Resource World Magazine

The transaction was one of the rare win-win scenarios that created value for both companies. With several other assets in hand that could become flagship projects for other companies there is always the potential for a similar deal in the future. Silver Standard also retained an interest in Pretium through ownership of 18.9 million shares valued in the range of $240 million. Silver Standard is also working on further mine development as part of its growth strategy. Four of the silver deposits currently outlined by the company have been slated for development into new mines. The most advanced of these is the Pitarrilla Project in Mexico. The defined deposit area represents one of the largest undeveloped silver reserves in the world. In addition the resource zones also contain a large byproduct of zinc that would contribute significant additional production value. A feasibility study has been completed for the project that outlines solid operating economics and the potential to sustain a long mine life. Development planning is underway for a large open pit mine and the construction of a processing plant and service infrastructure. Mexico is a favorable jurisdiction in which to move a mine plan forward, and the process to secure permitting is underway. The project may be approved before the end of this year and secure the next major growth stage for the company as a significant silver producer. Other late-stages asset in the pipeline include San Luis (Peru), and 56 www.resourceworld.com Diablillos (Argentina). These could become the next wave of longlife mine projects with large silver resources in the years ahead. Silver Standard has established itself as a thoroughly competent and successful exploration specialist. Most of the resources currently outlined among the projects under management were discovered and defined through drilling programs led by personnel groomed in-house, and funded by an aggressive exploration budget. The company plans to continue with this track record of discovery success, including a budget for at least $15 million in exploration spending during the current year. If you ask 10 different economists for what may come to pass regarding the outlook for silver, you are likely to get 12 different answers. The metal has been extremely volatile and, even given the current price range, there are many silver companies that are barely breaking even. Mine development is challenging and capital cost overruns are common. Even the largest silver players like Silver Standard are therefore subject to a high degree of uncertainty in this market environment. Silver Standard has survived and prospered under difficult circumstances in the past. Today, they are in an advantageous position, employing an experienced management team, are set up with an extremely strong foundation of high quality projects, and have access to funding, which can provide the expectation for continued success in the future. n february 2013

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