Mr. Robert Archer reports
GREAT PANTHER SILVER REPORTS FOURTH QUARTER AND ANNUAL 2016 PRODUCTION RESULTS AND PROVIDES 2017 OUTLOOK
Great Panther Silver Ltd. has released its fourth quarter and annual 2016 production results from its two wholly owned Mexican silver mining operations: the Guanajuato mine complex, which includes the San Ignacio mine, and the Topia mine in Durango.
2016 production highlights (compared with full-year 2015)
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Consolidated metal production decreased 7 per cent to 3,884,960 silver-equivalent ounces.
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Silver production decreased 14 per cent to 2,047,260 silver ounces.
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Gold production increased 2 per cent to 22,238 gold ounces, an annual record.
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Ore processed was steady at 376,739 tonnes.
Fourth quarter 2016 production highlights (compared with the fourth quarter of 2015)
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Consolidated metal production decreased 12 per cent to 883,772 silver-equivalent ounces.
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Silver production decreased 17 per cent to 460,571 silver ounces.
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Gold production decreased 8 per cent to 5,206 gold ounces.
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Ore processed decreased 2 per cent with 92,869 tonnes milled.
"Metal production was down for the fourth quarter and 2016 due to lower grades at San Ignacio and to shutdowns at Topia, with the most recent to accommodate tailings expansion and plant improvements," stated Robert Archer, president and chief executive officer of Great Panther Silver. "The increased output from San Ignacio did result in a second consecutive annual record for gold production, and recent preliminary drill results from San Ignacio indicate that grades are likely to improve as we continue to the southeast. In addition, with the upgrades at Topia and the recently signed agreement to purchase the Coricancha mine in Peru, we expect 2017 to be a very exciting time for Great Panther Silver as we position ourselves for production growth in future years."
CONSOLIDATED OPERATIONS SUMMARY
Q4 2016 Q4 2015 FY 2016 FY 2015
Ore processed (tonnes milled) 92,869 94,874 376,739 375,332
Silver-equivalent ounce
production (1) (2) 883,772 1,002,584 3,884,960 4,159,121
Silver ounce production 460,571 553,189 2,047,260 2,386,028
Gold ounce production 5,206 5,637 22,238 21,740
Lead production (tonnes) 213 278 1,034 1,198
Zinc production (tonnes) 315 425 1,496 1,850
(1) Silver-equivalent ounces for 2016 were calculated using a 70:1
silver/gold ratio and ratios of 1:0.0504 and 1:0.0504 for the price
per ounce of silver to price per pound of lead and zinc, respectively.
(2) Silver-equivalent ounces for 2015 were calculated using a 65:1
silver/gold ratio and ratios of 1:0.050 and 1:0.056 for the price
per ounce of silver to price per pound of lead and zinc, respectively.
Guanajuato mine complex
Total metal production for the Guanajuato mine complex during the fourth quarter of 2016 decreased by 7 per cent to 702,351 silver-equivalent ounces, compared with the fourth quarter of 2015, and decreased by 3 per cent to 2,987,074 silver-equivalent ounces for 2016, compared with the prior year. The decreases in both periods were primarily attributed to lower silver grades at San Ignacio. Ore processed in 2016 increased by 4 per cent, which partly offset the lower silver grades. San Ignacio accounted for 58 per cent of the total ore processed at the Guanajuato mine complex in 2016, compared with 48 per cent in 2015.
GMC OPERATIONS SUMMARY
Q4 2016 Q4 2015 FY 2016 FY 2015
Ore processed (tonnes milled) 81,518 79,651 320,903 309,944
Silver-equivalent ounce
production (1) (2) 702,351 751,927 2,987,074 3,081,258
Silver ounce production 347,415 394,655 1,473,229 1,708,061
Gold ounce production 5,071 5,496 21,626 21,126
Ag grade (g/t) 149 175 163 192
Au grade (g/t) 2.25 2.39 2.43 2.35
Ag recovery (%) 88.7% 87.9% 87.9% 89.2%
Au recovery (%) 85.9% 89.7% 86.4% 90.2%
(1) Silver-equivalent ounces for 2016 were calculated using
a 70:1 silver/gold ratio.
(2) Silver-equivalent ounces for 2015 were calculated using
a 65:1 silver/gold ratio.
