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Press release from Marketwire

Silver Standard Reports Fourth Quarter and Year-End 2010 Results

Tuesday, March 01, 2011

Silver Standard Reports Fourth Quarter and Year-End 2010 Results20:49 EST Tuesday, March 01, 2011VANCOUVER, BRITISH COLUMBIA--(Marketwire - March 1, 2011) - Silver Standard Resources Inc. (TSX:SSO)(NASDAQ:SSRI) - Highlights: (All figures are in U.S. dollars unless otherwise noted)Net earnings of $346.2 million or $4.44 per share compared to a net loss of $13.2 million or ($0.19) per share in 2009.Pirquitas milled 1.26 million tonnes of ore in 2010 with silver grades of 233 grams/tonne at recoveries of 65.2% producing a total of 6.30 million ounces of silver. We sold 5.94 million ounces at a weighted average silver price of $20.92 per ounce for total revenues of $112.3 million.Pirquitas mined a continuous feed of sulphide ores from September 2010 until the end of the year, with silver and zinc recoveries achieving designed rates.The Pirquitas mine generated positive earnings from mine operations of $10.0 million.On December 21, 2010 we completed the sale of our 100% interest in the Snowfield and Brucejack properties to Pretium Resources Inc. ("Pretium") for total consideration of $442.3 million (C$450.0 million). After the conversion on January 31, 2011 of the balance of the convertible promissory note issued by Pretium, we had received from the transaction gross cash proceeds of $229.3 million (C$233.0 million), and a total of 36.16 million shares of Pretium, representing a 42.31% equity interest.On February 28, 2011, we reached an agreement to acquire the remaining interest in the San Luis project from our joint venture partner Esperanza Resources Corp. ("Esperanza"). Upon completion of the acquisition we will own 100% of the project. Under the terms of the agreement we will pay C$17 million in cash, transfer to Esperanza the 6.459 million shares of Esperanza that we own, and grant to Esperanza a 1% net smelter return royalty on future revenues.We incurred total exploration and development expenditures of $54.8 million to advance our growth and exploration properties during the year.In June we completed a feasibility study at the San Luis project in Peru and submitted the environmental and social impact study to Peruvian authorities in October.In February we closed a public share offering of 6.73 million common shares at a price of $17.00 per share, for aggregate proceeds of $114.4 million.Effective August 6, 2010, John Smith was appointed President and Chief Executive Officer. Pirquitas Mine, Argentina Summary Mine Operating Statistics(1)Full Year 2010Q4 2010Q3 2010Q2 2010Q1 2010Total Material MinedKt16,0564,3603,9203,9003,876Ore ProcessedKt1,255313320346276Silver Gradeg/tonne233267283240129Recoveries%65.276.366.363.753.2Silver Produced'000 oz.6,3022,0671,9331,692609Cash Production CostUS$/oz.$12.16$9.47$10.42$11.27$29.32Cash Operating CostUS$/oz.$18.03$16.07$16.94$14.98$36.61Cash production cost per ounce and cash operating cost per ounce are Non-GAAP measures discussed under non-GAAP financial performance measures contained in the MD&A for the quarter and year ended December 31, 2010. Open pit mining operations improved throughout the year, achieving design rates of 47,000 tonnes per day by the fourth quarter. During the early months of start-up at Pirquitas, the plant was run on oxide ore for testing and commissioning. The plant is designed for milling and flotation of sulphide ores, and in September, when the mine reached the sulphide horizon in the pit, the plant began operating at designed recovery rates in the neighbourhood of 78% for silver. At this point we were also able to commission and run the new zinc circuits which will provide an important by-product to the operation for the life of the mine.The metallurgical response to the sulphide ore has been in line with expectations and overall silver recovery rates are achieving feasibility study levels. Commissioning of the gravity pre-concentration stage commenced near the end of the third quarter, and results have been encouraging. The crushing circuit is being expanded by the installation of a tertiary crusher in Q1 2011. Proof of concept for silver recovery has now been achieved.We continued to see improved silver production at our Pirquitas Mine quarter over quarter in 2010 since the completion of the commissioning phase on December 1, 2009. During the fourth quarter, we produced 2.07 million ounces of silver, compared to 1.93 million ounces in the third quarter, 1.69 million ounces in the second quarter and 0.61 million ounces in the first quarter. This brought total production for the year to 6.30 million ounces. The improving trend in production is due to improved recoveries and higher grade zones in the fourth quarter. With the increase in production and resulting silver sales, the Pirquitas mine reached an important milestone of being cash flow positive during the third and fourth quarters.Cash production cost per ounce declined through 2010, to $9.47 per ounce in the fourth quarter from $29.32 per ounce for the first quarter. This has been achieved through increased production and recoveries whilst maintaining consistent operating costs. Cash operating costs on a per ounce basis were higher than expected during the third