Great Panther Silver Reports Fiscal Year 2012 Financial Results
VANCOUVER, BRITISH COLUMBIA -- (Marketwire) -- 03/13/13 -- GREAT PANTHER SILVER LIMITED (TSX: GPR)(NYSE MKT: GPL) ("Great Panther"; the "Company") today reported financial results for the Company's year ended December 31, 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.
"We are pleased to report record revenues and revenue growth of 6% despite a decline in average silver prices," stated Robert Archer, CEO. "While we remained profitable, we saw a decrease in profitability due to lower metal prices, increases in our operating costs and greater expenditures in exploration and development activities. These additional expenditures resulted in the discovery of new silver-gold mineralization in the Guanajuato Mine Complex and the development of the underground infrastructure to connect the lower levels of the Guanajuatito Mine with the main ore hoisting shaft at Cata. Our focus for 2013 is to improve the profitability of our operations, and to commence the development of our San Ignacio Project in preparation for anticipated production in 2014."
FOURTH QUARTER AND FISCAL YEAR 2012 FINANCIAL SUMMARY
--------------------------------------------------------------------------
Highlights
(in 000s except
ounces, amounts Year Ended Year Ended
per share and Dec 31, Dec 31,
per ounce) 2012 Q4 2011 Q4 Change 2012 2011 Change
--------------------------------------------------------------------------
Revenue $ 17,789 $ 17,520 2% $ 61,139 $ 57,818 6%
Gross profit
(Earnings from
mining
operations) $ 3,318 $ 6,032 -45% $ 19,206 $ 26,916 -29%
Net income
(loss) $ (1,285) $ (1,419) 9% $ 5,510 $ 11,506 -52%
Adjusted
EBITDA(1) $ 3,800 $ 6,265 -39% $ 16,893 $ 24,723 -32%
Earnings (loss)
per share -
basic $ (0.01) $ (0.01) 0% $ 0.04 $ 0.09 -56%
Earnings (loss)
per share -
diluted $ (0.01) $ (0.01) 0% $ 0.04 $ 0.08 -50%
Silver ounces
produced 453,934 354,754 28% 1,560,040 1,495,372 4%
Silver
equivalent
ounces
produced(2) 672,690 545,294 23% 2,378,603 2,200,013 8%
Silver payable
ounces 446,077 425,225 5% 1,472,269 1,332,262 11%
Total cash cost
per silver
ounce (USD)(1) $ 14.58 $ 11.92 22% $ 12.24 $ 10.84 13%
Average realized
silver price
(USD)(3) $ 31.94 $ 30.86 3% $ 30.93 $ 34.71 -11%
--------------------------------------------------------------------------
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
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
Fiscal Year 2012 Financial and Operational Highlights (Compared to Fiscal Year 2011)
-- Revenues totalled $61.1 million for the year ended December 31, 2012, an
increase of 6%;
-- Net income was $5.5 million for 2012, a decrease of 52%;
-- Cash-flow from operating activities was $13.1 million for 2012, compared
to $19.1 million;
-- Cash position at year end was $25.9 million, inclusive of short term
investments, compared to $39.5 million;
-- Net working capital at year end was $44.5 million, compared to $53.8
million;
-- Processed ore for 2012 totaled 230,120 tonnes, a 6% increase;
-- Record metal production was achieved for 2012 of 2,378,603 silver
equivalent ounces ("Ag eq oz"), an 8% increase;
-- Silver production for 2012 increased 4% to 1,560,040 ounces;
-- Gold production for 2012 increased 36% to a record of 10,924 ounces;
-- Cash cost per silver ounce for 2012 increased 13% to US$12.24;
-- Average silver grades at Guanajuato for 2012 were unchanged at 199g/t,
while average gold grades increased to 2.02g/t from 1.52g/t;
-- Topia average silver grades for 2012 decreased to 345g/t from 400g/t,
and
-- Guanajuato maintained strong metallurgical recoveries 2012 of 90.2% and
91.5% for silver and gold respectively.
Fourth Quarter 2012 Financial and Operational Highlights (Compared to Fourth Quarter 2011)
-- Revenues totalled $17.8 million for the three months ended December 31,
2012 ("Q4 2012") compared to $17.5 million for the three months ended
December 31, 2011 ("Q4 2011"), an increase of 2%;
-- Net loss for Q4 2012 was $1.3 million, compared to a net loss of $1.4
million in Q4 2011;
-- Cash-flow from operating activities was $4.5 million for Q4 2012,
compared to $9.9 million for Q4 2011;
-- Processed ore for Q4 was 67,659 tonnes, representing an increase of 30%;
-- Metal production for Q4 2012 was 672,690 Ag eq oz, a quarterly record
and an increase of 23% over Q4 2011;
-- Silver production for Q4 was 453,934 ounces, an increase of 28%; and
-- Gold production for Q4 was 2,826 ounces, an increase of 24%.
