Production for 2022 expected to be within guidance range with steady state at Tucano to be achieved in Q4; inflationary pressures and necessary capital expenditures contributing to adjusted cost guidance

Great Panther Mining Limited (TSX: GPR) (NYSE-A: GPL) announces consolidated financial results for the three months ended June 30, 2022, from the Tucano Gold Mine in Brazil and the Topia mine in Mexico.

“Inflationary pressures  and the necessary acceleration of certain capital programs affected our financial results this quarter, however as previously guided we continue to expect improvements in the coming quarters as we return to a normalized rate of production in the second half,” stated Alan Hair, Chair and Interim CEO. “We expect the ramp up to steady-state production to continue through the third quarter and regular run rate to be achieved by the fourth quarter. From a cost perspective, we have had to adjust our guidance for the year, given the aforementioned factors, and are adapting our plans for capital expenditures to preserve capital where possible while focusing our efforts on improving operations and efficiencies at Tucano.”

Selected Q2 2022 Financial Highlights from Continuing Operations¹

• Gold production of 16,629 ounces compared with 20,696 ounces in the second quarter of 2021
• Cash costs of $1,575 per gold ounce sold compared with $1,617 in Q2 2021
• All-in-sustaining-costs (“AISC”)², excluding corporate G&A, of $3,080 per gold ounce sold compared with $2,214 for the same period in 2021
• Revenue of $30.0 million compared with $39.0 million in the same period in 2021
• Mine operating income of $0.1 million compared with a loss of $2.7 million in Q2 2021
• EBITDA² of negative $5.0 million compared with EBITDA of negative $0.9 million for Q2 2021
• Net loss of $12.1 million compared with net loss of $8.7 million in Q2 2021

Selected Q2 2022 Non-Financial Highlights

• Reported updated mineral reserve and mineral estimate for Tucano that demonstrated replacement of 2021 mining depletion and an increase of 1.5 years to the open pit mine life
• Completed a resource conversion drill program for the Urucum North (“URN”) underground project and commenced an updated resource estimate, engineering and metallurgical studies, as well as permitting with the State Environmental Agency, SEMA
• Announced an agreement to sell the Guanajuato Mine Complex and Topia mine in Mexico completing the pivot to gold and refining the Company’s focus on gold in Brazil
• Continued regional target definition, validation and prioritization for a regional drill program at Tucano, which is expected to begin in the third quarter

Financial Highlights

Summary of Select Financial Results

For Q2 2022, the Company recorded a net loss of $12.3 million compared with a net loss of $10.1 million for Q2 2021. Lower metal sales volumes due to low production, offset partially by higher realized prices for gold, resulted in a decrease in revenue to $30.0 million from $39.0 million for Q2 2021. Mine operating income for Q2 2022 was $0.1 million compared with a mine operating loss of $2.7 million for Q2 2021.

Net working capital was negative $39.2 million compared with $0.2 million at December 31, 2021. For Q2 2022, the Company had cash inflows from operating activities of $8.3 million and incurred cash outflows from investing activities of $13.6 million.

Operational Highlights

Production from Tucano during the second quarter was in line with expectations as stripping continued to advance in preparation for accessing main ore lenses and consequently better grades in the second half of 2022. Mobilization of the new mining contractor, MINAX, continues to advance, and mobilization of the required equipment for the 2022 mine plan is expected to be complete by September 2022. During this period of mobilization, the current mining contractor, U&M, and MINAX have been working in tandem, which contributed to an increase in mined tonnage in Q2 2022 compared with the previous quarter.

Outlook

The Company’s Tucano operation is on track to meet previously announced production guidance for 2022 of 85,000 to 100,000 Au oz. As disclosed in the Company’s news release dated January 19, 2022, the second half of 2022 is expected to account for a least 65% of annual production guidance.  The mine plan for Tucano reflects more stripping in the first half of 2022 and therefore consolidated AISC is expected to be higher in the first half of 2022 compared with the second half. Following the sale of the Company’s Mexican assets, guidance shown in the table below is for continuing operations only.

Due to a combination of inflationary pressures  and accelerated capital spending specifically on the Tucano tailings facility, the Company has determined that Tucano cost guidance for the year must be adjusted. Inflationary pressures have had a significant impact on operating costs, including on diesel and other key consumables, when compared to the same period in 2021. In addition, due to higher-than-normal precipitation in the past two years, an increase in capital spending was necessary to fast track the Company’s expansion of the Tucano tailings storage facility, which brought forward $3.5 million planned for 2023, as well as a $2.3 million investment in evaporators to manage water levels in the tailings facilities. Alterations in a number of aspects of the mine plan, which will produce benefits in future quarters, further impacted costs. Revised 2022 guidance on costs is stated in the table below:

Guidance for Continuing Operations¹

Production and AISC guidance here and elsewhere in this news release is forward-looking information that should be read in conjunction with the Cautionary Statement on Forward-Looking Statements section at the end of this news release and the Company’s most recently filed Management Discussion and Analysis for the three and six months ended June 30, 2022. The Company may revise guidance during the year to reflect actual results to date and those anticipated for the remainder of the year.

The Company has determined that it will require further financing to meet long-term objectives, improve working capital, fund planned capital investments and exploration programs for its operating mines, and meet scheduled debt repayment obligations and will be considering additional equity financing (including through use of the ATM facility) and/or debt financing.

Refer to the Company’s MD&A for more details of the financial results and for reconciliations of the Company’s non-GAAP performance measures to the nearest GAAP measure. The full version of the Company’s unaudited condensed interim consolidated financial statements for the three and six months ended June 30, 2022, and 2021 annual consolidated financial statements and MD&A can be viewed on the Company’s website at www.greatpanther.com, on SEDAR at www.sedar.com or on EDGAR at www.sec.gov/edgar.shtml. All financial information is prepared in accordance with IFRS, except as noted in the Non-GAAP Measures section of the Company’s MD&A.

ABOUT GREAT PANTHER

Great Panther Mining is a precious metals producer focused on the operation of the Tucano Gold Mine in Brazil where the Company controls a land package covering nearly 200,000 hectares in the prospective Vila Nova Greenstone belt. Great Panther’s aim is to create long-term stakeholder value through safe, sustainable production and reinvest into exploration to tap into the potential of the Tucano Gold Mine to replace resources, extend mine life and make new discoveries. Great Panther trades on the Toronto Stock Exchange trading under the symbol GPR and on the NYSE American under the symbol GPL.

TECHNICAL INFORMATION

The technical information contained in this news release has been reviewed and approved by Fernando A. Cornejo, P. Eng., Chief Operating Officer, a non-independent Qualified Person for the purposes of National Instrument 43-101 – Standards of Disclosure for Mineral Projects.