Gold and silver miner Silver Standard Resources (NASDAQ:SSRI) made some big moves in 2016, including both acquisitions and assets sales. All that activity enhanced the company's production performance and didn't upend the improving cost trends of recent years. Investors should be pleased with the way Silver Standard implemented its growth plans last year. Here are some key takeaways.

Getting bigger

Looking just at the big picture, Silver Standard produced a record amount of gold equivalent ounces in 2016. However, you need to dig in a little bit to get a full understanding of how that was achieved.  

Silver Standard Resources trucks

Image source: Silver Standard Resources. 

For example, the company's two main mines in 2015 were Marigold and Pirquitas. Production was actually down slightly at Marigold, falling from around 207,000 ounces of gold in 2015 to a little over 205,000 ounces last year. Silver production at Pirquitas inched up less than 1% year over year to 10,422,000 ounces in 2016. In other words, its was basically steady as she goes at the company's core mines.  

The big increase came from the acquisition of the Claude Resources, which was completed on May 31st last year. That deal added the SeaBee mine, which produced a little under 46,600 ounces of gold for Silver Standard in 2016. That deal was basically an all-stock transaction, with a cash component of just $200,000. Thus, Silver Standard was able to grow its business without destroying its balance sheet.  

In fact, year over year, the company's cash position increased by around 50% to $327 million helped along by increased production and rising precious metals prices. For reference, the company's debt level only increased by around $8 million. So the increase in the company's bank account was a notable achievement.  

What about operating costs?

The addition of Claude Resources looks like a pretty solid move production-wise, but it also helped on the cost front. When precious metals prices were high, all-in sustaining costs were less important because high spot prices for gold and silver covered up a lot of sins. For example, in the second quarter of 2014 Silver Standard's gold equivalent cash cost per ounce was $926.  

A graphic showing Silver Standard Resources' costs falling over time.

Silver Standard's cash costs over time. Image source: Silver Standard Resources.  

With falling commodity prices, however, miners across the industry, including Silver Standard Resources, were forced to cut back. The miner brought its cash costs down to $746 per ounce of gold equivalent by the end of 2015. And, despite the acquisition and sale of several assets, it didn't lose focus in 2016, further reducing that number to $653 per ounce of gold equivalent for all of last year.

Cash costs represent the general costs of operating a mine, so it's clear that Silver Standard didn't lose its focus when it added Claude Resources to the fold. However, a deeper dive is again needed, with a look at all-in sustaining costs. This measures both the cost of running a mine and the expenses required to maintain production. And the news here is less positive, but hardly bad, with all-in sustaining costs rising roughly 3% year over year in 2016 to $923 per gold equivalent ounce.    

All-in sustaining costs at the company's Marigold mine actually jumped 7% in 2016. Pirquitas saw all-in sustaining costs decline around 18% (per silver ounce, in this case). But the bigger takeaway is that costs at the newly added SeaBee mine are nearly 15% lower than the costs at Marigold. That helped to keep overall all-in sustaining costs in check and, assuming the company can continue to run this mine as efficiently as it did last year, could continue to offset the higher costs at Marigold.    

Foolish bottom line

So, all in, Silver Standard Resources' 2016 results were a pretty good read. It managed to increase production, strengthen its balance sheet, and hold the line on costs. Those successes were achieved despite a major acquisition. In fact, the acquisition ended up helping a great deal on all fronts while also enhancing the company's future prospects.