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Silver Standard Tops in 4Q - Analyst Blog
Silver Standard Resources Inc.
) reported fourth-quarter 2012 earnings of 30 cents per share, a
significant increase from 3 cents per share delivered in the
year-ago quarter. The results outperformed the Zacks Consensus
Estimate of a penny.
Silver Standard, which is among the leading players in the silver mining industry along with Buenaventur ( BVN ), Coeur d'Alene Mines ( CDE ) and Hecla Mining ( HL ), posted earnings of 68 cents per share for full-year 2012, a decline of 32% from $1.00 posted in 2011. It, however, surpassed the Zacks Consensus Estimate of 11 cents.
Total revenue improved nearly five-fold year over year to $86.8 million in the quarter, beating the Zacks Consensus Estimate of $74 million.
Revenues for the full year increased 63% to $241.1 million from $147.8 million in 2011 and exceeded the Zacks Consensus Estimate of $217.4 million.
The company sold 3.2 million ounces of silver in the quarter while zinc sales amounted to 2.7 million pounds.
Cost of sales was $70.1 million in the quarter compared with $17.6 million in the year-ago quarter. Income from mine operations was $16.6 million in the quarter versus a loss of $3.2 million in the prior-year quarter.
Operating income in the quarter amounted to $6 million compared with an operating loss of $7.1 million in the year-ago quarter.
Mine Production Details
Silver produced at the Pirquitas mine rose 22% during 2012 to 8.6 million ounces due to better mechanical availability in the plant and operational improvements, resulting in higher and more consistent throughput. Zinc production was 11.2 million pounds, up 10% from 10.1 million pounds produced in 2011, driven by higher throughput.
During 2012, 1.6 million tons of ore were processed at an average milling rate of 4,433 tons per day compared with 1.1 million tons at an average of 2,983 tons per day in 2011.The increase was driven by improved preventative maintenance.
Ore milled in 2012 contained an average silver grade of 217 g/t (grams per ton) compared with 253 g/t in the year 2011. Silver recoveries were 76.3% versus 79.5% in 2011. The decline was due to a temporary shortage in the desired reagents.
Cash and cash equivalents amounted to $366.9 million as of December 31, 2012, compared with $329.1 million as of December 31, 2011. Cash provided by operating activities was $13.3 million for the fourth quarter, compared with cash used in operating activities of $7.2 million a year ago.
Outlook For 2013
The company expects to produce between 8.2 million and 8.5 million ounces of silver in 2013. Direct mining costs are predicted to lie within $17 and $18.5 per ounce of silver. The company anticipates to produce zinc of over 20 million pounds.
Capital expenditure at the Pirquitas mine has been projected at $25 million for 2013. The company expects that expenses related to exploration will be $15 million. Development expenditures are estimated to be $17 million.
Silver Standard retains a short-term Zacks Rank #3 (Hold).
BUENAVENTUR-ADR (BVN): Free Stock Analysis Report
COEUR DALENE MI (CDE): Free Stock Analysis Report
HECLA MINING (HL): Free Stock Analysis Report
SILVER STD RES (SSRI): Free Stock Analysis Report
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