Great Panther Silver Reports Third Quarter 2012 Financial Results
VANCOUVER, BRITISH COLUMBIA -- (Marketwire) -- 11/14/12 -- Great Panther Silver Limited (TSX: GPR)(NYSE MKT: GPL) ("Great Panther" or the "Company") today reported financial results for the Company's three and nine months ended September 30, 2012. The full version of the Company's financial statements and Management's Discussion and Analysis can be viewed on the Company's website at www.greatpanther.com, or SEDAR at www.sedar.com. All financial information is prepared in accordance with IFRS and all dollar amounts are expressed in Canadian dollars unless otherwise indicated.
"Great Panther continues to enjoy a strong balance sheet and has made significant investments in our operations in 2012," stated Robert Archer, CEO. "Grade variability continues to be a challenge at both mines, especially at Topia, and is a major focal point for our mine planners in order to reduce our unit cash costs going forward. Quarterly revenue was impacted by lower year-over-year metal prices and a large in-transit shipment of concentrate from Guanajuato, however the latter simply defers revenue recognition until the fourth quarter of 2012."
THIRD QUARTER AND YEAR TO DATE 2012 FINANCIAL SUMMARY
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(in 000s except
ounces, amounts 9 Months 9 Months
per share and ended ended
per ounce) 2012 Q3 2011 Q3 Change Sep 30, 2012 Sep 30, 2011 Change
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Revenue $ 15,286 $ 16,278 -6% $ 43,350 $ 40,298 8%
Gross profit
(Earnings from
mining
operations) $ 5,791 $ 8,320 -30% $ 15,887 $ 20,884 -24%
Net income $ 1,758 $ 3,415 -49% $ 6,795 $ 12,925 -47%
Adjusted
EBITDA(1) $ 4,961 $ 7,752 -36% $ 13,093 $ 18,459 -29%
Earnings per
share - basic $ 0.01 $ 0.03 -67% $ 0.05 $ 0.10 -50%
Earnings per
share - diluted $ 0.01 $ 0.02 -50% $ 0.05 $ 0.10 -50%
Silver ounces
produced 371,857 343,768 8% 1,106,106 1,140,618 -3%
Silver
equivalent
ounces
produced(2) 592,586 484,550 22% 1,705,974 1,654,719 3%
Silver payable
ounces 314,146 364,684 -14% 1,026,192 907,037 13%
Total cash cost
per silver
ounce (USD)(1) $ 13.16 $ 9.02 46% $ 11.22 $ 10.34 8%
Average realized
silver price
(USD)(3) $ 31.92 $ 35.38 -10% $ 31.61 $ 36.36 -13%
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THIRD QUARTER 2012 FINANCIAL DISCUSSION
-- Revenues for the third quarter of 2012 totalled $15.3 million, a
decrease of 6% over the same period in 2011 as a result of a decrease in
both silver equivalent ounces sold and realized metal prices. An in-
transit shipment of concentrate at the end of the quarter accounted for
the decrease in ounces sold, representing approximately 108,000 Ag eq oz
with an approximate revenue value of $3.3 million that will be
recognized in the fourth quarter of this year. Revenues increased 6%
over the second quarter of 2012 due to higher metal prices and an
increase in silver equivalent ounces sold;
-- Gross profit for the third quarter of 2012 was $5.8 million compared to
$8.3 million for the same period in 2011. The decrease in gross profit
is attributable to lower revenues and an increase in cost of sales. The
increase in cost of sales is attributable to higher site costs at
Guanajuato and Topia, and lower grades at Topia which resulted in lower
metal production and higher unit cost of sales. Silver grades at Topia
were 316g/t for the third quarter of 2012, a 25% decrease from the
silver grades realized in the third quarter of 2011. While revenues were
negatively impacted by lower silver, lead and zinc prices compared to
third quarter 2011, this was partially offset by higher gold production
at Guanajuato. In addition, higher amortization and depletion charges
were realized in the quarter as a result of an increased investment in
mine development and capital equipment over the past year. From the
second quarter to the third quarter of 2012, gross profit increased by
$2.0 million, primarily as a result of higher average realized metal
prices;
-- Total cash cost per silver ounce for the third quarter of 2012 was
US$13.16, a 46% increase compared to US$9.02 for the same period in 2011
and a 15% increase compared to US$11.42 in the second quarter of 2012.
