VANCOUVER, BRITISH COLUMBIA — (Marketwired) — 05/08/13 — 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, 2013. The full version of the Company-s financial statements and Management-s Discussion and Analysis can be viewed on the Company-s website at , or on SEDAR at . All financial information is prepared in accordance with IFRS and all dollar amounts are expressed in Canadian dollars unless otherwise indicated.
„Great Panther-s operations processed record tonnage and delivered year-over-year production growth in the first quarter of 2013 but significantly lower silver grades at Guanajuato translated into higher costs and lower margins,“ stated Robert Archer, CEO. „The Company also had a significant in-transit shipment of concentrate containing 162,178 silver equivalent ounces and representing approximately $4.5 million at the end of the quarter which was not included in revenue. While the concentrate shipment will be booked in the second quarter and grade and site cost issues are being addressed, the Company is reviewing the impact of this on its cash cost guidance for 2013.
In the fourth quarter of 2012, the Company commenced several initiatives to improve and strengthen the operational efficiency of the Guanajuato Mine Complex and the Topia Mine. Costs have started to decline at Topia but Guanajuato saw similarly high site costs as in the previous quarter. All of the mining in Guanajuato is conducted by contract miners, and contractors and materials are the largest cost centres for the Company. Consequently, these areas are under review with the aim of reducing overall site costs. During the first quarter some contractors were replaced by employees and the Company is evaluating making further changes as well as modifying existing contracts.
With the recent lower silver grades and continued grade variability, particular emphasis is also being placed on improving grade control as this is key to increased production and lower unit costs. A recently completed structural analysis of the Guanajuato vein zones by a prominent structural geologist is being used to better understand grade distribution and assist with geological modeling and exploration drilling. Results from many of these initiatives will take time to have an effect but Great Panther remains committed to long term profitability and growth.
Our key objective for 2013 is to reduce our unit cash costs. In addition, we are preparing to commence the development of our San Ignacio Project and have started drilling at the El Horcon Project. Despite the challenging times for the industry overall, Great Panther continues to maintain a strong balance sheet with $42.2 million in working capital, and no long term debt.“
Further discussion of the Company-s operational and financial results is contained in the Company-s Management-s Discussion and Analysis for the three months ended March 31, 2013.
OUTLOOK
In the first quarter of 2013, cash costs per ounce were significantly impacted by lower silver grades at Guanajuato. As a result, the Company is reviewing its cash cost guidance for 2013. The key objectives at Great Panther-s operations are to increase grades and lower costs while maintaining production goals. Existing capacity and continued improvements at the Guanajuato and Topia processing plants will help provide the foundation for growth in 2014 and beyond.
Silver and gold prices experienced significant declines in mid-April after the completion of the Company-s first quarter. If metal prices at the date of this news release are sustained through the balance of the second quarter of 2013, management anticipates that gross margins will be very low, or negative, for the period. Also, should these metal prices continue, or go lower, into the second half of the year, it is likely that cash flow from operations will not cover currently projected capital investments for the year.
Management continues to plan cost reduction initiatives and, with the recent lower silver grades and continued grade variability, particular emphasis is being placed on improving grade control as this is key to increased production and lower unit costs. Results from many of these initiatives will take time to have an effect but Great Panther remains committed to long term profitability and growth. With working capital in excess of $40 million, and no long term debt, management believes that the Company has sufficient funds to manage through the cost restructuring.
At the San Ignacio Project in Guanajuato, Mexico, the Company has acquired additional surface rights allowing sufficient space for the development of a ramp and waste dumps and for auxiliary infrastructure, and has applied for the permits required for underground development. During the first quarter of 2013, the Company received the explosives permit and began rehabilitation of the surface infrastructure to prepare for the commencement of mining development activities. It is expected that the land use permit and the Environmental Impact Assessment approvals will be received in the third quarter of 2013.
The Company commenced a surface drill program at El Horcon in April 2013 which includes plans for 30 drill holes for a total of 3,000 metres. The program is laid out along an 800-metre length of the Diamantillo vein and will test the Diamantillo vein as well as various splays and nearby parallel structures and veins.
In light of the recent drop in metal prices, the Company is reviewing its M&A strategy.
WEBCAST AND CONFERENCE CALL TO DISCUSS FINANCIAL RESULTS
The Company will host a webcast and conference call on May 9, 2013, at 7:00 a.m. Pacific Time, 10:00 a.m. Eastern Time. Hosting the call will be Mr. Robert Archer, Chief Executive Officer and Mr. Jim Zadra, Chief Financial Officer.
Shareholders, analysts, investors and media are invited to join the live webcast and conference call by dialing in just prior to the start time.
Dial in number (Toll Free): 1-877-407-9205
Dial in number (International): +1-201-689-8054
No passcode is required
To access the webcast please visit our website at .
A replay of the teleconference call will be available until May 16, 2013 by dialing the numbers below. In addition, the call and webcast will be archived on the Company-s website.
Replay number (Toll Free): 1-877-660-6853
Replay number (International): +1-201-612-7415
Conference ID #: 412943
NON-IFRS MEASURES
The discussion of financial results in this press release includes reference to EBITDA, Adjusted EBITDA and Cash Cost per Silver Ounce 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, 2013 for a definition and reconciliation of these measures to the Company-s financial statements.
ABOUT GREAT PANTHER
Great Panther Silver Limited is a profitable, 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. The Company-s current activities are focused on the mining of precious metals from its two wholly-owned operating mines in Mexico, Topia and Guanajuato. Great Panther is also in the process of developing its San Ignacio Project and has two exploration projects, El Horcon and Santa Rosa. The Company is also pursuing additional mining opportunities within Latin America, with the goal of adding to its portfolio of mineral properties.
All shareholders have the ability to receive a hard copy of the Company-s complete financial statements free of charge upon request. Should you wish to receive Great Panther Silver-s Financial Statements or the Annual Information Form in hard copy, please contact us at the Company toll free at 1-888-355-1766 or 604-608-1766, or e-mail .
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 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 Information Form for the year ended December 31, 2012 and Material Change Reports filed with the Canadian Securities Administrators available at and reports on Form 40-F and Form 6-K filed with the Securities and Exchange Commission and available at .
Contacts: Great Panther Silver Limited Robert A. Archer Chief Executive Officer 1-888-355-1766
Great Panther Silver Limited Rhonda Bennetto Vice President Corporate Communications 1-888-355-1766
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