As Pirquitas remains on course, Silver Standard sues HSBC Canada, DBRS

Explorer Silver Standard reported a $5.5m loss for the second-quarter 2008 as its first mine, Pirquitas, remains on schedule for commissioning this year.

RENO, NV -

Vancouver's Silver Standard said Monday that its $220 million Pirquitas silver-zinc project in Argentina remains on schedule with plant commissioning to begin in the fourth quarter of this year.

The company reported a $5.5 million loss or negative 9-cents per share for the second quarter, compared to a $5 million loss (negative 8-cents/sh) for the same quarter of 2007.

During a conference call with analysts, Silver Standard reported a 14% in increase at the Pitarilla silver project in Durango, Mexico with measured resources of 148.6 million ounces of silver and indicated resources of 452.5 million ounces of silver. Silver Standard officials said that Pitarilla is "among the largest silver discoveries in the last decade." A pre-feasibility study is underway

For the first six months of this year Silver Standard reported a loss of $3.3 million or negative 5-cents per year, compared to a loss of $6.5 million (negative 11-cents per share) reported during the same period of 2007.

The company sold its Shafter property in Texas to Aurcana Corporation for a cash-and-shares price of $42.6 million including $23 million in cash, 15 million Aurcana common shares, and a $10 million convertible debenture.

Meanwhile, Silver Standard has sued Dominion Bond Rating Service (DBRS) and HSBC Bank Canada as a consequence of the collapse of Canada's commercial paper market, which began August 14, 2007. The market for the Asset-Backed Commercial Paper (ABCP) notes collapsed because of fears that they had high exposure to risky U.S. mortgages. As a result, $32 billion in ABCP notes were frozen.

Silver Standard bought the ABCP notes through six different trusts on the advice of its bank and investment adviser HSBC Canada. The Canadian news media reported that Silver Standard holds $57.7 million of ABCP notes and has written down the paper to $27 million.

In the lawsuit, Silver Standard claims that HSBC failed to advise the company of the risks the notes carried. The litigation claims that HSBC learned that the notes carried a materially higher risk one month before the market for the notes dived, but did not notify Silver Standard.

The silver explorer also asserts that DBRS failed to identify or properly assess the risks.

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