GREAT PANTHER SILVER LIMITED (TSX: GPR) (the "Company") is pleased
to announce the unaudited financial results for the Company's year
ending December 31, 2009. The Company will be filing its annual
audited consolidated financial statements and management's
discussion and analysis on March 19, 2010, following which the full
version of these documents will be available to be viewed on the
Company's web site at www.greatpanther.com or on SEDAR at
www.sedar.com.
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Q4 2009
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Revenue $9.9 million $31.7 million
Earnings from mining operations(2)
(before amortization and depletion) $5.2 million $15.0 million
Earnings from mining operations
(net of amortization and depletion) $4.2 million $11.4 million
Adjusted EBITDA(4) $3.0 million $7.0 million
Income (loss) $1.0 million ($0.9 million)
Cost per silver ounce (USD) $4.80 $5.58
Silver equivalent production 625,288 Ag eq oz 2,202,456 Ag eq oz
Silver ounces sold 363,282 Ag oz 1,376,763 Ag oz
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"The Board is very pleased to see the Company's first quarterly
net profit of $1.0 million. And in terms of production, gross
revenues, net operating profits and positive cash flow, 2009 was
the Company's fourth successive all-time record year," said Kaare
Foy, Executive Chairman.
Fourth Quarter Highlights
-- Record metal production of 625,288 silver equivalent ounces ("Ag eq
oz")(1), up 5% from the third quarter of 2009 and 26% from the fourth
quarter of 2008.
-- Record gold production of 2,456 oz Au, up 26% from the third quarter of
2009 and 53% from the fourth quarter of 2008.
-- Silver production of 390,026 oz Ag, within 2% of the third quarter of
2009 and up 9% from the fourth quarter of 2008.
-- Record production from Guanajuato of 470,025 Ag eq oz, up 9% from the
third quarter of 2009 and 37% from the fourth quarter of 2008.
-- Net income of $1.0 million for the three months ended December 31, 2009
compared to a net loss of $1.2 million for the same period in 2008.
-- 80% increase in mineral sales revenues to $9.9 million for the three
months ended December 31, 2009 from $5.5 million for the same period in
2008.
-- $3.7 million increase in earnings from mining operations(2) (excluding
amortization and depletion) to $5.2 million for the three months ended
December 31, 2009 from $1.5 million for the same period in 2008.
-- 37% decrease in cash cost per silver ounce(3), net of by-products, for
the three months ended December 31, 2009 to US$4.80 from US$7.58 for the
same period in 2008.
-- $3.7 million increase in Adjusted EBITDA(4) to $3.0 million for the
three months ended December 31, 2009 from an Adjusted EBITDA loss of
$0.7 million for the same period in 2008.
-- Acquisition of a 100% interest in the "La Prieta" concession in the
Topia District to provide increased production by late 2010.
Year End Highlights
-- Record annual metal production of 2,202,456, up 22% from 2008, and 6%
above target.
-- Record silver production of 1,456,830 silver ounces ("oz Ag"), up 20%
from 2008, and meeting target.
-- Record gold production of 7,151 gold ounces ("oz Au"), up 14% from 2008,
and 19% above target.
-- Highest quality concentrates to date, produced at record metal
recoveries.
-- 41% increase in mineral sales revenues to $31.7 million for the twelve
months ended December 31, 2009 from $22.4 million for 2008.
-- $10.7 million increase in earnings from mining operations (excluding
amortization and depletion) to $15.0 million for the twelve months ended
December 31, 2009 from $4.3 million for the same period in 2008.
-- 46% decrease in cash cost per silver ounce, net of by-products, for the
full year 2009 to US$5.58 from US$10.25 in 2008.
-- $14.9 million increase in Adjusted EBITDA to $7.0 million for the year
ended December 31, 2009 from an Adjusted EBITDA loss of $7.9 million in
2008.