FISCAL YEAR 2012 FINANCIAL DISCUSSION
-- Revenues for the year ended December 31, 2012 totalled $61.1 million, an
increase of 6% over 2011 as a result of an increase in silver equivalent
ounces sold, which offset an 11% decrease in the average realized silver
price;
-- Gross profit for the year ended December 31, 2012 was $19.2 million
compared to $26.9 million for the year ended December 31, 2011. The
decrease is due to higher site costs at both mines and lower ore grades
at Topia. In addition, higher amortization and depletion charges were
realized in cost of sales as a result of increased investments in mine
development, exploration of operating mines, and plant and equipment
over the past year;
-- Gross profit percentage for the year ended December 31, 2012 was 31%
compared to 47% for the year ended December 31, 2011. The decrease is
attributed to a lower average realized silver price, higher unit cost of
sales, and higher amortization and depletion charges;
-- Consolidated cash cost per silver ounce for the year ended December 31,
2012 was US$12.24, a 13% increase from US$10.84 in 2011. The increase
was primarily due to higher site costs at both mines and lower grades at
Topia which resulted in higher unit production costs. In addition, the
Company saw an increase in overall smelting and refining charges as a
result of higher contractual charges for Topia concentrates. The higher
unit production costs and smelting and refining charges were offset
somewhat by higher by-product credits from an increase in gold
production at Guanajuato;
-- General and administrative expenses for the year ended December 31, 2012
totalled $10.1 million as compared to $8.6 million for the year ended
December 31, 2011. The increase due primarily to a one-time payment of
$0.7 million in connection with the retirement of an executive director,
a $0.3 million increase in occupancy costs reflecting a new office lease
and the remaining payments on the lease for the former premises;
-- Exploration and evaluation expenses for the year ended December 31, 2012
were $2.4 million compared to $0.9 million for the year ended December
31, 2011. The increase is attributable to an increase in exploration and
business development activities outside of the Company's operating
mines. These include exploration activities at Santa Rosa and the El
Horcon Project and increased evaluation activities in connection with
prospective acquisitions;
-- Net income for the year ended December 31, 2012 totalled $5.5 million,
compared to $11.5 million for the year ended December 31, 2011. The
decrease is attributable to a $7.7 million decrease in gross profit, a
$1.5 million increase in general and administrative expenses, a $1.5
million increase in exploration and evaluation expenses, and an increase
in tax expense of $2.2 million. These were offset by a foreign exchange
gain of $2.8 million in 2012 in finance and other income compared to a
foreign exchange loss of $4.6 million in 2011;
-- Foreign exchange gains and losses arise from the translation of foreign
denominated transactions and balances relative to the functional
currency of the Company's subsidiaries and the Company's reporting
currency. The Company has significant Canadian and US dollar loans
receivable from one of its Mexican subsidiaries and fluctuations in the
Mexican peso create significant unrealized foreign exchange gains and
losses on the loans owing to the Canadian parent. These unrealized gains
and losses are recognized in the consolidated net income of the Company;
-- Adjusted EBITDA(1) was $16.9 million for the year ended December 31,
2012, compared to $24.7 million for the year ended December 31, 2011.
The decrease is primarily due to a decrease in gross profit but also an
increase in general and administrative expenses before amortization and
share-based payment expenses, and increased exploration and evaluation
expenses;
-- At December 31, 2012, the Company had cash and cash equivalents of $25.9
million, inclusive of short term investments, which constituted a
decrease of $13.6 million from the balance at December 31, 2011. During
the year, the Company generated net cash flows from operating activities
of $13.1 million. Net cash outflows from investment activities were
$27.5 million for the year, primarily related to the development and
exploration of the Company's operating mines, the purchase of plant and
mine equipment, and the acquisition of the El Horcon Project for $1.6
million; and
-- At December 31, 2012, the Company's net working capital position
remained strong at $44.5 million, although it represented a decrease
from $53.8 million at December 31, 2011.
(1) "Adjusted EBITDA" is a non-IFRS measure. Refer to the "Non-IFRS Measures" section of this Press Release and the Company's MD&A for a complete definition and reconciliation to the Company's financial statements.
