Silver Standard Reports Fourth Quarter 2016 Production Results and 2017 Guidance
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January 11, 2017 News Release 17–01
SILVER STANDARD REPORTS FOURTH QUARTER 2016 PRODUCTION RESULTS
AND 2017 GUIDANCE
VANCOUVER, B.C. -- Silver Standard Resources Inc. (NASDAQ: SSRI) (TSX: SSO) (“Silver
Standard”) reports its fourth quarter and full year 2016 operating results. Additionally, we are
providing 2017 production and cost guidance for our three operations.
Fourth Quarter and 2016 Operating Highlights:
Consistent record of delivery: Achieved production guidance for the fifth consecutive year.
Record annual production: Produced 393,325 gold equivalent ounces in 2016 as all three
operations met or exceeded previously improved production guidance. During the fourth
quarter, gold equivalent production totaled 110,130 ounces.
Robust gold production at Marigold: Production in the fourth quarter was strongest for the
year at 59,945 ounces of gold, taking full year production to 205,116 ounces.
Exceeded gold production guidance at Seabee: The mine achieved the highest annual
production in its 26-year history, producing 77,640 ounces of gold in 2016. With fourth quarter
production of 19,711 ounces of gold, production over the second half of the year exceeded our
H2 2016 production guidance range.
Record annual silver production at Pirquitas: The mine concluded a successful year with
fourth quarter production of 2.2 million ounces of silver, taking annual production to a record
10.4 million ounces of silver in 2016.
Paul Benson, President and CEO said, “Our production results continue to demonstrate the
strength of our operating portfolio , following the successful acquisition of the Seabee Gold
Operation earlier this year. I commend our mines and their respective teams for delivering to or
exceeding their operating plans. Our fourth quarter production of over 110,000 gold equivalent
ounces is a strong finish to a very successful year . These results are underpinned by our
operational excellence program , commitment to safe production and strong balance sheet
positioning us to continue creating shareholder value in 2017.”
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Marigold mine, U.S.
Q4 2016 Q3 2016 % Change 1 FY 2016 FY 2015 % Change 1
Total material mined kt 19,559 19,558 0.0% 75,093 74,592 0.7%
Waste removed kt 13,123 14,741 (11.0%) 51,480 54,054 (4.8%)
Ore to leach pad kt 6,436 4,817 33.6% 23,613 20,538 15.0%
Strip ratio w/o 2.0 3.1 (35.5%) 2.2 2.6 (15.4%)
Gold grade to leach pad g/t 0.48 0.42 14.3% 0.45 0.45 0.0%
Gold recovery % 75% 71% 5.6% 72% 71% 1.4%
Gold produced oz 59,945 47,456 26.3% 205,116 207,006 (0.9%)
Gold sold oz 61,308 47,278 29.7% 204,315 206,338 (1.0%)
Notes:
1. Percent changes are calculated using rounded numbers presented in the table.
In 2016, the Marigold mine produced 205,116 ounces, compared to 207,006 ounces of gold
produced in 2015 , achieving the mid -point of our improved 2016 production guidance . Gold
sales were 204,315 ounces for the year.
Total material mined and ore stacked on leach pads of 75.1 million tonnes and 23.6 million tonnes,
respectively, in 2016, were record amounts for the Marigold mine, due to the increased hauling
capacity added to the fleet earlier in the year.
In the fourth quarter of 2016, Marigold produced 59,94 5 ounces of gold, 26% higher than the
previous quarter as expected, due to higher grade ore tonnes sourced from the deeper benches of
the current Mackay pit phase during the third and fourth quarters of 2016. Higher grade ore was
placed on the new leach pad, completed in the third quarter of 2016, which assisted in accelerated
gold recovery. Gold sales totaled 61,308 ounces for the quarter.
A total of 19.6 million tonnes of material were mined in the fourth quarter of 2016, in line with
material mined in the third quarter. Approximately 6.4 million tonnes of ore were delivered to
the heap leach p ads at a gold grade of 0.48 g/t, containing approximately 75,000 recoverable
ounces of gold stacked during the quarter. This compares to 4.8 million tonnes of ore delivered
to the heap leach pads at a gold grade of 0.42 g/t in the third quarter of 2016, co ntaining
approximately 47,000 recoverable ounces of gold. Gold grade mined in the fourth quarter was
14% higher than the third quarter. The strip ratio declined to 2.0:1 in the quarter, a 36% reduction
compared to the previous quarter.
