Great Panther Announces New Strategy to Accelerate Production
September 16 2009 - 3:27PM
Marketwired
GREAT PANTHER RESOURCES LIMITED (TSX: GPR) (the "Company") is
pleased to announce that its Board of Directors has approved a new
3-year growth strategy focused on an immediate and aggressive
increase in production and resources while maintaining
profitability. It is anticipated that the new strategy should see
the Company's annual production increase to approximately 3.8
million silver equivalent ounces (Ag eq oz) by 2012 from its two
existing mines in Mexico. Increased throughput and operating
efficiencies should allow for further increases beyond this level
such that production upside will remain.
The Company is currently on track to meet or exceed its 2009
target of 2.1 million Ag eq oz and the new plan foresees the
production of 2.5 million Ag eq oz in 2010, 3.0 million Ag eq oz in
2011 and 3.8 million Ag eq oz in 2012. This equates to annual
increases of approximately 20% and a total increase of more than
100% from 2008 levels. In addition, Great Panther intends to build
its resource base at the Guanajuato and Topia operations to support
a minimum 10 year mine life at the planned rate - a minimum of 40
million Ag eq oz.
Using metal prices of US$15/oz silver, US$900/oz gold, US$0.80
lead and US$0.75 zinc, the Company projects annual revenues in
excess of CAD$50 million by 2012. Cash operating costs are
anticipated to continue to decrease from existing levels towards
US$4.00 per oz of silver (net of by-product credits). Capital
expenditures for the new strategy are projected to total
approximately $22 million over the next 3 years, with an additional
$14 million in exploration spending. It is anticipated that the
vast majority of this will be funded internally from internally
generated cash flow.
In order to achieve this accelerated growth, the Company will
invest in new equipment for both mines, plant upgrades and an
increased drilling budget. New underground mine development is
anticipated to reach more than 10 kilometres at Guanajuato and 5.5
kilometres at Topia. Plant throughput is expected to approach
capacities of 1,200 tonnes per day at Guanajuato and 220 tonnes per
day at Topia.
At Guanajuato, new development will focus on the deep extensions
of the Rayas Clavo, the famous Valenciana Mine, the Cata Clavo and
the Guanajuatito Zone and from new targets in between the major
orebodies along the 4.2 kilometre trend of the Veta Madre
structure. In addition, plans are underway to dewater, explore and
develop the San Ignacio Mine, a stand-alone operation in the La Luz
District, approximately 20 kilometres by road from the plant and on
care-and-maintenance since 2001.
At Topia, production will be increased on several of the 10
veins currently being developed. Specifically, the Argentina,
Rosario and San Gregorio veins will provide the largest increases
in tonnage.
An estimated total of 65,000 metres of exploration drilling will
concentrate on defining resources, looking for vein extensions and
testing new targets. Based upon previous experience, the discovery
cost per ounce is expected to be about $0.50 or less. Initially,
the focus will be on the deep drilling of the Rayas Clavo at
Guanajuato, where development of accessways and drill stations is
already underway. Surface drilling at San Ignacio and on other
targets within the La Luz trend will commence once specific targets
have been identified and permits are in place.
As this new strategy strongly emphasizes near-term production
growth, the Company has decided to terminate its option on the
Mapimi Project in Durango State. An in-house scoping study looked
at several options for advancing this project but concluded that
the low grades and high capital costs of a new plant precluded a
sufficiently attractive return on investment. With US$2.2 million
in cash payments due over the next 12 months just to maintain the
Mapimi option, plus ongoing exploration costs, the allocation of
those funds to delineating resources at the existing mines is
deemed to be a better use of the Company's funds. Notwithstanding
this decision, the Company will continue to evaluate potential
acquisitions where new projects could result in an immediate or
near term boost to production.
The ultimate goal of Great Panther's new 3-year growth strategy
is profitable growth. The Company is nearing the end of a third
successive quarter of record earnings from mining operations and,
providing metal prices remain robust, earnings are projected to
continue to increase. Great Panther's management considers that the
best way to capitalize on an increase in the silver price is to do
so by monetizing it through production.
Further details of the new growth strategy will be released as
the plan is rolled out. Exploration drilling will be announced as
the programs commence and results disclosed as they become
available.
ON BEHALF OF THE BOARD
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 parametres 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, 2008 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.
Contacts: B&D Capital 604 685 6465 604 899 4303
info@greatpanther.com www.greatpanther.com
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