TORONTO (miningweekly.com) – Despite recording the lowest quarterly average silver price in several years, Mexico’s highest-grade silver producer Excellon Resources late Tuesday reported that it had managed to narrow its net loss for the three months ended June 30, as higher output and sales offset sagging prices.

The Toronto-based miner, which operates the 40 854 ha Platosa silver/lead/zinc mine, in Durango state, Mexico, had a net loss of $700 000, or $0.01 a share, for the period, compared with a net loss of $5.04-million in the same quarter of 2013.

Revenues for the period more than doubled to $8.8-million compared with $4.19-million a year earlier, boosted by a 48% rise in silver output at 374 266 oz and a 58% increase in silver equivalent ounces produced to 636 713 oz, as zinc and lead output soared. The silver sales volume rose 42% to 327 631 oz.

The spot silver price averaged $19.62/oz during the second quarter, the lowest quarterly average silver price in recent years; however, the grey metal’s volatility from the year-earlier period had declined significantly since the silver price dropped from $32/oz to $21/oz during the first half of 2013. Lower silver prices continued to impact the company’s revenues and operating profits, as silver is the company’s main product, accounting for about 61% of the company’s cash inflows from metals sold at current silver prices.

The company’s total cash cost a silver ounce payable of $9.04/oz reflected a 34% improvement on the comparable period last year, while total cash costs were $13.69/oz.

Silver output of 374 266 oz reflected a 48% increase compared with the previous period, mainly owing to increased mill throughput. Lead output rose 52% to 2.3-million pounds and zinc output was up 26% at 3.1-million pounds.

"We continued to generate positive cash flow during the second quarter despite another period of low silver prices. Our all-in sustaining costs continued to improve this quarter and, with improved silver prices and higher-grade mineralisation ahead, we expect to continue building our cash position through the rest of the year.

“We are also encouraged by the ongoing strengthening of zinc and lead prices, which currently contribute about 40% of our revenue and ensure low per ounce production costs on a by-product basis,” Excellon president and CEO Brendan Cahill said.

Despite Excellon’s TSX-listed stock trading C$0.02 a share lower on Wednesday morning, the stock had gained 17% from the start of the year.