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Seabee Gold Operation, Canada
Q4 2016 Q3 2016 % Change 1
Period from
Acquisition to
December 31, 2016 2
2016 3
Total ore milled t 84,526 82,756 2.1% 186,138 312,679
Ore milled per day t/day 919 900 2.1% 870 854
Gold mill feed grade g/t 7.40 7.40 0.0% 7.44 7.91
Gold recovery % 97.0% 96.5% 0.5% 96.7% 96.7%
Gold produced oz 19,711 20,142 (2.1%) 46,574 77,640
Gold sold oz 17,229 21,911 (21.4%) 50,445 76,474
Notes:
1. Percent changes are calculated using rounded numbers presented for Q4 2016 and Q3 2016 in the table.
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., to and including December 31, 2016.
3. The data presented in this column is for the period from January 1, 2016 to December 31, 2016 and includes operating results
for the Seabee Gold Operation for the period from January 1, 2016 to May 30, 2016 prior to our acquisition.
The Seabee Gold Operation consists of the Seabee and Santoy underground mines, both of which
feed a single processing facility. During the period since acquisition, from May 31, 2016 to
December 31, 2016, the mine produced a total of 46,574 ounces of gold with gold sales of 50,445
ounces. For the full year 2016, production totaled 77,640 ounces of gold, marking record annual
production since the beginning of operations in 1991.
In the fourth quarter, the Seabee Gold Operation produced 19,711 ounces of gold, largely in line
with the 20,142 ounces of gold produced during the third quarter of 2016. Production during the
second half of the year of 39,853 ounces of gold exceeded our second half 2016 production
guidance range of 32,000 to 35,000 ounces of gold.
A record 84,526 tonnes of ore were milled at an average gold grade of 7.4 0 g/t and recovery of
97.0% during the fourth quarter. This compares to a total of 82,756 tonnes of ore milled at an
average gold grade of 7.40 g/t and recovery of 96.5% in the third quarter. Gold sales totaled 17,229
ounces during the quarter.
During the fourth quarter, the mill was maintained at a higher throughput of 919 tonnes per day,
a record quarterly performance . T he Santoy complex mined approximately 92% of total ore
milled, with the remainder mined from Seabee. Mining continues to transition to long hole stope
ore from Santoy and we are reviewing the mine plan to determine the feasibility of higher,
sustainable production rates in excess of our 2017 Outlook.
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Pirquitas mine, Argentina
Q4 2016 Q3 2016 % Change 1 FY 2016 FY 2015 % Change 1
Total material mined kt 1,694 2,385 (29.0%) 9,142 11,900 (23.2%)
Waste removed kt 1,193 1,584 (24.7%) 6,317 9,090 (30.5%)
Ore mined kt 501 801 (37.5%) 2,825 2,810 0.5%
Strip ratio w/o 2.4 2.0 20.0% 2.2 3.2 (31.3%)
Silver mined grade g/t 168 190 (11.6%) 183 183 0.0%
Ore milled kt 476 455 4.6% 1,774 1,557 13.9%
Silver mill feed grade g/t 194 264 (26.5%) 235 250 (6.0%)
Silver recovery % 74.5% 79.0% (5.7%) 77.8% 82.6% (5.8%)
Silver produced ‘000 oz 2,210 3,047 (27.5%) 10,422 10,339 0.8%
Silver sold ‘000 oz 2,633 2,947 (10.7%) 11,397 10,294 10.7%
Notes:
1. Percent changes are calculated using rounded numbers presented in the table.
In 2016, the Pirquitas mine produced a record 10.4 million ounces of silver, close to the upper end
of our increased annual production guidance range. This was largely the result of achieving a
14% increase in daily milling rate during the year. Silver mined grade of 183 g/t was in line with
that realized in 2015, while silver mill feed gra de was 6% lower than the previous year , in line
with expectations as medium grade stockpiled ore supplemented the mill feed. Silver recovery of
77.8% was lower compared to 2015, due to a combination of closing down the zinc circuit in
January 2016, lower silver grade throughout the year and higher mill throughput in the latter half
of 2016. Silver sales totaled 11.4 million ounces for the year.
In the fourth quarter of 2016 , Pirquitas production declined relative to the third quarter, as
expected, producing 2.2 million ounces of silver . Silver sales totale d 2.6 million ounces for the
quarter.
