Update: Great Panther Silver's Q3 Earnings I like this stock because it provides good leverage to the price of silver.
lately that leverage has been to the downside, but when silver turns bullish, it will be leverage to the long side.
goldguy
Ben Kramer-Miller
Update: Great Panther Silver's Q3 Earnings
Summary
- Great Panther Silver reported decent Q3 earnings as production costs came down, although it will still lose money at current prices.
- This exceeds my expectations.
- Shares are sitting at major support around $0.65/share and the company is overcoming one of the issues that concerned me making the stock more compelling, but better options exist.
Great Panther Silver (NYSEMKT:GPL) just announced its Q3 earnings report. The company's silver equivalent production rose 13% year over year to 890,000 oz. Furthermore, production costs came down from $24/oz. to $20/oz. as sustaining costs came down (slightly offset by rising operating costs due to lower ore grades). As a result the company reported a loss of $1 million or $0.01/share.
This is good news as the company is bringing operating costs down. However, the company simply cannot make money with the silver price so depressed. Furthermore, unlike many of its silver mining peers, I don't see substantial optionality value as the company's resource base is small compared with its market capitalization.
Investors will recall that I pointed out costs and lack of resources as issues that will hold the shares back. Before I become interested in the company, I want to see management add more ounces so that it can compete with its peers on a market cap/resources basis seeing that it can almost compete with them on production costs.
Note that the stock is trading near a major support level of $0.65/share, which was hit last June, and the stock could be due for a bounce.