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Great Panther shares gain after Q1 earnings rise to C$3.7mln

Last updated: 15:23 05 May 2016 EDT, First published: 10:23 05 May 2016 EDT

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Great Panther Q1 earnings rise

Great Panther Silver (NYSEMKT:GPL) shares rose on Thursday after the company announced falling costs and a rise in first-quarter earnings, while previously announced production and cost guidance for the year ending Dec. 31, 2016, remains unchanged.

Adjusted EBITDA (earnings before interest, taxes, depreciation and amortisation) increased to C$3.7mln in the three months to March 31, compared with C$3.6mln.

The net loss of C$4.5mln for the first quarter of 2016, versus a net profit of C$3.5mln in the same period in 2015, is primarily attributable to a C$6.1mln net foreign exchange loss incurred in the period. That compares with a C$6.0mln foreign exchange gain incurred in the first quarter of 2015.

In addition, the C$1.5mln increase in EE&D expenses and a C$300,000 increase in income tax expense contributed to the net loss in the first quarter of 2016. These factors were partly offset by a C$5.6mln increase in mine operating earnings, as well as the C$300,000 decrease in general and administrative (G&A) expenses.

For the first quarter of 2016, the company reduced all-in sustaining costs (AISC) per payable silver ounce by 36% to $9.25, which contributed to strong operating earnings and free cash flow margins from the company's operating mines. While lower cash cost per payable silver ounce was the primary factor in the reduction in AISC, lower-than-normal development and sustaining capital expenditures relating to the company's operating mines also contributed to the decline in AISC. These factors were mainly due to the timing of expenditures and AISC is expected to trend toward the company's guidance range during the remainder of the year.

Gold output increased by 19% to 5,599 gold ounces, to outweigh a fall in silver production of 10% to 539,472 ounces.

Net working capital increased to C$35.5mln at March 31, from C$33.2mln at Dec. 31, 2015.

"Great Panther continued to deliver strong performance from its operations in the first quarter, including continued reductions in cash costs and all-in sustaining costs, while staying on track with our full-year operating guidance," stated Robert Archer, president and chief executive officer.

"Our mine operating earnings before non-cash items increased 16% over the first quarter of the prior year due to significantly lower cash costs and favourable foreign exchange rates. Consolidated cash cost for the company continued the declining trend of last year to reach $4.20 per payable silver ounce, an impressive reduction of 52% from the first quarter in 2015," he added.

Great Panther shares were 3.2% higher at $1.62 on Thursday.

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