March 12, 2012 / 1:27 PM / in 6 years

UPDATE 1-Silver Standard profit falls on mill shut down

March 12 (Reuters) - Silver Standard Resources Inc’s fourth-quarter profit fell 88 percent sequentially as the miner was hurt by shut-downs at its only operating mine.

Net profit for the quarter was $2.6 million, or 3 cents per share, compared with $21.8 million, or 27 cents per share, in the third quarter.

Vancouver-based Silver Standard has one producing mine, Pirquitas in Argentina, which produced 1.8 million ounces of silver in the fourth quarter, compared with 1.6 million ounces of silver in the third quarter.

The Pirquitas mill was shut down in July and then again in September due to a gearbox failure, which prompted the Canadian miner to cut its 2011 silver production outlook to 7.3-7.6 million ounces in October last year.

The mill was restarted in early November 2011, the company said.

Total cash cost for the year rose 16 percent to $20.93 per ounce of silver.

Revenue for the quarter fell 45 percent sequentially to $14.4 million.

Silver prices shed 7 percent to average $31.83 an ounce in the October-December quarter.

The Pirquitas mine, which is located in the Jujuy province in Argentina, began commercial production in December 2009. The silver and zinc concentrates produced from the plant are shipped to smelters.

Silver Standard, which has a pipeline of 15 projects in Argentina, Peru, Mexico, Canada, Chile and the United States, expects capital expenditures at Pirquitas of about $19 million for this year, it said in a statement.

The company maintained its production forecast of 8.2-8.5 million ounces of silver and 10.5-11.5 million pounds of zinc, for this year.

Shares of the company closed at C$13.34 on Friday on the Toronto Stock Exchange.

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