|Great Panther Silver Limited
Guanajuato Mine Complex
Topia Mine Complex
Great Panther Silver Limited (TSX: GPR) (NYSE Amex: GPL) headquartered in Vancouver, Canada, is one of the fastest growing primary silver producers in Mexico with strong leverage to future rises in the price of silver. Since entering production in the first quarter of 2006, the Company has seen four consecutive increases in annual production.
Great Panther has completed the first year of a three-year growth strategy (2010-2012). During 2010, the Company purchased new equipment, upgraded milling operations, advanced new development headings, rehabilitated old workings, and completed over 27,000 metres of exploration diamond drilling. The Company is now focusing on an immediate and aggressive increase in production, an increase in resources and reserves, and maintaining profitability. The Company's annual production is expected to grow to 3.8 million silver equivalent ounces, including 2.65 million ounces of silver by 2012 from its two existing mines in Mexico.
Great Panther Silver’s primary goal is that of profitable growth, the key to maximizing long-term shareholder value. Great Panther’s specific objectives are to grow production and earnings from mining operations and maintain positive cash flow while continuing to actively pursue exploration and development opportunities in Latin America.
- 33% increase in mineral sales revenues to $42.2 million for the year ended December 31, 2010 from $31.7 million for 2009.
- 40% increase in mineral sales revenues to $13.8 million for the three months ended December 31, 2010 from $9.9 million for the same period in 2009.
- 63% increase in earnings from mining operations to $18.7 million for the year ended December 31, 2010 from $11.5 million for the same period in 2009.
- 60% increase in earnings from mining operations to $6.8 million for the three months ended December 31, 2010 from $4.2 million for the same period in 2009.
- 212% increase in cash flows from operations to $4.2 million for the year ended December 31, 2010 from $1.4 million in 2009.
- $5.8 million increase in net income to $5.0 million for the year ended December 31, 2010 from a net loss of $0.9 million for 2009.
- Record annual metal production of 2,255,802 silver equivalent ounces ("Ag eq oz"), up 2% from 2,202,456 Ag eq oz in 2009.
- Record silver production of 1,534,957 silver ounces, up 5% from 1,456,830 in 2009.
- Record metal recoveries of gold and silver at Guanajuato and silver, lead and zinc at Topia.
- 33% increase in cash cost per silver ounce, net of by-products, to US$7.43 in 2010 from US$5.58 in 2009. This increase in costs during 2010 was primarily due to lower than forecasted production, lower ore grades, higher smelting and refining charges and development costs at Guanajuato, and lower ore grades and higher mining costs at Topia.
- 75% increase in cash cost per silver ounce, net of by-products, for the fourth quarter of 2010 to US$8.41 from US$4.80 for the fourth quarter of 2009 primarily due to lower than forecast production and ore grades, general inflation and higher power costs.
- Updated NI 43-101 compliant mineral resource/reserve estimate for the Los Pozos, Santa Margarita, and Cata Clavo at the Guanajuato Mine. The new Measured and Indicated mineral resource contains 5,455,650 silver equivalent ounces. Inferred mineral resources are estimated at 2,676,924 Ag eq oz. The Measured and Indicated mineral resources include 4,372,000 Ag eq oz categorized as Proven and Probable mineral reserves, using a cut-off grade of 185 g/t silver equivalent.
- A successful surface drilling program at the San Ignacio mine property in Guanajuato commenced during the third quarter of 2010 and is continuing throughout 2011. A $2.8 million budget has been approved for 2011 to drill approximately 24,000 metres and to prove up as many ounces as possible in the highly prospective San Ignacio area which has the potential to be a separate mine.
The Guanajuato Mine Complex is located in the State of Guanajuato, Mexico, on the outskirts of the colonial city of Guanajuato, which also serves as the state capital. The Guanajuato Mining District is one of the most prolific and best-known silver districts in the world. During the 18th century, the district was reportedly producing one-third of the world's silver.
