Silver Standard Resources Inc. (SSRI, Financial) released its first quarter financial results for the period ended March 31. The company posted profit of $8.7 million, that is 11 million CAD. Earnings per share were $0.10 for the quarter. Investors of the Silver Standard Resources company must be a happy lot, as share value has seen a boom of 13% since the start of 2015. Given the past trend, analysts had expected light trading in issue after the report were to be announced. As of trading day Tuesday, the lowest share value was at $5.37 while highest reported value was $5.58. On a 52 week basis, highest value was observed at $10.11 while the lowest was at $3.92.
Financial stats
The Vancouver-based company reported an EPS of 10 cents. Wall Street had estimated Silver Standard Resources to post an EPS of 7 cents, according to a data compiled by Zacks Investment Research. Revenue for the first quarter was $107 million or 135.2 million CAD. Net income earned was $9.1 million or 11 cents a share as compared to the 15 cents loss that the company suffered in the first quarter last year. The adjusted income posted was $6.8 million. The company produced around 55,598 ounces of gold, surely a good sign of progress.
For the fourth quarter 2014, around 66,748 ounces were sold. But the fact that gold for this quarter was sold at an average price of $1,210 is a consolation given that production was lower for this quarter. Around 2.7 million ounces of silver were produced while production of zinc was 3.8 million pounds for the quarter. The company also got $20 million deferred cash consideration from the sale of the San Agustin project in Durango, Mexico. As part of the consideration, the mining company retained 2% net smelter return royalty on sulphide ore produced from San Agustin. Total costs for the quarter was $728 per payable ounce of gold versus the $778 per payable ounce of gold which was sold in the last quarter of 2014. These costs included the expenses paid towards depletion, amortization as well as depreciation. The company had 2 wholly owned feasibility stage projects, Pitarrilla in Mexico and San Luis. Just last year, Goldcorp Inc. (GG, Financial) and Barrick Gold Corporation (ABX, Financial), the previous owner of Marigold mine, sold the mine to Silver Standard for a whooping $275 million. Now that the mine belongs to Silver Standard alone, the company expects to witness an increase in the production of gold for the year.
Management view
John Smith, the CEO & President of Silver Standard Resources, said that their assets were ensuring strong cash generation. This was reflected in the high production given that both operations were delivered at lesser costs. Given that the company has produced 6.8 million ounces of silver at $9.57 per payable ounce, proves that the company has a competitive advantage, he said. "Positive net income and strong operating cash flows in the quarter resulted from our focus on cost discipline and further enable our growth strategy," he said.
Investor take
Investors must be overjoyed with the fact that the mining company earned $0.10 per share as compared to the $0.07 EPS of Wall Street. The company also has very strong cash holdings. Cash & cash equivalent holdings at the end of the quarter was $175.6 million. Though this was a smaller amount as compared to the cash holdings of $184.6 million for the same quarter last year, the lower cash holdings was due to payment to Canada Revenue Agency. Working capital for the quarter ended 31st December 2014 was $368.9 million as compared to the $358.3 million for the first quarter. Silver Standard Resources has estimated their exploration expenditure to remain at a low amount of $15 million for the full-year 2015. Production of gold from the mine at Marigold is also estimated to show an increase. The company shares have fallen around 19% in the past twelve months. However, given that the company is continuing to keep the Pitarrila project and other projects in good standing condition, investors can expect a steady increase in the months to come.