The increases were primarily due to lower grades at Topia which resulted
in higher unit production costs, and increased smelting and refining
charges. These were offset by decreases in cash cost per ounce at the
Guanajuato mine due to higher by-product revenues from increased gold
production;
-- General and administrative expenses for the third quarter of 2012
totalled $3.0 million, as compared to $2.0 million for the same period
in 2011 and $2.1 million for the second quarter in 2012. Both increases
were primarily the result of $0.7 million in share-based payment expense
and a $0.2 million capital tax assessment in Mexico related to prior
years. The comparative periods did not include any share-based payment
expenses;
-- Net income for the third quarter of 2012 totalled $1.8 million, compared
to $3.4 million for the same quarter in 2011 and $0.4 million in the
second quarter of 2012. The decrease from the third quarter in 2011 was
the result of decreased gross profit of $2.5 million, increases in
general and administrative expenses of $1.0 million and an increase in
exploration and evaluation expenses of $0.4 million. These were offset
by a foreign exchange loss of $0.6 million in the third quarter of 2012,
which compared to a loss of $3.1 million in the comparative period. The
increase in net income over the second quarter of 2012 was the result of
an increase in gross profit of $2.0 million and a decrease in income tax
expense of $0.2 million, offset by an increase of $0.9 million in
general and administrative expenses, primarily due to share-based
payment expenses;
-- Adjusted EBITDA(4) was $5.0 million for the third quarter of 2012,
compared to $7.8 million for the same period in 2011 and $3.7 million
for the second quarter of 2012. The decrease from the third quarter of
2011 primarily reflects a decrease in gross profit and an increase in
general and administrative expenses as noted above. The increase from
the second quarter of 2012 was the result of higher gross profit, partly
offset by higher general and administrative expenses;
-- At September 30, 2012 the Company had cash and cash equivalents of $26.8
million, a decrease of $1.9 million from the quarter ended June 30,
2012. During the third quarter of 2012 the Company generated net cash
flows from operating activities of $5.9 million. Net cash outflows from
investment activities were $7.8 million during the third quarter of
2012, primarily related to the development of mineral properties,
capitalized exploration and evaluation, and the purchase of plant and
equipment relating to the two operating mines. Investment activities for
the three month period also include the initial cash payment of $1.0
million for the purchase of the El Horcon Project; and
-- At September 30, 2012 the Company's net working capital position
remained strong at $45.9 million, although it constituted a decrease
compared to $49.9 million at June 30, 2012. The decrease from the prior
quarter end is accounted for by capital expenditures and increased
inventories due primarily to the in-transit shipment at the end of the
quarter.
THIRD QUARTER 2012 OPERATIONAL SUMMARY
-- Processed ore increased 9% to 58,307 tonnes compared to the third
quarter of 2011, and increased 10% over the second quarter of 2012 due
to a concerted effort to increase production;
-- Metal production increased 22% to 592,586 silver equivalent ounces ("Ag
eq oz") compared to the third quarter of 2011 and increased 7% over the
second quarter of 2012;
-- Gold production increased 102% to 3,015 ounces compared to the third
quarter of 2011;
-- Silver production increased 8% to 371,857 ounces compared to the third
quarter of 2011;
-- Cash cost per silver ounce increased 46% to US$13.16 compared to the
third quarter of 2011 due primarily to increased site labor and
contractor operating costs;
-- Processed ore at Guanajuato increased 6% over the third quarter of 2011
due in part to the move to a seven day work week for the Guanajuato mine
operation;
-- Guanajuato ore grades of 188g/t Ag and 2.22g/t Au, or 321g/t Ag eq were
up 32% over the third quarter of 2011;
-- Guanajuato achieved strong metallurgical recoveries of 90.9% and 91.9%
for silver and gold respectively due largely to the addition of a re-
grind mill earlier in the year;
-- Ore processed at Topia was up 22% from the third quarter of 2011 to
14,593 tonnes due to the processing of some of the stockpiled ore from
the first half of the year; and
-- Topia ore grades were down 19% to 442g/t Ag eq compared to the same
period in the prior year.
