Silver Standard Resources Inc. (NASDAQ:SSRI) (TSX:SSO)  is pleased to announce the Mineral Resources estimate, Mineral Reserves estimate and life of mine plan for its 100% owned Marigold mine  located in Nevada, U.S. All figures in U.S. dollars except where noted.

Life of Mine Plan Highlights

• Significantly Increases Silver Standard’s Reserve Base: Mineral Reserves of 2.1 million ounces of gold contained in 129.7 million tonnes grading 0.51 grams per tonne mined over a 13-year operating life.

• Potential for Mine Life Extension: Indicated Mineral Resources of 4.0 million ounces of gold contained in 243.7 million tonnes grading 0.51 grams per tonne providing strong potential to extend mine life.
• Production Growth: Gold production averages 186,700 ounces per year over the nine years of active mining to 2023.
• Competitive Cost Position: Average annual cash costs of $762 per payable ounce of gold sold and all-in sustaining costs of $986 per payable ounce of gold sold.
• Limited Capital Requirements: Total sustaining capital expenditures of $123 million or $74 per payable ounce of gold sold.
• Robust Economics: After-tax net present value (NPV) of $419 million, assuming $1,300 per ounce gold price and a 5% discount rate.

“Following successful integration, the life of mine plan demonstrates how Marigold is an important step in transforming Silver Standard into a premier mining company,” said John Smith, President and CEO. “The cost structure and reserve life highlights the strategic value Marigold brings to us now and through the resource cycle. The life of mine plan and team provide a strong platform to drive margins and growth opportunities at the mine and in the region. Next, the team will focus on converting resources to reserves and achieving operating efficiencies, both of which are within our demonstrated expertise.”

Mine Overview

Marigold is an open-pit gold mine located in Humboldt County, Nevada, U.S. and is situated at the northern end of the Battle Mountain–Eureka trend. Marigold is a distal-type, structurally-controlled, sediment-hosted gold-silver deposit related to Eocene magmatism. The mineralization has a strike length in excess of eight kilometers and widths up to one kilometer, making it one of the largest mineral systems in the region. The surface zone of oxide ore extends down to approximately 200 meters.

Marigold has been in continuous production since 1988, producing in excess of 2.7 million ounces of gold prior to our ownership on April 1, 2014. Ore is mined by conventional truck and shovel equipment at an average annual rate of 15.1 million tonnes at steady state production. Ore is processed via a large run-of-mine heap leach operation with an average daily stacking rate of 42,000 tonnes. Marigold produces gold doré bars which are refined into London Bullion Market Association quality bullion and the gold sold on the spot market through bullion banks. Production at Marigold is subject to various net smelter return royalties.

The mine is connected to Interstate 80 by a six kilometer unpaved road providing excellent access. Marigold has a skilled operating team and employs approximately 360 people, who manage and maintain the mine and processing facilities to world-class safety and environmental standards. Marigold power supply is provided by NV Energy through a 120 kilovolt transmission line to site. Power draw is five megawatts and is distributed through a 25 kilovolt distribution grid. Marigold water requirements are supplied from three wells located near the mine access road. There is potential for additional water for processing and site usage from a new well to be commissioned in early 2015.  The mine is located on approximately 7,900 hectares of land controlled by Silver Standard.

Mineral Resources Estimate

The Mineral Resources estimate herein is based on all available data for Marigold.

Table 1: Marigold Mineral Resources Estimate (as at September 30, 2014)

Mineral Reserves Estimate

The Mineral Reserves estimate herein is based on all available data for Marigold.

Table 2: Marigold Mineral Reserves Estimate (as at September 30, 2014)

Mining and Processing

Marigold uses conventional drill/blast and truck/shovel open pit mining methods. Waste and some ore is mined on 15 meter benches by a 55-cubic meter electric rope shovel. The majority of the ore is extracted on 7.5 meter benches using two 520 tonne hydraulic excavators. Wall angles vary from 47 to 51 degrees, with pre-split for final walls. Over the mine life, a fleet of eighteen 290 tonne haul trucks and three loading units are expected to move approximately 614.8 million tonnes of material including 129.7 million tonnes of ore for a strip ratio of 3.7:1.

Mine material movement averages 71.8 million tonnes per year for the nine year period of mine operations. Ore tonnage averages 15.1 million tonnes per year.  The majority of the mining is from the Mackay area. The remaining ore is mined from two satellite deposits: the Hercules pit which is north of the Mackay pit; and the 5 North pit, which is one mile north of the Mackay pit. Both the Hercules and 5 North pits contain higher grade ore; however, due to haul distances and relatively smaller ore tonnages, these pits are scheduled to be mined later in the mine life.

Ore is hauled to the leach pads and truck dumped in 6- to 9-meter lifts. The pads are permitted to a maximum height of 120 meters. Pad expansion occurs periodically through the mine life as required. The ore is treated with cyanide solution which passes through a conventional ADR (adsorption-desorption-recovery) circuit. Solution management is a critical part of the process with ore being leached over a 120-day cycle for a total recovery averaging approximately 74%. All gold treatment occurs on site, producing gold doré bars.

