TSX: GPR
NYSE MKT:
GPL
VANCOUVER, May 4, 2016 /PRNewswire/ - GREAT PANTHER
SILVER LIMITED (TSX: GPR; NYSE MKT: GPL) ("Great Panther"; the
"Company") today reported financial results for the Company's three
months ended March 31, 2016.
The full version of the Company's unaudited condensed interim
consolidated financial statements, and Management's Discussion and
Analysis ("MD&A") can be viewed on the Company's website at
www.greatpanther.com, or SEDAR at www.sedar.com. All
financial information is prepared in accordance with IFRS and all
dollar amounts are expressed in Canadian dollars unless otherwise
indicated.
"Great Panther continued to deliver strong performance from its
operations in the first quarter, including continued reductions in
cash costs and all-in sustaining costs, while staying on track with
our full year operating guidance," stated Robert Archer, President and CEO. "Our
mine operating earnings before non-cash items increased 16% over
the first quarter of the prior year due to significantly lower cash
costs and favourable foreign exchange rates. Consolidated
cash cost for the Company continued the declining trend of last
year to reach US$4.20 per payable
silver ounce, an impressive reduction of 52% from the first quarter
in 2015."
For the first quarter of 2016, the Company reduced all-in
sustaining costs per payable silver ounce ("AISC") by 36% to
US$9.25, which contributed to strong
operating earnings and free cash-flow margins from the Company's
operating mines. While lower cash cost per payable silver
ounce ("cash cost") was the primary factor in the reduction in
AISC, lower than normal development and sustaining capital
expenditures relating to the Company's operating mines also
contributed to the decline in AISC. These factors were mainly
due to the timing of expenditures and AISC is expected to trend
towards the Company's guidance range during the remainder of the
year. Despite the significant reductions in cash cost and
AISC, and strong mine operating earnings, the Company reported a
net loss of $4.5 million for the
first quarter of 2016, mainly due to unrealized (non-cash) foreign
exchange losses of $6.4 million on
inter-company loans and advances to the Company's subsidiaries
which are marked to market exchange rates in the accounts of the
subsidiaries at the end of each period. In addition, a
$1.5 million increase in exploration,
evaluation and development ("EE&D") expenditures over the first
quarter of 2015 contributed to the net loss. The increase in
EE&D expenditures is primarily associated with the Coricancha
and GDLR projects for which the Company entered into or signed
option agreements in the second quarter of 2015. The Company
terminated its work and the option on the GDLR Project in the first
quarter of 2016.
Highlights of the first quarter 2016 compared to first
quarter 2015, unless otherwise noted:
- Metal production increased 2% to 1,009,828 Ag eq oz;
- Silver production of 539,472 ounces, a decrease of
10%;
- Gold production increased 19% to 5,599 gold ounces;
- Cash cost decreased 52% to US$4.20 per ounce;
- AISC decreased 36% to US$9.25 per
payable silver ounce;
- Revenues decreased 9% to $18.5
million;
- Mine operating earnings before non-cash items increased to
$7.7 million compared to $6.7 million;
- Adjusted EBITDA increased to $3.7
million compared to $3.6
million;
- Net loss totalled $4.5 million,
compared to a net income of $3.6
million;
- Cash flow from operating activities, before changes in non-cash
net working capital, amounted to $4.0
million, compared to $4.8
million;
- Cash and cash equivalents were $17.0
million at March 31, 2015
compared to $17.9 million at
December 31, 2015; and
- Net working capital increased to $35.5
million at March 31, 2015 from
$33.2 million at December 31, 2015.
