Shares in Great Panther Silver (TSE:GPR) (NYSE MKT:GPL) opened higher this morning after the company posted 57% higher revenues and net income of C$3.6 million in for the first quarter of 2015, compared to a net loss of C$0.6 million in the same period of 2014.
Metal production increased 48% year-on-year thanks to better performance from both of the company's wholly owned mining operations and despite lower metal prices.
Revenue for the first quarter of 2015 was C$20.3 million, compared to $12.9 million for the comparative period in 2014 thanks to a 79% increase in metal sales volume as a result of an increase in metal production.
The company said that the combination of improved metal sales and 12 percent higher US dollar more than offset the impact of 16% and 7% respective decreases in the average realized silver and gold prices in US dollars.
The strong showing, presented in a report released Wednesday by the company, largely reflects an improving cash flow and the continuing ramp-up at the San Ignacio mine, which started commercial operations in June 2014, and a 17% quarter-over-quarter increase in output at the Topia mine:
"Despite metal prices that are down significantly from the first quarter of last year, the strengthening of the US dollar, improved grades, and addition of production from San Ignacio since it commenced commercial production last June, all contributed to a significantly improved quarter. These same factors decreased our cash cost and AISC per payable silver ounce to US$8.71 and US$14.47, respectively. It should be noted that the first quarter of last year was marked by operational disruptions that also contributed to the improved comparative results," said Great Panther's president and CEO, Robert Archer.
Total metal production in the first quarter reached 987,887 silver equivalent ounces, representing a 48 percent increase from 667,349 ounces in the same period of 2014 thanks to the additional 164,982 silver equivalent ounces production from San Ignacio, which achieved a total of 217,429 silver equivalent ounces.
Gold production increased 28% to 4,703 gold ounces.
Cash costs during the quarter came to US$8.71 per silver payable ounce for the first quarter of 2015, a 35% decrease compared to US$13.40 a year ago thanks to the stronger US dollar compared to the Mexican peso and higher silver grades. All-in sustaining costs (AISC), an industry-wide metric, decreased to US$14.47 from US$24.18 in the first quarter of 2014 due to lower cash, exploration, mine development and capital costs per payable silver ounce.
Total ore processed in the first quarter increased 37% year-on-year to a record 99,252 tonnes, with silver output rising 61% to 597,111 ounces, and gold up 28% to 4,703 ounces.
At Guanajuato, which includes the San Ignacio satellite mine, ore processed increased 48% to a record 82,026 tonnes compared to the year-ago quarter. Silver grades improved 38%, helping the silver equivalent ounce total soar 74% to a record 713,371 ounces.
Compared to the fourth quarter 2014 ("Q4 2014"), metal production on a silver equivalent ounce basis increased 8% and revenues increased 42%. Cash flow from operating activities rose by $6.1 million and the company can count on cash and cash equivalents of C$18.7 million at March 31, 2015 with net working capital increasing to C$36.9 million at March 31, 2015 from $32.9 million on December 31, 2014.
At the company's Topia mine, ore processed dropped 1% from the first quarter of 2014, but was up 9% to 17,225 tonnes compared to the fourth quarter. Topia notched record production of 274,515 silver equivalent ounces in the first quarter 2015, up 6% on the year ago quarter.
In March, Great Panther said production at San Ignacio is expected to continue increasing as the focus shifts to the new high grade and thicker vein zones to the south of 2014 workings. Considered together with ongoing efforts to improve grades at the main Guanajuato mines and at Topia, the company projected total production in a range of 3.5 to 3.6 million silver equivalent ounces for 2015.
Great Panther also confirmed its previous guidance of C$10 to $12 million for capital expenditures this year. It plans to spend on mine development and diamond drilling at GMC and Topia, and the acquisition of new equipment to drive efficiencies.