and fourth quarters; primarily due to escalating deductions and refining charges flowing from higher realized prices.As we have achieved the continuous processing of sulphide ore we re-commissioned the zinc flotation in the fourth quarter of 2010, and began making separate silver and zinc concentrates. We expect the first sales of zinc concentrate to be completed in early 2011.OutlookOur production guidance and cost estimates for 2011 are as follows:Produce 8.5 million ounces of silver in 2011 Produce 10.0 million pounds of zinc in 2011 We will advise through 2011 progress on the tin circuit Average cash production cost of $9.00 per ounce of silver (net of by-product credits) Average cash operating cost of $15.00 per ounce of silver Average total production cost of $19.00 per ounce of silver Please refer to the cautionary note regarding forward-looking statements and non-GAAP financial performance measures contained in this news release. Financial Results Net IncomeNet earnings of $376.6 million or $4.75 per share in the three months ended December 31, 2010, compared to a net loss of $9.1 million or ($0.13) per share in the three months ended December 31, 2009.Net earnings of $346.2 million or $4.44 per share in the year ended December 31, 2010, compared to a net loss of $13.2 million or ($0.19) per share in the year ended December 31, 2009. Mine OperationsMine operations at Pirquitas earned $24.0 million in the three months ended December 31, 2010, from revenues of $45.1 million which were net of deductions, treatment and refining charges. Cost of sales was $14.2 million plus $6.9 million in non-cash depletion, depreciation and amortization.Mine operations at Pirquitas earned $10.0 million in the year ended December 31, 2010, from revenues of $112.3 million which were net of deductions, treatment and refining charges. Cost of sales was $76.0 million plus $26.3 million in non-cash depletion, depreciation and amortization. LiquidityCash and cash equivalents at December 31, 2010, were $232.3 million compared to $26.7 million at December 31, 2009. Working capital at December 31, 2010, was $303.8 million compared to $24.5 million at December 31, 2009. Selected Financial Data(US$000's, except per share amounts) This summary of selected financial data should be read in conjunction with the management discussion and analysis ("MD&A") of the audited consolidated operating results and financial condition of the company for the three months and years ended December 31, 2010, and December 31, 2009.Three Months Ended December 31Year Ended December 312010200920102009Earnings (loss) from mine operations23,949(2,523)9,958(2,523)Earnings (loss) from operations12,279(7,365)(23,832)(19,954)Net earnings (loss) for the period376,575(9,126)346,239(13,193)Basic earnings (loss) per share4.75(0.13)4.44(0.19)Cash generated (used) in operating activities7,677(20,870)(11,110)(39,943)Cash generated by financing activities14,4873,548124,076146,413Cash generated by (used in) investing activities174,3071,09592,686(151,824)Financial PositionDecember 31, 2010December 31, 2009Cash and cash equivalents232,31126,659Current assets – total342,05475,197Current liabilities – total38,21050,682Working capital303,84424,515Total assets1,262,017749,925 Principal Projects San Luis Project, Peru The feasibility study on placing the project into production was completed in June 2010. The Joint Venture Committee is in the process of considering the feasibility study for next steps, including a production decision.During 2010, we continued to negotiate long-term land access agreements, submitted the Environmental Impact Study ("EIS") and calibrated our strategy for executing the project. In 2011 we expect to finalize the long-term land access agreements, receive approval on the EIS and make a construction decision. Pitarrilla Project, Mexico We commenced a feasibility study in the first quarter of 2010 to evaluate the economic viability of underground sulphide mineralization extraction.As part of the continuing exploration of the property, a program of geophysical surveying was completed in 2010 in the area covering the known silver deposits. A diamond drilling program was completed in the first half of the year providing information that was incorporated in the feasibility study. Diablillos, Argentina Expenditures in 2010 were primarily on engineering and metallurgical studies done as part of a preliminary economic assessment ("PEA") to be completed in the first quarter of 2011. The PEA is evaluating open pit mining with a conventional milling operation and heap-leach processing of a portion of the deposit.In addition, a preliminary metallurgical program to assess the heap leaching characteristics of the mineralization at Diablillos has been completed and further leach metallurgical test work has been planned for 2011. San Agustin, Mexico We completed a comprehensive program of geophysical surveying over most of the property. The main objective of the survey was to outline zones that could indicate the continuation of known low-grade gold-zinc-silver mineralization to depth and laterally.We completed a study to evaluate the economic potential of heap-leach processing of the 'oxide' gold mineralization in 2010; consequently, a 5,000 meter diamond drilling program has been planned for 2011. Detailed metallurgical