U.S. Silver Corporation (TSX: V.USA, Stock Forum) announced several new cost saving measures Friday morning, including the suspension of repair work on the Galena shaft at its Galena silver-lead-copper mine in Idaho.
“While the shaft repair is within five months of completion, it was felt that until cash flows improve shaft repair at approximately $175,000 per month is too large an expense to maintain. The Company is negotiating with major suppliers for further cost reductions for goods and services,” says U.S. Silver.
U.S. Silver added that all of its salaried personnel have taken a 10% salary reduction and the union representing the hourly employees has also approved a similar reduction in wages for the hourly workforce. Officers of the corporation and the board have also reportedly reduced their cash compensation until cash goals are achieved.
The initiatives are expected to save the company at least $300,000 per month in expenses.
While the company’s operations were temporarily disrupted in November due to the reduction in force and release of contractor groups, U.S. Silver says the #3 circuit in the Galena Mill was activated on November 6 and has been operational since then, giving the Galena Mill a capacity of 900 tons per day.
“That, combined with improved mine production, allowed the Company to produce 496,041 ounces of silver in the fourth quarter, including a U.S. Silver record of 248,223 ounces of silver in December, 2008. The Galena Mill has been processing both copper/silver and lead/silver ores. The Coeur Mill has been placed on standby, providing some cost savings,” says U.S. Silver.
U.S. Silver also noted Friday that it is not part of any consolidation effort, as it responded to reports in the local Idaho press that an ownership consolidation of various silver properties in the Silver Valley of northern Idaho may be occurring.
Shares of U.S. Silver climbed 7% to 7.5 cents Friday morning.
On the U.S. Silver Bullboard Friday, stateside said: “USA now represents the one "go-to" company to benefit from any sustained upward movement (ie - today) in the price of silver. They crushed their old monthly production record by 25% in December and now are producing at a 3 million ounce annual rate. With lower costs and higher production going forward, watch the bottom line numbers escalate higher if the silver gods allow it[sic].”
