Silver Standard Resources (SSRI) Updates on Q3 Operational Results; Gold Production Hits Record

October 12, 2016 7:22 AM EDT
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Silver Standard Resources Inc. (Nasdaq: SSRI) provides its third quarter 2016 operational results.

Operating Highlights:

  • Demonstrated scale from three operations: Record quarterly production of 112,559 gold equivalent ounces.
  • Strong gold production at the Seabee Gold Operation: Produced 20,142 ounces of gold in the third quarter, positioning the mine to meet the upper end of production guidance.
  • Commenced Operational Excellence program at Seabee: Milled 900 tonnes per day during the third quarter, including a successful trial of approximately 1,000 tonnes per day in August 2016.
  • Record quarterly silver production at Pirquitas: Produced 3.0 million ounces of silver, 21% higher than the second quarter of 2016, as we milled more ore tonnes and achieved higher silver mill feed grade and recovery, on track to meet the upper end of production guidance.
  • Strong operating fundamentals at Pirquitas: Achieved record quarterly milling rate of 4,946 tonnes per day in the third quarter, including over 5,200 tonnes per day in August 2016.
  • Gold production on track at Marigold: Produced 47,456 ounces of gold during the third quarter of 2016, with expected strong fourth quarter production results, on track to meet guidance.
  • Increased total material mined at Marigold: Mined 19.6 million tonnes during the quarter reflecting increased haul truck capacity.

Paul Benson, President and CEO said, "This was a strong quarter with a number of production records. Our three mines delivered impressive operating results and record quarterly gold equivalent production, reflecting the addition of a full quarter gold production from Seabee and record silver production at Pirquitas with another solid quarter from Marigold. Pleasingly, we were able to start our Operational Excellence program at Seabee and saw some immediate results. With Seabee integrated into Silver Standard, our portfolio is showing our strength as a high-quality intermediate producer with scale and margin. We continue to focus on creating shareholder value through operational excellence, exploration for mine life extension and disciplined growth."

Marigold mine, U.S.

Q3 2016

Q2 2016

% Change 1

Total material mined

kt

19,558

18,685

4.7%

Waste removed

kt

14,741

12,005

22.8%

Ore to leach pad

kt

4,817

6,680

(27.9%)

Strip ratio

w/o

3.1

1.8

72.2%

Gold grade to leach pad

g/t

0.42

0.44

(4.5%)

Gold recovery

%

71%

71%

0.0%

Gold produced

oz

47,456

47,195

0.6%

Gold sold

oz

47,278

47,124

0.3%

1.

Percent changes are calculated using rounded numbers presented in the table.

The Marigold mine produced 47,456 ounces of gold in the third quarter of 2016, in line with our second quarter gold production and on target to meet previously increased annual guidance. The construction of a new leach pad was completed on schedule and under budget in the latter half of the third quarter. The additional leach pad capacity and higher amount of ore tonnes stacked earlier in the year are expected to result in a strong fourth quarter gold production. We recognized sales of 47,278 ounces of gold in the third quarter of 2016.

A total of 19.6 million tonnes was mined during the quarter, five per cent higher than the second quarter of 2016, due to increased hauling capacity added to the fleet earlier in the year. Approximately 4.8 million tonnes of ore were delivered to the leach pads at a gold grade of 0.42 g/t, containing approximately 47,000 recoverable ounces of gold stacked during the quarter. The strip ratio increased to 3.1:1 in the third quarter as we began stripping of the next Mackay pit phase. Gold recovery was 71% in the third quarter.

Seabee Gold operation, Canada

Q3 2016

Q2 2016 1

Period fromAcquisition toJune 30, 2016 2

% Change 3

Total ore milled

t

82,756

71,218

18,856

16.2%

Ore milled per day

t/day

900

783

629

14.9%

Gold mill feed grade

g/t

7.40

7.97

7.79

(7.2%)

Gold recovery

%

96.5%

96.8%

96.6%

(0.3%)

Gold produced

oz

20,142

17,524

6,721

14.9%

Gold sold

oz

21,911

16,305

11,306

34.4%

1.