Ore was milled at an average rate of 5,175 tonnes per day in the fourth quarter, 5% higher than
the previous quarter and a record quarterly result. Additionally, the average milling rate was 29%
above the mill’s nominal design of 4,000 tonnes per day, which is the result of a successful 14 -
month operational excellence project. Ore milled in the fourth quarter of 2016 contained an
average silver grade of 194 g/t, 27% lower than the 264 g/t reported in the third quarter as the
availability of ore in the lower benches of the San Miguel open pit was reduced, resulting in
medium grade stockpile ore supplementing mill feed.
The average silver recovery in the fourth quarter was 74.5%, lower than the 79.0% recovery in the
previous quarter, in line with reduced silver mill feed grade that resulted from the increasing
proportion of stockpiled material in the mill feed.
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Detailed planning and consultation with the workforce, union, communities and government for
the cessation of open pit mining in January 2017 is well-advanced. Thereafter, medium grade
stockpile material will be processed through the plant in 2017. Low grade stockpiles may be
processed in late 2017, and potentially in early 2018 , depending on prevailing economic
conditions.
2017 Outlook
This section of the news release provides management's production and cost estimates. See "Cautionary
Note Regarding Forward-Looking Statements."
For the full year 2017, we expect:
Operating Guidance Marigold mine Seabee Gold Operation Pirquitas mine
Gold Production oz 205,000 - 215,000 72,000 - 82,000 —
Silver Production Moz — — 4.5 - 5.5
Cash costs per payable ounce sold 1 $/oz 655 - 705 575 - 625 13.50 – 16.00
Capital Expenditures $M 30 8 5
Capitalized Stripping /
Capitalized Development $M 17 11 —
Exploration Expenditures 2 $M 5 5 —
Notes:
1. We report the non-GAAP financial measures of cash costs per payable ounce of silver and gold sold to manage and evaluate
operating performance at the Marigold mine, the Seabee Gold Operation and the Pirquitas mine. See “Cautionary Note
Regarding Non-GAAP Measures”.
2. Includes capitalized and expensed exploration expenses.
In 2017, o n a consolidated basis at mid-point of guidance , Silver Standard expects to produce
355,000 gold equivalent ounces at gold equivalent cash costs of $735 per ounce. Cash costs and
capital guidance are based on $55 per barrel oil price and 1. 30 Canadian to U.S. dollar exchange
rate. Gold equivalent figures are based on a $1,250 per ounce gold price and a $17.50 per ounce
silver price.
Marigold production is expected to increase compared to 2016 as the mine benefits from the gold
ounces stacked on the leach pads through the latter months of 2016 and from continued strong
performance in 2017. As a result, production is expected to be weighted towards the first half of
the year. Capital exp enditures total $30 million and a re primarily attri butable to mining
equipment components of $17 million and replacement of support equipment of $5 million, with
$2.5 million allocated for permitting. Capitalized stripping is expected to decline significantly
relative to 2016 as mining focuses on the current phases of the Mackay pit. Approximately $11
million of capitalized stripping are expected to be incurred in the second half of the year as we
commence stripping of the next phase of the Mackay pit. Despite the decline in mining costs
capitalized, cash costs per payable ounce are expected to be similar to 2016.
At the Seabee Gold Operation, 2017 will mark our first full year of ownership with production
expected to remain near record levels of between 7 2,000 and 82,000 ounces of gold at low cash
costs, based on mill throughput of 900 tonnes per day . Annual production is expected to be
weighted toward the second half of the year as mine grade is expected to increase as additional
levels are developed at the Santoy mine complex through early 2017 . Capital investments at
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Seabee of $8 million include $2 million for improvement of gravity recovery in the plant, $2
million for ventilation improvements to the Santoy mine complex to support a higher mining rate
and $ 3 million for a water treatment plant related to tailings water discharge. Capitalized
development of $11 million is principally for Santoy decline development and to establish
stations for underground definition and exploration drilling.
At the Pirquitas mine, as previously disclosed, mining of the San Miguel open pit is expected to
cease in Janu ary 2017. Medium grade stockpiles are expected to constitute the mill feed upon
cessation of open pit mining activities. As a result, silver production is expected to decline and
cash costs are expected to be higher in 2017, compared to 2016. Zinc production is not expected
in 2017 due to lower zinc grades in the stockpiled material. As we report cash costs on a per
payable ounce sold basis, 2017 expected cash costs include stockpile inventory costs of
approximately $3.50 per ounce of silver th at were previously incurred. Capital expenditures
include approximately $1 million for completion of the tailings facility lift, which commenced in
the fourth quarter of 2016 and is scheduled for completion in the first quarter of 2017. The
remaining sustaining capital is for maintaining the re-handle fleet and the mill in fully operational
condition. Further, we expect to incur approximately $6 million related to remediation of mining
areas in 2017, mainly on surface water control measures. The Pirquitas plant is expected to
operate through 2017, conditional upon profitable processing of stockpiles at prevailing market
conditions, and to close in late 2017 or early 2018 , subject to our investment decision on the
Chinchillas project.
