VANCOUVER, BRITISH COLUMBIA--(Marketwired - July 11, 2013) -
GREAT PANTHER SILVER LIMITED (TSX:
GPR)(NYSE MKT:
GPL) (the "Company")
today reports second quarter ("Q2") production at its two wholly-owned
Mexican silver mining operations, Guanajuato and Topia.
Second Quarter 2013 Operations Highlights (Compared to Second Quarter 2012)
- Ore processed was up 28% to 67,569 tonnes;
- Metal production increased 22% to a record 680,212 silver equivalent ounces ("Ag eq oz"), at a 60:1 silver:gold ratio;
- Silver production rose 6% to 396,730 silver ounces ("Ag oz");
- Gold production increased 70% to a record 3,994 gold ounces ("Au oz"); and
- Land Use Permit for San Ignacio was received.
"We are pleased to report both
record total metal production
and gold production for the second quarter," stated Robert Archer,
President and CEO. "Both Guanajuato and Topia rebounded from low grades
in the first quarter of 2013 as a result of our ongoing focus on grade
control. As we continue to concentrate on improving efficiencies at the
operations, the current emphasis is on site cost reductions and
maintaining strong grade control, in light of lower metal prices.
Non-essential budget items have been cut, some capital expenditures have
been cut or deferred, and corporate overheads have been lowered in
order to conserve cash and maintain our favorable working capital
position. Directors and senior management have participated in these
cuts through voluntary salary deferrals. Overall, these cuts will result
in lower administrative, exploration and corporate development
expenditures in the second half."
"Following the addition of a new Vice President, Operations
and Vice President, Safety, Health & Environment in the first
quarter, we welcome two new mine-site Safety Superintendents in Q2. Our
safety record has improved through the quarter, the Rayas Shaft
rehabilitation is nearing completion and we are proceeding with
improvements to the tailings dams at Guanajuato and Topia. Preparations
for the ramp development at San Ignacio are on track, pending the
approval of the Environmental Impact Assessment."
Despite an improvement in grades over the first quarter, we
caution that operating margins will remain weak for the second quarter
due primarily to the severe drop in silver and gold prices over the
quarter. In addition, the impact of improved grades will not be
substantially reflected in the margins and unit costs for the quarter as
most of the concentrate sales will reflect production from the prior
period at lower grades. This factor will also impact reported cash costs
for the period.
1 Silver equivalent ounces for 2013 were
established in November 2012 using prices of US$28 per oz, US$1,680 per
oz (60:1 ratio), US$0.85 per lb and US$0.85 per lb for silver, gold,
lead & zinc, respectively, and applied to the recovered metal
content of the concentrates that were produced by the two operations.
For consistency, these prices will be used for the balance of 2013.
Guanajuato Mine Complex
For the second quarter, the Guanajuato operation processed
52,917 tonnes, up 29% compared to the same period in 2012, at ore grades
of 159 grams/tonne ("g/t") Ag and 2.47g/t Au. Metal production included
236,454 Ag oz, and 3,841 Au oz, or 466,925 Ag eq oz, which represented
an increase of 30% over the same period in 2012. Plant metallurgical
performance remained strong, with metal recoveries of 87.2% for silver
and 91.5% for gold.
1 Silver equivalent ounces for 2013 were
established in November 2012 using prices of US$28 per oz, US$1,680 per
oz (60:1 ratio), US$0.85 per lb and US$0.85 per lb for silver, gold,
lead & zinc, respectively, and applied to the recovered metal
content of the concentrates that were produced by the two operations.
For consistency, these prices will be used for the balance of 2013.
The lower levels of the Cata and Santa Margarita
mines
continued to excel in terms of production and grades. Mining at Cata
demonstrated that the hanging wall veins merge with the main Veta Madre
at the 510 metre level, resulting in well mineralized ore.
Gold grades increased significantly, with the most meaningful
impact coming from Santa Margarita. Silver grades recently started to
show notable improvements across all zones due to better grade control.
