Silver Standard Resources Inc. SSRI has posted second-quarter operational results and revised full-year 2015 outlook for its Pirquitas and Marigold mines.
The Pirquitas mine produced 2.4 million ounces of silver in the second quarter of 2015, down 10.6% from 2.7 million ounces produced in the previous quarter. The sequential decline was attributable to an 11-day planned shutdown for mill maintenance during the second quarter, the impact of which was included in the company’s previous 2015 production outlook for silver and zinc.
The Pirquitas mine produced roughly 2.7 million ounces of zinc in the second quarter. During the quarter, the company sold 2.6 million ounces of silver and 4.9 million pounds of zinc produced at the mine, down 9.8% and up 78.3% sequentially, respectively.
Silver Standard milled 347,000 tons of ore at the mine in the second quarter, down 8.4% from the prior quarter. Average rate of ore milled was 3,815 tons per day. The mine’s ore milled had an average silver grade of 262 g/t, down 2% from 267 g/t reported in the first quarter of 2015. Silver recovery averaged 83.7% in the second quarter.
The Marigold mine produced 48,685 ounces of gold in the second quarter, down 12.4% from 55,598 ounces in the prior quarter owing to the anticipated reduction in mine grade. In the quarter, the company sold a total of 48,121 ounces of gold produced at the mine. This figure is 13.9% lower than that recorded in the previous quarter.
Silver Standard expects the Pirquitas mine to produce 9.5–10.5 million ounces of silver in 2015 which is 5% higher than its earlier outlook of 9–10 million ounces of silver. The company reaffirmed its zinc production guidance of 10–12 million pounds for 2015. Also, it now expects the Marigold mine to produce gold in the range of 195,000–205,000 ounces in 2015, 19% higher than its previous outlook of 160,000–175,000 ounces.
Gold and silver production in the first half of 2015 was recorded as 104,283 ounces and 5.2 million, respectively.
Silver Standard’s shares rose roughly 4.5% to close at $6.02 yesterday.
According to Silver Standard, the assay program initiated in Jan 2015 was the main driving factor behind the increased 2015 production guidance. Data revealed by this program highlights the presence of additional low-grade mineralization not contained within the existing Mineral Resources estimate. This leads to an anticipated increase in gold ounces to be produced in 2015. The company will be applying the results of the assay program to the Marigold life of mine plan with results anticipated to be completed later in 2015 and 2016.
The updated guidance at the Pirquitas mine reflects the impact of continuous better ore availability and higher silver grade, which indicate an improved relationship between the Mineral Resources model and mined ore production. The company is striving to manage costs and increase operational efficiencies to maintain cash flows in a lower silver price environment while looking for alternatives for mine life extension.
The related cost guidance for the above-mentioned mines will be revealed when the company reports its second-quarter earnings.
Silver Standard currently carries a Zacks Rank #3 (Hold).
Better-ranked companies in the mining space include Endeavour Silver Corp. EXK, Fresnillo PLC FNLPF and Primero Mining Corp. PPP, all carrying a Zacks Rank #2 (Buy).
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