Silver
Standard Reports Second Quarter 2009 Results
VANCOUVER, BRITISH
COLUMBIA, Aug 6, 2009 (Marketwire via COMTEX News Network) -- Silver Standard
Resources Inc. (TSX:SSO)(NASDAQ:SSRI) reports the following principal project
updates and financial highlights from the company's second quarter of 2009. 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.
Update on Pirquitas
Mine Ramp-up
During the second
quarter, the company commenced the ramp-up of the plant by feeding historical
jig tailings to the ball mill as planned. However, start-up issues were
encountered, which resulted in delays. Following resolution of these start-up
issues, operations were adversely affected by unseasonably cold weather until
additional cold weather protective systems were installed. The ball mill and
flotation circuits are now operating consistently and producing concentrate
with the first concentrate shipment of 100 tonnes occurring at the end of
July. The focus for this quarter is commissioning the crushing and tin
circuits and improving silver concentrate grade.
With the delays caused
by start-up issues, Pirquitas is now expected to produce approximately 3
million ounces of silver in 2009 and to achieve full production in 2010 of approximately
10 million ounces of silver.
As of June 30, 2009,
the company had expended $221 million in construction costs. With the delays
in start up, capital costs are now estimated to be $233 million.
Financial Highlights
- The company reports
a second quarter loss of $1.4 million ($0.02 per share) for the three months
ended June 30, 2009 compared to a loss of $ 5.9 million ($0.09 per share) for
the second quarter of 2008.
- For the three months
ended June 30, 2009, Silver Standard incurred $25.5 million for construction,
$15.5 million for pre-operating costs and $0.1 million for mining equipment
at the Pirquitas Mine.
- Significant
exploration expenditures to advance other projects during the quarter
included $1.2 million at the Pitarrilla Project in Mexico; $1.2 million at
the San Luis Project in Peru; $0.6 million at the Diablillos Project in
Argentina; and $1.0 million at the Snowfield Project in Canada.
- Cash and cash
equivalents decreased from $72.0 million at December 31, 2008 to $52.8 million
at June 30, 2009.
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Selected Financial Data
($000's, except per share amounts)
This summary of selected financial data should be read in conjunction with
the management discussion and analysis ("MD&A") of the unauditedconsolidated operating results and financial position of the company for
the six months ended June 30, 2009 and June 30, 2008 and the audited
figures at December 31, 2008.
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Three Months Six Months
Ended June 30 Ended June 30
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2009 2008 2009 2008
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Loss for period (1,374) (5,913) (3,972) (3,585)
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Loss per share (0.02) (0.09) (0.06) (0.06)
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Cash used in operating activities (9,390) (76) (13,396) (8,128)
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Cash generated by financing activities 1,205 - 94,959 137,970
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Cash used in investing activities (46,703) (40,896) (100,741) (29,577)
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Financial Position June 30, 2009 December 31, 2008
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Cash and cash equivalents 52,835 72,013
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Marketable securities 8,187 10,923
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Current assets - total 66,403 86,814
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Current liabilities - total 28,513 45,328
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Working capital 37,890 41,486
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Total assets 653,622 567,905
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Principal Project
Updates
San Luis, Ancash, Peru
A feasibility study on
placing the project into production is underway and is expected to be
completed in the third quarter of 2009. An environmental impact study has
also been initiated and is scheduled to be completed by the end of 2009. The
joint venture is currently negotiating long-term land access agreements for
the project.
Silver Standard
presently holds a 55% interest in the San Luis Project and has elected to
increase its interest to 70% by completing a feasibility study. Silver
Standard has the right to increase its interest in the San Luis project to
80% by placing the project in production. The remaining joint venture
interest is held by Esperanza Silver Corporation.
Pitarrilla, Durango,
Mexico
During the second
quarter, the company reported the results of a pre-feasibility study for the
underground component of the Breccia Ridge Zone, the potential first phase of
a staged underground and open pit development of Pitarrilla (news release
dated June 24, 2009). Based on the pre-feasibility study, the underground component of
Breccia Ridge now contains probable silver reserves of 91.7 million ounces.
