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Great Panther Announces First Quarter 2020 Production Results

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Great Panther Announces First Quarter 2020 Production Results

 

 

 

 

 

GREAT PANTHER MINING LIMITED (NYSE American: GPL) (TSX: GPR) announces its first quarter 2020 production results for its Tucano Gold Mine in Brazil, and two Mexican mining operations: the Topia Mine and the Guanajuato Mine Complex, which includes the San Ignacio and Guanajuato mines. 

 

First Quarter 2020 Highlights

 

  • More than doubled consolidated gold equivalent production: Produced 35,000 consolidated gold equivalent ounces, a 134% increase compared to the first quarter of 2019(1), driven by a full 2020 quarter of Tucano mine production and operational improvements;
  • Increased production in a seasonally lower quarter at Tucano: Produced 26,000 ounces of gold, a 12% increase relative to Tucano’s first quarter of 2019 benefitting from higher plant throughput as well as improved gold recoveries and in line with guidance contemplating increasing production through 2020;
  • Significant increase in material movement at Tucano and rehabilitation of UCS initiated: Achieved a 47% increase in material mined at Tucano relative to the first quarter of 2019, benefitting from implemented operational improvements and favorable weather conditions. Tucano started pre-stripping activities at the Urucum Central South pit (“UCS”), which are ahead of schedule.  Geotechnical drilling and studies will be initiated by May with targeted recovery of nearly 90,000 ounces from UCS in 2021;
  • Production growth at the GMC: Production of 393,000 silver equivalent ounces resulted in an 11% increase relative to the first quarter of 2019, benefitting from higher throughput, silver grades, and recoveries;
  • Strong response to COVID-19: Enacted comprehensive safety protocols and contingency plans across all operations, projects and offices, along with filing of these protocols with Brazilian government authorities.  A temporary four-week suspension of operations, until April 30, 2020, was implemented in Mexico in compliance with the federal government’s directive in response to COVID-19.  Production for the affected Mexican operations during the four-week period is estimated at about 2% of annual consolidated gold equivalent production; and
  • Enhanced liquidity: Raised US$14 million of additional non-dilutive capital from Samsung and Banco Bradesco in Brazil in the first quarter, further strengthening a cash position of US$37 million at December 31, 2019.
  •  
(1) Consolidated operational results reflect Tucano production for the period following the March 5, 2019 date of acquisition.  During the remainder of Q1 2019, while owned and operated by Great Panther, Tucano produced 5,164 gold ounces.

 

 

“We had a solid start to the year, achieving production growth supporting our 2020 annual guidance, completing a strong advance in stripping at Tucano which will benefit production later in 2020 and in 2021, and commencing our exploration programs,” stated Jeffrey Mason, Interim President & CEO.  “We remain well positioned to deliver on our 2020 objectives while keeping our workforce and communities safe by proactively and collaboratively working with local, state and federal authorities in managing the ongoing challenges of COVID-19.”

 

There are no confirmed or suspected cases of COVID-19 across the Company’s global mining operations, projects, and corporate offices. 

 

It is noted that operational results are preliminary and subject to final adjustment.  Final operational and financial results for Q1 2020 will be published with the Company’s earnings results for the first quarter.

 

Consolidated Operational Results

 

Great Panther produced 34,725 gold equivalent ounces in the first quarter of 2020, including 28,940 ounces of gold and 374,917 ounces of silver.  For 2020, the Company is changing its metal equivalency ratios to reflect an increase in the gold-to-silver ratio while still considering that the more significant recent rise is significantly higher than historic averages.  Gold equivalent ounces for 2020 are calculated using a 1:90 gold to silver ratio, (2019 at 1:80) and ratios of 1:0.0006412 and 1:0.0007554 for the price per ounce of gold to price per pound of lead and zinc, respectively.

 

 

Consolidated Operational Results Q1 2020 Q1 2019 Change Q1 2020 Q4 2019 Change
Ore processed (tonnes) 880,162 263,821 234% 880,162 927,928 -5%
Gold equivalent production (ounces) (1,2,3) 34,725 14,860 134% 34,725 44,697 -22%
Gold production (ounces)  28,940 8,293 249% 28,940 37,088 -22%
Silver production (ounces)  374,917 338,431 11% 364,917 423,230 -11%
   
(1) Gold equivalent ounces for 2020 are calculated using a 1:90 Au:Ag ratio, and ratios of 1:0.0006412 and 1:0.0007554 for the price/ounce of gold to price/pound of lead and zinc, respectively. 
(2) Gold equivalent ounces for 2019 were calculated using a 1:80 Au:Ag ratio, and ratios of 1:0.000795 and 1:0.00102258 for the price/ounce of gold to price/pound of lead and zinc, respectively, consistent with the Company’s guidance for the year. 
(3) Consolidated operational results reflect Tucano production for the period following the March 5, 2019 date of acquisition.

