Great Panther still on track to build reserves to 40m SEOs
With the market so intently focused upon Great Panther's unanticipated delay in its bid to increase production to 3.8m SEOs, I believe it has overlooked the fact that the reserve-growth portion of the growth plan remains on track to increase reserves to 40m SEOs. Ongoing exploration continues to expand mineralization in all the right places, and with spare processing capacity waiting in the wings the company remains poised to deliver the production growth ... albeit with an obvious delay from the initial timeline.
At Santa Margarita, the first phase fill-in drill program consists of drilling on 25 metre centres between the 435 and 500 metre levels. Initially, drilling is taking place between the 0S to 250S sections, to be followed by 250S to 450S. The main Santa Margarita ("SM") structure is a well delineated breccia zone one to three metres wide. Initial results have confirmed the high grade gold values typical of the SM structure (mostly electrum, a naturally-occurring gold-silver alloy), and drilling has regularly encountered two stockwork dominant footwall zones that are persistent between drill holes. The two footwall zones plus part of the main vein are classified as inferred in the current mineral resource estimate and will be upgraded in the resource update presently being prepared.
Intersections on the Santa Margarita structure include 44.76g/t gold and 46g/t silver over a true width of 1.14 metres in drill hole UGSM11-005. The SM footwall 1 (SMBo1) stockwork zone is located adjacent to or within four to eight metres below the Santa Margarita structure. Intersections on the SMBo1 zone include 17.15g/t gold and 36g/t silver over a true width of 3.28 metres in UGSM11-003. The SM footwall 2 (SMBo2) stockwork zone is located about 20 metres below the Santa Margarita structure. Intersections on the SMBo2 zone include 6.04g/t gold and 7g/t silver over a true width of 1.74 metres in UGSM11-007. An updated longitudinal section showing the drill holes has been added to the Company website. Highlights from the seven drill holes completed so far in 2011 are listed below.
Production mining continues between the 435 and 390 metre levels at Santa Margarita with ongoing ramp development to access the 475 metre level plus exploratory drifting on the 455 metre level. Production stoping from the new areas will commence in the first quarter of 2012 when total gold production at Guanajuato is anticipated to increase by an average of 200 ounces per month, an increase of 33% over the average of 2011.
The new mineralization at Guanajuatito has been defined over a strike length of approximately 100 metres and 300 metres vertically (approximately 400 metres down the dip). Drilling is being conducted from drill stations located at or near the 120 metre level in a hanging wall cross-cut ramp. Highlights from 28 drill holes completed in 2011 are listed below. Two mineralized zones are interpreted from the data - the Veta Madre zone, and a slightly deeper Footwall zone. Typically, the mineralized portion of the zones pinches and swells with true widths varying from less than one metre to 5.38 metres. Intersections of the Veta Madre include assays of 268g/t silver and 0.91g/t gold over a true width of 3.36 metres in UGG11-045. Intersections of the Footwall zone include assays of 1,493g/t silver and 13.28g/t gold over a true width of 5.38 metres in UGG11-029, and 866g/t silver and 2.92g/t gold over a true width of 1.14 metres in UGG11-047. An updated longitudinal section showing the drill holes has been added to the Company website.
Ramp access has been provided to the 120 and 160 metre production levels. Production stoping is established on the 120 metre level and the initial ore development is underway on the 160 metre level. Ramp development will continue to provide access to the 200 and 240 metre levels in 2012. In addition, a new haulage drift will be driven on the 390 metre level from the current Valenciana exploration drive. The 390 metre level development will provide access to the deeper and richer mineralization later in 2012 such that ore may be hauled by underground truck haulage to the Cata shaft for hoisting to the processing plant. Monthly production from the 120 metre level stope contributes 5,000 Ag equivalent ounces (Ag eq oz) and production from the Guanajuatito zones is expected to increase to 25,000 Ag eq oz by the end of 2012.
The hanging wall exploration drive continues to be driven both northwest and southeast to accommodate additional drill stations at 50 metre intervals to test the mineralized zones in the Guanajuatito Mine area from the 100 metre level down to the 390 metre level (approximately 400 metres down dip), and along 500 metres of strike. Exploration drilling on the Guanajuatito zones will continue through most of 2012 with potential to add more resources along strike, in both directions, while the zones remain open at depth.