OPERATING AND FINANCIAL RESULTS SUMMARY
|
|
|
|
|
|
(CAD 000s, unless
otherwise noted)
|
Q1
2016
|
Q1
2015
|
Change
|
Q4
2015
|
Change
|
OPERATING
|
|
|
|
|
|
Tonnes milled
(excluding custom milling)
|
88,683
|
99,252
|
-11%
|
94,874
|
-7%
|
Silver equivalent
ounces ("Ag eq oz") produced1
|
1,009,828
|
987,887
|
2%
|
1,002,584
|
1%
|
Silver ounce
production
|
539,472
|
597,111
|
-10%
|
553,189
|
-2%
|
Gold ounce
production
|
5,599
|
4,703
|
19%
|
5,637
|
-1%
|
Payable silver
ounces
|
478,098
|
622,339
|
-23%
|
502,170
|
-5%
|
Cost per tonne milled
(USD)2
|
$
|
95
|
$
|
102
|
-7%
|
$
|
97
|
-2%
|
Cash cost
(USD)2
|
$
|
4.20
|
$
|
8.71
|
-52%
|
$
|
8.14
|
-48%
|
AISC
(USD)2
|
$
|
9.25
|
$
|
14.47
|
-36%
|
$
|
15.10
|
-39%
|
FINANCIAL
|
|
|
|
|
|
|
|
|
Revenue
|
$
|
18,454
|
$
|
20,250
|
-9%
|
$
|
17,152
|
8%
|
Mine operating
earnings before non-cash items2
|
$
|
7,746
|
$
|
6,652
|
16%
|
$
|
4,907
|
58%
|
Mine operating
earnings
|
$
|
6,147
|
$
|
524
|
1,073%
|
$
|
3,226
|
91%
|
Net (loss)
income
|
$
|
(4,461)
|
$
|
3,588
|
-224%
|
$
|
(4,860)
|
8%
|
Adjusted
EBITDA2
|
$
|
3,733
|
$
|
3,688
|
1%
|
$
|
(557)
|
-770%
|
Operating cash flows
before changes in non-cash net working capital
|
$
|
4,001
|
$
|
4,827
|
-17%
|
$
|
(775)
|
-616%
|
Cash at end of
period
|
$
|
16,981
|
$
|
18,694
|
-9%
|
$
|
17,860
|
-5%
|
Net working capital
at end of period
|
$
|
35,532
|
$
|
36,904
|
-4%
|
$
|
33,252
|
7%
|
Average realized
silver price (USD)3
|
$
|
16.19
|
$
|
16.99
|
-5%
|
$
|
13.57
|
19%
|
PER SHARE
AMOUNTS
|
|
|
|
|
|
|
|
|
Earnings (loss) per
share – basic and diluted
|
$
|
(0.03)
|
$
|
0.03
|
-200%
|
$
|
(0.03)
|
0%
|
_________________________________
1 Silver
equivalent ounces are referred to throughout this document. For
2016, Aq eq oz are calculated using a 70:1 Ag:Au ratio and ratios
of 1:0.0504 and 1:0.0504 for the price / ounce of silver to lead
and zinc price/pound, respectively, and applied to the relevant
metal content of the concentrates produced, expected to be
produced, or sold from operations. Comparatively, in 2015 Aq eq oz
were calculated using a 65:1 Ag:Au ratio, and ratios of 1:0.050 and
1:0.056 for the price/ounce of silver to lead and zinc price/pound,
respectively, and applied to the relevant metal content of the
concentrates produced, expected to be produced, or sold from
operations.
|
2 The
Company has included the non-IFRS performance measures cost per
tonne milled, cash cost, AISC, mine operating earnings before
non-cash items, cost of sales before non-cash items and adjusted
EBITDA throughout this document. Refer to the Non-IFRS
Measures section of this MD&A for an explanation of these
measures and reconciliation to the Company's reported financial
results in accordance with IFRS. As these are not standardized
measures, they may not be directly comparable to similarly titled
measures used by others.
|
3 Average
realized silver price is prior to smelting and refining
charges.
|
REVIEW OF FINANCIAL RESULTS
The $1.8 million or 9% decrease in
revenue during the first quarter of 2016 relative to the first
quarter of 2015 was primarily attributable to the 16% reduction in
metal sales volumes, which was due to the timing of concentrate
shipments. The effect of the lower metal sales volumes was an
estimated $4.3 million reduction in
revenue and was partly offset by an estimated positive $2.0 million impact from the stronger US
dollar/Canadian dollar ("USD"/"CAD") exchange rate in the first
quarter of 2016, as well as the impact of a 13% increase in average
realized gold prices (as expressed in USD), which accounted for an
approximate $0.2 million positive
impact on revenue. Due to the lower metal sales volumes,
smelting and refining charges were also $0.2
million lower than during the first quarter of 2015, which
had a positive impact on revenue.