 

 

Tucano

 

 

Tucano Operational Results Q1 2020 Q1 2019(1) Change Q1 2020 Q4 2019 Change
Total material mined (tonnes) 7,115,135 4,850,075 47% 7,115,135 5,857,185 21%
Total waste mined (tonnes) 6,804,081 4,293,277 58% 6,804,081 5,139,284 32%
Ore mined (tonnes) 310,597 481,550 -36% 310,597 715,346 -57%
Ore processed (tonnes milled) 811,197 747,200 9% 811,197 860,364 -6%
Au grade (g/t) 1.09 1.11 -1% 1.09 1.33 -18%
Au recovery (%) 91.69% 87.98% 4% 91.69% 92.80% -1%
Gold production (ounces) 26,176 23,470 12% 26,176 34,181 -23%
   
(1) The Tucano operational results presented in the above table includes production for the full quarter of Q1 2019 including the period from January 1, 2019 to March 4, 2019, as reported by the previous owner of Tucano.  From March 5, 2019 to Mar 31, 2019, Tucano, while owned and operated by Great Panther, produced 5,164 gold ounces.

 

 

Tucano produced 26,176 gold ounces in Q1 2020, an increase of 12% compared to the first quarter of 2019, inclusive of the period prior to the Company’s acquisition of Tucano.  Gold production improved as a result of increased ore processing and higher recoveries.  The decrease in Q1 2020 production relative to Q4 2019 is due to the rainy season in northern Brazil which seasonally impacts productivity in the first half of the year.

 

Tucano production in the first quarter was in line with the Company’s expectations and is expected to increase through the remainder of 2020.  Production guidance for 2020 remains between 120,000 and 130,000 ounces of gold as announced in the Company’s news release dated March 30, 2020. 

 

Relatively favorable weather conditions and operational improvements made at the mine enabled the advancement of pre-stripping activities resulting in a 47% increase in total material mined compared to the first quarter of 2019, including diggable material unloaded from the UCS west wall area.  Continued remedial unloading work at UCS and benching involving drilling and blasting is expected to start in the third quarter contingent on favorable results from five geotechnical core holes to be drilled commencing in May 2020.

 

Mining activities continue uninterrupted at Tucano at this time as the state of Amapá in Brazil has not introduced any measures to restrict mining activities in response to COVID-19, while the reported infections in the state remain very low and concentrated in the state capital.  The Company has implemented numerous health and safety measures to protect against the spread of the virus, working closely with local health and labor authorities to protect its people and local communities.  The Company continues to monitor the situation closely in order to be in a state of preparedness.

 

Mexico Mine Operations

 

The Company’s Mexican operations produced 8,549 gold equivalent ounces in Q1 2020 or approximately 769,000 silver equivalent ounces.

 

Subsequent to the end of the quarter, the Company suspended mining and processing at both of its Mexican operations until April 30, 2020, following a directive of the Mexican Federal Government to mitigate the spread of COVID-19.  Production for the affected operations during this four-week period is estimated at about 2% of consolidated annual 2020 gold equivalent production. 

 

Topia Mine

 

 

 

Topia Operational Results

Q1 2020 Q1 2019 Change Q1 2020 Q4 2019 Change
Ore processed (tonnes) 19,359 20,232 -4% 19,359 18,854 3%
Ag grade (g/t) 357 336 6% 357 424 -16%
Au grade (g/t) 0.82 1.09 -25% 0.82 0.81 1%
Ag recovery (%) 92.3% 93.3% -1% 92.3% 94.4% -2%
Au recovery (%) 55.2% 53.4% 4% 55.2% 54.2% 2%
Silver equivalent production (ounces) (1,2) 376,303 420,926 -11% 376,303 449,621 -16%
Silver production (ounces) 205,184 203,579 1% 205,184 242,776 -15%
Gold production (ounces) 282 380 -26% 282 267 6%
Lead production (tonnes) 401 481 -17% 401 487 -18%
Zinc production (tonnes) 632 662 -5% 632 650 -3%
   
(1) Silver equivalent ounces for 2020 were calculated using a 90:1 Ag:Au ratio, and ratios of 1:0.05770651 and 1:0.06798419 for the price/ounce of silver to price/pound of lead and zinc, respectively. 
(2) Silver equivalent ounces for 2019 were calculated using an 80:1 Ag:Au ratio, and ratios of 1:0.0636 and 1:0.0818 for the price/ounce of silver to price/pound of lead and zinc, respectively, consistent with the Company’s guidance for the year.    