BUSINESS DEVELOPMENTS HIGHLIGHTS
-- On August 21, 2012, the Company announced it had signed a definitive
agreement for the purchase of a 100% interest in certain surface rights
on its wholly-owned San Ignacio Project in Guanajuato, Mexico. A total
of 19.4 hectares has been purchased, thereby allowing sufficient space
for access to and construction of a portal for the development of a
ramp, for waste dumps, and for auxiliary infrastructure.
-- On September 5, 2012, the Company completed the purchase of a 100%
interest in the El Horcon Silver-Gold Project ("El Horcon") in Jalisco
State, Mexico for total cash consideration of US$1,600,000. El Horcon is
a past producing mine and the property covers 7,908 hectares in 17
contiguous mining concessions along the regional Guanajuato structural
trend. It is located within trucking distance, 60 kilometres northwest
of the Company's Guanajuato Mine Complex, allowing for the potential to
become a satellite mine for the Company's Guanajuato operations.
OUTLOOK
Based upon continued grade variability and higher smelting and refining charges at both mines, especially at Topia, which have resulted in higher unit operating costs, cash cost per silver ounce guidance has been adjusted to a range of USD$11.00 to USD$12.00 from a range of USD$9.50 to USD$10.50.
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2012 Production and Cash Cost 2012 Guidance 2012 Guidance
per Silver Ounce Guidance 2011 Actual Low Case High Case
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Tonnes milled 216,181 215,000 230,000
Silver Ounces 1,495,372 1,450,000 1,550,000
Gold Ounces 8,016 10,000 11,000
Lead Tonnes 941 900 1,000
Zinc Tonnes 1,314 1,300 1,500
Silver Equivalent Ounces 2,200,013 2,200,000 2,400,000
Cash costs per silver ounce
(USD) $ 10.84 $ 11.00 $ 12.00
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With the acquisition of key surface rights at San Ignacio, the Company has applied for the permits required for underground development and permitting is expected to be completed by the first quarter of 2013. The construction of the portal and development of a ramp will commence immediately after the receipt of permits.
Great Panther continues to seek out opportunities to add production in the districts within which it is already operating. Consequently, the Company expects to commence a drill program in the first quarter of 2013 with the goal of delineating a resource at the recently acquired El Horcon Project located 60 kilometres northwest of the Guanajuato mine.
CONFERENCE CALL TO DISCUSS THIRD QUARTER 2012 FINANCIAL RESULTS
The Company will hold a conference call to discuss the financial results on November 15, 2012, at 7:00 AM Pacific Standard Time, 10:00 AM Eastern Standard Time. Hosting the call will be Mr. Robert Archer, Chief Executive Officer and Mr. Jim Zadra, Chief Financial Officer.
Interested shareholders, analysts, investors and media are invited to join the live 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
A replay of the teleconference call will be available until November 29, 2012 by dialing the numbers below. In addition, the call will be archived on the Company's website.
Replay number (Toll Free): 1-877-660-6853
Replay number (International): +1-201-612-7415
Replay Passcodes (both are required for playback):
Account #: 286
Conference ID #: 401683
INTERNATIONAL FINANCIAL REPORTING STANDARDS
The financial results discussed in this press release have been prepared in accordance with IFRS standards applicable to the preparation of financial information as required for all publicly traded companies in Canada. Readers should note that some comparative figures in this press release and the Company's financial statements and Management's Discussion and Analysis ("MD&A") have been restated to reflect IFRS. Please refer to the Company's Consolidated Financial Statements and MD&A for the year ended December 31, 2011 for a detailed description of the Company's accounting policies under IFRS and for disclosures and reconciliation of the impact of IFRS on previously reported results.
