Great Panther produces 667,349 oz AgEq in Q1 2014

2014-04-10 08:46 ET - News Release

Mr. Robert Archer reports

GREAT PANTHER SILVER REPORTS FIRST QUARTER 2014 PRODUCTION RESULTS

Great Panther Silver Ltd. has released first quarter production results at its two wholly owned Mexican silver mining operations, Guanajuato and Topia.

First quarter 2014 operations highlights (compared with first quarter 2013)

Exploration drilling at Guanajuato increased 113 per cent over the fourth quarter of 2013 to 3,532 metres. Two-thirds of the diamond drilling was at Valenciana, targeting the main Veta Madre vein, and both the hangingwall and footwall vein systems. In addition, infill drilling was conducted at Guanajuatito between the 245- and 265-metre levels. This drilling is being conducted to upgrade the resource and guide mine planning by increasing confidence in the ore grade distribution.

The Cata shaft rehabilitation program is progressing as planned and has no effect on ore hoisting operations.

Topia mine

For the first quarter, ore processed at Topia increased 2 per cent to a record 17,351 tonnes compared with the same period in 2013. Ore grades were 344 g/t silver, 0.56 g/t gold, 1.90 per cent lead and 2.70 per cent zinc. Metal production included 171,609 Ag ounces, 168 Au ounces, 308 Pb tonnes and 431 Zn tonnes. Total metal production was a record 258,407 AgEq ounces, which is 24 per cent higher than the same period in 2013. The increase was primarily a function of improved grades over the first quarter of 2013. Silver grades alone improved 15 per cent.

Plant metallurgical performance was 89.4 per cent for silver, 53.8 per cent for gold, 93.4 per cent for lead and 91.9 per cent for zinc.

                     TOPIA Q1 OPERATIONS SUMMARY    
           
                         Q1 2014   Q1 2013      Q1 2014   Q4 2013
Ore processed (tonnes
milled)                   17,351    16,995       17,351    14,054
Silver-equivalent
ounce production         258,407   208,084      258,407   207,948
Silver ounce
production               171,609   146,718      171,609   153,988
Gold ounce production        168       202          168       131
Lead production
(tonnes)                     308       286          308       286
Zinc production
(tonnes)                     431       449          431       402
Ag grade (g/t)               344       300          344       376
Au grade (g/t)              0.56      0.65         0.56      0.49
Ag recovery (%)            89.4%     89.4%        89.4%     90.6%
Au recovery (%)            53.8%     56.6%        53.8%     58.6%
Total underground
development (m)            1,987     2,256        1,987     2,456
Underground diamond
drilling (m)                 641       406          641       657

Silver-equivalent ounces for 2014 are established using prices
of $18.50 (U.S.) per ounce, $1,110 (U.S.) per ounce
(60-to-1 ratio), 90 U.S. cents per pound and 85 U.S. cents per
pound for silver, gold, lead and zinc, respectively, and applied
to the recovered metal content of the concentrates that were
produced by the two operations.

The Argentina, El Rosario and San Gregorio mines were the primary sources of improved silver grades and the increase in silver ounce production. Mining continues to be focused in areas with consistently higher-grade and better vein widths.

Various process optimization measures have been implemented at the processing plant and others are under way. Crushing capacity increased 48 per cent as a result of the new cone crusher installed late last year. It is expected that the reduction of ore feed size at the mill will improve recoveries and decrease milling costs.

San Ignacio project

For the first quarter, preproduction development at San Ignacio delivered 8,037 tonnes that were milled at the Guanajuato plant at ore grades of 103 g/t Ag and 2.47 g/t Au. Metal production included 20,674 Ag ounces and 530 Au ounces, or 52,447 AgEq ounces.

Preproduction exploration crosscuts and development on the Intermediate vein, and, to a lesser degree on the Melladito vein, are continuing. The ramp has reached the 2,300-metre level (above mean sea level), where initial production will commence following the development of the access drift and stopes. Anticipated production of 100 tonnes per day by the end of June is on schedule.

Ancillary surface infrastructure at San Ignacio was further upgraded by finalizing the electrical substation. This has improved the underground air and power supply resulting in higher efficiency for the drilling equipment. In addition, the waste dump was completed and a mechanical services workshop is under construction.

El Horcon

At this time, plans for El Horcon are limited to applying for the necessary government permits to allow further exploration and development. This project has the potential to be another satellite mine to the company's Guanajuato operation, leveraging excess capacity at its Cata processing plant.

Outlook

The company is maintaining its guidance of approximately 10-per-cent growth in production in 2014 to 3.1 million to 3.2 million AgEq ounces. The company is also maintaining its 2014 cost guidance as shown in the table.

                   2014 PRODUCTION AND CASH COST GUIDANCE      
                       
                                      2013 actual         2014 guidance range

Total silver-equivalent ounces          2,840,844      3,100,000 to 3,200,000
Consolidated cash costs per silver                                          
payable ounce ($US)                   $     13.45    $         11.00 to 12.00
Consolidated all-in sustaining costs                                        
per silver payable ounce ($US)                n/a    $         17.50 to 19.50
Consolidated all-in costs per silver                                        
payable ounce (U.S.)                          n/a    $         20.00 to 21.00

The company anticipates the start of commercial production at San Ignacio before the end of the second quarter at a rate of approximately 100 tonnes per day. As development increases, output will be gradually ramped up to approximately 250 tonnes per day by year-end.

With silver and gold prices remaining at relatively low levels, management will continue to look for ways to reduce costs, and improve operational efficiencies and grade control. However, both Guanajuato and Topia have complex geology, and the measures taken to mitigate this grade variability cannot serve to completely eliminate this factor.

Exploration drilling at Guanajuato will focus on upgrading mineral resource estimates at Valenciana, Cata, San Cayetano, Guanajuatito and Los Pozos before the end of the year.

Exploration drilling at San Ignacio will focus on expanding and upgrading the mineral resource at the Intermediate, Melladito and Nombre de Dios zones in areas adjacent to the ramp development in the second and third quarters.