FOURTH QUARTER 2012 FINANCIAL DISCUSSION
-- Revenues totalled $17.8 million for the fourth quarter 2012 compared to
$17.5 million for fourth quarter of 2011, an increase of 2%;
-- Gross profit for the fourth quarter of 2012 was $3.3 million compared to
$6.0 million for the fourth quarter of 2011. The decrease was due to
lower average realized metal prices, higher unit operating costs, higher
smelting and refining charges and increased amortization and depletion
costs;
-- Cash cost per silver ounce for the fourth quarter of 2012 increased 22%
to US$14.58 compared to the fourth quarter of 2011 due primarily to
lower grades at Topia and increased site labour and contractor operating
costs;
-- General and administrative expenses for the fourth quarter of 2012 were
$1.9 million for the fourth quarter of 2012 compared to $3.2 million for
the fourth quarter of 2011. The decrease was the result of a large
share-based payment expense of $1.2 million in the fourth quarter of
2011. During 2011 the Company only granted options in the fourth
quarter, whereas in 2012 the Company granted options throughout the
year;
-- Net loss for the fourth quarter of 2012 was $1.3 million, compared to a
net loss of $1.4 million for the fourth quarter of 2011;
-- Adjusted EBITDA for the fourth quarter of 2012 was $3.8 million,
compared to $6.3 million for the fourth quarter of 2011. The decrease is
attributable to a decrease in gross profit and an increase in
exploration and evaluation expenses.
OUTLOOK
The Company's primary focus for the 2013 fiscal year is to improve and strengthen the operational efficiency of the existing operations and build the platform for more significant growth in 2014 and beyond.
The Company's goals are to:
1. Increase cash flow from mine operations by cutting costs and improving
operating efficiency;
2. Aggressively drive the development of the San Ignacio Project with the
view to commencing production in 2014 to augment existing production at
the Guanajuato Mine Complex;
3. Commence the exploration drilling at the El Horcon Project; and
4. Develop acquisition opportunities.
The Company expects metal production for 2013 to be in the range of 2.4 to 2.5 million Ag eq oz, and cash costs to be in the range of US$10.00 to US$11.00 per silver ounce.
--------------------------------------------------------------------------
2013 Production and Cash Cost per
Silver Ounce Guidance 2012 Actual 2013 Guidance Range
--------------------------------------------------------------------------
Silver Equivalent Ounces 2,378,603 2,400,000 - 2,500,000
Cash costs per silver ounce (USD) $ 12.24 $ 10.00 - 11.00
--------------------------------------------------------------------------
CONFERENCE CALL TO DISCUSS FISCAL YEAR 2012 FINANCIAL RESULTS
The Company will hold a conference call to discuss the financial results on March 14, 2013, at 7:00 AM Pacific Daylight Time, 10:00 AM Eastern Daylight 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 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 March 21, 2013 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
Conference ID #: 409255
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 year ended December 31, 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, Topia and Guanajuato, the development stage San Ignacio Project as well as the exploration project El Horcon. The Company is also pursuing additional mining opportunities within Latin America, with the goal of adding to its portfolio of mineral 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 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 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 Information Form for the year ended December 31, 2012 and Material Change Reports filed with the Canadian Securities Administrators available at www.sedar.com, and reports on Form 40-F and Form 6-K filed with the Securities and Exchange Commission and available at www.sec.gov.
GREAT PANTHER SILVER LIMITED
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
(Expressed in thousands of Canadian dollars)
December 31, 2012 and December 31, 2011
-------------------------------------------------------------------------
-------------------------------------------------------------------------
December 31, December 31,
2012 2011
-------------------------------------------------------------------------
Recast
(Note 5)
Assets
Current assets:
Cash and cash equivalents $ 20,735 $ 34,437
Short term investments 5,164 5,080
Trade and other receivables 18,099 14,076
Income taxes recoverable 130 374
Inventories 6,927 4,591
Prepaid expenses, deposits and advances 1,995 1,732
-------------------------------------------------------------------------
53,050 60,290
Non-current assets:
Mineral properties, plant and equipment 55,451 38,078
Exploration and evaluation assets 7,270 3,868
Intangible assets 705 708
Deferred tax asset 253 -
-------------------------------------------------------------------------
$ 116,729 $ 102,944
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Liabilities and Shareholders' Equity
Current liabilities:
Trade and other payables $ 8,111 $ 6,350
Finance lease obligations - 130
Current tax liability 400 -
-------------------------------------------------------------------------
8,511 6,480
Non-current liabilities:
Reclamation and remediation provision 2,447 2,154
Deferred tax liability 5,746 1,824
-------------------------------------------------------------------------
16,704 10,458
-------------------------------------------------------------------------
Shareholders' equity:
Share capital 122,444 121,536
Reserves 7,586 6,465
Deficit (30,005) (35,515)
-------------------------------------------------------------------------
100,025 92,486
-------------------------------------------------------------------------
$ 116,729 $ 102,944
-------------------------------------------------------------------------
-------------------------------------------------------------------------
GREAT PANTHER SILVER LIMITED
