Silver Standard Resources (SSRI) Reports Q4 Production and Offers FY17 Guidance

Silver Standard Resources Inc. (NASDAQ: SSRI) reports its fourth quarter and full year 2016 operating results. Additionally, we are providing 2017 production and cost guidance for our three operations.

Fourth Quarter and 2016 Operating Highlights:

• Consistent record of delivery: Achieved production guidance for the fifth consecutive year.
• Record annual production: Produced 393,325 gold equivalent ounces in 2016 as all three operations met or exceeded previously improved production guidance. During the fourth quarter, gold equivalent production totaled 110,130 ounces.
• Robust gold production at Marigold: Production in the fourth quarter was strongest for the year at 59,945 ounces of gold, taking full year production to 205,116 ounces.
• Exceeded gold production guidance at Seabee: The mine achieved the highest annual production in its 26-year history, producing 77,640 ounces of gold in 2016. With fourth quarter production of 19,711 ounces of gold, production over the second half of the year exceeded our H2 2016 production guidance range.
• Record annual silver production at Pirquitas: The mine concluded a successful year with fourth quarter production of 2.2 million ounces of silver, taking annual production to a record 10.4 million ounces of silver in 2016.

Paul Benson, President and CEO said, "Our production results continue to demonstrate the strength of our operating portfolio, following the successful acquisition of the Seabee Gold Operation earlier this year. I commend our mines and their respective teams for delivering to or exceeding their operating plans. Our fourth quarter production of over 110,000 gold equivalent ounces is a strong finish to a very successful year. These results are underpinned by our operational excellence program, commitment to safe production and strong balance sheet positioning us to continue creating shareholder value in 2017."

Marigold mine, U.S.

In 2016, the Marigold mine produced 205,116 ounces, compared to 207,006 ounces of gold produced in 2015, achieving the mid-point of our improved 2016 production guidance. Gold sales were 204,315 ounces for the year.

Total material mined and ore stacked on leach pads of 75.1 million tonnes and 23.6 million tonnes, respectively, in 2016, were record amounts for the Marigold mine, due to the increased hauling capacity added to the fleet earlier in the year.

In the fourth quarter of 2016, Marigold produced 59,945 ounces of gold, 26% higher than the previous quarter as expected, due to higher grade ore tonnes sourced from the deeper benches of the current Mackay pit phase during the third and fourth quarters of 2016. Higher grade ore was placed on the new leach pad, completed in the third quarter of 2016, which assisted in accelerated gold recovery. Gold sales totaled 61,308 ounces for the quarter.

A total of 19.6 million tonnes of material were mined in the fourth quarter of 2016, in line with material mined in the third quarter. Approximately 6.4 million tonnes of ore were delivered to the heap leach pads at a gold grade of 0.48 g/t, containing approximately 75,000 recoverable ounces of gold stacked during the quarter. This compares to 4.8 million tonnes of ore delivered to the heap leach pads at a gold grade of 0.42 g/t in the third quarter of 2016, containing approximately 47,000 recoverable ounces of gold. Gold grade mined in the fourth quarter was 14% higher than the third quarter. The strip ratio declined to 2.0:1 in the quarter, a 36% reduction compared to the previous quarter.

Seabee Gold Operation, Canada

The Seabee Gold Operation consists of the Seabee and Santoy underground mines, both of which feed a single processing facility. During the period since acquisition, from May 31, 2016 to December 31, 2016, the mine produced a total of 46,574 ounces of gold with gold sales of 50,445 ounces. For the full year 2016, production totaled 77,640 ounces of gold, marking record annual production since the beginning of operations in 1991.

In the fourth quarter, the Seabee Gold Operation produced 19,711 ounces of gold, largely in line with the 20,142 ounces of gold produced during the third quarter of 2016. Production during the second half of the year of 39,853 ounces of gold exceeded our second half 2016 production guidance range of 32,000 to 35,000 ounces of gold.

A record 84,526 tonnes of ore were milled at an average gold grade of 7.40 g/t and recovery of 97.0% during the fourth quarter. This compares to a total of 82,756 tonnes of ore milled at an average gold grade of 7.40 g/t and recovery of 96.5% in the third quarter. Gold sales totaled 17,229 ounces during the quarter.

During the fourth quarter, the mill was maintained at a higher throughput of 919 tonnes per day, a record quarterly performance. The Santoy complex mined approximately 92% of total ore milled, with the remainder mined from Seabee. Mining continues to transition to long hole stope ore from Santoy and we are reviewing the mine plan to determine the feasibility of higher, sustainable production rates in excess of our 2017 Outlook.

Pirquitas mine, Argentina

In 2016, the Pirquitas mine produced a record 10.4 million ounces of silver, close to the upper end of our increased annual production guidance range. This was largely the result of achieving a 14% increase in daily milling rate during the year. Silver mined grade of 183 g/t was in line with that realized in 2015, while silver mill feed grade was 6% lower than the previous year, in line with expectations as medium grade stockpiled ore supplemented the mill feed. Silver recovery of 77.8% was lower compared to 2015, due to a combination of closing down the zinc circuit in January 2016, lower silver grade throughout the year and higher mill throughput in the latter half of 2016. Silver sales totaled 11.4 million ounces for the year.

In the fourth quarter of 2016, Pirquitas production declined relative to the third quarter, as expected, producing 2.2 million ounces of silver. Silver sales totaled 2.6 million ounces for the quarter.