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 and nine months ended September 30, 2012 for a definition and reconciliation of these measures to reported IFRS results.
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, including the development stage San Ignacio Project. In addition, the Company is also pursuing acquisition opportunities throughout Latin America to add additional mines to its portfolio of properties. Great Panther's mission is to become a leading primary silver producer by acquiring, developing and profitably mining precious metals.
All shareholders have the ability to receive a hard copy of the Company's complete audited financial statements free of charge upon request. Should you wish to receive Great Panther Silver's Financial Statements or the Annual Report on Form 20-F in hard copy, please contact us at the Company toll free at 1-888-355-1766 or 604-608-1766, or e-mail info@greatpanther.com.
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, 2011 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.
GREAT PANTHER SILVER LIMITED
CONDENSED INTERIM CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
(Expressed in thousands of Canadian dollars)
September 30, 2012 and December 31, 2011 (Unaudited)
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September 30, December 31,
2012 2011
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Assets
Current assets
Cash and cash equivalents $ 26,827 $ 39,437
Marketable securities 88 80
Trade and other receivables 17,202 14,076
Income taxes recoverable 58 374
Inventories 7,844 4,591
Prepaid expenses, deposits and advances 1,252 1,732
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53,271 60,290
Non-current assets
Mineral properties, plant and equipment 60,129 41,946
Intangible assets 657 708
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$ 114,057 $ 102,944
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Liabilities and shareholders' equity
Current liabilities
Trade and other payables $ 7,178 $ 6,350
Finance lease obligations - 130
Current tax liability 182 -
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7,360 6,480
Non-current liabilities
Reclamation and remediation provision 2,069 2,154
Deferred tax liability 3,500 1,824
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12,929 10,458
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Shareholders' equity
Share capital 122,404 121,536
Reserves 7,444 6,465
Deficit (28,720) (35,515)
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101,128 92,486
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$ 114,057 $ 102,944
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GREAT PANTHER SILVER LIMITED
CONDENSED INTERIM CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(Expressed in thousands of Canadian dollars, except per share data)
For the three and nine months ended September 30, 2012 and 2011 (Unaudited)
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Three months ended Nine months ended
September 30, September 30,
2012 2011 2012 2011
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Revenue $ 15,286 $ 16,278 $ 43,350 $ 40,298
Cost of sales
Production costs 7,566 6,581 21,747 16,605
Amortization and depletion 1,668 1,377 5,428 2,809
Share-based payments 261 - 288 -
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9,495 7,958 27,463 19,414
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Gross profit 5,791 8,320 15,887 20,884
General and administrative expenses
Administrative expenses 2,199 1,997 6,967 5,228
Amortization and depletion 67 36 136 94
Share-based payments 723 - 1,036 -
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2,989 2,033 8,139 5,322
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Exploration and evaluation expenses
Exploration and evaluation
expenses 582 279 1,601 652
Share-based payments 73 - 73 -
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655 279 1,674 652
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Income before the undernoted 2,147 6,008 6,074 14,910
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Finance and other income (expense)
Interest income 88 128 364 289
Finance costs (8) (17) (27) (308)
Foreign exchange gain (loss) (614) (3,143) 2,269 (2,498)
Other income 22 331 58 646
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(512) (2,701) 2,664 (1,871)
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Income before income taxes 1,635 3,307 8,738 13,039
Income tax recovery (expense)
Current (315) 108 (315) (114)
Deferred 438 - (1,628) -
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123 108 (1,943) (114)
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Net income for the period $ 1,758 $ 3,415 $ 6,795 $ 12,925