Underground development at Guanajuato consisted of 1,790
metres, up 6% compared to the same period in 2012. The development
program for the quarter was focused on preparing underground
access-ways, stopes for production, and defining new mineralized
structures indicated by exploration drilling results.
Exploration development at Cata was focused on defining the
continuity of the Veta Madre at the 525 metre level, resulting in high
grade intersections and expanding the known mineralized resources.
The Santa Margarita main ramp reached the 510 metre level,
from which an exploration crosscut is being developed; aiming to further
define the ore structure's potential as indicated by exploration
drilling. In addition, exploratory development was completed at the 490
metre level to define the Santa Margarita vein and assist the mining
activities.
Exploration drilling was carried out using four underground
drill rigs, guiding the mining activities with more accurate definitions
of mineralized zones. For the quarter, diamond drilling totaled 6,426
metres, up 3% compared to the same period in 2012. Exploration drilling
at deep Cata between the 525 and 540 metre levels returned excellent
results and demonstrated the potential for the continuity of silver-gold
mineralization to depth.
The development of the Guanajuatito main ramp was temporarily
suspended to put in place the development required to support an
exploration drilling program to upgrade the mineral resources between
the 245 and 390 metre levels. This program will commence during the
third quarter. The Guanajuatito Mine was connected underground to all
the other mines in the Guanajuato Mine Complex. As a result,
Guanajuatito ore production, which was previously hauled to surface via
the ramp and then by truck to the Cata plant, is now being transported
underground and up the Cata shaft, thereby reducing haulage costs.
The Rayas shaft is undergoing a thorough rehabilitation to
improve safety and efficiency. The rehabilitation is expected to be
finalized by mid third quarter. Once completed, this investment is
expected to improve the transportation of personnel to their work places
and increase operational efficiencies by reducing transportation times.
The Cata processing plant is being upgraded by installing a
new filter press that will maximize the rate of filtration and deliver a
dryer final concentrate. This will reduce concentrate loss and
electricity consumption. The new filter press installation is expected
to be completed by mid-third quarter. The Guanajuato tailings dam is
undergoing its 13
th dyke lift to increase its storage potential and is expected to be completed within the next few weeks.
Topia Mine
For the second quarter, 14,652 tonnes were processed at
Topia, up 22% compared to the same period in 2012, at grades of 376g/t
Ag, 0.57g/t Au, 1.79% lead ("Pb") and 3.05% zinc ("Zn"). Metal
production included 160,276 Ag oz, 153 Au oz, 243 Pb tonnes, and 411 Zn
tonnes, or 213,287 Ag eq oz, which is 8% up over the same period in
2012. Plant metallurgical performance was satisfactory with
metal
recoveries of 90.6% for silver, 57.0% for gold, 92.5% for lead, and
91.9% for zinc.
1 Silver equivalent ounces for 2013 were
established in November 2012 using prices of US$28 per oz, US$1,680 per
oz (60:1 ratio), US$0.85 per lb and US$0.85 per lb for silver, gold,
lead & zinc, respectively, and applied to the recovered metal
content of the concentrates that were produced by the two operations.
For consistency, these prices will be used for the balance of 2013.
The majority of the metal production during the quarter was
obtained from the 1522 and Durangueno mines, followed closely by the
Argentina and El Rosario mines, which showed increased production.
Silver grades were lower than anticipated due to the continuous narrow
vein formations resulting in higher dilution. However, a trend of
increasing silver grades was noticed from month to month during the
quarter due to ongoing efforts towards improving grade control.
Underground development at Topia consisted of 2,254 metres,
down 14% compared to the same period in 2012. The development program
for the quarter was focused on deepening main ramps at the Argentina and
La Prieta mines to access new mineralized levels indicated by
exploration drilling results. In addition, development was carried out
to prepare sublevels, raises and stopes for production. Development
reached level 4 as planned at the Argentina main ramp, whereas
development of the La Prieta ramp was temporarily suspended giving
priority to preparatory work for production.
