Silver Standard Resources Inc. (TSX:SSO) has reported a big drop in net earnings to US$2.6 million, as costs rose and the mining company had downtime at its Pirquitas mine in Argentina.
The company said its profits amounted to three cents per share in the quarter, compared to a net income of $361.6 million, or $4.56 per share.
Analysts expected Silver Standard to report a loss of six cents per share, according to four estimates compiled by Thomson Reuters.
President and CEO John Smith said 2011 was a significant year in building the company.
“At Pirquitas, we resolved the technical issues and the focus going forward is on producing consistently, managing costs and extending the mine life,” Smith said in a news release.
“Other key objectives for 2012 are advancing our development projects and growing our substantial resource base.”
For fiscal 2011, Silver Standard had net earnings of $80.1 million or $1 of earnings per share, compared with net earnings of $338.5 million or $4.34 per share in the same quarter in 2010.
Revenue for 2011 was $147.8 million compared with $112.2 million in 2010.
Direct mining costs in 2011 were $13.65 per ounce of silver compared to $12.19 per ounce in 2010 due to local labour costs and catering, as well as repairs and maintenance costs and expenditures to improve long-term production efficiency of the facility, the company said.
For 2012, Silver Standard expects to produce 8.2 million to 8.5 million ounces of silver and 10.5 million pounds to 11.5 million pounds of zinc.
Direct mining costs are projected at $11.85 per ounce of silver based on mining costs of $100.8 million. Capital expenditures at Pirquitas of approximately $19 million.
The Vancouver-based company, which has a market value of about $1.2 billion, is mainly involved in the silver properties in the Americas. Its flagship Pirquitas mine is in Argentina.
It is also developing the Pitarrilla project in Durango, Mexico, and released updated mineral resource estimates in February.