In 2005, Great Panther purchased the Guanajuato Mine Complex for $US7.25 million, and immediately began a major refurbishment of all the facilities and equipment. The property contains 25 shafts, of which three are operational, and more than 100 km of underground tunnels.
The three principal mines at Guanajuato, Valenciana, Cata and Rayas, are situated on the main Veta Madre (Mother Lode) structure that trends northwest-southeast through the district for at least 25 kilometers. The Valenciana Mine was once said to be the richest silver mine in the world.
An extensive exploration drill program was initiated during 2010 to explore the deeper extensions of the Rayas structures including the Santa Margarita vein which was successfully extended down to 600 metres in depth. During the fourth quarter of 2010, the NI43-101 compliant mineral resource estimate for Guanajuato was updated and the first mineral reserve statement was released. The measured and indicated resources were estimated at 5.45 million Ag eq oz, the inferred resources at 2.68 million Ag eq oz, and the mineral reserves (derived from the measured and indicated resources) were estimated at 320,000 tonnes with an average grade of 282g/t silver and 2.19g/t gold.
Production from Guanajuato is planned to increase steadily throughout 2011 as output from the Los Pozos and Santa Margarita areas reach full capacity, Cata production returns to previous levels, and new production is added from the Guanajuatito area. Plant throughput is estimated to be 200,000 tonnes at grades of 240g/t silver and 1.80g/t gold for metal production of 1.38 million oz silver and 10,400 oz gold; equivalent to 2.00 million Ag eq oz.
A new discovery was made during 2010 at the San Ignacio property, located approximately 5 kilometres west-northwest of Guanajuato. A budget of $2.8 million has been approved for 2011 for the exploration and development of the San Ignacio property. Once the appropriate permits are in place an expanded drilling program will begin. Potential sites to establish a portal for an underground ramp are also being evaluated. Due to the proximity of the San Ignacio Property to the Company’s main Guanajuato operation, any mineralization intersected in the course of underground exploration and development can be trucked to the plant for processing. In this way, cash flow provided by the additional tonnage can be used to offset the cost of the exploration and development program.
Topia is a high-grade silver-lead-zinc Mine Complex in the Sierra Madre Mountains of Durango State, where silver has been mined intermittently since the 1500’s. The district was consolidated by Peñoles, who built the mine and operated it from 1952-1989. After 16 years under private ownership, Great Panther purchased the operation in 2005 for US$2.55 million.
After refurbishing the plant, Great Panther brought the mine back into production and the first concentrates were shipped from Topia in the first quarter of 2006.
Great Panther owns 100% of the concessions that comprise 6500 hectares and are accessible by road and air. Topia includes 14 small mining operations of which 11 are currently operating.
During 2010, mine development continued to extend known areas and provide access to new mining areas. Mining of the San Gregorio and El Rosario veins progressed well, contributing almost 40% of the silver production. Ramp development at Argentina continued and is now fully mechanized with an electric-hydraulic drill jumbo, a new 2-yard underground loader and a 7-tonne capacity haulage truck. Access to the third level is expected in Q2 2011. The surface exploratory drilling program, completed in third quarter of 2010, was extremely successful and will guide mine development to continue to expand silver production from the San Gregorio, Recompensa, and Cantarranas veins (Hormiguera mine) as well as enable new production to be added from other veins where no mining is currently taking place.
Mineral resource and reserve estimations have commenced on all viable areas with the completion of the surface drilling. Added mineral resources and reserves will play an important role in the Company’s plans to increase production at Topia by 20% per year from 2010 to 2012. The Company anticipates mineral resource and reserve estimates to be released for Topia in Q1 2011.
Great Panther's three-year strategy to accelerate production to 3.8 million Ag eq oz by 2012 is now commencing its second year. New equipment has been delivered to the mines, new production areas are being added, plant performance continues to excel, plant capacity is being increased, resources have been increased and reserves defined, and exploration drill programs have made significant new discoveries of high grade mineralization.
