What: Shares of Silver Standard Resources (NASDAQ:SSRI) jumped on Thursday, and were up 12% at 10:45 a.m. EDT.
So what: Driving Silver Standard's rally were its strong second-quarter earnings. The miner reported $23.6 million, or $0.25 per share, of adjusted net income, which trounced the consensus estimate by $0.16 per share. Meanwhile, cash flow generation was a robust $30.2 million, bringing the company's cash balance up to $233 million.
Driving the better-than-expected earnings was the company's ability to tamp down costs. Silver Standard's cash costs at its Marigold mine, in Nevada, were just $663 per ounce of gold sold during the quarter, which led management to lower its full-year costs guidance to between $650 and $700 per ounce of gold sold. Meanwhile, the company improved the cash costs at its Pirquitas mine, in Argentina, to $8.87 per ounce of silver sold. That enabled it to lower its cost guidance at that mine to between $9 and $10 per ounce for the full year. In addition to that, the company completed the acquisition of Claude Resources, a gold production company, which added a third cash-flow-generating mine to its portfolio.
Now what: With the addition of Claude Resources' Seabee Gold operations to its portfolio, Silver Standard Resources is well-positioned to deliver solid results in the second half of 2016. And with a boatload of cash on its balance sheet, the company believes it has the financial strength to create value for investors over the long term as its exploration program bears fruit.
Matt DiLallo has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.