Mine operating earnings before non-cash items for the first
quarter of 2016 were $7.7 million, an
increase of $1.1 million compared to
the first quarter of 2015. This was predominantly the result
of the impact of favourable exchange rates. The stronger USD
relative to the CAD during the first quarter of 2016 had the effect
of increasing revenue in CAD terms. Conversely, the CAD
strengthened 9% against the Mexican peso ("MXN"), which had the
impact of reducing MXN production costs in CAD terms. In
addition, the Company's mine operating earnings benefitted from the
increase in average realized gold prices relative to the first
quarter of 2015, as well as from the decrease in smelting and
refining charges. These factors were offset by the impact of
the lower metal sales volumes, which was due to the timing of
shipments.
Exploration, evaluation and development ("EE&D") expenses
were $2.5 million for the first
quarter of 2016, an increase of $1.5
million compared to the same period in 2015. This was
primarily a result of exploration and evaluation programs related
to the Coricancha and the GDLR projects, which commenced after the
Company entered into option agreements for these projects in the
second quarter of 2015, and continued into the first quarter of
2016.
Finance and other expense increased significantly due to a
$6.1 million net foreign exchange
loss recognized in the first quarter of 2016, compared to a
$6.0 million foreign exchange gain
recorded during the same period in 2015. The net foreign
exchange loss for the first quarter of 2016 includes $6.9 million in foreign exchange losses,
$6.4 million of which relates to
intercompany balances, partly offset by a fair value gain of
$0.7 million recorded on the
outstanding foreign currency forward contracts as at March 31, 2016.
The net loss of $4.5 million for
the first quarter of 2016 is primarily attributable to a
$6.1 million net foreign exchange
loss incurred in the period. This compares to a $6.0 million foreign exchange gain incurred in
the first quarter of 2015. In addition, the $1.5 million increase in EE&D expenses and a
$0.3 million increase in income tax
expense contributed to the net loss in the first quarter of
2016. These factors were partly offset by a $5.6 million increase in mine operating earnings,
as well as the $0.3 million decrease
in general and administrative ("G&A") expenses.
Adjusted EBITDA of $3.7 million
for the first quarter of 2016 was comparable with that of the same
quarter of the prior year.
CASH COST AND ALL-IN SUSTAINING COST
Cash cost was US$4.20 for the
first quarter of 2016, a 52% decrease compared to the first quarter
of 2015. The decrease in cash cost was predominantly the
result of higher by-product credits per payable silver ounce from
an increase in gold production due to the increase in production
from San Ignacio which has higher
gold grades. In addition, the strengthening of the USD
compared to the MXN reduced cash operating costs in USD
terms.
AISC for the first quarter of 2016 decreased 36% to US$9.25 compared to the first quarter of 2015,
primarily due to the reduction in cash cost described above.
The reduction in G&A expenses, sustaining EE&D expenditures
and sustaining capital expenditures also contributed to decrease in
AISC. The Company expects an increase in sustaining capital
expenditures and EE&D expenses in subsequent quarters, which is
expected to increase AISC from the levels reported in the first
quarter of 2016. However, the Company is maintaining its
guidance for 2016 cash cost and AISC as detailed in the
Outlook section below.
Please refer to the Company's Management's Discussion and
Analysis for further discussion of cash cost and AISC, and for a
reconciliation to the Company's financial results as reported under
IFRS.