-- New three-year strategy announced to accelerate annual production to 3.8
million Ag eq oz, increase National Instrument ("NI") 43-101 compliant
resources to 40 million Ag eq oz, and invest $22 million in capital
expenditures and $14 million in a 65,000-metre diamond drilling program
for both mines.
-- Closed an equity offering for gross proceeds of $12.3 million on
November 17, 2009.
Exploration Highlights
-- Announced completion of the first NI 43-101 compliant mineral resource
estimate on the zone known as the 'Cata Clavo' at the Guanajuato Mine.
The new indicated resource estimate of 5,032,000 Ag eq oz, plus 285,000
Ag eq oz in the inferred category, represents only a very small part of
the 4.2 kilometre strike length of the Guanajuato deposit.
-- Increase to NI 43-101 compliant measured and indicated resources for
Topia to 5.5 million Ag eq oz, and inferred resources to 5.7 million Ag
eq oz, sufficient to support a 10-year mine plan.
-- Surface core drilling successfully extended known high grade
mineralization in six areas at the Topia mine, including the Recompensa,
San Gregorio, El Rosario, Cantarranas, San Miguel, and El Ochenta veins.
-- Successful mine exploratory development at Topia, including three areas
hosting high grade silver-gold-lead-zinc mineralization along the San
Gregorio, El Rosario and Don Benito veins which are already contributing
to increased silver production.
-- Continued underground development at Guanajuato was successful in
identifying and delineating three new zones of silver-gold
mineralization, all of which are currently being developed for
production. The Alto 2 Zone in the Cata area, Santa Margarita in the
Rayas area and the Los Pozos Zone between Cata and Rayas will all make
significant contributions to production in 2010 and beyond.
2010 Outlook
Great Panther has initiated its new strategy to accelerate
production and increase resources at both Guanajuato and Topia. The
new plan forecasts increases to 2.6 million Ag eq oz in 2010 and to
3.8 million Ag eq oz by 2012. In the fourth quarter of 2009, the
Company successfully raised the financing required to initiate and
accelerate this strategy. Subsequently, new equipment has been
ordered and is being delivered to the mines, and exploration drill
programs have started in the first quarter of 2010. Great Panther
is confident that the targets outlined in its new strategy will be
achieved or exceeded.
The Company will continue to provide silver equivalent totals
but the volatility of metal prices in recent months has made this
an inconsistent basis for comparison with past and future
production, such that individual metal production will also be
presented. The Company has used metal prices of US$11/oz Ag,
US$850/oz Au, US$0.50/lb Pb and US$0.50/lb Zn for 2009 silver
equivalent calculations. These have been revised in 2010 to
US$16/oz Ag, US$1,000/oz Au, US$0.80/lb Pb and US$0.80/lb Zn.
Some highlights from the 2010 plan include:
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Guanajuato Topia Consolidated
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Tonnes milled 174,000 34,500 208,500
Silver ounces 1,300,000 511,000 1,811,000
Gold ounces 8,300 600 8,900
Lead tonnes - 1,100 1,100
Zinc tonnes - 1,300 1,300
Silver equivalent
ounces 1,820,000 820,000 2,640,000
Silver head grades
(grams/tonne) 272 490
Silver recoveries 84% 94%
Production costs
per ounce US$4.50 - US$5.00 US$7.00 - US$7.50 US$5.50 - US$6.00
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Operations produced 1,456,830 silver ounces at a cash operating
cost of US$5.58 per oz of silver, net of by-product credits, for
the year 2009. This compares favourably to the forecasted range of
US$6.00 to US$6.50 per silver oz, is well below current metal
prices of approximately $17/oz Ag and represents a significant
improvement over the 2008 cash cost of US$10.25/oz Ag. The cost per
oz of silver is dependent upon mine site operating costs, silver
production, the cost of smelting and refining, the relative value
of the Mexican peso against the US dollar and the value of
by-product credits.
