GREAT PANTHER SILVER LIMITED (TSX:GPR) (NYSE American:GPL) (“Great Panther”; or the “Company”) today reported financial results for the Company’s three months ended March 31, 2018. 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 on SEDAR at www.sedar.com. All financial information is prepared in accordance with International Financial Reporting Standards (“IFRS”), except as noted in the Non-GAAP Measures section of the MD&A. All dollar amounts are expressed in US dollars (“USD”), unless otherwise noted.
“Great Panther’s revenues were up 38% reflecting the normal operation of the Topia processing plant compared to the first quarter of last year when it was suspended for planned upgrades”, stated Jim Bannantine, President and CEO. “We continue to focus our efforts on advancing the Coricancha project, and we expect to release an economic study before the end of this quarter. Our balance sheet remains strong and our cash position increased to just over $60 million as we continue to fund Coricancha from the cash flows from our operations in Mexico.”
OPERATIONAL AND FINANCIAL HIGHLIGHTS
| Q1 2018 | Q1 2017 | Change | Q4 2017 | Change | ||||
| OPERATING RESULTS | ||||||||
| Tonnes milled | 96,869 | 82,656 | 17% | 98,396 | -2% | |||
| Ag eq oz produced1 | 1,031,937 | 730,186 | 41% | 1,065,773 | -3% | |||
| Silver production – ounces | 491,063 | 366,435 | 34% | 514,218 | -5% | |||
| Gold production – ounces | 5,831 | 5,178 | 13% | 5,931 | -2% | |||
| Payable silver ounces | 476,325 | 344,995 | 38% | 516,078 | -8% | |||
| Ag eq oz sold | 971,189 | 680,984 | 43% | 1,038,023 | -6% | |||
| Cost per tonne milled2 | $ | 121 | $ | 88 | 38% | $ | 116 | 4% |
| Cash cost2 | $ | 5.39 | $ | 3.54 | 52% | $ | 7.25 | -26% |
| Cash cost per Ag eq oz2 | $ | 12.76 | $ | 10.99 | 16% | $ | 13.18 | -3% |
| All in Sustaining Cost (AISC)2 | $ | 12.33 | $ | 19.55 | -37% | $ | 14.72 | -16% |
| AISC per Ag eq oz2 | $ | 16.16 | $ | 19.10 | -15% | $ | 16.89 | -4% |
| (in 000’s, unless otherwise noted) | Q1 2018 | Q1 2017 | Change | Q4 2017 | Change | ||||
| FINANCIAL RESULTS | |||||||||
| Revenue | $ | 17,019 | $ | 12,371 | 38% | $ | 17,384 | -2% | |
| Mine operating earnings before non-cash items2 | $ | 5,225 | $ | 5,445 | -4% | $ | 4,962 | 5% | |
| Mine operating earnings | $ | 4,019 | $ | 4,662 | -14% | $ | 3,755 | 7% | |
| Net income (loss) | $ | (97) | $ | 3,040 | -103% | $ | (1,918) | 95% | |
| Adjusted EBITDA2 | $ | 415 | $ | 2,134 | -81% | $ | 904 | -54% | |
| Operating cash flows before changes in | |||||||||
| non-cash net working capital | $ | 118 | $ | 894 | -87% | $ | 618 | -81% | |
| Cash and short-term deposits at end of period | $ | 60,884 | $ | 53,158 | 15% | $ | 56,888 | 7% | |
| Net working capital at end of period | $ | 67,076 | $ | 69,281 | -3% | $ | 65,965 | 2% | |
| Average realized silver price per oz3 | $ | 16.36 | $ | 19.33 | -15% | $ | 16.86 | -3% | |
| Average realized gold price per oz3 | $ | 1,363 | $ | 1,297 | 5% | $ | 1,292 | 5% | |
| Earnings (loss) per share – basic and diluted | $ | (0.00) | $ | 0.02 | -100% | $ | (0.01) | 100% | |
| ___________________________ | |
| 1 | Silver equivalent ounces are referred to throughout this document. Ag eq oz are calculated using a 70:1 Ag:Au ratio and ratios of 1:0.0559 and 1:0.0676 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-GAAP performance measures cost per tonne milled, cash cost, cash cost per Ag eq oz, AISC, AISC per Ag eq oz, mine operating earnings before non-cash items, cost of sales before non-cash items and adjusted EBITDA throughout this document. Refer to the Non-GAAP Measures section of the MD&A for an explanation of these measures and reconciliation to the Company’s financial results reported 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
Revenue increased by $4.6 million or 38% compared to the first quarter of 2017. This was primarily attributable to an increase in metal sales volumes ($5.6 million effect) as there were negligible metal sales for Topia during the first quarter of 2017 due to the suspension of milling operations for plant upgrades, and an increase in gold prices ($0.4 millioneffect). This was partly offset by a decrease in silver prices ($1.4 million effect). The Company’s average realized silver price for the first quarter of 2018 was $16.36 per oz compared to $19.33 per oz during the first quarter of 2017.
The increase in metal sales volume resulted in a corresponding increase in production costs for the first quarter of 2018, compared to the first quarter of 2017 (approximate $3.2 million increase). Production costs also increased in MXN terms as a result of mining narrower veins at the GMC (which causes more waste material to be mined), along with rate increases for mining contractors ($0.4 million effect). Another factor in the increase of production costs was the strengthening of the MXN against the USD which had the impact of increasing costs in USD terms by $0.8 million.
Mine operating earnings before non-cash items decreased by $0.2 million relative to the first quarter of 2017 as the $4.9 million increase in production costs exceeded the $4.6 million increase in revenue.
Amortization and depletion increased compared to the first quarter of 2017 due to depreciation of the new tailings filtration and handling facilities at Topia that were commissioned in the second quarter of 2017.
G&A expenses for the first quarter of 2018 increased 3% compared to the same period in 2017, primarily due to higher share-based compensation.
Exploration, evaluation and development (“EE&D”) expenses for the first quarter of 2018 increased $1.4 million or 70% compared to the same period in 2017, mainly due to $1.5 million of care and maintenance and project expenditures related to Coricancha, which was acquired on June 30, 2017. The first quarter of 2017 included $0.3 million of Coricancha pre-acquisition EE&D costs related to technical evaluation, integration planning and pre-closing legal and professional fees. The Company will continue to expense costs associated with the ongoing care and maintenance of Coricancha and any project costs associated with evaluating the return of Coricancha to production until such time as a positive decision is made to restart the mine. EE&D expenditures for the first quarter of 2018 also included $0.6 millionof additional corporate development costs, due to a higher level of activity associated with the evaluation of potential acquisitions.
Finance and other income (expense) primarily reflects interest income or expense and foreign exchange gains and losses. During the quarter ended March 31, 2018, the Company had foreign exchange gains of $0.7 million compared to $1.8 million in the first quarter of 2017. …read more