Great Panther Silver Output Hits Record Levels
Company On Rapid Growth Path to Becoming a Mid-Tier Silver Producer
3.8 Million Ounce Silver Production Target at Two Mexico Mines for 2012
Record 2010 production of silver and base metals by
Great Panther Silver Limited
(TSX: GPR • NYSE Amex: GPL)--
www.greatpanther.com -- bodes well for the company to reach itsproduction goal of 3.8 million ounces of silver by 2012 – an incredible68% 24-month increase.
“We have had five consecutivequarters of profitability, clearly demonstrating our ability to achieveour goals,” says Great Panther Silver’s President and CEO Robert Archer.“We are one of the fastest growing primary silver producers in Mexicoand intend to continue growing while maintaining profitability.”
For investors, the company, which operates two 100%-owned silvermines in mining-friendly Mexico, provides strong leverage to futureincreases in the price of silver. The fact that the company has gold as aproduction by-product, providing a comfortable hedge against fallingsilver prices, is a significant plus. Nor does it hurt that GreatPanther Silver is run by a seasoned management team led by Mr. Archerwho has previously worked for such major mining companies as Newmont,Placer Dome and Noranda – and is guided by an internationally-recognizedboard of directors drawn from three continents.
During justthe past year, Great Panther Silver invested $17 million from its cashflow to rehabilitate and expand its mines in Mexico, a majoraccomplishment in itself. The company acquired new equipment, developednew production faces, exceeded plant performance goals, increasedresources, defined reserves, and discovered significant new high grademineralization.
The next two years promise to provide equalaccomplishments as Great Panther Silver moves toward its productiongoals in Mexico and expands its search for advanced silver propertiesthroughout Latin America.
Record Silver, Base Metals Production Posted for 2010
Great Panther Silver achieved record production of 2,255,802silver equivalent ounces (Ag eq oz) in 2010, a 2% increase over 2009.New records were established as well for the output of individual metals– 1,534,957 ounces silver (up 5%), 7,216 ounces gold (up 1%), 1,092tonnes lead (up 25%), and 1,358 tonnes zinc (up 29%). In the fourthquarter alone, the company produced 565,660 Ag eq oz.
Production from Guanajuato is expected to increase steadily throughout2011 to two million ounces of silver equivalent, largely from increasedproduction as the Los Pozos and Santa Margarita areas reach fullcapacity, Cata production returns to previous levels, and new productiondevelops from the Guanajuatito area.
Plant throughput for 2011 is estimated at 200,000 tonnes at grades of240 g/t silver and 1.80 g/t gold for metal production of 1.38 million ozsilver and 10,400 oz gold.
Output from the Topia Mine isexpected to increase as development on existing and new veins andincreased plant capacity contribute to production totals. Topia’s 2011estimated 40,000-tonne plant throughput is expected to produce 0.56million oz silver, 800 oz gold, 1,170 tonnes lead, and 1,430 tonnes zinc– the equivalent to 0.87 million ounces of silver equivalent.
The company has set a combined 2011 production target from Guanajuatoand Topia at 2.87 million ounces of silver equivalent, (1.94 million ozsilver, 11,200 oz gold, 1,170 tonnes lead and 1,430 tonnes zinc), basedon prices of $1,200/oz Au, $20/oz Ag,
.85/lb Pb and Zn.
Considering the company’s low operating costs averaging $7 per ounce ofsilver (net of by-products) – an amount the company expects to soonlower to about $5 per ounce, increased silver production in 2011 and2012 will significantly boost the company’s bottom line.
“Silver is more than the poor man’s gold. It is the only commodity thathas both industrial uses and monetary value,” says Archer. “Withincreasing demand from recovering economies, we have recently seen theprice of silver rising at a significantly faster rate than gold. Becausewe are a primary silver producer, this gives Great Panther Silvertremendous leverage.”
Historic Silver-Gold Guanajuato Mine Complex on a World-Class Deposit
Great Panther Silver’s Guanajuato Mine Complex is located inMexico’s second-largest producing silver district of the same name wheremore than one billion ounces of silver have been produced over the past400 years.
The Company’s property on this world-class silver-gold deposit has a4.2 kilometer strike length. The underground mine has 25 shafts, over100 kilometers of underground tunnels, three ramps, and has producedmore than 4.8 million ounces of silver equivalent since the Companyrestarted production in 2006. The plant has the capacity to doublecurrent production rates to about 1,200 tonnes per day. During the finalquarter of 2010, the Guanajuato plant achieved record gold recovery andexcellent silver recovery of 91.1% and 89.1% respectively. Improvementsto plant operations and equipment will continue in 2011.