Proven and probable reserves for the company now total 286.8 million ounces
of silver.
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.
As presented in the pre-feasibility study, the underground
project has a 12-year mine life, mining 4,000 tonnes per day and producing
approximately seven million ounces of silver per year. Capital costs are
projected at $277 million with average operating costs of $33.81/tonne.
Recoveries vary by rock type with expected weighted average recoveries of
88.4% for silver, 93.2% for zinc and 89.6% for lead. Ore processing will
produce two concentrates: lead and zinc.
Breccia Ridge Underground
As part of the pre-feasibility study, the potential for
underground bulk mining opportunities was identified for the Breccia Ridge
underground resource which requires further study. As a result, a scoping
study is underway, to be followed, if warranted, by a pre-feasibility study
on the Breccia Ridge underground project. Feasibility-level studies are also
continuing on certain aspects of the project.
Open Pit Opportunities
Concurrent with the advancement of the Breccia Ridge underground
project, a scoping study is underway, to be followed, if warranted, by a
pre-feasibility study on the Breccia Ridge open-pit opportunity.
Metallurgical testwork on recoveries of the open-pit, oxide-sulfide material
is in progress along with geotechnical drilling data for pit design.
In addition to Breccia Ridge, engineering and testwork continues
on the four other surface zones: Pena Dike, Cordon Colorado, Javelina Creek
and South Ridge. These four zones contain approximately one-third of total
Pitarrilla resources and will complement the contemplated underground and
open-pit scenarios of Breccia Ridge.
A total of $1,155,000 was spent on the Pitarrilla Project in
Mexico during the quarter compared to $4,545,000 in the same quarter of the
prior year. Pitarrilla is 100%-owned by Silver Standard and is among the
largest silver discoveries in the last decade.
Diablillos, Salta, Argentina
In the second quarter, Silver Standard reported an updated
resource estimate (news release dated June 18, 2009) for the Diablillos
Project in the Province of Salta in northern Argentina. Diablillos is located
275 kilometers (171 miles) south of the company's Pirquitas Mine in the
Province of Jujuy. The resource estimate follows recent diamond drilling
which was successful in converting a significant portion of the previously
reported inferred resources into the indicated category.
The following block model resource estimate is for the Oculto
Zone, one of 11 mineralized zones identified on the property.
Diablillos Project - Oculto Zone Resource Summary - June 2009(1)
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Contained Ounces(1)
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Tonnes Gold Silver Gold Silver
Category (millions) (g/t) (g/t) (in oz.) (in millions of oz.)
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Indicated 21.6 0.922 111 640,000 77.1
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Inferred 7.2 0.807 27 187,000 6.3
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(1) The cut-off grade is based on US$10.00 recovered metal values (RMV) and
the following metal prices and recoveries: gold (US$700/oz, 65%); and
silver (US$11.00, 40%).
Based on a locked-cycle metallurgical program using conventional
milling, preliminary precious metal recoveries averaged 86.9% for gold and
87.0% for silver. The heap leaching characteristics of the mineralization
were also tested on a number of composites. Recoveries from column tests
using a 3/4 inch crush averaged 65.2% for gold and 43.5% for silver. A
pre-feasibility study will be undertaken that will explore various
combinations of milling and heap leaching alternatives for this significant
silver-gold resource.
A total of $555,000 was spent at the wholly-owned, silver-gold
Diablillos Project in Argentina during the quarter compared to $967,000 in
the same quarter of the prior year.
Snowfield, British Columbia, Canada
The Snowfield Project hosts a significant gold resource
comprised of measured and indicated gold resources totalling 4,362,000 ounces
and inferred gold resources of 14,276,000 ounces using a cut-off grade of 0.5
grams of gold-equivalent per tonne. There are currently six drills on site to
complete at least 20,000 meters of diamond drilling this year. Results will
be reported as received and a resource update is expected in the fourth
quarter.