Taking into account constantly changing metal prices,
management continues to conduct mine by mine reviews to determine the
profitability of individual mines at Topia, thereby determining where to
best concentrate the mining efforts and reduce costs. To date, two of
the fourteen mines have been temporarily shut down, and supplemented
with increased production at other more profitable mines.
Improvements are being made to the Topia processing plant by
the installation of a cone crusher that will significantly increase the
crushing capacity at the plant and reduce maintenance and electricity
costs. In addition, a performance improvement analysis is being
undertaken in order to further optimize the mill and flotation sections
of the plant.
San Ignacio Project
The Company received approval of the Land Use permit earlier
than anticipated during the second quarter and submitted a revised
Environmental Impact Assessment which is expected to be approved by the
end of the third quarter.
A new mine plan is being compiled for San Ignacio
incorporating the latest geological resource model based on the known
veins, grade ranges and elevation for commencement of mining.
An infill and extension drilling campaign is anticipated to
begin in September at San Ignacio to better define the resource. In
addition, mine and earthwork contractors will be selected and the
installation of the water supply for the mine will be completed by the
end of the third quarter.
El Horcon
A surface drill program consisting of 24 drill holes for a
total of 2,156 metres was completed during the second quarter. The
program was laid out along 650 metres of strike length on the
Diamantillo vein and also tested various splays and nearby parallel
structures and veins.
Assay results have been received and are being compiled and
interpreted. A wireframe and 3D model are being constructed such that
the continuity of grade and vein widths can be determined. An internal
resource estimate and preliminary economic assessment will be prepared
in the third quarter.
Outlook
With first half production totaling 1,287,713 silver
equivalent ounces, the Company is on track to meet its guidance of 2.4
to 2.5 million silver equivalent ounces for fiscal 2013.
As precious metals prices dropped significantly in the second
quarter, the Company has heightened its focus on improving and
strengthening the operational efficiency of its operations. Cash cost
guidance is being reviewed and the Company will provide an update in our
second quarter earnings release, expected in early August.
ABOUT GREAT PANTHER
Great Panther Silver Limited is a profitable, primary silver
mining and exploration company listed on the Toronto Stock Exchange
trading under the symbol GPR, and on the NYSE MKT trading under the
symbol GPL. The Company's current activities are focused on the mining
of precious metals from its two wholly-owned operating mines in Mexico,
Topia and Guanajuato. Great Panther is also in the process of developing
its San Ignacio Project and has two exploration projects, El Horcon and
Santa Rosa.
For further information, please visit the Company's website at
www.greatpanther.com.
This news release contains forward-looking statements within
the meaning of the United States Private Securities Litigation Reform
Act of 1995 and forward-looking information within the meaning of the
Securities Act (Ontario) (together, "forward-looking statements"). Such
forward-looking statements may include but are not limited to the
Company's plans for production at its Guanajuato and Topia Mines in
Mexico, exploring its other properties in Mexico, the overall economic
potential of its properties, the availability of adequate financing and
involve known and unknown risks, uncertainties and other factors which
may cause the actual results, performance or achievements expressed or
implied by such forward-looking statements to be materially different.
Such factors include, among others, risks and uncertainties relating to
potential political risks involving the Company's operations in a
foreign jurisdiction, uncertainty of production and cost estimates and
the potential for unexpected costs and expenses, physical risks inherent
in mining operations, currency fluctuations, fluctuations in the price
of silver, gold and base metals, completion of economic evaluations,
changes in project parameters as plans continue to be refined, the
inability or failure to obtain adequate financing on a timely basis, and
other risks and uncertainties, including those described in the
Company's Annual Information Form for the year ended December 31, 2012
and Material Change Reports filed with the Canadian Securities
Administrators available at
www.sedar.com, and reports on Form 40-F and Form 6-K filed with the Securities and Exchange Commission and available at
www.sec.gov.
