Sector Spotlight

Q

Can you tell us about Mina Pirquitas?

Located in the province of Jujuy, Argentina, Mina Pirquitas is Silver Standard’s flagship project. We plan to produce between 8.2 and 8.5 million ounces of silver at the site in 2012 - making it one of the world’s largest open-pit primary silver mines. Currently, Mina Pirquitas has proven and probable reserves of around 90 million ounces, yielding an expected mine life of approximately 9 years at an annual production rate of around 8 million ounces. However, we have an active drilling program in place, and we are working hard to expand reserves and extend the mine life. In July, we reported some very impressive drill results, including a 78 meter long interval averaging 756 g/t of silver and 9.8% zinc (see news release dated July 25, 2012).

Q

Mining has become a popular destination for investment. Why

do you think this is?

As the likes of China and India develop, their economies have fuelled an enormous demand for resources, thereby attracting investment. At the same time, the state of many western economies has led investors to diversify their

portfolios with precious metals as a hedge against inflation and expansionary monetary policies.

Q

Most mines are now large enterprises, requiring large

amounts of capital, while the exploration sector tends to be made up of individuals and small mineral resource companies dependent on venture capital. How do you ensure you have the funding in place?

With over $350 million in cash as of July 31, 2012, and a 20% ownership stake in Pretium Resources, Silver Standard has an enviable balance sheet. This positions us to develop our own properties, and to potentially acquire others. We view our stake in Pretium Resources as a key asset, in that it provides exposure to the gold market and future project prospectivity. We don’t have specific plans to sell our interest in Pretium, as we have a comfortable cash position. But it provides opportunity for diversification or the right acquisition.

With regards to exploration, we plan to invest about $25 million during 2012. We recently announced very encouraging drill results at

Pirquitas, and accelerated our drill program by adding a third rig. We plan to drill some 28,000 meters at Pirquitas in 2012, and around 55,000 meters across all our properties in 2012.

So, again, our balance sheet leaves us well positioned to deliver shareholder value as we continue exploring and developing projects that will provide strong economic returns for our shareholders. We believe we are well positioned.

Q

Has this altered much during the last four years since the beginning of the financial crisis? If so, how?

The financial crisis of 2008-2009 was a cataclysmic event for many industries. Mining experienced a major downturn, but came back strong on emerging market demand, most notably in China. During 2010 and 2011, investors were willing to put capital to work, and projects were generally easy to finance. More recently, perhaps on the heels of slower growth in China and concerns regarding the European and American economies, investors have become cautious. Investors are now looking for shorter payback periods and less risk. This isn’t surprising,