Great Panther Silver reports lower costs and improved operating margins for the 3. Quarter 2013
Vancouver, British Columbia, November 06, 2013. Great Panther Silver Ltd. (TSX: GPR; NYSE MKT: GPL; WKN: A0Y H8Q) (“the“ Company ”) today announced the company's financial results for the three and nine months ended September 30, 2013. The full version of the company's financial reports and management analysis and discussion can be found on the company's website at www.greatpanther.com or on SEDAR at www.sedar.com and on EDGAR at www.sec.gov. All financial information is prepared in accordance with IFRS and all dollar information is in Canadian dollars unless otherwise stated.
"We are very pleased to report that the cost reduction and salary control initiatives implemented during the year have significantly improved our operating margins and cash flow compared to the second quarter of 2013," said Robert Archer, President & CEO. “The improved financial results were achieved along with two consecutive quarters of record total metal production. While I recognize and appreciate the efforts and dedication of all of our employees and contractors, we understand that there is still more to be done and we will continue to implement cost reductions in all of our operations to further improve margins. "
The total cash cost per ounce payable decreased to 9,89 US $ versus 18,14 US $ in the previous period, and gross profit, or operating income (before non-cash items), improved to 5,5 million or 39% of revenue Break even level of the second quarter 2013. In addition, operating cash flow increased from negative 0,7 million in the last quarter to 5,7 million. Guanajuato's cash cost per payable ounce received the biggest improvement, falling to 3,92 US $ from 17,26 US $ over the past quarter.
The cost-reduction initiatives included a reduction in the number of mining contractors at Guanajuato, renegotiation of mining contracts to create greater accountability for materials and labor costs, improvements in mine planning and coordination with geology, and generally improved payroll control.
Topia's operating costs were also reduced, but at a lower margin than Guanajuato's. The company will continue to focus on cost reductions at Topia with a focus on salary control. The number of mines in operation at Topia has been reduced to 11 (by 14) and will continue to be reduced to 9 by the end of the year. Production in the remaining mines we increased to maintain the overall level of production and increase efficiency.
The company also cut exploration, overhead and administrative expenses and reduced capital and development programs, focusing on those with the highest return on investment. These initiatives all contributed to improved cash flow in the third quarter of 2013 compared to the last quarter.
Financial Summary 3. Quarter 2013
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Deduction) is adjusted for share-based expenses, currency gains or losses, and non-recurring items. See the “Non-IFRS Measures” section for a definition and comparison of standardized and adjusted EBITDA in the financial reports.
(2) Silver equivalent ounces were calculated in 2013 using prices of US $ 28 / oz, US $ 1.680 / oz, US $ 0,85 / pound and US $ 0,85 / pound for silver, gold, lead & zinc for the recoverable metal content of the concentrates that were produced in the two plants. For the sake of consistency, these prices will be used for the remainder of 2013.
(3) The “cash cost per ounce of silver” is not an IFRS figure and is used by the company to manage and evaluate the operational performance of each mine in the company. They are reported in the silver mining industry as a yardstick for performance, but they have no standardized meaning. See the “Non-IFRS Measures” section in this press release and in the company's MD&A.
(4) Average silver price before treatment, refining and melt costs.
Financial discussion of the 3. quarter
In the three months on 30. September 2013 ended (the "third quarter 2013"), the company realized metal sales of 621.353 oz silver equivalent, an increase in 32% compared to the same period last year. Nonetheless, third-quarter revenue in 2013 decreased by 6% to 14,3 million, compared to 15,3 million in the same 2012 period. The decline was due to significantly lower silver prices, which lifted the rise in metal prices. The average realized silver price was 21,85 US $ in the third quarter 2013, compared to 31,92 US $ in the third quarter 2012.
Average realized silver prices were slightly higher in the third quarter of 2013 than in the second quarter of 2013, but metal sales based on ounces of silver equivalent were 6% lower due to higher volumes of in-transit concentrate deliveries not yet booked as sales. Despite lower unit metal sales, third-quarter revenue at 2013 increased by 3,1 million or 28% compared to the last quarter. This was due to a positive revaluation adjustment of approximately $ 0,9 million to account for higher metal prices at the end of the third quarter for last quarter's concentrate deliveries, which still required final clearing. In contrast, a negative revaluation adjustment of 1,3 million in the second quarter of 2013 was recorded as a result of the sharp decline in metal prices towards the end of the quarter.