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Other comprehensive income (loss),
net of tax
Foreign currency translation (224) (223) (30) (721)
Change in fair value of available-
for-sale financial assets 8 (28) 1 (134)
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(216) (251) (29) (855)
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Total comprehensive income for the
period $ 1,542 $ 3,164 $ 6,766 $ 12,070
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Earnings per share
Basic $ 0.01 $ 0.03 $ 0.05 $ 0.10
Diluted $ 0.01 $ 0.02 $ 0.05 $ 0.10
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GREAT PANTHER SILVER LIMITED
CONDENSED INTERIM CONSOLIDATED STATEMENTS OF CASH FLOWS
(Expressed in thousands of Canadian dollars)
For the three and nine months ended September 30, 2012 and 2011 (Unaudited)
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Three months ended Nine months ended
September 30, September 30,
2012 2011 2012 2011
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Cash flows from operating
activities:
Net income for the period $ 1,758 $ 3,415 $ 6,795 $ 12,925
Items not involving cash:
Amortization, depletion and
accretion expense 1,735 1,413 5,564 2,903
Unrealized foreign exchange
(gains) losses (109) 2,006 (2,443) 2,198
Income tax expense (recovery) (123) (108) 1,943 114
Share-based payments 1,057 - 1,397 -
Other non-cash items (80) (111) (359) 19
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4,238 6,615 12,897 18,159
Interest received 66 93 328 254
Interest paid (3) (6) (6) (35)
Income taxes received (paid) 388 318 (146) (166)
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Net cash from operating activities
before changes in non-cash
working capital 4,689 7,020 13,073 18,212
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Changes in non-cash working
capital:
Trade and other receivables 713 (3,187) (3,090) (4,942)
Income taxes recoverable 197 (36) 316 (57)
Inventories (2,152) 748 (2,763) (3,079)
Prepaid expenses, deposits and
advances 2,571 223 480 (628)
Trade and other payables (147) (147) 584 (94)
Current tax liability 13 (338) 13 33
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Net cash from operating activities 5,884 4,283 8,613 9,445
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Cash flows from investing
activities:
Purchase of intangible assets (200) (133) (426) (454)
Purchase of mineral properties,
plant and equipment (7,580) (6,314) (21,460) (15,726)
Proceeds from disposal of
mineral properties, plant and
equipment - - 86 -
Restricted cash - (14) - 31
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Net cash used in investing
activities (7,780) (6,461) (21,800) (16,149)
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Cash flows from financing
activities:
Repayment of capital lease
obligations (13) (65) (130) (287)
Repayment of promissory notes - - - (448)
Repayment of convertible loan
notes - - - (61)
Proceeds from exercise of
options 157 394 479 2,308
Proceeds from exercise of
warrants - 505 - 4,056
Issuance of shares for cash, net
of issue costs - - - 22,500
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Net cash from financing
activities 144 834 349 28,068
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Effect of foreign currency
translation on cash (96) (342) 228 (257)
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Increase (decrease) in cash and cash
equivalents (1,848) (1,686) (12,610) 21,107
Cash and cash equivalents, beginning
of period 28,675 36,760 39,437 13,967
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Cash and cash equivalents, end of
period $ 26,827 $ 35,074 $ 26,827 $ 35,074
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(1) "Adjusted EBITDA" and cash cost per silver ounce are non-IFRS measures. Refer to the "Non-IFRS Measures" section of the Company's MD&A for a complete definition and reconciliation to the Company's financial statements.
(2) Silver equivalent ounces in 2012 were established using prices of US$28 per oz, US$1,680 per oz, US$0.85 per lb and US$0.85 per lb for silver, gold, lead & zinc, respectively, and applied to the recovered metal content of the concentrates that were produced by the two operations.
(3) Average realized silver price is prior to treatment, refining and smelting charges.
(4) "Adjusted EBITDA" is a non-IFRS measure. Refer to the "Non-IFRS Measures" section of this Press Release and Company's MD&A for a complete definition and reconciliation to the Company's financial statements.
Contacts:
Great Panther Silver Limited
Rhonda Bennetto
Vice President Corporate Communications
1-888-355-1766
Great Panther Silver Limited
Robert A. Archer
Chief Executive Officer
1-888-355-1766
info@greatpanther.com
www.greatpanther.com