Management anticipates that unit costs will continue the current
downward trend and Great Panther remains on course to achieve costs
of US$4.00/oz by 2012. Cash flow generated from mining activities
will be reinvested in operations for exploration and capital
expenditures to increase resources and production. Surplus cash
flow will be available for potential acquisitions as the Company
continues to grow.
Both operations have demonstrated the ability to achieve higher
silver production at a lower cost per ounce and with a higher
profit margin. The Company's emphasis will be on maintaining
positive operating cash flow while developing and exploring to
continually increase metal production. The Company's production
strategy is to increase silver production by 20% year-on-year at
continually decreasing unit costs.
Mr. Robert Archer, President & CEO said today, "I am
extremely proud of the entire Great Panther team for a tremendous
year of record production, financial results and resource growth,
culminating in the Company's first quarter of positive earnings. As
we are bullish on near-term metal prices, the acceleration of our
3-year growth strategy should result in continued strong
performance for Great Panther in the years ahead."
For further information, please visit the Company's website at
www.greatpanther.com.
ON BEHALF OF THE BOARD
Robert A. Archer, President & CEO
Kaare G. Foy, Executive Chairman
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
the Securities Act (Ontario) (together, "forward-looking
statements"). Such forward-looking statements may include but are
not limited to the Company's plans for production at its Guanajuato
and Topia Mines in Mexico, exploring its other properties in
Mexico, 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, 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, the inability or failure to obtain adequate
financing on a timely basis, and other risks and uncertainties,
including those described in the Company's Annual Report on Form
20-F for the year ended December 31, 2008 and reports on Form 6-K
filed with the Securities and Exchange Commission and available at
www.sec.gov and Material Change Reports filed with the Canadian
Securities Administrators and available at www.sedar.com.
(1) Silver equivalent ounces in 2009 were established using prices of
US$850/oz Au, US$11/oz Ag, US$0.50/lb Pb and US$0.50/lb Zn.
(2) "Earnings from mining operations" is a non-GAAP measure and is defined
as mineral sales less cost of sales (excluding amortization and
depletion).
(3) The non-GAAP measure of cash cost per ounce of silver is used by the
Company to manage and evaluate operating performance at each of the
Company's mines and is widely reported in the silver mining industry as
a benchmark for performance, but does not have a standardized meaning.
(4) "Adjusted EBITDA" is a non-GAAP measure in which standard EBITDA
(earnings before interest expense, taxes, and depreciation and
amortization) is adjusted for stock-based compensation expense and non-
recurring items.
GREAT PANTHER SILVER LIMITED
(Formerly Great Panther Resources Limited)
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
(Expressed in Canadian Dollars)
Three months ended December 31, 2009 and 2008
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2009 2008
(Unaudited) (Revised(1))
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Revenues:
Mineral sales $ 9,850,074 $ 5,482,342
Cost of sales (excluding amortization
and depletion) 4,698,174 4,008,363
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5,151,900 1,473,979
Expenses:
Amortization and depletion of mineral
properties, plant and equipment 914,640 948,902
Accretion on asset retirement obligation 68,819 76,348
Mineral property exploration expenditures 373,286 348,155
General and administrative 1,875,097 1,526,782
Stock-based compensation 434,603 -
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3,666,445 2,900,187
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1,485,455 (1,426,208)
Other income (expenses):
Interest income 25,472 15,093
Interest expense (219,014) (309,822)
Foreign exchange gain (loss) 182,211 (261,050)
Gain (loss) on disposal of fixed assets (5,621) 36,289
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(16,952) (519,490)
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Income (loss) before provision for income taxes 1,468,503 (1,945,698)
Recovery of (provision for) income taxes (431,509) 763,368
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Income (loss) for the period 1,036,994 (1,182,330)
Other comprehensive income (loss), net of tax:
Unrealized gain (loss) on marketable
securities 315 (12,992)
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Comprehensive income (loss) for the period $ 1,037,309 $ (1,195,322)
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Earnings (loss) per share
Basic $ 0.01 $ (0.02)
Diluted $ 0.01 $ (0.02)
Weighted average number of shares
Basic 101,034,625 81,654,521
Diluted 104,593,028 81,654,521
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(1) Revision - The Company's December 31, 2008 consolidated financial
statements were revised for the effect of an adjustment to future income
taxes that was not considered material to be recorded last year.