The data presented in this column is for the period from April 1, 2016 to June 30, 2016 and includes operating results for the Seabee Gold Operation for the period from April 1 to May 30, 2016 prior to our acquisition.

2.

The data presented in this column is for the period from and after May 31, 2016, the effective date of our acquisition of Claude Resources Inc. ("Claude Resources"), to and including June 30, 2016.

3.

Percent changes are for the three-month periods ending June 30, 2016 and September 30, 2016. Percent changes are calculated using rounded numbers presented for Q2 2016 and Q3 2016 in the table.

The Seabee Gold Operation consists of the Seabee and Santoy underground mines, both of which feed a single processing facility. The operation produced 20,142 ounces of gold during the quarter that included a three-day, unplanned power outage. The Seabee Gold Operation is on track to meet the upper end of annual production guidance as disclosed by Claude Resources in its news release dated May 5, 2016. Gold sales were 21,911 ounces in the third quarter of 2016.

As part of our initial Operational Excellence plan for the Seabee Gold Operation, we successfully tested higher mill throughput during the month of August. The mill processed ore at or above 1,000 tonnes per day, with an average of 998 tonnes per day for the month of August. We achieved this with minor modifications to the processing facility, while maintaining gold recovery. As a result, we were able to increase throughput in the third quarter by 15% to 900 tonnes per day, compared to the second quarter of 2016. We are reviewing the long term mine plan to determine the feasibility of higher, sustainable throughput rates.

A total of 82,756 tonnes of ore were milled at an average gold grade of 7.40 g/t and gold recovery of 96.5%.

Pirquitas mine, Argentina

Q3 2016

Q2 2016

% Change 1

Total material mined

kt

2,385

2,543

(6.2%)

Waste removed

kt

1,584

1,814

(12.7%)

Ore mined

kt

801

729

9.9%

Strip ratio

w/o

2.0

2.5

(20.0%)

Silver mined grade

g/t

190

189

0.5%

Ore milled

kt

455

425

7.1%

Silver mill feed grade

g/t

264

238

10.9%

Silver recovery

%

79.0%

77.6%

1.8%

Silver produced

'000 oz

3,047

2,526

20.6%

Silver sold

'000 oz

2,751

2,594

6.1%

1.

Percent changes are calculated using rounded numbers presented in the table.

The Pirquitas mine produced 3.0 million ounces of silver during the third quarter of 2016, a quarterly record for the mine, which is well-positioned to meet the upper end of production guidance. Higher silver production is a result of more ore tonnes milled, higher silver mill feed grade and higher silver recovery. We recognized sales of 2.8 million ounces of silver in the third quarter of 2016.

Ore was milled at an average rate of 4,946 tonnes per day in the third quarter. During August 2016, the mill operated at an average rate of over 5,200 tonnes per day, a record for the mill since it began operating, a result of one of our ongoing Operational Excellence programs initiated in the fourth quarter of 2015. Ore milled contained an average silver grade of 264 g/t, 11% higher than the 238 g/t reported in the second quarter. We continued to encounter additional tonnes of higher grade ore, relative to the production model, in the lower benches of the San Miguel open pit. Detailed planning and consultation for the cessation of open pit mining in early 2017 is well underway. Thereafter medium and low grade stockpile material will be processed through the plant in 2017.

Qualified Persons

The scientific and technical data contained in this news release relating to the Marigold mine has been reviewed and approved by Thomas Rice, SME Registered Member, a Qualified Person under National Instrument 43-101 – Standards of Disclosure for Mineral Projects ("NI 43-101") and our Technical Services Manager at the Marigold mine. The scientific and technical data contained in this news release relating to the Seabee Gold Operation has been reviewed and approved by Gordon Reed, P.Eng., a Qualified Person under NI 43-101 and General Manager at the Seabee Gold Operation. The scientific and technical data contained in this news release relating to the Pirquitas mine has been reviewed and approved by Bruce Butcher, P.Eng., a Qualified Person under NI 43-101 and our Director, Mine Planning.



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