Silver Standard Resources (NASDAQ:SSRI) is a silver mine developer and operator based out of Canada with operations in Australia, North America and South America.
SSRI has the largest in-ground silver resource of any silver company estimated at proven, probable, measured, indicated, and inferred resources totaling 1.68 billion ounces of silver and an extensive portfolio of projects throughout the Americas.
During 2010 SSRI started mining from its Pirquitas mine in Northern Argentina with production ramping up to 8 to 10 million ounces of silver per year. Byproducts from the silver production are tin (extremely high demand globally) and zinc.
SSRI currently has the San Luis JV and Pitarilla projects under development and Diablillos and San Agustin projects in the advanced exploration stage.
The San Luis JV project is a small mine in Peru located in proximity to Barrick’s Pierina mine. The expected mine life is only 3.5 years and holds just 7.2 million ounces of silver which is small relative to other projects in the company’s portfolio and is not expected to be of a material nature.
The Pitarilla project in Mexico has a MII resource of 630 million ounces of silver and 9.2 million ounces of gold located in the Durango region of Mexico. It is an underground project with an expected two-year construction time and $278 million in capex from a 2009 pre-feasibility study.
The San Agustin project near the Pitarilla project is in the advanced exploration phase with approximately MII 110 million ounces of silver in the advanced exploration phase.
The Diablillos project in Argentina is in the advanced exploration stage with approximately MII 220 million ounces of silver with additional drilling intended for 2011.
SSRI sold the Snowfield and Bluejack projects to Pretium Resources for a total consideration of $450 million, included in that figure is Silver Standard taking a significant equity interest in Pretium retaining upside if the project surprises on the upside. Pretium is interesting in that Robert Quartermain, the former president of SSRI, is the president and CEO of Pretium Resources.
SSRI is just moving into production with one of its mines and is very expensive on a fundamental basis. Investors are paying up in hopes that the silver in the ground will be monetized at a future date. Fourth quarter earnings are scheduled to be released next week and investors would be well served to note how quickly management is moving in terms of bringing portfolio projects into production.
Disclaimer: Communications are intended solely for informational purposes. Statements made should not be construed as an endorsement, either expressed or implied. This article and the author is not responsible for typographic errors or other inaccuracies in the content. This article may not be reproduced without credit or permission from the author. We believe the information contained herein to be accurate and reliable. However, errors may occasionally occur. Therefore, all information and materials are provided “AS IS” without any warranty of any kind. Past results are not indicative of future results.
Before making any type of investment, one should consult with an investment professional to consider whether the investment is appropriate for the individual's risk profile. This is not intended to be investment advice or a solicitation to purchase any of the securities listed here. I will not be held liable or responsible for any losses or damages, monetary or otherwise that result from the content of this article.