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Great Panther Commences Deep Drilling Program At Guanajuato;
Provides Production Update For Both Mines
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GREAT PANTHER RESOURCES LIMITED (TSX:GPR) is pleased to announce that a
deep underground drilling program has commenced at its 100% owned
Guanajuato Mine in central Mexico. The program is designed to twin,
then fill in between, diamond drill holes completed in the 1980's and
1990's by the previous owners that indicated the continuation of
silver-gold mineralization for approximately 200 metres below the
existing mine workings.
Intercepts reported from this historic drilling included 863 g/t Ag and
4.33 g/t Au over 3.30 metres, 347 g/t Ag and 1.69 g/t Au over 3.05
metres, 377 g/t Ag and 20.0 g/t Au over 0.40 metres and 141 g/t Ag and
7.4 g/t Au over 0.60 metres. As both the drill core and drill logs for
these holes are incomplete and assay certificates were not kept at the
time, the results cannot be used for NI 43-101 purposes and cannot be
relied upon. This has been one of the major limiting factors in why the
Company has not been able to produce a new NI 43-101 compliant resource
for the Guanajuato Mine. Similarly, most of Great Panther's surface
drilling cannot be used for this purpose due to the inability of an
independent engineer to validate the location of the boundaries of old
mine workings around the holes. This limits the ability to calculate
volumes, and therefore tonnages, of mineralized rock. New, deep holes
will have no such limitations and can then be used to calculate a new
NI 43-101 compliant resource.
At present, six drill stations have been prepared on the 345 level (345
metres below surface) just southeast of the Cata shaft. As several
holes can be drilled from each station, 30 core holes are currently
planned, representing 7,000 metres. The full 4.2 kilometre strike
length of the Guanajuato orebody is open to depth and previous drilling
indicates significant potential to expand the mine below the existing
workings. As additional drill stations have yet to be prepared
elsewhere in the mine, it is anticipated that this will be an ongoing
program and the Company hopes to add a second drill once the
underground infrastructure is in place to support it.
On the production side, refurbishing of the Guanajuato plant is
continuing. The third ball mill is now operational and the crushing
circuit has been modified to produce smaller, more consistently sized
ore to the ball mills. The flotation circuit is undergoing minor
modifications and column cells are being considered for installation in
order to improve recoveries. Improvements are also being made to the
thickeners and disk filters. Throughput at the plant is averaging
approximately 700 tonnes per day (tpd), although it has been tested at
a rate exceeding 900 tpd. As the plant last operated at its rated
capacity of 1,200 tpd in 1991, each new increase in throughput tests
the limits of the aging equipment, usually requiring the replacement of
some components.
In the mine, development in the Guanajuatito area is continuing with
the production of higher grade material but the development of higher
grade stopes at deeper levels of the Rayas and Cata Mines has been
slower than planned. As such, the overall head grades are continuing to
average approximately 165 g/t silver equivalent (Ag Eq). In the short
term, the Company is expecting head grades to improve as production
increases from the Cata and Rayas stopes.
The Guanajuato Mine has seen steady quarter-over-quarter increases in
output since Great Panther commenced production in June 2006. The
slower than anticipated development, however, has caused management to
revise its production forecast for the mine to approximately 845,000 Ag
Eq Oz for 2007.
At the Company's 100% owned Topia Silver-Lead-Zinc Mine in Durango, the
third ball mill is now operational, with a capacity of 200-225 tpd.
Operating this larger mill instead of the two smaller ones will result
in immediate cost savings. The operation of all three mills at once
will ultimately require a new substation and a boost in electrical
supply from the Federal Electrical Commission, both of which are
currently being negotiated. In the mine itself, recently encountered
narrow vein widths have resulted in a slight increase in dilution and
an overall decrease in tonnage such that throughput at the plant is
approximately 170 tpd with a head grade in the range of 600-650 g/t Ag
Eq. While this is still a respectable grade, the Company aims to get
back to the 800-850 g/t range by year end.
Under current circumstances, the production guidance for Topia for 2007
has been revised to approximately 675,000 Ag Eq Oz. The combined total
production for the Company for 2007 is now estimated to be
approximately 1,520,000 Ag Eq Oz (metal prices of US$600/oz for Au,
US$12/oz for Ag, US$0.60/lb for Pb and US$1.50/lb for Zn were used in
the conversion to Ag Eq Oz). While the ramp up at both mines has been
slower than anticipated, management is nonetheless pleased with the
steady increase in production and the potential for continued growth
through exploration and development.
At the Guanajuato Mine, a new state-of-the-art assay laboratory has
been constructed on site and is now operational. Built and operated
under contract by SGS Labs, the facility is considered to be
independent of the Company and all assay results will qualify for NI
43-101 reporting purposes. The lab has a design capacity of
approximately 180 samples per day and, once at this rate, should have
the ability to process all samples from the Guanajuato mine and mill as
well as all of Great Panther's exploration samples. Turn around time
for the mine samples is less than 24 hours while exploration samples
can be processed in 48-72 hours. It is expected that the lab will pay
for itself within a year and ongoing unit costs are anticipated to be
substantially less than commercial rates, resulting in a significant
saving for the Company. In addition, the new lab is environmentally
friendly in that a bank of dust collectors filters all air coming off
of the crushing and grinding equipment and all acids used in the sample
digestion process are neutralized, with the resulting water being
recycled into the plant.
The underground drilling program at Guanajuato is being conducted by
Canrock Drilling of San Luis Potosi, Mexico. Robert F. Brown, P.Eng.
and Vice-President of Exploration for Great Panther and its wholly
owned subsidiary, Minera Mexicana El Rosario, S.A. de C.V., is
designated as the Qualified Person for the drilling at the Guanajuato
Mine under the meaning of NI 43-101 and has reviewed this news release.
For further information please contact Brad Aelicks or Don Mosher at
telephone 604 685 6465, fax 604 899 4303 or e-mail
info@greatpanther.com.
ON BEHALF OF THE BOARD
"Robert A. Archer"
Robert A. Archer, President & CEO
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 Report on Form 20-F for the year
ended December 31, 2006 and reports on Form 6-K filed with the
Securities and Exchange Commission and available at www.sec.gov and
Material Change Reports filed with the Canadian Securities
Administrators and available at www.sedar.com.
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Copyright (c) 2007 GREAT PANTHER RESOURCES LIMITED (GPR) All rights
reserved. For more information visit our website at
http://www.greatpanther.com/ or send mailto:info@greatpanther.com
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