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.