OUTLOOK
The Company's previously-announced production and cost guidance
for the year ending December 31, 2016
remains unchanged:
|
|
|
|
Production and
cash cost guidance
|
Q1 2016
Actual
|
FY 2016
Guidance
|
FY 2015
Actual
|
Total silver
equivalent ounces1
|
1,009,828
|
4,000,000
– 4,200,000
|
4,159,121
|
Cash cost
(USD)2
|
$ 4.20
|
$ 5.00 –
$ 7.00
|
$ 7.50
|
AISC
(USD)2
|
$ 9.25
|
$ 13.00 –
$ 15.00
|
$ 13.76
|
Exploration drilling
– operating mines (metres)
|
2,135
|
11,000
|
17,680
|
The Company's previously-announced guidance for capital
expenditures and EE&D expenses for the year ending December 31, 2016 remains unchanged:
|
|
|
|
Capex and EE&D
expense guidance (in CAD millions)
|
Q1 2016
Actual
|
FY 2016
Guidance
|
FY 2015
Actual
|
Capital expenditures
– buildings, plant & equipment
|
$0.4
|
$3.5 – 5.0
|
$3.2
|
Capitalized
development costs – operating mines
|
$0.1
|
$0.5
|
$3.2
|
EE&D – operating
mines
|
$0.6
|
$7.0 – 8.0
|
$4.6
|
Exploration and
evaluation expense – Coricancha
|
$1.2
|
$1.0 – 3.0
|
$2.7
|
_______________________________
1 For 2016
guidance, Aq eq oz have been established using a 70:1 Au:Ag ratio,
and a ratio of 1:0.0504 for the US dollar price of silver ounces to
the US dollar price for both lead and zinc pounds. For 2015, Aq eq
oz were calculated using a 65:1 Ag:Au ratio, and ratios of 1:0.050
and 1:0.056 for the price/ounce of silver to lead and zinc
price/pound, respectively.
|
2 Cash cost and AISC are non-IFRS
measures. Refer to the Non-IFRS Measures section of this
MD&A for an explanation of these measures and reconciliation to
the Company's reported financial results in accordance with IFRS.
As these are not standardized measures, they may not be directly
comparable to similarly titled measures used by others.
|
WEBCAST AND CONFERENCE CALL TO DISCUSS FIRST QUARTER 2016
FINANCIAL RESULTS
Great Panther will hold a live webcast and conference call to
discuss the financial results on May 5,
2016, at 8:00 AM Pacific Standard
Time, 11:00 AM Eastern Standard
Time. Hosting the call will be Mr. Robert Archer, President and CEO, and Mr.
Jim Zadra, CFO and Corporate
Secretary.
Shareholders, analysts, investors and media are invited to join
the live webcast and conference call by logging in or dialing in
just prior to the start time.
Live webcast and
registration
|
www.greatpanther.com
|
U.S. & Canada
Toll-Free
|
1 866 832 4290
|
International
Toll
|
+1 (919) 825 3215
|
Conference
ID
|
99233135
|
A replay of the webcast will be available on the Investors
section of the Company's website approximately one hour after the
conference call.
NON-IFRS MEASURES
The discussion of financial results in this press release
includes reference to mine operating earnings before non-cash
items, adjusted EBITDA, cash cost, and AISC, which are non-IFRS
measures. The Company provides these measures as additional
information regarding the Company's financial results and
performance. Please refer to the Company's MD&A for the
three months ended March 31, 2016,
for definitions and reconciliations of these measures to the
Company's financial statements.
ABOUT GREAT PANTHER
Great Panther Silver Limited is a primary silver mining and
exploration company listed on the Toronto Stock Exchange trading
under the symbol GPR, and on the NYSE MKT trading under the symbol
GPL. Great Panther's current activities are focused on the
mining of precious metals from its two wholly-owned operating mines
in Mexico: the Guanajuato Mine
Complex, which includes the San Ignacio Mine, and the Topia Mine in
Durango. The Company holds an option agreement to acquire a
100% interest in the Coricancha Mine Complex in the central Andes
of Peru where an active
exploration program is ongoing.
Robert A.
Archer
President & CEO
CAUTIONARY STATEMENT ON FORWARD-LOOKING STATEMENTS
This news release contains forward-looking statements within the
meaning of the United States Private Securities Litigation Reform
Act of 1995 and forward-looking information within the meaning of
Canadian securities laws (together, "forward-looking
statements"). Such forward-looking statements may include but
are not limited to the Company's plans for production at its
Guanajuato Mine Complex and Topia
Mines in Mexico, exploring
its other properties in Mexico and
Peru, the overall economic
potential of its properties, the availability of adequate
financing, and involve known and unknown risks, uncertainties and
other factors which may cause the actual results, performance or
achievements expressed or implied by such forward-looking
statements to be materially different. Such factors include,
among others, risks and uncertainties relating to potential
political risks involving the Company's operations in a foreign
jurisdiction, uncertainty of production and cost estimates and the
potential for unexpected costs and expenses, uncertainty in mineral
resource estimation, physical risks inherent in mining operations,
currency fluctuations, fluctuations in the price of silver, gold
and base metals, completion of economic evaluations, changes in
project parameters as plans continue to be refined, permitting
risks, the inability or failure to obtain adequate financing on a
timely basis, and other risks and uncertainties, including those
described in the Company's most recently filed Annual Information
Form and Material Change Reports filed with the Canadian Securities
Administrators available at www.sedar.com and reports on Form 40-F
and Form 6-K filed with the Securities and Exchange Commission and
available at www.sec.gov.