In the three months on 30. September 2013 ended, the company recorded a gross profit of 2,6 million $ (18% of sales), compared with a gross profit of 5,8 million $ (38% of sales) in the same period 2012. The decline in gross profit was primarily due to lower average realized metal prices and higher depreciation and settlement expenses. These factors were partially offset by lower unit production costs. The gross profit before non-cash items1 was 5,5 million (39% of revenue) in the third quarter of 2013, compared to 7,7 million (51% of revenue) in the same period last year.
1 “Gross profit before non-cash items” is a non-IFRS measure that adjusts gross profit to exclude amortization and deduction and stock-based payments. See the “Non-IFRS Measures” section for a definition and comparison of standardized and adjusted EBITDA in the financial reports.
Compared to the second quarter of 2013, gross profit increased by $ 6,5 million, mainly as a result of lower unit cost of Guanajuato. Also contributing to the improvement from quarter to quarter, higher metal prices and a positive revaluation adjustment of $ 0,9 million for concentrate deliveries from the previous quarter have yet to be settled.
The total cash cost per payable ounce of silver was at 9,89 US $ over the three months ended on 30. September 2013 ended, an improvement of 25% compared to the 13,16 US $ in the same period 2012 and an improvement of 45% compared to the 18,14 US $ in the last quarter. The decrease in total cash costs per payable ounce of silver, compared with the 3. Q1 2012, on the back of lower cash costs at Guanajuato due to lower on-site costs and higher by-product credits. The same factors, along with improved levels in the second quarter 2013 led to an improvement in cash costs from quarter to quarter.
General and administrative expenses were $ 1,8 million for the three months ended September 30, 2013 compared to $ 3,0 million for the same period in 2012. The decrease was primarily due to a decrease of 0,6 million. $ 0,3 million in severance payments from the prior-year period, and other reductions in general and administrative expenses that were part of the company's overall cost-cutting initiatives. Compared to the second quarter of 2013, general and administrative expenses were down $ 0,7 million, primarily due to $ 0,4 million in non-recurring severance charges incurred in the last quarter and other general and administrative expense cuts.
The $ 0,5 $ $ exploration and exploration expenditures over the three months on 30. September 2013 ended at 24% below those of the third quarter 2012 and 48% below those of the second quarter 2013. The decline in both cases was due to a reduction in exploration activities outside the company's mining operations, workforce reductions, and the appointment of exploration personnel at the mines. The completion of El Horcon's second-quarter 2013 drill program also contributed to quarter-on-quarter decline in exploration and exploration expenditures.
The company posted an income tax refund of 1,3 million in the three months on 30. September 2013 ended, compared with a refund of 0,1 million $ in the same period 2012. The reimbursement is mainly due to input tax losses incurred by the Company's Mexican operations during the period due to foreign exchange losses. Unrealized currency gains and losses are recognized in Mexico for tax purposes. The company has not claimed operating net tax losses in Canada and the benefit of any of these losses in its financial reports.
The net loss of the three months at 30. September 2013 ended, 1,5 was $ million, compared with a net profit of 1,8 million $ in the same period 2012. The decline in net income is primarily due to the decline in the gross profit of 3,1 million and an increase in financial and other expenses of 2,6 million, mainly due to currency losses. These factors were partly due to a $ 1,2 million reduction in overhead and administrative expenses and a smaller reduction in exploration and valuation costs. The decline in the net loss compared to the net loss of the 2. 5,1 $ 1 million for the quarter, primarily as a result of the increase in 6,5 $ million in gross profit and the decrease in general and administrative expenses of $ 0,7 million. However, these factors were offset by higher currency losses.
The adjusted EBITDA1 was at 3,9 million $ in the three months ended on 30. September 2013 ended, compared with adjusted EBITDA of 5,0 million $ in the same period 2012. The lower adjusted EBITDA was primarily due to lower metal prices, which reduced gross profit before non-cash items. This was partly offset by lower overheads and administrative costs (excluding non-cash items) and lower exploration and valuation expenses.
1's adjusted EBITDA3,9 of 2013 in the third quarter represents a significant improvement over the negative 3,3 $ adjusted second-quarter EBITDA of 2013. The improvement is due to the significantly higher gross profit before non-cash items due to lower unit costs and lower common costs Attributable to administrative costs.