Ore was milled at an average rate of 5,175 tonnes per day in the fourth quarter, 5% higher than the previous quarter and a record quarterly result. Additionally, the average milling rate was 29% above the mill's nominal design of 4,000 tonnes per day, which is the result of a successful 14-month operational excellence project. Ore milled in the fourth quarter of 2016 contained an average silver grade of 194 g/t, 27% lower than the 264 g/t reported in the third quarter as the availability of ore in the lower benches of the San Miguel open pit was reduced, resulting in medium grade stockpile ore supplementing mill feed.

The average silver recovery in the fourth quarter was 74.5%, lower than the 79.0% recovery in the previous quarter, in line with reduced silver mill feed grade that resulted from the increasing proportion of stockpiled material in the mill feed.

Detailed planning and consultation with the workforce, union, communities and government for the cessation of open pit mining in January 2017 is well-advanced. Thereafter, medium grade stockpile material will be processed through the plant in 2017. Low grade stockpiles may be processed in late 2017, and potentially in early 2018, depending on prevailing economic conditions.

2017 Outlook

This section of the news release provides management's production and cost estimates. See "Cautionary Note Regarding Forward-Looking Statements."

For the full year 2017, we expect:

In 2017, on a consolidated basis at mid-point of guidance, Silver Standard expects to produce 355,000 gold equivalent ounces at gold equivalent cash costs of $735 per ounce. Cash costs and capital guidance are based on $55 per barrel oil price and 1.30 Canadian to U.S. dollar exchange rate. Gold equivalent figures are based on a $1,250 per ounce gold price and a $17.50 per ounce silver price.

Marigold production is expected to increase compared to 2016 as the mine benefits from the gold ounces stacked on the leach pads through the latter months of 2016 and from continued strong performance in 2017. As a result, production is expected to be weighted towards the first half of the year. Capital expenditures total $30 million and are primarily attributable to mining equipment components of $17 million and replacement of support equipment of $5 million, with $2.5 million allocated for permitting. Capitalized stripping is expected to decline significantly relative to 2016 as mining focuses on the current phases of the Mackay pit. Approximately $11 million of capitalized stripping are expected to be incurred in the second half of the year as we commence stripping of the next phase of the Mackay pit. Despite the decline in mining costs capitalized, cash costs per payable ounce are expected to be similar to 2016.

At the Seabee Gold Operation, 2017 will mark our first full year of ownership with production expected to remain near record levels of between 72,000 and 82,000 ounces of gold at low cash costs, based on mill throughput of 900 tonnes per day. Annual production is expected to be weighted toward the second half of the year as mine grade is expected to increase as additional levels are developed at the Santoy mine complex through early 2017. Capital investments at Seabee of $8 million include $2 million for improvement of gravity recovery in the plant, $2 million for ventilation improvements to the Santoy mine complex to support a higher mining rate and $3 million for a water treatment plant related to tailings water discharge. Capitalized development of $11 million is principally for Santoy decline development and to establish stations for underground definition and exploration drilling.

At the Pirquitas mine, as previously disclosed, mining of the San Miguel open pit is expected to cease in January 2017. Medium grade stockpiles are expected to constitute the mill feed upon cessation of open pit mining activities. As a result, silver production is expected to decline and cash costs are expected to be higher in 2017, compared to 2016. Zinc production is not expected in 2017 due to lower zinc grades in the stockpiled material. As we report cash costs on a per payable ounce sold basis, 2017 expected cash costs include stockpile inventory costs of approximately $3.50 per ounce of silver that were previously incurred. Capital expenditures include approximately $1 million for completion of the tailings facility lift, which commenced in the fourth quarter of 2016 and is scheduled for completion in the first quarter of 2017. The remaining sustaining capital is for maintaining the re-handle fleet and the mill in fully operational condition. Further, we expect to incur approximately $6 million related to remediation of mining areas in 2017, mainly on surface water control measures. The Pirquitas plant is expected to operate through 2017, conditional upon profitable processing of stockpiles at prevailing market conditions, and to close in late 2017 or early 2018, subject to our investment decision on the Chinchillas project.

We continue to evaluate our right to exercise our option to form a joint venture on the Chinchillas project as an opportunity to extend the mine life at Pirquitas. The completion of our technical evaluation combined with the assessment of market conditions and country risk factors, including the status of our export duty litigation, will determine our decision on exercising the option in advance of its expiry on March 30, 2017.

Exploration and development expenditures are forecast at $15 million. Approximately $5 million of exploration at Marigold is for Mineral Resource discovery and conversion of Mineral Resources to Reserves with particular focus on the Valmy property. At the Seabee Gold Operation, $5 million of expenditures are to be incurred targeting Mineral Resource discovery and conversion of Mineral Resources to Reserves, including Mineral Resource discovery contiguous to Seabee at the Fisher property, where we hold an option. The remaining expenditures are attributable to our development portfolio, including $1 million at the Perdito early-stage exploration property.

Qualified Persons

The scientific and technical data contained in this news release relating to the Marigold mine has been reviewed and approved by Thomas Rice, SME Registered Member, a Qualified Person under National Instrument 43-101 – Standards of Disclosure for Mineral Projects ("NI 43-101") and our Technical Services Manager at the Marigold mine. The scientific and technical data contained in this news release relating to the Seabee Gold Operation has been reviewed and approved by Cameron Chapman, P.Eng., a Qualified Person under NI 43-101 and General Manager at the Seabee Gold Operation. The scientific and technical data contained in this news release relating to the Pirquitas mine has been reviewed and approved by Bruce Butcher, P.Eng., a Qualified Person under NI 43-101 and our Director, Mine Planning.

You May Also Be Interested In

• Sony/Apollo bid for Paramount could be worth as much as $29 billion - Source
• EVe Mobility Acquisition Corp (EVE) Receives NYSE Non-compliance Notice
• Form 8.3 - Hipgnosis Songs Fund Limited