GREAT PANTHER
SILVER LIMITED
|
CONDENSED INTERIM
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
|
(Expressed in
thousands of Canadian dollars)
|
|
As at March 31, 2016
and December 31, 2015 (Unaudited)
|
|
|
|
|
|
|
March
31,
2016
|
December
31,
2015
|
|
|
|
|
|
|
|
|
Assets
|
|
|
|
|
|
|
|
|
|
|
Current
assets:
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
16,981
|
|
$
|
17,860
|
|
Trade and other
receivables
|
|
13,162
|
|
12,576
|
|
Inventories
|
|
8,229
|
|
8,536
|
|
Other current
assets
|
|
1,454
|
|
1,110
|
|
Derivative
assets
|
|
737
|
|
-
|
|
|
|
40,563
|
|
40,082
|
Non-current
assets:
|
|
|
|
|
|
Mineral properties,
plant and equipment
|
|
19,461
|
|
21,252
|
|
Exploration and
evaluation assets
|
|
5,155
|
|
5,427
|
|
Intangible
assets
|
|
51
|
|
111
|
|
Deferred tax
asset
|
|
325
|
|
413
|
|
|
|
$
|
65,555
|
|
$
|
67,285
|
|
|
|
|
|
|
Liabilities and
Shareholders' Equity
|
|
|
|
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
|
Trade and other
payables
|
|
$
|
5,031
|
|
$
|
6,830
|
|
|
|
|
|
|
|
|
Non-current
liabilities
|
|
|
|
|
|
|
Reclamation and
remediation provision
|
|
|
4,846
|
|
|
4,762
|
|
Deferred tax
liability
|
|
|
3,909
|
|
|
3,998
|
|
|
|
|
13,786
|
|
|
15,590
|
|
|
|
|
|
|
|
Shareholders'
equity:
|
|
|
|
|
|
|
|
Share
Capital
|
|
|
126,618
|
|
|
125,646
|
|
Reserves
|
|
|
14,700
|
|
|
11,137
|
|
Deficit
|
|
|
(89,549)
|
|
|
(85,088)
|
|
|
|
|
51,769
|
|
|
51,695
|
|
|
|
$
|
65,555
|
|
$
|
67,285
|
GREAT PANTHER
SILVER LIMITED
|
CONDENSED INTERIM
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
|
(Expressed in
thousands of Canadian dollars, except per share data)
|
|
For the three months
ended March 31, 2016 and 2015 (Unaudited)
|
|
|
|
|
|
For the three
months ended March 31,
|
|
|
2016
|
|
|
2015
|
|
|
|
|
|
Revenue
|
$
|
18,454
|
|
$
|
20,250
|
Cost of
sales
|
|
|
|
|
|
|
Production
costs
|
|
10,708
|
|
|
13,598
|
|
Amortization and
depletion
|
|
1,550
|
|
|
6,000
|
|
Share-based
compensation
|
|
49
|
|
|
128
|
|
|
12,307
|
|
|
19,726
|
|
|
|
|
|
|
Mine operating earnings
|
|
6,147
|
|
|
524
|
|
|
|
|
|
|
General and
administrative expenses
|
|
|
|
|
|
|
Administrative
expenses
|
|
1,658
|
|
|
2,074
|
|
Amortization and
depletion
|
|
69
|
|
|
63
|
|
Share-based
compensation
|
|
207
|
|
|
98
|
|
|
1,934
|
|
|
2,235
|
|
|
|
|
|
|
Exploration,
evaluation, and development expenses
|
|
|
|
|
|
|
Exploration and
evaluation expenses
|
|
1,836
|
|
|
772
|
|
Mine development
costs
|
|
587
|
|
|
144
|
|
Share-based
compensation
|
|
27
|
|
|
57
|
|
|
2,450
|
|
|
973
|
|
|
|
|
|
|
Finance and other
income (expense)
|
|
|
|
|
|
|
Interest
income
|
|
30
|
|
|
139
|
|
Finance
costs
|
|
(26)
|
|
|