The combined production target for 2011 has been set at 2.87 million Ag eq oz, consisting of 1.94 million oz silver, 11,200 oz gold, 1,170 tonnes lead and 1,430 tonnes zinc. Silver equivalents for 2011 have been established using prices of US$1,200/oz Au, US$20/oz Ag, US$0.90/lb Pb and Zn.
Production from Guanajuato is planned to increase steadily throughout 2011 as output from the Los Pozos and Santa Margarita areas reach full capacity, Cata production returns to previous levels, and new production is added from the Guanajuatito area. Plant throughput is estimated to be 200,000 tonnes at grades of 240g/t silver and 1.80g/t gold for metal production of 1.38 million oz silver and 10,400 oz gold, equivalent to 2.0 million Ag eq oz.
Output from Topia is estimated to increase as new mine production is added as a result of development on existing and new veins and plant capacity is increased. Plant throughput is estimated to be 40,000 tonnes with metal production of 0.56 million oz silver, 800 oz gold, 1,170 tonnes lead and 1,430 tonnes zinc, equivalent to 0.87 million Ag eq oz.
No production from the new discoveries at the San Ignacio property is included in the 2011 target. However, as resources are estimated and mine plans are developed, it is anticipated that this project will positively impact the plans for 2012. Due to the proximity of San Ignacio to the Company's main operations at Guanajuato, any ore extracted during the development phase can be trucked to the plant for processing.
Diamond drilling in 2010, from both surface and underground, totaled 30,730 metres at Guanajuato, San Ignacio and Topia. Due to the success of this program in delineating new resources and making new discoveries, the drilling budget for 2011 has been more than doubled to over 60,000 metres, including at least 24,000 metres at San Ignacio, and 30,000 metres from underground at Guanajuato. This compares favourably with the 65,000 metres of diamond drilling originally proposed for the Company's overall three-year growth strategy.
- Record 2010 production: 2,255,802 silver equivalent ounces. New records were established for the output of all metals, comprising 1,534,957 ounces silver, 7,216 ounces gold, 1,092 tonnes lead, and 1,358 tonnes zinc.
- Successfully lists on the NYSE Amex under the trading symbol "GPL".
- Eliminates all long-term debt freeing up cash to ensure the successful continuation of its 3-year organic growth strategy at the Guanajuato and Topia Mines.
- Receives distinction as a “Socially Responsible Company” by CEMEFI, Centro Mexicano para la Filantropía (Mexican Centre for Philanthropy). This annual distinction is a milestone for the Company and has been awarded for its commitment to sustainable environmental, social and economic development.
- $21 million bought deal financing. Use of proceeds include $9.2 million to advance the new discovery at San Ignacio for Environmental Impact Assessment & permitting, Engineering Studies, and preliminary mine development. $5 million has been earmarked for the acquisition of new mineral properties in Latin America.
- Preparing the first ever NI 43-101 resource estimate for the new discovery at San Ignacio.
Corporate Profile on Stockhouse
Robert A. Archer P.Geo.
President & Chief Executive Officer
As President, Chief Executive Officer and a Director, Mr. Archer is responsible for the day-to-day operations of the Company and for the development of its strategic direction. Also, as the President of Great Panther Silver's Mexican subsidiary, he is responsible for the management and supervision of its affairs and business in Mexico.
Mr. Archer has more than 27 years' experience working for mining companies throughout North America, namely Newmont Exploration of Canada Ltd., Rio Algom Exploration Inc., Placer Dome Canada Ltd. and Noranda Exploration Inc. He also served as President of Consolidated Magna Ventures Ltd.
Mr. Archer is the President of R. A. Archer & Associates and Platoro Resource Corp. He also serves as President and Chief Executive Officer and is a director of Cangold Limited, a company publicly listed on the TSX Venture Exchange. He is also a non-executive director of Altair Ventures Incorporated, a company also publicly listed on the TSX Venture Exchange.