GREAT PANTHER SILVER LIMITED
(Formerly Great Panther Resources Limited)
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
(Expressed in Canadian Dollars)
Years ended December 31, 2009, 2008 and 2007
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2009 2008 2007
(Unaudited) (Revised(1))
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Revenues:
Mineral sales $ 31,731,715 $ 22,445,438 $ 15,523,094
Cost of sales (excluding
amortization and depletion) 16,767,683 18,144,223 14,152,657
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14,964,032 4,301,215 1,370,437
Expenses:
Amortization and depletion of
mineral properties, plant and
equipment 3,576,796 4,285,029 3,603,668
Accretion on asset retirement
obligation 277,214 281,677 22,704
Mineral property exploration
expenditures 1,581,955 6,327,926 6,803,104
General and administrative 5,802,508 5,965,595 4,672,362
Stock-based compensation 2,377,927 1,608,271 1,129,500
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13,616,400 18,468,498 16,231,338
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1,347,632 (14,167,283) (14,860,901)
Other income (expenses):
Interest income 58,955 240,929 207,892
Interest expense (1,168,799) (1,155,197) (1,035,577)
Debt settlement expense (51,165) - -
Foreign exchange gain (loss) (383,400) 113,042 (1,440,802)
Gain (loss) on disposal of
fixed assets (2,014) 31,168 -
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(1,546,423) (770,058) (2,268,487)
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Loss before provision for income
taxes (198,791) (14,937,341) (17,129,388)
Recovery of (provision for)
income taxes (668,060) 1,176,515 (2,571,473)
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Loss for the year (866,851) (13,760,826) (19,700,861)
Other comprehensive income
(loss), net of tax:
Unrealized gain (loss) on
marketable securities 14,819 (43,537) 5,945
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Comprehensive loss for the year $ (852,032) $(13,804,363) $(19,694,916)
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Basic and diluted loss per share $ (0.01) $ (0.17) $ (0.27)
Weighted average number of shares 90,210,438 81,321,733 72,227,455
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(1) Revision - The Company's December 31, 2008 consolidated financial
statements were revised for the effect of an adjustment to future income
taxes that was not considered material to be recorded last year.
GREAT PANTHER SILVER LIMITED
(Formerly Great Panther Resources Limited)
CONSOLIDATED BALANCE SHEETS
(Expressed in Canadian Dollars)
Years ended December 31, 2009 and 2008
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2009 2008
(Unaudited) (Revised(1))
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Assets
Current assets:
Cash and cash equivalents $ 13,312,091 $ 606,244
Marketable securities 22,754 6,435
Amounts receivable 5,539,238 3,737,925
Income taxes recoverable 342,217 431,523
Inventories 1,438,376 945,506
Prepaid expenses, deposits and advances 1,585,069 495,287
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22,239,745 6,222,920
Mineral properties, plant and equipment 14,934,521 16,087,761
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$ 37,174,266 $ 22,310,681
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Liabilities and Shareholders' Equity
Current liabilities:
Accounts payable and accrued liabilities $ 2,658,024 $ 4,466,335
Current portion of capital lease obligations 800,761 436,498
Current portion of promissory note 121,994 -
Current portion of future income tax
liability 506,222 -
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4,087,001 4,902,833
Long-term liabilities:
Capital lease obligations 62,634 456,788
Promissory note 118,424 -
Convertible loan notes 3,356,397 4,651,690
Asset retirement obligations 1,382,091 1,104,877
Future income tax liability 1,311,609 1,376,588
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10,318,156 12,492,776
Shareholders' equity:
Capital stock 75,910,220 57,865,462
Contributed surplus 10,268,043 7,724,900
Equity component of convertible loan notes 1,563,000 2,569,000
Advances on share subscriptions - 85,000
Accumulated other comprehensive loss (22,773) (37,592)
Deficit (60,862,380) (58,388,865)
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26,856,110 9,817,905
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$ 37,174,266 $ 22,310,681
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(1) Revision - The Company's December 31, 2008 consolidated financial
statements were revised for the effect of an adjustment to future income
taxes that was not considered material to be recorded last year.