(21)
|
|
Foreign exchange gain
(loss)
|
|
(6,143)
|
|
|
5,966
|
|
Other
income
|
|
23
|
|
|
26
|
|
|
(6,116)
|
|
|
6,110
|
|
|
|
|
|
|
(Loss) income
before income taxes
|
|
(4,353)
|
|
|
3,426
|
|
|
|
|
|
|
Income tax expense
(recovery)
|
|
108
|
|
|
(162)
|
Net (loss) income
for the period
|
$
|
(4,461)
|
|
$
|
3,588
|
|
|
|
|
|
|
Other comprehensive
income (loss), net of tax
|
|
|
|
|
|
|
Items that are or
may be reclassified subsequently to net income
(loss):
|
|
|
|
|
|
|
Foreign currency
translation
|
|
3,580
|
|
|
(2,054)
|
|
Change in fair value
of available-for-sale financial assets (net of tax)
|
|
4
|
|
|
-
|
|
|
3,584
|
|
|
(2,054)
|
Total comprehensive (loss) income for the
period
|
$
|
(877)
|
|
$
|
1,534
|
|
|
|
|
|
|
Earnings (loss) per
share
|
|
|
|
|
|
|
Basic and
diluted
|
$
|
(0.03)
|
|
$
|
0.03
|
GREAT PANTHER
SILVER LIMITED
|
CONDENSED INTERIM
CONSOLIDATED STATEMENTS OF CASH FLOWS
|
(Expressed in
thousands of Canadian dollars)
|
|
|
|
For the three months
ended March 31, 2016 and 2015 (Unaudited)
|
|
|
|
|
|
Three months ended
March 31,
|
|
|
2016
|
|
2015
|
|
|
|
|
|
Cash flows from
operating activities
|
|
|
|
Net income (loss)
for the period
|
$
|
(4,461)
|
|
$
|
3,588
|
Items not involving
cash:
|
|
|
|
|
Amortization and
depletion
|
1,619
|
|
6,063
|
|
Unrealized foreign
exchange loss (gains)
|
6,425
|
|
(4,816)
|
|
Income tax expense
(recovery)
|
108
|
|
(162)
|
|
Share-based
compensation
|
283
|
|
283
|
|
Other non-cash
items
|
15
|
|
(118)
|
Interest
received
|
17
|
|
49
|
Income taxes
paid
|
(5)
|
|
(60)
|
|
|
4,001
|
|
4,827
|
Changes in non-cash
working capital:
|
|
|
|
|
Increase in trade and
other receivables
|
(1,353)
|
|
(2,946)
|
|
Decrease (increase)
in inventories
|
(395)
|
|
94
|
|
Increase in other
current assets
|
(374)
|
|
(636)
|
|
Increase (decrease)
in trade and other payables
|
(1,516)
|
|
505
|
|
Net cash from
operating activities
|
363
|
|
1,844
|
|
|
|
|
|
Cash flows from
investing activities:
|
|
|
|
|
Additions to mineral
properties, plant and equipment
|
(575)
|
|
(1,325)
|
|
Advances under
Cangold Loan
|
-
|
|
(932)
|
|
Net cash used in
investing activities
|
(575)
|
|
(2,257)
|
|
|
|
|
|
Cash flows from
financing activities:
|
|
|
|
|
Proceeds from
exercise of share options
|
668
|
|
9
|
|
Net cash from
financing activities
|
668
|
|
9
|
|
|
|
|
|
Effect of foreign
currency translation on cash and cash equivalents
|
(1,335)
|
|
1,130
|
|
|
|
|
|
Increase (decrease)
in cash and cash equivalents
|
(879)
|
|
726
|
Cash and cash
equivalents, beginning of period
|
17,860
|
|
17,968
|
Cash and cash
equivalents, end of period
|
$
|
16,981
|
|
$
|
18,694
|
SOURCE Great Panther Silver Limited