We continue to evaluate our right to exercise our option to form a joint venture on the Chinchillas
project as an opportunity to extend the mine life at Pirquitas. The completion of our technical
evaluation combined with the assessment of market conditions and country risk factors ,
including the status of our export duty litigation, will determine our decision on exercising the
option in advance of its expiry on March 30, 2017.
Exploration and development expenditures are forecast at $15 million. Approximately $5 million
of exploration at Marigold is for Mineral Resource discovery and conversion of Mineral Resources
to Reserves with particula r focus on the Valmy property. At the Seabee Gold Operation, $5
million of expenditures are to be incurred targeting Mineral Resource discovery and conversion
of Mineral Resources to Reserves, including Mineral Resource discovery contiguous to Seabee at
the Fisher property, where we hold an option. The remaining expenditures are attributable to
our development portfolio, including $1 million at the Perdito early-stage exploration property.
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 t he Seabee Gold Operation has been reviewed and approved by
Cameron Chapman, 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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About Silver Standard
Silver Standard is a Canadian -based precious metals producer with three wholly-owned and
operated mines, including the Marigold gold mine in Nevada, U.S. , the Seabee Gold Operation
in Saskatchewan, Canada and the Pirquitas silver mine in Jujuy Province, Argentina. We also
have two feasibility stage projects and an extensive portfolio of exploration properties throughout
North and South America. We are committed to delivering safe production through relentless
emphasis on Operational Excellence. We are also focused on growing production and Mineral
Reserves through the explorat ion and acquisition of assets for accretive growth, while
maintaining financial strength.
SOURCE: Silver Standard Resources Inc.
For further information contact:
W. John DeCooman, Jr.
Vice President, Business Development and Strategy
Silver Standard Resources Inc.
Vancouver, BC
N.A. toll-free: +1 (888) 338-0046
All others: +1 (604) 689-3846
E-Mail: [email protected]
To receive Silver Standard’s news releases by e -mail, please register using the Silver Standard website at
www.silverstandard.com.
Cautionary Note Regarding Forward-Looking Statements:
This news release contains forward-looking information within the meaning of Canadian securities laws and forward-
looking statements within the meaning of the U.S. Private Securities Litigation Reform Act of 1995 (collectively,
“forward-looking statements”). All statements, other than statements of historical fact, are for ward-looking
statements.
Generally, forward -looking statements can be identified by the use of words or phrases such as “expects,”
“anticipates,” “plans,” “projects,” “estimates,” “assumes,” “intends,” “strategy,” “goals,” “objectives,” “potential,”
“believes,” or variations thereof, or stating that certain actions, events or results “may,” “could,” “would,” “might”
or “will” be taken, occur or be achieved, or the negative of any of these terms or similar expressions. The forward-
looking statements in this news release relate to, among other things: future production of gold, silver and other
metals; future costs of inventory, and cash costs and total costs per payable ounce of gold, silver and other metals sold;
expected exploration and development expenditures; the prices of gold, silver and other metals; the timing of cessation
of San Miguel open pit mining activities and stockpile processing at the Pirquitas mine; the effects of laws, regulations
and government policies affecting our operations or potential future operations; future successful development of our
projects; the sufficiency of our current working capital, anticipated operating cash flow or our ability to raise necessary
funds; estimated production rates for gold, silver and other metals produced by us; timing of production and the cash
costs and total costs of production at the Marigold mine, the Seabee Gold Operation and the Pirquitas mine; the
estimated cost of sustaining capital; ongoing or future development plans and capital repla cement, improvement or
remediation programs; the estimates of expected or anticipated economic returns from our mining projects, including
future sales of metals, concentrate or other products produced by us; our ability to expand Mineral Resources and
convert Mineral Resources into Mineral Reserves; and our plans and expectations for our properties and operations.
