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Mexico-focused Great Panther Silver
(TSE:GPR) late Monday posted a 69 per cent increase in second-quarter
revenues as processed ore increased by 3 per cent sequentially.
"While we are pleased with our revenue growth, gross profit was
significantly impacted by lower silver prices and an increase in
depreciation charges due to the substantial investments made in our
mines, plant and equipment over the last year," Great Panther Silver CEO Robert Archer said.
"Looking ahead, there are a number of positive operational developments
that we anticipate will contribute to Great Panther’s growth in
production in the second half of 2012."
For the quarter, net income fell to $354,000, or nil per share, from $2.5 million, or 2 cents per share a year earlier.
For the six months ended June 30, net income was $5.04 million, or 4
cents a share, compared to $9.5 million or 8 cents oer share a year
Overall, Great Panther said that gold production
increased 22 per cent to 2,354 ounces from the second quarter of 2011
and Topia silver production reached a record 148,439 ounces, despite
Cash cost per silver ounce decreased by 11 per cent to US$11.42 compared to the second quarter of 2011.
Guanajuato achieved record metallurgical recoveries of 91.1 per cent and 92.3 per cent for silver and gold respectively.
On a conference call, Great Panther's Archer said that metal production was expected to increase in the second half of the year.
terms of full-year production guidance, Archer expects metals output to
be "at the lower end" of the 2.50 million to 2.75 million silver
equivalent ounces. Higher grades are expected from Cata although Archer
pointed out that it would be difficult to be too specific about grades
Archer said earnings were impacted by lower silver prices and higher smelter costs during the period.
asked about possible M&A activity in the silver space, Archer said
the company hoped to "make some acquisions in the near term".
During the second quarter, the company experienced a reduction in
cash from $40.3 million at March 31, 2012 to $28.7 million at June 30,
2012. The primary factor for the decrease was the timing of payments on
concentrate shipments during the second quarter, resulting in an
increase of $8.5 million in accounts receivable.
The company's net working capital at June 30, 2012 was $49.9 million compared to $53.5 million at March 31, 2012.
During the second quarter, Great Panther said processed ore increased 3
percent sequentially to 52,956 tonnes and decreased 7 per cent compared
to the second quarter of 2011. The decrease reflects additional
processing of ore from San Ignacio during the prior period to test
Metal production decreased by 1 per cent to 555,721
silver equivalent ounces (Ag eq oz) compared to the second quarter of
2011 due to drought conditions at Topia which resulted in curtailed
production and stockpiling of ore due to water shortages.
drought at Topia ended in June with the commencement of the rainy
season, and the Topia plant has since increased throughput to
approximately 220 tonnes per day. Stockpiled ore will be processed in
the second half of 2012.
Great Panther is maintaining its
guidance for metal production in the range of 2.50 to 2.75 million Ag eq
oz for fiscal 2012 as compared to metal production of 2.2 million Ag eq
oz for fiscal 2011.
While first-half 2012 metal production of
1,113,388 Ag eq oz shows no increase over first-half 2011 of 1,170,169
Ag eq oz, several operating initiatives and developments have already
demonstrated improvements for increased production in the second half of
At Guanajuato, the mine is now operating on a
7-day-week schedule (formerly on a 6-day-week) to allow for increased
equipment utilization and production.
The processing plant,
which is already achieving record metallurgical recoveries, will be
further improved by a new double-deck crushing screen that became
operational in June, and a new tertiary crusher scheduled to be
operational later in the third quarter of 2012.
Production from Cata, the highest grade area of the mine, is expected to increase.
Development at Valenciana continues on two fronts: haulage access
connecting the Cata ore hoisting shaft and the newly discovered, deeper
extensions of the Guanajuatito North zone at the 390 metre level is
underway; and up-ramp access from the 320 metre level to the 285 metre
level of the 18th and 19th century workings of Valenciana is ongoing.
Access to some of the old Valenciana workings has been established and diamond drilling has commenced.
Underground diamond drilling at Guanajuato is ongoing on 50 metre
exploration centres at Guanajuatito and Valenciana, while more
production-detailed 25 metre centre drilling is ongoing at Santa
Margarita, Los Pozos, and Cata.
A total of 6,222 metres was completed in the second quarter of 2012.
Drilling at Guanajuatito is expanding a new discovery approximately 100
metres to the northwest from current workings between the 160 and 200
metre levels. This new zone is open both up and down dip and to the
Drilling at Santa Margarita continues to improve
ore definition of the multiple gold-rich veins and stockworks, hence
guiding mine development.
At Topia, the rainy season is well
underway and processing capacity increased from 160 to 220 tonnes per
day in June. Mined ore has been stockpiled and mining rates are
increasing with additional mobile equipment acquired.
circuit bottlenecks are being eliminated with the installation of a new
screen and crusher scheduled in the current quarter
Panther is a primary silver mining and exploration company focused on
mining precious metals from its two wholly-owned operating mines in
It also owns the development stage property San
Ignacio, and an exploration stage property, Santa Rosa, which is located
approximately 15 kilometres northeast of Guanajuato.
Full details of earnings can be found at: http://www.greatpanther.com