1 “Adjusted EBITDA” is a NON-IFRS key figure in which the standardized EBITDA (earnings before interest, taxes, depreciation and deduction) is adjusted for share-based expenses, currency gains or losses and non-recurring items. See the “Non-IFRS Measures” section for a definition and comparison of standardized and adjusted EBITDA in the financial reports.
To the 30. September 2013, the company had a net working capital of 35,9 million and cash and equivalents of 23,7 million, compared with a net working capital of 44,5 million $ and cash and equivalents of 20,7 million $ by 31. December 2012. In the 9 months, on the 30. September 2013 ended, the company generated 8,3 million in cash from operations and used 6,0 $ million for investment activities. During this period, the Company also received $ 0,4 million through the exercise of stock options against Company stock.
Operational summary of the third quarter 2013
• Quarterly production records were achieved for total throughput, total metal production, and for silver and gold production and metal production of each of the two mines;
• Consolidated quarterly sales reached 76.898 tonnes, an 32% increase over the third quarter 2012 and 14% more than in 2. Quarter 2013;
• Quarterly metal production was at 789.250 oz AgEq, an increase of 33% over the third quarter of 2012 and an increase of 16% over the second quarter 2012;
• Silver production increased 24% over the third quarter 2012 and 16% over the second quarter 2013;
• Gold production increased by 56% over the third quarter 2012 and 18% over the second quarter 2012;
• Cash costs per ounce payable on silver were 9,89 US $, 25% lower than Q3 2012 and 45% below those of Q2 2013.
Further discussions of the company's operating and financial results are in the discussion and analysis of management for the three and nine months that took place at 30. September 2013 ended, included.
Third Quarter Business Update 2013
The company announced the appointment of Mr. James Mullin to the Board through 7. August 2013. Mr. Mullin was previously Senior Vice President of North American Operations at Newmont Mining Corporation, from which he retired after 33's career with the company. He holds a degree in mining engineering from the Colorado School of Mines and he is a retired professional engineer in British Columbia.
After the end of 3. Quarters, at 8. October 2013, the company announced the receipt of environmental control approval for the San Ignacio project. The company has since completed Phase 1 construction of an 2 km long road and has begun work on the new ramp and mine development portal. The company also started a fill-in drill program in October to further define the resource. The production of San Ignacio should start at the beginning of 2014.
On the 21. December 2013 announced the company has completed a first resource estimate for the El Horcon project with encouraging results to justify the next phase of exploration. The drill program tested 650 m brushing at the Diamantillo vein and numerous spans, as well as nearby parallel structures and veins lying within an NW-SO ongoing structural corridor that is 6 km long and 2,5 km wide. The resource estimate was based on the 2.156 m and 24 holes completed during the second quarter of 2013. (See press release from 21, October 2013 for more details.)
outlook
The Company expects to exceed its planning from 2,4 to 2,5 million ounces of silver equivalent in 2013, based on production results through the end of October and production outlook for November and December. The production of the company for the 30. September 2013 ended nine months ago totaled 2.076.963 ounces silver equivalent, representing an increase of 22% over the same period 2012.
In light of the third-quarter cash cost improvement and recent production and earnings results, the Company expects its 2013 cash costs to be below its 15 to 16 US $ per ounce silver in the 2013 fiscal year.
The company will continue to pursue cost-cutting measures and focus on salary control. It is noted that the Guanajuato and Topia mines have complex geology, making them susceptible to salary variability. The measures taken to reduce salary variability can not be used to completely eliminate this billing in the future.
It is anticipated that production at San Ignacio in the first half of 2014 will be raised to 100 tonnes per day by the end of 2014 at about 250 tonnes per day added by the end of 22. The ore is transported by lorry to the XNUMX km company's Cata processing plant in the Guanajuato main mine complex and processed there. Guanajuato's ability to increase throughput without additional capital expenditures is expected to have a positive impact on local production costs and, ultimately, cash costs.
Following the third quarter, the Mexican Congress passed a tax reform package for the year 2014. Based on a first review, these reforms could significantly impact the company's financial results for the year 2014. The company continues to closely monitor this and expects to provide an impact update by the end of the year.