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(Expressed in thousands of Canadian dollars, except per share data)
For the years ended December 31, 2012 and 2011
-------------------------------------------------------------------------
-------------------------------------------------------------------------
2012 2011
-------------------------------------------------------------------------
Revenue $ 61,139 $ 57,818
Cost of sales
Production costs 32,864 25,475
Amortization and depletion 8,684 4,465
Share-based payments 385 962
-------------------------------------------------------------------------
41,933 30,902
-------------------------------------------------------------------------
Gross profit 19,206 26,916
General and administrative expenses
Administrative expenses 8,808 7,222
Amortization and depletion 206 97
Share-based payments 1,071 1,248
-------------------------------------------------------------------------
10,085 8,567
-------------------------------------------------------------------------
Exploration and evaluation expenses
Exploration and evaluation expenses 2,309 928
Share-based payments 73 -
-------------------------------------------------------------------------
2,382 928
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Income before the undernoted 6,739 17,421
-------------------------------------------------------------------------
Finance and other income (expense)
Interest income 442 435
Finance costs (34) (324)
Foreign exchange gain (loss) 2,828 (4,572)
Other (expense) income (265) 531
-------------------------------------------------------------------------
2,971 (3,930)
-------------------------------------------------------------------------
Income before income taxes 9,710 13,491
Income tax expense
Current (592) (108)
Deferred (3,608) (1,877)
-------------------------------------------------------------------------
(4,200) (1,985)
-------------------------------------------------------------------------
Net income for the year $ 5,510 $ 11,506
-------------------------------------------------------------------------
Other comprehensive income (loss), net of tax
Foreign currency translation 1 (352)
Change in fair value of available-for-sale
financial assets (8) (103)
-------------------------------------------------------------------------
(7) (455)
-------------------------------------------------------------------------
Total comprehensive income for the year $ 5,503 $ 11,051
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Earnings per share
Basic $ 0.04 $ 0.09
Diluted $ 0.04 $ 0.08
-------------------------------------------------------------------------
-------------------------------------------------------------------------
GREAT PANTHER SILVER LIMITED
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Expressed in thousands of Canadian dollars)
For years ended December 31, 2012 and 2011
-------------------------------------------------------------------------
-------------------------------------------------------------------------
2012 2011
-------------------------------------------------------------------------
As restated
Cash flows from operating activities
Net income for the year $ 5,510 $ 11,506
Items not involving cash:
Amortization and depletion 8,890 4,561
Unrealized foreign exchange (gains) losses (2,860) 3,849
Income tax expense 4,200 1,985
Share-based payments 1,529 2,210
Other non-cash items (391) (223)
-------------------------------------------------------------------------
16,878 23,888
-------------------------------------------------------------------------
Interest received 384 378
Interest paid (6) (171)
Income taxes paid (202) (267)
-------------------------------------------------------------------------
Net cash from operating activities before
changes in non-cash working capital 17,054 23,828
-------------------------------------------------------------------------
Changes in non-cash working capital:
Trade and other receivables (3,963) (4,384)
Income taxes recoverable 244 (135)
Inventories (1,924) (1,821)
Prepaid expenses, deposits and advances (263) (599)
Trade and other payables 1,982 2,070
Current tax liability 10 140
-------------------------------------------------------------------------
Net cash from operating activities 13,140 19,099
-------------------------------------------------------------------------
Cash flows from investing activities:
Purchase of intangible assets (811) (627)
Purchase of mineral properties, plant and
equipment (26,712) (23,459)
Proceeds from disposal of mineral
properties, plant and equipment 86 149
Purchase of short term investments (85) (5,000)
Restricted cash - 151
-------------------------------------------------------------------------
Net cash used in investing activities (27,522) (28,786)
-------------------------------------------------------------------------
Cash flows from financing activities:
Repayment of capital lease obligations (130) (367)
Repayment of promissory notes - (450)
Repayment of convertible loan notes - (62)
Proceeds from exercise of options 507 2,309
Proceeds from exercise of warrants - 6,170
Issuance of shares for cash, net of issue
costs - 22,512
-------------------------------------------------------------------------
Net cash from financing activities 377 30,112
-------------------------------------------------------------------------
Effect of foreign currency translation on
cash 303 45
-------------------------------------------------------------------------
Increase (decrease) in cash and cash
equivalents (13,702) 20,470
Cash and cash equivalents, beginning of year 34,437 13,967
-------------------------------------------------------------------------
Cash and cash equivalents, end of year $ 20,735 $ 34,437
-------------------------------------------------------------------------
-------------------------------------------------------------------------
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
info@greatpanther.com
www.greatpanther.com
