Great Panther Silver Reports Third Quarter 2016 Financial Results

VANCOUVER - “Great Panther Silver reported third quarter mine operating earnings, operating cash flow and net income all showed significant increases over the third quarter of 2015, reflecting improved metal prices and favorable foreign exchange rates," stated Robert Archer, President and CEO.  "In addition, we have seen a significant increase in operating cash flow on a year-to-date basis that, along with the completion of a $29.9 million bought deal financing in July, has contributed to a significant strengthening of our balance sheet.  The Company also continues to be debt free."

During the third quarter of 2016, the Company generated $7.2 million in mine operating earnings before non-cash items, and $4.2 million in operating cash flows before changes in non-cash net working capital, which represent increases of 64% and 254%, respectively, over the results from the third quarter of 2015.  These strong operating results were primarily attributable to a 22% increase in revenue and a slight decrease in cost of sales.  The Company reported net income of $2.1 million for the third quarter of 2016, and adjusted EBITDA increased by 197% to $4.7 million.

Highlights of the third quarter 2016 compared to third quarter 2015, unless otherwise noted: Metal production decreased 12% to 953,632 Ag eq oz; Silver production decreased 13% to 510,491 silver ounces; Gold production decreased 11% to 5,432 gold ounces; Cash cost decreased 49% to $3.30 per payable silver ounce; Cash cost per Ag eq oz increased 5% to $10.99; AISC decreased 8% to $11.97 per payable silver ounce; AISC per Ag eq oz increased 8% to $15.43; Revenue increased 22% to $15.6 million; Mine operating earnings before non-cash items increased to $7.2 million, a 64% increase; Adjusted EBITDA improved to $4.7 million from $1.6 million; Net income totaled $2.1 million, compared to a net loss of $2.6 million; Net income per share improved to $0.01, compared to a net loss per share of $0.02; Cash flow from operating activities, before changes in non-cash net working capital ("NCWC"), increased to $4.2 million, from $1.2 million; Cash and cash equivalents increased to $52.9 million at September 30, 2016, from $13.7 million at December 31, 2015; and Net working capital increased to $68.2 million at September 30, 2016 from $25.5 million at December 31, 2015. 

Revenue increased by $2.8 million or 22% relative to the third quarter of 2015.  In addition, smelting and refining charges, which are netted against revenue, were $0.2 million lower than in the third quarter of 2015.  These positive factors were partly offset by a 7% decrease in metal sales volumes, which had an estimated effect of reducing revenue by $1.2 million, relative to the third quarter of 2015.  The lower metal sales volume was predominantly the result of the lower gold grades at the Guanajuato Mine Complex (the "GMC"), as well as a decrease in production at the Topia Mine due to two temporary shut-downs of operations during the quarter.  The Company sold 864,605 Ag eq oz during the third quarter of 2016, compared to 931,198 during the same period in 2016; a reduction of 7%.  

Cost of sales before non-cash items, when compared to the third quarter of 2015, remained relatively unchanged as the 7% reduction in metal sales volumes more than offset a 5% increase in cash cost per Ag eq oz sold.

Exploration, evaluation and development (EE&D) decreased by $0.1 million compared to the same period in 2015.  During the comparative period, the Company undertook significant exploration programs related to two projects, while project exploration activity was significantly less in the third quarter of 2016.  This reduction in project exploration and evaluation expenses was partly offset by an increase in mine development expenses at the GMC. 

The Company is maintaining its cash cost and AISC guidance for the year ending December 31, 2016 as shown in the table below.  AISC for the fourth quarter of 2016 is expected to be higher than the $9.23 for the first nine months of 2016, due to the impact of capital expenditure and development programs including the Topia tailings dam Phase II construction which commenced in the third quarter of 2016.