Production from the Los Pozos area on the 310 and 345 meter levelsaccounted for more than 50% of the total silver production at the mineduring the fourth quarter of 2010, while production at the Cata Clavoand Santa Margarita areas will be increased in 2011. Exploratory coredrilling of the Guanajuatito North Zone indicates mineralizationcontinues to depths below the 80 meter level. Most recently, the companydiscovered deeper mineralized silver-gold zones grading as high as 8.53g/t gold and 1,300 g/t silver over more than a half meter in width atits Guanajuatito Mine at the northwest end of the Guanajuato MineComplex. An access ramp will intersect the vein on the 120 meter levelhere to allow for more detailed exploration in preparation for anadditional stoping area.
Underground exploratory coredrilling between the Valenciana and Cata mine areas is also underway.Deep drilling under the main Valenciana Mine will begin in the secondquarter of 2011 to test structures in the Valenciana area below the 390level and along a 600 meter strike length.
The NI 43-101compliant reserves for the historic Guanajuato Mine strongly indicatethe project’s long-term viability and, more immediately, an anticipatedimproved output in 2011 and 2012. Guanajuato contains a measured andindicated mineral resource of 5,450,000 Ag eq oz, with inferred mineralresources estimated at 2,678,000 Ag eq oz. The measured and indicatedmineral resources include 4,372,000 Ag eq oz of proven and probablemineral reserves, using a cut-off grade of 185 g/t silver equivalent.
High-Grade Topia Mine Producing Silver, Gold, Lead and Zinc
Great Panther Silver’s historic Topia silver-gold-lead-zinc mineproperty encompasses 6,500 hectares, dominating this mining district inthe Sierra Madre Mountains of Durango State. Mining in the area datesback to 1538.
The deposit is characterized by high-grade, narrow veins. Althoughcurrently identified resources will support a 10-year mine life, apending updated resource estimate is expected to significantly extendthe length of economic production at the mine.
The TopiaMine recorded strong production in Q4 2010 of 129,650 oz of silver, 108oz of gold, 515,305 lbs of lead, and 669,216 lbs of zinc from milling9,081 tonnes of ore. This equates to 195,598 Ag eq oz, 26% higher thanin Q4 2009. Ore grades averaged 458 g/t silver, 0.46 g/t gold, 2.78%lead and 3.64% zinc. New flotation cells for the zinc and leadconcentrate circuits will enable a 22% increase in plant throughput in2011, from 180 to 220 tonnes per day. Q4 metal recoveries at the Topiaplant were high: 91.5% for silver, 81.5% for gold, 92.7% for lead and91.8% for zinc.
Mine development at Topia continued toextend known areas and provide access to new mining areas. Mining of theSan Gregorio and El Rosario veins contributed almost 40% of the silverproduction. Ramp development at Argentina is now fully mechanized, andaccess to the third level is expected in the Q2 2011.
GreatPanther Silver plans to increase production at Topia by 20% per yearthrough 2012. Mineral resource/reserve estimates are pending.
Investment Considerations
Great Panther Silver is well capitalized with $13.5 million inits treasury, and a growing cash flow sufficient to fund production,expanded mine development and exploration. Currently, some 70% of thecompany’s revenues derive from silver.
Now in its second year of its ambitious three-year plan to reach anannual production rate of 3.8 million ounces of silver equivalent by2012, Great Panther Silver also has its eye on potential futureacquisitions.
“Profitable growth is the key to maximizinglong-term shareholder value,” says Archer. “We will grow production andearnings from mining operations, while maintaining a positive cash flowand actively pursuing promising exploration and developmentopportunities in Mexico and South America.”
If Great PantherSilver’s track record during the past year is any indication, thecompany could well make good on its promises. For not only did thecompany set record production numbers in 2010, it conducted successfuldiamond drilling programs at the Guanajuato Mine, the nearby San IgnacioProject and the Topia Mine that delineated new resources and identifiedintriguing new mineralized areas. Exploration during the coming yearpromises more of the same: Great Panther Silver has more than doubledits 2011 drilling program to about 60,000 meters of further exploratoryand infill drilling.
For example, the company will spend$2.8 million on further exploration and development at San Ignacio whereit is evaluating sites for a portal to an underground ramp. Oreextracted during the development phase will be trucked to the Guanajuatoplant for processing. The cash flow generated will offset the cost ofexploration and development.
“Our strategy for growth beyond2012 is to target undercapitalized projects that can be made profitableby introducing new equipment and mining methods,” says Archer.
“This could add millions of ounces to our books and bring
Great Panther Silver to mid-tier status.”
GREAT PANTHER SILVER LIMITED
TSX: GPR • NYSE Amex: GPL
Contact: Erick J. Bertsch,
Vice President of
Corporate Development
2100 - 1177 West Hastings Street
Vancouver, BC
V6E 2K3, Canada
Toll Free: (888) 355-1766
Phone: (604) 608-1766
Fax: (604) 608-1768
E-Mail:
info@greatpanther.com
Web Site:
https://www.greatpanther.com
by The Bull & Bear
