Great Panther Silver (TSE:GPR)(AMEX:GPL) late Monday posted an increase in 2011 earnings and revenues as precious metals prices continued to soar.
For the year that ended December 31, Great Panther said net earnings
increased eight percent to $11.5 million while full-year revenues jumped
37 percent to $57.8 million.
"We are extremely pleased with our growth in revenues and the
significant increase in our operating cash flow," said Great Panther's
president and chief executive Robert Archer.
"The increase in our profitability and cash flow has enabled us to
step up the investment in our properties and in exploration to drive
growth in 2012 and beyond."
In a conference call, Archer characterized 2011 as "a year of tremendous volatility" in the precious metals space which Great
Panther intends to take advantage of as part of its goal of becoming a mid-tier silver producer.
Panther's Archer said that the company has already secured contracts to
sell its 2012 metals output to two smelters directly rather than a
He also said that the company was "very focused"
on acquisitions, even opening new exploration offices in Peru and Mexico
during the past year.
"We have got a number of things that we're looking at quite closely in Mexica and Peru," Archer said.
He added that it was "dificult to put a timeline" on when and where any future acquisition would take place.
San Ignacio, Archer reckoned the company could produce "early-stage
development ore" by the end of this year, with eventual production in
Great Panther is also working on a new resource estimate
for Guanajuato, Archer said, but due to the "extremely complex" ore body
at the mine, a material change in the estimate is "not likely".
While the average price of silver for 2011 increased by 74 percent on
a year-over-year basis, it has fluctuated significantly in recent
years, and it continued to be volatile in 2011 reaching a high of $48.70
in April and a low of $26.16 in December.
Vancouver-headquartered Great Panther Silver is a Mexico-focused silver miner focused on its two wholly-owned operating mines in Mexico - Guanajuato and Topia.
Since commencing operations at these two mines in 2006, Great Panther
achieved continuous growth in metal production in excess of 20 percent
per year until 2010, when the company achieved record production of 2.3
million silver equivalent ounces.
For 2011, the company produced 2.2 million silver equivalent ounces,
down two percent due to lower ore grades which limited metal production,
with average revenue per silver ounce at $34.71, up 63 percent.
During the fourth quarter, however, the company saw an improvement in
ore grades, and the company expects production to return to its growth
trend. In 2012, Great Panther expects to deliver production of 2.5 to
2.75 million silver equivalent ounces, an increase of 14 to 25 percent
The company also increased working capital to $53.8 million at December 31, from $18.8 million at the end of 2010.
the fourth quarter of 2011, the company posted a net loss of $1.4
million, or loss of one cent per share, on revenue which grew 27 percent
to $17.5 million.
Earnings in the fourth quarter were hit by non-cash charges that
included a deferred income tax expense of $1.9 million, $2.2 million in
non-cash share-based payments and $4.6 million in foreign exchange
losses which primarily relate to unrealized losses on loans made by the
company to its Mexican subsidiary.
Looking ahead, Archer said: "We are very excited about our growth
prospects in 2012. The recent development of our Deep Cata and gold-rich
Santa Margarita zones at Guanajuato are expected to contribute to
higher grades and increased production in 2012.
"In addition, we have a very intensive exploration and development
program for San Ignacio which we expect will contribute to production
growth in 2013."
During the fourth quarter of 2011, the company saw a marked
improvement in grades at Guanajuato through the development of the high
grade Deep Cata and gold-rich Santa Margarita ore bodies. Expansion of
production from these areas is underway in 2012.
Guanajuato saw a 17 percent increase in mined and processed ore in
2011 to almost 170,000 tonnes, and the plan for 2012 is to increase
throughput up to 200,000 tonnes. The plant at Guanajuato has capacity
for over 300,000 tonnes per year, Great Panther said.
Ore mined and processed at Topia in 2011 increased by 23 percent to
almost 47,000 tonnes. The plan for 2012 includes a further increase of
17 percent to 57,000 tonnes.
Cash costs for 2012 are seen at $10.50 per ounce, compared to 2011's $10.84 per ounce.
The company plans a total of over 45,000 metres of exploration
drilling in 2012 to further define resources, look for vein extensions
and test new targets.
It also expects to release a resource update for the San Ignacio
project in the second quarter of 2012. In October 2011, a NI 43-101
compliant initial mineral resource estimate of 4.5 million silver
equivalent ounces was released for San Ignacio, after drilling 24
diamond core holes.
Metres drilled at San Ignacio have more than tripled to date.
San Ignacio is expected to realize its potential during 2012 with an
intensive exploration and mine development program being planned, which
the company expects will add to production growth in 2013.
The present surface drill program includes a minimum of 9,600 metres of drilling at San Ignacio in 2012.