studies will also be undertaken in 2011 and will focus on the gold recovery characteristics of the oxide mineralization. Nazas, Mexico Exploration of the Nazas property, located 15km east of Pitarrilla, was initiated in the second half of 2010 and involved geological mapping, rock sampling and a comprehensive program of geophysical surveying with four different survey methods being performed. The geophysical surveying will continue into the first quarter of 2011, and 7,500 meter diamond drilling campaign is planned for 2011. Management Discussion & Analysis and Conference Call This news release should be read in conjunction with Silver Standard's Fourth Quarter 2010 Financial Statements and Management's Discussion and Analysis filed with Canadian securities regulators available at www.sedar.com or the company's web site at www.silverstandard.com. Conference Call and Webcast: Wednesday, March 2, 2011, at 11:00 a.m. EST. Toll-free in North America: (888) 429-4600 All other callers: (970) 315-0481 Webcast: http://ir.silverstandard.com/events.cfmThe call will be archived and available at www.silverstandard.com after March 2, 2011. Audio replay will be available for one week by calling: Toll-free in North America: (800) 642-1687, replay conference ID 44076784 All other callers: (706) 645-9291, replay conference ID 44076784 SOURCE: Silver Standard Resources Inc.Cautionary Statements on Forward Looking Information: Statements in this news release relating to the estimated production and recoveries of silver, tin and zinc, timing of processing of sulphide ore, anticipated revenues, cash and operating costs per silver ounce, estimated costs of mining, milling and administration, operations of the tin circuit, all relating to the Pirquitas Mine, timing to complete feasibility studies and assessments of principal projects, statements concerning mineral reserves and resource estimates, and certain statements relating to our other projects, are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and forward looking information within Canadian securities laws (collectively "forward looking statements"). Forward-looking statements are statements that are not historical facts and that are subject to a variety of risks and uncertainties which could cause actual events or results to differ materially from those reflected in the forward-looking statements. Such risks and uncertainties include, but are not limited to Silver Standard's ability to raise sufficient capital to fund development; changes in economic conditions or financial markets; changes in prices for the company's mineral products or increases in input costs; uncertainty of production and cost estimates for the Pirquitas Mine; risks and uncertainties associated with new mining operations including start-up delays and operational issues; risks relating to the interpretation of drill results and the geology, grade and continuity of our mineral deposits; litigation, legislative, environmental and other judicial, regulatory, political and competitive developments in Argentina, Australia, Canada, Chile, Mexico, Peru, the United States and other jurisdictions in which Silver Standard may carry on business; technological and operational difficulties or the delay, non-compliance or inability to obtain permits encountered in connection with exploration and development activities; labour relations matters; and changing foreign exchange rates, all of which are described more fully in the company's most recent Form 20-F, and in the Management Discussion and Analysis under the heading "Risks and Uncertainties" and in other filings with the Securities and Exchange Commission and Canadian regulatory authorities. Cautionary note to U.S. investors:The terms "measured mineral resource", "indicated mineral resource", and "inferred mineral resource" used in this news release are Canadian geological and mining terms as defined in accordance with National Instrument 43-101, Standards of Disclosure for Mineral Projects ("NI 43-101") under the guidelines set out in the Canadian Institute of Mining, Metallurgy and Petroleum (the "CIM") Standards on Mineral Resources and Mineral Reserves. We advise U.S. investors that while such terms are recognized and required under Canadian regulations, the U.S. Securities and Exchange Commission (the "SEC") does not recognize these terms. "Inferred mineral resources" in particular have a great amount of uncertainty as to their economic feasibility. It cannot be assumed that all or any part of an inferred mineral resource will ever be upgraded to a higher category. Under Canadian rules estimates of inferred mineral resources may not generally form the basis of feasibility or other economic studies. U.S. investors are cautioned not to assume that any part or all of an inferred mineral resource exists, or is economically or legally mineable. Disclosure of contained metal expressed in ounces is in compliance with NI 43-101, but does not meet the requirements of Industry Guide 7 of the SEC, which will only accept the disclosure of tonnage and grade estimates for non-reserve mineralization.FOR FURTHER INFORMATION PLEASE CONTACT: W. John DeCooman Jr.Silver Standard Resources Inc.Vice President, Business DevelopmentN.A toll-free: (888) 338-0046 / All others: (604) 689-3846invest@silverstandard.comwww.silverstandard.com