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Silver Standard Resources Inc. (SSRI)
Q2 2010 Earnings Call
August 6, 2010 11:00 am ET
Michael Anglin - President and CEO
John Smith –President and CEO
Tom Yip – CFO
George Paspalas - SVP, Operations
Joe Ovsenek - SVP, Corporate Development
Kristen G. Ribbell – VP, Corporate Secretary and General Council
Ken McNaughton – SVP, Expiration
Paul Lafontaine, Director of Investor Relations
Haytham Hodaly - Salman Partners
Kwan Lunz-Intaglo - Scotia Capital
Heather Taylor from BMO Capital
Chris Lichtenheldt – USB
Good day, everyone. And welcome to the Second Quarter 2010 Financial Results and Project Update Conference Call. This call is being recorded.
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Thank you. Good morning, Ladies and Gentleman. Welcome to Silver Standard’s Second Quarter 2010 Conference Call, reviewing our financial performance and updating our projects.
On the call this morning we have George Paspalas, Chief Operating Officer; Joe Ovsenek, Senior Vice President Corporate Development; Tom Yip, Vice President of Finance and Chief Financial Officer., Kristen G. Ribbell, Vice President, Corporate Secretary and General Counsel; Ken McNaughton, Senior Vice President, Expiration; and Paul Lafontaine, Director of Investor Relations.
Also on the call with us this morning is John Smith, the new President and CEO of Silver Standard, effective today. Welcome John. Would you like to say a few words?
Thanks, Mike. And hello, everybody. I’d just like to say how pleased I am about the opportunity to join Silver Standard at this time. I’m really looking forward to working with the team here in Vancouver.
I’d also like to thank Mike for acting Interim President these past several months, he’ll be returning to his role on the Board and we’ll continue to benefit from his service there.
I’ll be meeting with shareholders and other market participants in the coming quarter to discuss activities as we move ahead with our projects. I look forward to hosting the third quarter call in November.
On that note, I’m going to turn things back over to Mike in the management group here to discuss the second quarter and take your questions.
Thanks, John. So we’ll give John a chance to get his feet out of the desk over the next 90 days, and for this call, I’ll be leading the prepared remarks and moderating the Q&A which follows.
Our financial statements, as well as our management discussion analysis, together with project updates, have been filed on SEDAR and are available on our website.
We have a webcast accompanying our comments today. They can be found at a web location referenced in the news release.
We will be making forward-looking statements on the call today and I advise you to refer to our forward-looking disclosure accompanying our news release and on SEDAR.
I’ll focus on the second quarter, with the optimization of the Pirquitas Mill Complex where we achieved commercial production on December 1, 2009. We have made significant protests to the metallurgy of the transition of sulfide orders resulting in the improvement of both recoveries and production cost. George Paspalas, our Chief Operating Officer, will describe Pirquitas in more detail in his presentation.
Returning to the primary purpose of this call, our second quarter 2010 results, I’d like to turn the call over to Tom Yip, our Vice President of Finance and Chief Financial Officer, who will speak through our second quarter financial results. Tom?
Thanks Mike. And good morning, everybody. As mentioned, we continue to optimize our Pirquitas Mine and have significantly better production during the second quarter versus the first quarter.
For the second quarter P&L, we reported a net loss of $15.2 million or $0.19 per share versus a loss of 1.4 million or $0.02 a share for the second quarter of 2009. The main components of the $15 million loss, are shown on the slide.
During the quarter, we sold a million and 92,000 ounces of silver, at an average realized price of $18.12 per ounce.
Now with the transportation deductions and refining cost, revenues were $14.1 million. Cost of sales were 10.6 million and depreciation and amortization was 5.1, resulting in a loss from mine operations of $1.6 million. This was a significant improvement over the first quarter where we reported a loss on mine operations of 16.7 million.
G&A cost for the quarter were 4.4 million. The increase over the prior year relates to additional employees as we transition to a producer as well to the veils and advance of our project pipeline.
Sulfide compensation was 2 million which is similar to the first quarter cost as we continue to advertise the Black-Scholes value of previously granted options.
Interest expense of 3.4 million relates to the convertible debenture, which was previously capitalized to the Pirquitas construction and it is now charged to the P&L.
We recorded a foreign exchange loss of 2.3 million, primarily related to the affects of the leasing of the paso on our net monetary assets in Argentina. Lastly, we incurred a million dollars for export taxes related to our Pirquitas Mine.
In terms of cash flow, we began the quarter with 103 million, after completing our equity financing in February. And during the quarter, we had a net decrease of 45 million. We used 9.6 million for operating activities, which is primarily mine operations of 5 million and G&A cost of 4.4.