These forward-looking statements are subject to a variety of known and unknown risks, uncertainties and other factors
that could cause actual events or results to differ from those expressed or implied, including, without limitation, the
following: uncertainty of production, development plans and cost estimates for the Marigold mine, the Seabee Gold
Operation, the Pirquitas mine and our projects; our ability to replace Mineral Reserves; subject to exercising our
election to proceed, our ability to complete and successfully integrate Golden Arrow Resources Corporation’s
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Chinchillas project, on a joint venture basis, into our current operations; commodity price fluctuations; political or
economic instability and unexpected regulatory changes; currency fluctuations; the possibility of future losses; general
economic conditions; fully realizing the value of our shareholdings in Pretium Resources Inc. and our other marketable
securities, due to changes in price, liquidity or disposal cost of such marketable securities ; potential export duty and
related interest on past production and sales of silver concentrate from the Pi rquitas mine; counterparty and market
risks related to the sale of our concentrate and metals; uncertainty in the accuracy of Mineral Reserves and Mineral
Resources estimates and in our ability to extract mineralization profitably; differences in U.S. and Canadian practices
for reporting Mineral Reserves and Mineral Resources; lack of suitable infrastructure or damage to existing
infrastructure; future development risks, including start -up delays and cost overruns; our ability to obtain adequate
financing for further exploration and development programs and opportunities; uncertainty in acquiring additional
commercially mineable mineral rights; delays in obtaining or failure to obtain governmental permits, or non -
compliance with our permits; our ability to a ttract and retain qualified personnel and management ; potential labour
unrest, including labour actions by our unionized employees at the Pirquitas mine; the impact of governmental
regulations, including health, safety and environmental regulations, including increased costs and restrictions on
operations due to compliance with such regulations; reclamation and closure requirements for our mineral properties;
failure to effectively manage our tailings facilities; social and economic changes following closure of a mine, including
the expected closure of the Pirquitas mine in 2017, may lead to adverse impacts and unrest ; unpredictable risks and
hazards related to the development and operation of a mine or mineral property that are beyond our control; indigenous
peoples’ title claims and rights to consultation and accommodation may affect our existing operations as well as
development projects and future acquisitions ; assessments by taxation authorities in multiple jurisdictions;
recoverability of value added ta x and changes to the collection process in Argentina ; claims and legal proceedings,
including adverse rulings in litigation against us and/or our directors or officers; compliance with anti -corruption
laws and internal controls, and increased regulatory co mpliance costs; complying with emerging climate change
regulations and the impact of climate change , including extreme weather conditions ; uncertainties related to title to
our mineral properties and the ability to obtain surface rights; the sufficiency of our insurance coverage; civil
disobedience in the countries where our mineral properties are located; operational safety and security risks; actions
required to be taken by us under human rights law; competition in the mining industry for mineral properti es;
shortage or poor quality of equipment or supplies; an event of default under our convertible notes may significantly
reduce our liquidity and adversely affect our business ; failure to meet covenants under our senior secured revolving
credit facility ; conflicts of interest that could arise from certain of our directors’ involvement with other natural
resource companies; information systems security threats; and those other various risks and uncertainties identified
under the heading “Risk Factors” in our most recent Annual Information Form filed with the Canadian securities
regulatory authorities and included in our most recent Annual Report on Form 40 -F filed with the U.S. Securities
and Exchange Commission (“SEC”).
This list is not exhaustive of the factors that may affect any of our forward -looking statements. Our forward-looking
statements are based on what our management considers to be reasonable assumptions, beliefs, expectations and
opinions based on the information currently available to it. Assumptions have been made regarding, among other
things, our ability to carry on our exploration and development activities, our ability to meet our obligations under
our property agreements, the timing and results of drilling programs, the discovery of Mineral Resources and Mineral
Reserves on our mineral properties, the timely receipt of required approvals and permits, including those approvals
and permits required for successful project permitting, construction and opera tion of our projects, the price of the
minerals we produce, the costs of operating and exploration expenditures, our ability to operate in a safe, efficient and
effective manner, our ability to obtain financing as and when required and on reasonable terms and our ability to
continue operating the Marigold mine, the Seabee Gold Operation and the Pirquitas mine. You are cautioned that the
foregoing list is not exhaustive of all factors and assumptions which may have been used. We cannot assure you that
actual events, performance or results will be consistent with these forward -looking statements, and management’s
assumptions may prove to be incorrect. Our forward-looking statements reflect current expectations regarding future
events and operating performance and speak only as of the date hereof and we do not assume any obligation to update
forward-looking statements if circumstances or management’s beliefs, expectations or opinions should change other
than as required by applicable law. For the reasons set for th above, you should not place undue reliance on forward -
looking statements.
Cautionary Note to U.S. Investors
This news release includes Mineral Reserves and Mineral Resources classification terms that comply with reporting
standards in Canada and the Mineral Reserves and the Mineral Resources estimates are made in accordance with NI