Great Panther Silver net income leap in first quarter
Strong silver prices and increased production make for a record setting first quarter for Great Panther, despite higher cash costs. Net income up a heady 600%.
Posted: Tuesday , 14 Jun 2011
HALIFAX, NS -
On the backs of strong silver prices and increased production, Great Panther Silver (TSX: GPR) delivered a record quarter. Investors, seemingly impressed by the first quarter results, had boosted the Mexico-focused miner's shareprice five percent to $3.01 as of presstime.
Net income catapulted from $1 million in the first quarter 2010 to $6 million in the first quarter 2011. Revenue more or less doubled to $15.5 million and production increased 15 percent in terms of silver-equivalent ounces to 410,640 ounces silver, 2,310 ounces gold, 241 tonnes lead and 345 gonnes zinc.
Cash costs were less kind to Great Panther, however, climbing 50 percent to $10.05 per ounce silver. That was also significantly higher than Great Panther's $6.50-per-ounce-silver target for 2011 cash costs. Clearly, however, swelling cash costs did not painfully drag down Great Panther's sky-high quarterly results given much stronger silver prices this year as compared to 2010.
Great Panther blamed a more onerous smelter contract at Topia, one of its two mines, for the increase in cash costs. But with increased production Great Panther has said it hopes to lower cash costs to $5 per ounce silver in 2012.
This year Great Panther estimated it would produce 2.9 million ounces silver-equivalent, up from 2.3 million in 2010. Next year it planned to do even better, churning out 3.8 million, all by increasing production at its Topia and Guanajuato mines.
To expand resources, which last year broke 40 million ounces silver-equivalent, this year Great Panther planned to drill some 60,000 metres, half at Guanajuato and the bulk of the rest at Topia.