History:
Silver Standard (SSRI) is one of the largest silver mining companies in the world with the largest in-ground silver resources of any publicly traded company. Currently celebrating its 60th year of being publicly traded, SSRI has 5 principal mines with 11 projects in the pipeline.
Financials:
The first quarter of 2007 ended with a slight loss per share and $270 million dollars of working capital with no long-term debt. Current production is unhedged to silver spot prices.
Operations:
Silver Standard's projects are located in Peru, Argentina, Chile, Australia, Mexico, Canada, and the United States. All stable pro-mining countries with low political risk. A brief description of SSRI's major mining properties is listed below.
The Pirquitas, Argentina property is slated to begin production in 2008 with $31.5 million dollars already spent in a capital budget of $146 million. An updated feasibility study is underway to reassess costs and expected revenues. In 2005, cash operating costs were estimated at $2.42/oz silver with proven reserves of 20.5 million ounces.
San Luis, Peru – Drilling continues on the Ayelen Vein with the identification of a high-grade gold-silver mineralization over 550 meters in length and 200 meters in depth. The vein remains open to strike and depth. During the 1stQ of 2007 SSRI became an operator and elected to increase its interest to 70% by completing a feasibility study later this year.
Pitarrilla, Mexico – extension drilling in the Breccia Ridge Zone allowed SSRI to report a 20% increase in silver reserves and a significant lead and zinc resource. Drilling is ongoing to extend and verify the resource as it remains open along strike and depth. The Board of Directors approved a $12.5 million dollar program when the appropriate permits are in place. Prefeasibility study is expected to be completed within the next few months.
I am going to add Silver Standard to my portfolio as my exposure to the silver market. Production will be commencing soon and value should be realized given rising global demand for commodities.
Source: Silver Standard 2006 Annual Report and 2007 1st Quarter Interim Financial Report
The author owns shares of Silver Standard
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