The Snowfield resource is part of an expansive gold camp located
65 kilometres north of the town of Stewart and 20 kilometres southeast of
Barrick's high-grade gold-silver mine at Eskay Creek.
A total of $976,000 was spent at the wholly-owned gold project,
compared to $140,000 in the same period in 2008.
Management Discussion & Analysis and Conference Call
For the full Second Quarter 2009 report, including Management
Discussion & Analysis, visit www.sedar.com or the company's web site at www.silverstandard.com.
A conference call with management to review Second Quarter 2009 financial results
and project activities is scheduled on Friday, August 7, 2009 at 11:00 a.m.
EDT.
Toll-free in North America: (877) 545-1491
All other calls: (719) 325-4847
This call will also be web-cast and can be accessed at the
following web location:
http://ir.silverstandard.com/presentations.cfm.
The call will be archived and available at www.silverstandard.com
after August 6, 2009.
Audio replay will be available for one week by calling:
Toll-free in North America: (888) 203-1112, replay passcode
6056624.
Overseas callers may dial: (719) 457-0820, replay passcode
6056624.
To receive Silver Standard's news releases by e-mail, contact
Paul LaFontaine, director, investor relations at invest@silverstandard.com or call
(888) 338-0046.
Statements contained in this news release that are not
historical fact, such as statements regarding the economic prospects of the
company's projects, future plans or future revenues, timing of development or
potential expansion or improvements, are forward-looking statements as that
term is defined in the Private Securities Litigation Reform Act of 1995. Such
forward-looking statements are subject to risks and uncertainties which could
cause actual results to differ materially from estimated results. Such risks
and uncertainties include, but are not limited to, the company's ability to
raise sufficient capital to fund development, changes in economic conditions
or financial markets, changes in prices for the company's mineral products or
increases in input costs, litigation, legislative, environmental and other
judicial, regulatory, political and competitive developments in Canada,
technological and operational difficulties or inability to obtain permits
encountered in connection with exploration and development activities, labour
relations matters, and changing foreign exchange rates, all of which are
described more fully in the company's filings with the Securities and
Exchange Commission.
Cautionary note to U.S. investors: The terms "measured
mineral resource", "indicated mineral resource", and
"inferred mineral resource" used in this news release are Canadian
geological and mining terms as defined in accordance with National Instrument
43-101, Standards of Disclosure for Mineral Projects ("NI 43-101")
under the guidelines set out in the Canadian Institute of Mining, Metallurgy
and Petroleum (the "CIM") Standards on Mineral Resources and
Mineral Reserves. We advise U.S. investors that while such terms are
recognized and permitted under Canadian regulations, the SEC does not
recognize them. U.S. investors are cautioned not to assume that any part or
all of the mineral deposits in the measured and indicated categories will
ever be converted into reserves. "Inferred mineral resources" in
particular have a great amount of uncertainty as to their economic
feasibility. It cannot be assumed that all or any part of an inferred mineral
resource will ever be upgraded to a higher category. Under Canadian rules
estimates of inferred mineral resources may not generally form the basis of
feasibility or other economic studies. U.S. investors are cautioned not to
assume that any part or all of an inferred mineral resource exists, or is
economically or legally mineable. Disclosure of contained metal expressed in
ounces is in compliance with NI 43-101, but does not meet the requirements of
Industry Guide 7 of the SEC, which will only accept the disclosure of tonnage
and grade estimates for non-reserve mineralization.
(Source: Silver Standard Resources Inc.)
SOURCE: Silver Standard Resources Inc.
Silver Standard Resources Inc.
Robert A. Quartermain
President
(604) 689-3846
Silver Standard Resources Inc.
Paul LaFontaine
Director, Investor Relations
N.A toll-free: (888) 338-0046 or Direct: (604) 484-8212
invest@silverstandard.com
www.silverstandard.com