Silver Standard Releases 1st-Quarter Operating Results
- By Alberto Abaterusso
Silver Standard Resources Inc. (SSRI) informed the markets Tuesday of the operating results of its three mines for the first quarter of 2017.
In the first quarter, the Canadian mining company reported a production of 97,851 ounces of gold equivalent.
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The intrinsic value of SSRI
At the Marigold mine (U.S.), Silver Standard Resources produced a volume of 55,215 ounces of gold, a 7.9% decrease compared to the previous quarter, and sold 52,528 ounces of gold, a 14.3% decrease from the last quarter of 2016.
The decrease in the first quarter production of Marigold mine has been attributed by the mining company to several interruptions at operations caused by bad weather conditions in the first two months of 2017 and maintenance at the mine during March. In addition, the pit phase sequencing caused the mining of the precious metal from those ore body's parts characterized by a lower gold grade.
The second company's mine, Seabee Gold, contributed to Silver Standard Resources' first quarter of 2017 total production for 21.5% and was 21,023 ounces of gold. This was 7% higher than the gold production in the last quarter of 2016 because Silver Standard Resources mined the precious metal according to a higher gold grade at the Santoy mine complex that "supplied 98% of ore milled in the first quarter," the company says.
In the first quarter the company sold 22,411 ounces of gold at Seabee Gold, a 30.1% increase from the previous quarter.
At the Pirquitas mine (Argentina) the amounts of silver produced (1.52 million ounces) and sold (1.443 million ounces) were lower in the first quarter of 2017 compared to the last quarter of 2016, due to the fact that the mill feed was sourced in bulk from stockpiles of medium grade ore as a consequence of the cessation in January of the mining activities at the San Miguel open pit.
Paul Benson, Silver Standard Resources' president and CEO, commented on first-quarter operating results: "Our production of 97,851 gold equivalent ounces is a strong start to the year, highlighted by Seabee continuing to demonstrate a capability to produce above historical levels. The sustained contribution from all three of our assets was solidified by our recent announcement to exercise our option on the Chinchillas project to extend the operating life of Pirquitas. This, combined with our focus on safe production and operational excellence, demonstrates the success of our strategy to create value through internal and external opportunities."
Silver Standard Resources is trading at $11.32 per share with a price-sales (P/S) ratio of 2.80 and a price-book (P/B) ratio of 1.50.
The Enterprise Value/EBITDA ratio is 5.34.
The stock has a recommendation rating of 2.6, and the analysts' average target price per share is $13.35, a 18% upside from the current share price.
Disclosure: I have no positions in Silver Standard Resources.
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This article first appeared on GuruFocus.
Warning! GuruFocus has detected 2 Warning Sign with SSRI. Click here to check it out.
The intrinsic value of SSRI