Underground drilling to improve the resource definition at San Ignacio continued through the fourth quarter of 2016 and is scheduled to extend into 2017. In addition, recent surface drilling at San Ignacio was successful in extending the strike extent of silver-gold mineralization for several hundred metres to the southeast of current workings. Seventeen holes, for a total of 3,766 metres, were drilled in the fourth quarter and many holes intersected silver-gold mineralization with higher grades than currently being mined. These results are being compiled and will be released in due course. Surface drilling has resumed to follow up on these encouraging results.
Topia mine
Total metal production in the fourth quarter of 2016 at Topia was 181,421 silver-equivalent ounces, a decrease of 28 per cent compared with the fourth quarter of 2015. When compared with the previous full year, total metal production in 2016 decreased by 17 per cent to 897,886 silver-equivalent ounces. The decrease was mainly attributed to the lower tonnes milled, reflecting the two temporary plant shutdowns during the third quarter of 2016 and a planned three-month processing suspension commencing in December, 2016, to facilitate mill upgrades and the transition to a new tailings storage facility.
Mining has continued through the plant shutdown and ore is being stockpiled at the site. This material will be processed once the plant starts up again such that production at Topia for 2017 should comprise 13 months of mined ore. Updates on the plant status will be provided as work progresses, with the expected restart in the first quarter of 2017.
TOPIA OPERATIONS SUMMARY
Q4 2016 Q4 2015 FY 2016 FY 2015
Ore processed (tonnes milled) 11,351 15,223 55,836 65,387
Silver-equivalent ounce
production (1) (2) 181,421 250,657 897,886 1,077,863
Silver ounce production 113,156 158,534 574,031 677,967
Gold ounce production 136 140 612 614
Lead production (tonnes) 213 278 1,034 1,198
Zinc production (tonnes) 315 425 1,496 1,850
Ag grade (g/t) 349 357 354 356
Au grade (g/t) 0.63 0.48 0.56 0.48
Ag recovery (%) 88.8% 90.6% 90.4% 90.7%
Au recovery (%) 59.4% 60.4% 60.6% 60.6%
(1) Silver-equivalent ounces for 2016 were calculated using a 70:1
silver/gold ratio and ratios of 1:0.0504 and 1:0.0504 for the price
per ounce of silver to price per pound of lead and zinc, respectively.
(2) Silver-equivalent ounces for 2015 were calculated using a 65:1
silver/gold ratio and ratios of 1:0.050 and 1:0.056 for the price
per ounce of silver to price per pound of lead and zinc, respectively.
Outlook
For 2017, the company expects a production level of four million to 4.1 million silver-equivalent ounces (at a 70:1 ratio) from its Mexico operations. An updated National Instrument 43-101 resource estimate for the Guanajuato mine complex
will be released later this month; however, due to necessary cut-off dates, recent high-grade drill results will not be included in this estimate. Commissioning of the new tailings storage facility at Topia and resumption of milling is expected in the first quarter, with the gradual processing of ore stockpiled during the shutdown to be conducted through the balance of the year.
Completion of the recently announced acquisition of the Coricancha mine in Peru is anticipated to take place before the end of the first quarter. Initial activities will include evaluations of current mine and processing infrastructure, underground drilling, and initiation of a preliminary economic assessment. Depending on the outcome of the latter, development in support of operations is expected to commence in early 2018 to mid-2018. A resource update is also scheduled for the second quarter of 2017.
For the reported periods of 2016, the company delivered reductions in cash cost and all-in sustaining costs of 60 per cent and 31 per cent, respectively. For 2017, the company expects cash cost to increase due to increases in site costs and increased expenditures on definition drilling aimed at reducing grade variability and improving mine planning. All-in sustaining costs are also expected to increase due to the increase in cash cost and greater investment in drilling, development and capital projects. In particular, all-in sustaining costs will reflect the non-recurring capital expenditures in the new tailings facility at Topia that will primarily be incurred in the first quarter of 2017. Based on current plans and projections, the company's 2017 guidance for cash costs and all-in sustaining costs is $5 (U.S.) to $6 (U.S.) and $14 (U.S.) to $16 (U.S.), respectively.
The technical information contained in this news release has been reviewed and approved by Robert F. Brown, PEng, who is the qualified person for the Guanajuato mine complex and the Topia mine under the meaning of NI 43-101. Aspects relating to mining and metallurgy are overseen by Ali Soltani, chief operating officer for Great Panther.
About Great Panther
Great Panther Silver's current activities are focused on the mining of precious metals from its two wholly owned operating mines in Mexico: the Guanajuato mine complex, which includes the San Ignacio mine, and the Topia mine in Durango. In addition, the company has recently signed an agreement to acquire a 100-per-cent interest in the Coricancha mine complex in the central Andes of Peru.
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