Operational statistics are presented in Table 3 and Table 4.  Production and cost statistics are presented in Table 5.
 

Table 3: Operating and Production Statistics

Table 4: Operating Statistics Per Annum

Table 5: Production and Cost Statistics Per Annum

Capital Expenditure Summary

Sustaining capital expenditures, exclusive of deferred stripping, are expected to total $123 million over the life of the mine.  Detailed capital expenditures by area are presented in Table 6.

Table 6: Summary of Sustaining Capital Expenditures ($M)

Operating Cost Summary

Operating costs per tonne of ore processed averages $9.16 over the life of mine to 2027. Optimization efforts continue at Marigold in order to reduce the operating costs going forward. These initiatives are discussed in more detail in the Opportunities section of this news release.

Table 7: Operating Costs per Tonne

Operating costs include mine operations, processing, and general and administrative costs. Cash costs, which include refining charges and royalties, average $762 per payable ounce of gold sold over the life of mine to 2027. Costs per payable ounce of gold sold basis are presented in Table 8.
 

Table 8: Costs per Payable Ounce of Gold Sold ($/oz)

Economic Analysis

The Marigold economic analysis is based on a $1,300 per ounce gold price.  The mine is expected to generate $419 million in after-tax NPV using a 5% discount rate over the life of mine. Key economic and financial assumptions are presented in Table 9 and the economic analysis summary is presented in Table 10.

Table 9: Key Economic and Financial Assumptions

The Marigold mine is subject to Nevada State Net Proceeds tax at a rate of 5% and U.S. Federal income tax at a statutory rate of 35% with an Alternative Minimum income tax rate of 20%.

Table 10: Economic Analysis Summary ($M)

Marigold provides significant leverage to the price of gold. NPV sensitivities for key operational and economic metrics are presented in Table 11.

Table 11: Sensitivity Analysis for Marigold

Environment, Reclamation and Social Responsibility

Marigold holds active, valid permits for all current facets of the mining operation as required by county, state, and federal regulations. The authorized Plan of Operations area currently encompasses 7,916 hectares, with 2,027 hectares within that area permitted for mining-related disturbance. The mine engages in concurrent reclamation practices and is bonded for all permitted features, as part of the Nevada permitting process.

Marigold will prepare a further Environmental Impact Statement (“EIS”) to permit the future mining of all pits to their planned maximum depths. In the normal course of operations planning, environmental baseline studies were initiated in 2013 to support the EIS, which is anticipated to begin in early 2015. Silver Standard has a reasonable expectation that all necessary operating permits will be granted within required timeframes to complete this life of mine plan.

Community support and engagement is well-established at Marigold and will continue, with regular updates provided by mine management to local stakeholders and regulators. In 2013, nearly $300,000 in donations, scholarships, and in-kind support was provided to local communities and charities.

Opportunities

Silver Standard has initiated exploration and resource/reserve development activities to enhance Marigold’s margins and extend the mine life. Drilling was initiated in June 2014 targeting the discovery of additional near-surface gold mineralization proximal to the current final pit and upgrading Inferred Mineral Resources to Indicated Mineral Resources. Further studies will examine the sulphide-hosted gold mineralization, which occurs directly below the leachable (oxide) ore, and may include further drill evaluation and metallurgical test work.

Several optimization studies were also initiated in 2014 to investigate opportunities to further increase Marigold’s operating efficiency. These studies include pit slope angle evaluation, haulage profile optimization, equipment productivity improvements, mine dispatch upgrade and grade control review. Initial indications from the operational excellence program show improvements and are now starting to transfer to our unit operating cost. Operational efficiency and cost control remain key areas of focus to manage the mine going forward for optimum margin, increasing the mine’s medium to long term potential and enabling the conversion of additional Mineral Resources into Mineral Reserves.

External Consultants

The Mineral Resources and Mineral Reserves estimates were prepared by Silver Standard.

AMEC Americas Limited (“AMEC”), Canada, provided technical input into the Marigold Mineral Resources model update upon which the current life of mine plan is based. This service was provided between April and August 2014.

Strategic life of mine options analyses and detailed life of mine planning was completed by Independent Mining Consultants Inc. (“IMC”) of Tucson, Arizona. IMC completed this work between June and September 2014.

Knight Piesold Ltd. (“KP”) provided rock mechanics comments to support internal review and the mine optimisation process. Current pit designs have included the slope recommendations provided by KP. Work by KP was completed between April and July 2014.

Independent peer review of the Marigold strategic optimization work and LOM planning and scheduling process was conducted by David Tutton C. Eng., consultant mining engineer. Mr. Tutton provided feedback throughout the process and his comments were incorporated in the evolving work.