 

 

Topia produced 376,303 silver equivalent ounces in Q1 2020, a decrease of 11% compared to the same period in 2019.  The decrease in production is attributed to lower tonnage processed, lower gold grades and silver recoveries and the change in metal equivalency ratios, partly offset by higher silver grades and gold recoveries.

 

As previously disclosed on March 9, 2020, during the first quarter the Company announced it had ceased depositing tailings on its Topia Mine Phase II tailings storage facility (“TSF”) following the recommendation from the Company’s independent tailings management and geotechnical consultants.  As noted in the Company’s news release dated March 30, 2020, processing operations at Topia were scheduled to cease after April 2020, pending achievement of satisfactory mitigation measures for the Phase II TSF or completion of the permitting for the Phase III TSF.

 

During the ongoing suspension of non-essential activities due to COVID-19, the Company is continuing discussions with geotechnical and tailings management consultants regarding ongoing observations and assessments, while continuing to monitor conditions at the Phase II TSF.  Alternatives to minimize any further suspension of processing activities once the current stoppage ends on April 30, per current government guidance, will continue to be evaluated.  These alternatives include recommencement of tailings deposition at the Phase II TSF (if satisfactory mitigation measures can be achieved), and normal course permitting for the Phase III TSF, which is at an advanced stage.  In addition, during the suspension period, only essential personnel will be on the GMC and Topia sites, while some administrative and technical staff will work from home.

 

Guanajuato Mine Complex

 

 

GMC Operational Summary Q1 2020 Q1 2019 Change Q1 2020 Q4 2019 Change
Ore processed (tonnes) 49,607 49,422 0% 49,607 48,710 2%
Ag grade (g/t) 125 102 22% 125 136 -8%
Au grade (g/t) 1.85 2.07 -10% 1.85 2.00 -7%
Ag recovery (%) 85.4% 83.3% 2% 85.4% 84.4% 1%
Au recovery (%) 84.1% 83.7% 0% 84.1% 84.1% 0%
Silver equivalent production (ounces) (1,2) 393,126 354,756 11% 393,126 391,637 0%
Silver production (ounces) 169,734 134,852 26% 169,734 180,454 -6%
Gold production (ounces) 2,482 2,749 -10% 2,482 2,640 -6%
         
(1) Silver equivalent ounces for 2020 were calculated using a 90:1 Ag:Au ratio.      
(2) Silver equivalent ounces for 2019 were calculated using an 80:1 Ag:Au ratio      

 

 

GMC’s silver equivalent production increased 11% in the first quarter of 2020 compared to the first quarter of 2019.  This was due to higher silver grades, higher silver and gold recoveries, and the change in metal equivalency ratios.

 

Coricancha

 

The Company continues to evaluate the timeline and conditions for a potential re-start of the Coricancha Mine.  In the first quarter of 2020, the Company undertook a limited mining and mill processing campaign of approximately 25,000 tonnes; however, these activities have been temporarily suspended in accordance with the Peruvian government-mandated restrictions until April 13, 2020.  Coricancha is not material to the Company’s operations.

 

The technical information contained in this news release has been reviewed and approved by Neil Hepworth, Chartered Engineer UK, Chief Operating Officer, a Qualified Person for the purposes of National Instrument 43-101.

 

ABOUT GREAT PANTHER

 

Great Panther Mining Limited is an intermediate gold and silver mining and exploration company listed on the Toronto Stock Exchange trading under the symbol GPR, and on the NYSE American under the symbol GPL.  Great Panther’s operations include the Tucano Gold Mine in Brazil, and the Topia Mine and Guanajuato Mine Complex, comprising the San Ignacio and Guanajuato mines, in Mexico.  It also owns the Coricancha Mine in Peru, which is currently on care and maintenance.

 

Posted April 9, 2020

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