- Silver Standard Resources Inc. (TSX: SSO)(NASDAQ: SSRI) provides the following updates on the Pirquitas Mine and principal development projects and reports on headline financial results from the company's second quarter ended June 30, 2010. Effective January 1, 2009, the company adopted the U.S. dollar as its reporting currency and all figures are in U.S. dollars, unless otherwise noted. (This news release contains forward-looking information that is subject to the risks and assumptions set out in the company's Cautionary Statements on Forward-Looking Information located on the last page of this news release.)
Pirquitas Mine, Argentina
During the second quarter the mill processed 345,661 tonnes of ore at an average milling rate of 3,798 tonnes per day, compared to 3,070 tonnes per day in the first quarter. Open pit mining continued to operate well with 3,900,000 tonnes or 43,000 tonnes per day, similar to the 3,876,000 tonnes or 43,000 tonnes per day mined in the first quarter.
The significant improvement in cash production cost per ounce is due to the higher production resulting from improved grades and recovery. Including deductions, treatment and refining charges, royalties and export taxes, cash operating cost per ounce is $14.98 compared to $36.61 for the first quarter 2010. At the beginning of the quarter, operations began encountering zinc in the mined ore, and the mill optimized the current circuit to produce a saleable zinc concentrate. The mill produced 896,000 pounds of zinc and shipments commenced at the end of June. In July, the mine produced approximately 614,300 ounces of silver with grades of 277 grams of silver per tonne and recoveries of 65.3%, exceeding the second quarter average grades and recoveries. During the second quarter, mining activity continued through a transitional horizon as well as exposing some sulphide ore. Operations will continue to mine through transitional ore during the third quarter, with levels of sulphides increasing by the middle of the fourth quarter. Significant progress was made with the metallurgy of the transitional ore during the first six months of this year which resulted in improved mill recoveries. In addition, the mill has started to produce zinc concentrates from the current installed flotation facility. Due to high zinc values encountered in the mine, the company is now anticipating producing 3.0 million pounds of zinc in 2010. The tin circuit is commissioned and will be operated when suitable material is available. Due to the lower tin grades in the initial levels of the mine, tin production is now estimated at 600,000 pounds for 2010 compared to the previous estimate of 800,000 pounds.
The company expects production for the full year of 2010 to be seven million ounces of silver at an average cash production cost of $10.00 per ounce of silver (net of by-product credits) and $14.00 per ounce cash operating costs. Please refer to the cautionary note regarding forward-looking statements and non-GAAP financial performance measures contained in the Management Discussion & Analysis.
Financial Results
(All figures are in US dollars unless otherwise noted)
- Silver Standard produced a total of 1,692,466 ounces of silver and sold
1,091,911 ounces during the second quarter of 2010.
- The company recorded a net loss of $15.2 million or $0.19 per share for
the three months ended June 30, 2010, compared to a net loss of $1.4
million or $0.02 per share for the same period in the prior year, and a
net loss of $22.8 million or $0.30 per share in the six months ended
June 30, 2010, compared to a net loss of $4.0 million or $0.06 per share
in the comparable 2009 period.
- Loss from mine operations narrowed in the second quarter to $1.6 million
including revenues of $14.1 million which were net of deductions,
treatment and refining charges. Cost of sales was $10.6 million plus
$5.1 million in non-cash depletion, depreciation and amortization.
- For the three months ended June 30, 2010, exploration expenditures
totalled $14.3 million, compared to $4.7 million in the second quarter
of 2009. Expenditures totalled $1.3 million at the San Luis Project in
Peru ($1.2 million in the second quarter of 2009); $4.2 million at
Pitarrilla in Mexico ($1.2 million in the second quarter of 2009); $2.9
million for the Snowfield Project in Canada ($1.0 million in the second
quarter of 2009); and $3.7 million at the Brucejack Project, Canada
($nil in the second quarter of 2009).
- Cash and cash equivalents at June 30, 2010 were $57.7 million compared
to $26.7 million at December 31, 2009. Working capital at June 30, 2010
was $89.4 million compared to $24.5 million at December 31, 2009.
Principal Projects
San Luis Project, Peru
The feasibility study has been finalized and approved by the board of
Silver Standard for submission to the joint venture. With the
completion of the feasibility study, Silver Standard has now vested a
70% interest in the joint venture. See the news release dated May 10,
2010, for details on the San Luis Feasibility Study. The joint venture
is currently negotiating long-term land access agreements for the
project.
Pitarrilla Project
At Pitarrilla in Mexico, the Breccia Ridge underground feasibility
study is underway and planned for completion in Q4 2010. Pitarrilla is
among the largest silver discoveries in the last decade and is
100%-owned by Silver Standard.
Based on the pre-feasibility study, the underground component of
Breccia Ridge now contains probable silver reserves of 91.7 million
ounces. Early indications are that this number will improve as the
feasibility study progresses. The Breccia Ridge Zone, containing 63% of
Pitarrilla's total silver resource of 643.6 million ounces of measured
and indicated silver resources and 82.3 million ounces of inferred
silver resources, is the main focus of current project activities and
is one of five zones of mineralization identified to date on the
property.
Snowfield Project
A National Instrument 43-101 compliant Preliminary Assessment was
completed for the Snowfield Project, located 65 kilometers north of
Stewart, British Columbia, during the quarter. The project includes
development of an open pit mine, a processing plant, infrastructure,
waste rock storage and tailing impoundment areas to recover the
mineralization identified to date. Details are summarized in a news
release dated June 1, 2010.
Preliminary results from an ongoing metallurgical program indicate
the potential for significant rhenium recoveries at Snowfield. The
potential impact of rhenium on the project's economics, as well as the
inclusion of the higher-grade gold
and silver resources of the company's adjacent Brucejack Project, will
be examined in an updated Preliminary Assessment which is currently
underway.
This season's exploration program includes an 18,000-meter drill
program primarily focused on expanding the project's known gold
resource. The Snowfield project currently hosts measured and indicated
gold resources of 19.77 million ounces and inferred gold resources of
10.05 million ounces, along with resources in copper, silver, and
molybdenum based on a cut-off of 0.35 grams of gold-equivalent/tonne.
Geotechnical and large diameter drilling for advanced metallurgical
studies are planned to be included as part of the drill program.
Preliminary environmental and geotechnical investigations will be
carried out at the proposed mill tailings locations.
Brucejack Project
A 24,000-meter drill program is underway for the Brucejack Project.
One goal of the drilling is the expansion of the newly-discovered
Bridge Zone, which is developing into a significant gold-silver
porphyry. Other drill targets include the continued testing for
expansion of the high-grade Galena Hill and West Zones, and new areas
which have been defined by surface sampling and mapping.
Drilling to date has encountered high-grade gold and silver
mineralization first identified in the 2009 drill program. The results
demonstrate consistency of these high grade intersections over a
relatively broad area. (See the July 12 and July 29, 2010 news releases
for details). The Brucejack Project currently hosts measured and
indicated resources of 4.04 million ounces of gold and 65.4 million
ounces of silver and inferred resources of 4.87 million ounces of gold
and 71.5 million ounces of silver based on a cut-off of 0.35 grams of
gold-equivalent/tonne.
Diablillos Project
At Diablillos in Argentina, a preliminary metallurgical program to
assess the heap leaching characteristics of the mineralization has been
completed. On completion of other engineering studies now underway, a
preliminary economic assessment will be completed to test the potential
economics of the project.
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