GREAT PANTHER SILVER LIMITED
(Formerly Great Panther Resources Limited)
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Expressed in Canadian Dollars)
Years ended December 31, 2009, 2008 and 2007
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2009 2008 2007
(Unaudited) (Revised(1))
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Cash flows provided by (used in)
operating activities:
Loss for the year $ (866,851) $(13,760,826) $(19,700,861)
Items not involving cash:
Amortization and depletion of
mineral properties, plant
and equipment 3,576,796 4,285,029 3,603,668
Foreign exchange (gain) loss
on debt (73,037) 133,612 (778)
Foreign exchange (gain) loss
on future income tax (161,828) - -
Stock-based compensation 2,377,927 1,608,271 1,129,500
Shares issued for mineral
exploration expenditures - 191,568 246,000
Shares received for mineral
exploration expenditures (1,500) (10,177) (33,850)
Future income tax 603,070 (1,044,916) 2,421,504
Interest accretion on debt
discount - 11,154 259,355
Interest accretion on
convertible notes payable 627,755 623,079 377,812
Debt settlement expense 51,165 - -
Interest on capital lease
obligation - 24,438 -
Accretion on asset retirement
obligations 277,214 281,677 22,704
Write-down of inventory - 240,810 -
Loss (gain) on disposal of
capital assets 2,014 (31,168) -
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6,412,725 (7,447,449) (11,674,946)
Changes in non-cash operating
working capital:
Amounts receivable (1,801,313) 2,277,611 (2,384,389)
Inventories (471,155) (357,566) (143,346)
Prepaid expenses and deposits (1,089,782) 371,085 245,025
Accounts payable and accrued
liabilities (1,840,322) 1,959,822 1,930,532
Income taxes 89,306 (68,303) (490,695)
------------------------------------------------------------------------
Net cash provided by (used in)
operating activities 1,299,459 (3,264,800) (12,517,819)
Cash flows provided by (used in)
investing activities:
Mineral properties and capital
expenditures (1,762,302) (1,927,624) (3,328,413)
Proceeds from disposal of
capital assets 5,177 100,614 -
------------------------------------------------------------------------
Net cash used in investing
activities (1,757,125) (1,827,010) (3,328,413)
Cash flows provided by (used in)
financing activities:
Repayment of long-term debt - (104,898) (1,456,893)
Repayment of capital lease
obligations (364,745) (180,985) -
Repayment of promissory note (9,840) - -
Proceeds from advances on
share subscriptions - 85,000 -
Proceeds from exercise of
warrants 519,153 142,710 8,725,054
Proceeds from exercise of
options 730,859 398,250 678,000
Proceeds from issuance of
convertible notes - - 4,050,000
Issuance of shares for cash,
net of issue costs 12,288,086 - -
------------------------------------------------------------------------
Net cash provided by financing
activities 13,163,513 340,077 11,996,161
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Increase (decrease) in cash and
cash equivalents 12,705,847 (4,751,733) (3,850,071)
Cash and cash equivalents,
beginning of year 606,244 5,357,977 9,208,048
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Cash and cash equivalents, end of
year $ 13,312,091 $ 606,244 $ 5,357,977
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(1) Revision - The Company's December 31, 2008 consolidated financial
statements were revised for the effect of an adjustment to future income
taxes that was not considered material to be recorded last year.
Standard & Poor's Listed
SEC 20-F Statement Filed
Contacts: B&D Capital 604 685 6465 604 899 4303 (FAX)
info@greatpanther.com www.greatpanther.com
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