In September 2011, Bob Archer, President of Great Panther Silver Limited (TSX: GPR) talks with ResourceClips on their Guanajuato operation.

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Curing A Hiccup
Great Panther Recovers from its 2Q Report
~ By Ted Niles - September 13 2011
“In this kind of a market,” says Bob Archer, “people have kind of a show-me attitude.” Great Panther acquired the properties in 2005 planning to avoid debt and share-
The President and CEO of Great Panther Silver is referring to the blow the company holder dilution. Archer explains, “Some people at the time advised us to just raise
suffered last month after its 2Q financials were released. He explains, “We had a $50 million and go hard at it, but we said no. We wanted to do it at a more gradual
little hiccup in the second quarter in terms of our concentrate sales from our Gua- level. We’ve been upgrading consistently year after year at the operations and doing
najuato operation. Our primary buyer said they weren’t going to accept any more a lot of drilling to expand the resource.” Since Great Panther began production in
concentrate, and that forced us to scramble to find another buyer. Which meant that 2006 it has increased production and resources year over year. It achieved net posi-
we had a little bit of a buildup of inventory at the end of the quarter—our revenues tive cash flow in May 2009.
and earnings for the quarter were substantially below what they normally would
have been.” Also in 2009 Great Panther announced a three-year growth strategy to increase
production at Guanajuato and Topia to a total of 3.8 million silver-equivalent ounces
by 2012, lower operating costs to roughly $5.00 per ounce silver and outline and
maintain a total resource of 40 million ounces silver equivalent. Archer comments,
“I’m pleased with our progress. It’s not a straight-line projection by any means, but
we’re still maintaining our targets for 2012. We’re a little over halfway through our
three-year organic growth strategy. We’ve upgraded the plants, and we’ve increased
the capacity. Now it’s a matter of trying to increase the output from the mines.”
Toward that end, Great Panther’s 2011 drill program includes 60,000 metres of
surface and underground exploration to upgrade resources: 6,000 metres at Topia,
30,000 metres at Guanajuato, and 24,000 metres at the company’s new San
Ignacio project—located 20 kilometres by road from Guanajuato’s Cata mill. Great
Panther also acquired the equally-close Santa Rosa project in July, where drilling is
expected to begin by 4Q.
March 10 assays of San Ignacio included 5.04 grams per tonne gold and 1,404 g/t
silver over 0.9 metres, 3.77 g/t gold and 356 g/t silver over 1.8 metres, 3.08 g/t gold
and 421 g/t silver over 3.8 metres, 1.69 g/t gold and 655 g/t silver over 2.4 metres
and 4.2 g/t gold and 854 g/t silver over 1.5 metres. August 30 assays of Guana-
Hiccup certainly seems like the appropriate word. Short-lived, innocuous but still juato’s Cata mine include 29.44 g/t gold and 6,447 g/t silver over 3.2 metres, 7.38
irritating. Great Panther shares lost 25% before the proverbial paper bag burst on g/t gold and 2,114 g/t silver over 5.4 metres, 6.02 g/t gold and 1,347 g/t silver over
August 18 with the announcement that the company had found a new Mexican 2.3 metres and 5.41 g/t gold and 1,764 g/t silver over 3.3 metres. Archer remarks,
buyer for its concentrate. Indeed, says Archer, “We have resolved the problem such “They are the highest assays we’ve seen in the drilling at the mine. We do know that
that as we draw down on the inventory to a new buyer the revenues in 3Q and 4Q bonanza-grade mineralization exists at different places within the mine, but it’s the
will be higher than they normally would be and will balance out by the end of the first time we’ve had these kinds of grades in the drilling. They’re pretty spectacular.”
year.” He adds, “It’s a bit of a non-issue for us, but the market is saying I want to
see those numbers. I think largely because of that we’re undervalued relative to our He continues, “Our COO has already given the go ahead to start development and
peers right now.” get those zones into production as soon as possible. Probably early 4Q. Guanajuato
is at half capacity right now—we’re running it at about 600 tonnes a day, and it can
The hiccup cured, Great Panther’s strengths are being recognized. Robin McCutch- operate at about 1,200 tonnes a day. So there’s room there to add additional feed
eon of Seeking Alpha marvelled that it was “still relatively inexpensive compared from San Ignacio when we get that going.” San Ignacio is anticipated to have a new
to the mainstream miners.” The Motley Fool’s Christopher Barker urged readers to resource by 4Q 2011 as well.
“carefully consider” the company.
Great Panther continues to concentrate on steady development. “We’re very
And there is much to consider about this primary silver producer and its two wholly- focused on acquisitions at the moment,” Archer says, “and looking to acquire either
owned and royalty-free mines in Mexico. The first, Guanajuato—in, as you might another project or another company that would bring us additional projects in the
expect, Guanajuato State—is a silver-gold mine occupying 4.2-kilometres of the near term. We really are very growth oriented at the moment.”
Veta Madre vein structure. Guanajuato is an underground mine and has NI 43-101
“
measured and indicated resources of 5.45 million ounces silver equivalent—4.37 At press time, Great Panther Silver had 134.2 million shares trading at $3.26 for a
million ounces of which are proven and probable reserves—and 2.68 million ounces market cap of $437.6 million.
silver equivalent inferred. In 2010, it produced 1.4 million ounces silver equivalent at
a cost of $6.61 per ounce.
The Topia silver-lead-zinc property is Great Panther’s second mine, located in If we aggressively pursue this project, it
Durango State, and is the smaller of the two operations. As with Guanajuato, silver
mining in the area goes back to the Conquistadors. Topia comprises four conces-
could come into production right around
sions totalling 6,438 hectares and has measured and indicated resources of 7.4 mil- the time the anticipated zinc shortfall is
lion ounces silver equivalent, 16.4 million pounds zinc, 28.3 million pounds lead and occurring. The timing could almost be
inferred resources of 11.9 million ounces silver equivalent, 23.4 million pounds zinc
and 41.1 million pounds lead. In 2010, it produced 822,000 ounces silver equivalent perfect for Lundberg
at a cost $9.06 per ounce.
– Warren MacLeod
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