Conference Call to Discuss Third Quarter Financial Results 2013
The company will be at 7. November 2013 to 7: 00 PM Pacific Time / 10: 00 Eastern Time, a live webcast and a conference call to hold. The conference call will be chaired by Mr. Robert Archer, President and Chief Executive Officer, and Mr. Jim Zadra, Chief Financial Officer and Company Secretary.
Shareholders, analysts, investors and media representatives are invited to participate in the live webcast and conference by signing up or dialing in immediately before the start.
Great Panther's live and archived webcast can be accessed on the company's website at www.greatpanther.com. Participants are forwarded to the audio broadcast after attending the meeting.
Alternatively, subscribers can dial into the conference call by phone:
• US and Canada (toll-free): 1 800 754 1382
• International (toll-free): + 1 212 231 2911
You can also follow the conference call as a listener through the webcast on our website www.greatpanther.com.
Non-IFRS measures
Discussion of financial results in this news release includes references to gross profit before non-cash items, EBITDA, adjusted EBITDA, and cash cost per ounce of silver, which are not IFRS measures. The company provides these metrics as additional information on the company's financial results and performance. Please review the company's MD&A for the three and nine months ended September 30, 2013 for a definition and comparison of these metrics against the company's financial results.
About Great Panther
Great Panther Silver Limited is a primary silver production and exploration company listed on the Toronto Stock Exchange under the symbol GPR and on the NYSE MKT under the symbol GPL. The company is currently concentrating its activities on the mining of precious metals in the two 100% owned mines Topia and Guanajuato in Mexico. Great Panther is also in the process of developing its San Ignacio Project with a start of production in 2014 and has two exploration projects - El Horcon and Santa Rosa. The company is also pursuing additional mining opportunities in Latin America with the aim of expanding its portfolio of mineral projects.
All shareholders have the option to receive a hard copy of the company's financial reports free of charge. If you would like to receive hard copy of Great Panther Silver's financial reports and annual news release, please contact the company toll-free at 1-888-355-1766 or 604-608-1766, or by email ppgad@pucrs.br.
For more information, please visit the company's website at www.greatpanther.com or send an email to ppgad@pucrs.br.
This release contains forward-looking statements within the meaning of the US Private Securities Litigation Reform Act of 1995 and forward-looking information within the meaning of the Securities Act (Ontario) (collectively, "forward-looking statements"). Such forward-looking statements may include, but are not limited to, the production plans at the Guanajuato and Topia mines in Mexico, the plans to explore the other properties in Mexico, the total economic potential of the properties, and access to adequate financing. In addition, they could involve known and unknown risks, uncertainties and other factors that could cause actual results, performance and achievements to differ materially from those announced or implied in such forward-looking statements. Such factors include, but are not limited to, risks and uncertainties related to possible political risks in the Company's operations in foreign jurisdictions, uncertainties in estimates of production and costs and possible unexpected costs and expenses, physical risks in mining, currency fluctuations, fluctuations in prices for Silver, gold and base metals, the completion of economic valuations, changes in project parameters in optimizing the plans, the inaccessibility or failure to secure adequate financing on time, and other risks and uncertainties, including those detailed in the company's annual report for December 31 Year ended December 2012, 40 and in the reports of material changes filed with the Canadian Securities Administrators and available at www.sedar.com and in the reports filed with the Securities and Exchange Commission and available at www.sec.gov hte on Form 6-F and Form XNUMX-K
The content of the press release is the sole responsibility of the company. It has not been audited by the TSX Venture Exchange or any third party. The German version may be shortened or summarized. No responsibility or liability is accepted for the content, accuracy, adequacy or accuracy of this translation. From the perspective of the translator, the message does not constitute a purchase or sale recommendation! Please see the original English report on www.sedar.com or www.sec.gov or on the company website!
For more information, please contact:
Robert Archer
President and Chief Executive Officer
1-888-355-1766
Rhonda Bennetto
Vice President Corporate Communications
1-888-355-1766
German investors:
Metals & Mining Consult Ltd.
Tel: 03641 / 597471
GREAT PANTHER SILVER LIMITED
Consolidated interim statement of the financial position
(in a thousand Canadian dollars)
30. September 2013 and 31. December 2012 (unaudited)
To view the full press release please follow the link:
http://www.irw-press.com/dokumente/GP_081113_DE.pdf
No liability is assumed for the accuracy of the translation! Please note english original message!
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