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Exploration Program & Resources Estimate

The Guanajuato property overlies the core of the prolific Veta Madre silver-gold structure. These world-class low sulfidation epithermal deposits to date have total production of over one billion ounces silver and 4 million ounces gold over a 450 year mining history. One marvellous aspect of world class deposits is their defiance of typical size due to multiple phase, overlapping events. This is borne out by structural studies and fluid inclusion work. The fluid inclusion work has shown that boiling horizons (and associate silver-gold deposition) occur over a vertical range of at least 600 metres below the present surface. There are consistent structural aspects between the various deposits on the Guanajuato property, which include bends, step-over and cymoid loops.

To a certain degree deep extensions of mineralization can be found by following known deposits down plunge to depth. Drill hole EUG10-057 has shown that systematic drilling can discover new "blind" mineralized zones. Many zones at Guanajuato are relatively small, but as history has shown, conditions are primed for world-class low sulfidation epithermal silver-gold systems.   

Resource Estimate

When Great Panther acquired the Guanajuato Mines in 2005, there were no NI43-101 compliant resources and the Company had to rehabilitate the mine in order to begin establishing a new resource base at depth. Since then, five NI 43-101 have been completed.


In December 2013, an updated mineral resource estimate was completed at the Company's wholly-owned
 Guanajuato Mine Complex ("Guanajuato Mine") in Guanajuato, Mexico.  This update does not affect the San Ignacio Inferred resource estimate, which remains as reported in 2012.  The updated mineral resource estimate for the Guanajuato Mine is valid as of July 31, 2013.

  • Updated Measured and Indicated ("M&I") mineral resources at the Guanajuato Mine Complex comprise 504,700 tonnes at a grade of 174g/t silver ("Ag") and 1.65g/t gold ("Au"), containing 4,430,000 silver equivalent ounces ("Ag eq oz"), using a 50g/t silver equivalent ("Ag eq") cut-off;
  • Inferred mineral resources at the Guanajuato Mine Complex are estimated to comprise 434,000 tonnes at a grade of 140g/t Ag and 2.32g/t Au, containing 3,900,000 Ag eq oz. Different cut-off grades were used for the seven mineralized zones as indicated in the table below.

The 2013 Guanajuato Mine Complex mineral resource estimate contains Measured and Indicated mineral resources of 4,430,000 Ag eq oz including 3,348,000 Ag eq oz in the Measured category and 1,081,000 Ag eq oz in the Indicated category (see table below). Inferred mineral resources are estimated at 3,900,000 Ag eq oz.  These are contained in the Cata Clavo, Los Pozos, Santa Margarita, San Cayetano, Promontorio, Valenciana and Guanajuatito zones.  The Guanajuatito zone has been expanded with the addition of the Northwest and Southeast zones (see Company news release dated February 15, 2013), illustrating that additional mineralization is being found and added to inventory with systematic and focused drilling.  A new zone, designated Los Pozos SE, has been added due to successful exploration immediately southeast of the Los Pozos zone.  Additionally, initial Inferred mineral resource estimates have been added for the San Cayetano (Rayas shaft area south of Santa Margarita), Valenciana, and Promontorio zones.

Guanajuato Mine Complex: Mineral Resource Estimations and Contained Silver Equivalent, Gold, and Silver

Tonnage

Grade g/t

Contained kOz

Area

kt

Ag Eq

Au

Ag

Ag Eq

Au

Ag

Sub Total Cata

84.9

408

1.34

328

1,114

3.65

894

Sub Total Pozos

138.9

229

0.78

182

1,023

3.48

814

Sub Total Santa Margarita

85

335

4.72

51

914

12.90

140

Sub Total Guanajuatito

53.2

174

0.64

135

298

1.10

232

Total Measured

362

288

1.82

179

3,348

21.14

2,080

Sub Total Cata

33.1

420

1.38

337

448

1.47

359

Sub Total Pozos

35.8

148

0.55

116

171

0.63

133

Sub Total Santa Margarita

23

296

3.3

98

219

2.44

73

Sub Total Guanajuatito

50.7

150

0.65

111

244

1.06

180

Total Indicated

142.6

236

1.22

163

1,081

5.60

745

Sub Total Cata

118.1

411

1.35

330

1,561

5.13

1,254

Sub Total Pozos

174.7

213

0.73

169

1,194

4.11

947

Sub Total Santa Margarita

108

326

4.42

61

1,133

15.34

213

Sub Total Guanajuatito

103.9

162

0.65

123

542

2.16

412

Total Measured + Indicated

504.7

273

1.65

174

4,430

26.74

2,825

Sub Total Cata

12.7

489

1.53

398

199

0.62

162

Sub Total Pozos

17

341

0.65

302

186

0.35

165

Sub Total Santa Margarita

14.3

340

2.18

209

157

1.01

96

Sub Total Guanajuatito

88.8

289

0.99

229

824

2.82

654

Sub Total San Cayetano

41.5

307

3.69

85

410

4.93

114

Total Valenciana

127.2

269

2.58

114

1,101

10.57

467

Total Promontorio

132.4

241

2.84

70

1,024

12.09

298

Total Inferred

434

280

2.32

140

3,900

32.38

1,957

Notes:

1. CIM Definitions were followed for Mineral Resources.

2. Measured and Indicated Mineral Resources are reported at a cut-off grade of 50g/t Ag Eq.

3. Inferred Mineral Resources are reported at area-specific cut-offs as follows: Cata 176g/t Ag Eq, Guanajuatito 164g/t Ag Eq, Pozos 178g/t Ag Eq, San Cayetano 169g/t Ag Eq, Santa Margarita 166g/t Ag Eq, Valenciana 167g/t Ag Eq, and Promontorio 166g/t Ag Eq.

4. Prices of US$1,280/Au oz and US$20.80/Ag oz were used in calculations.

5. Bulk Density is 2.68t/m3.

6. Totals may not agree due to rounding.

7. Ag Eq is given by the formula Ag Eq = Ag + 60*Au.

Both drill core and underground chip samples were assayed independently by SGS at the Company's Guanajuato Mine site laboratory. Aspects relating to mining and metallurgy are overseen by  Juan Manuel Flores  , V.P. Operations for Great Panther and its Mexican subsidiary, Minera Mexicana El Rosario, S.A. de C.V. Robert F. Brown, P.Eng., and Vice President of Exploration for the Company, is the Qualified Person for the Guanajuato Mine Project under the meaning of NI 43-101 and has reviewed these results.  The Company's QA/QC program includes the regular insertion of blanks, duplicates, and standards into the sample shipments.

Geology

The Guanajuato Mining District is located in the southern portion of the Mesa Central physiographic province of Mexico within the Sierra de Guanajuato, an anticlinal structure approximately 100 kilometres long and 20 kilometres wide. The Guanajuato District is underlain by rock strata of Mesozoic and Cenozoic age.

The most important phase of mineralization in the Guanajuato district comprises epithermal silver-gold veins contained within northwest-trending, Cenozoic age, faults. The Veta Madre, (Mother Lode), is the most significant mineralized structure in the District, extending for a known strike length of 25 km. Economic mineralization is contained within tabular veins, vein stockworks and breccias. The ore shoots typically range from 1 metre to 15 metres wide, and from 50 to 400 metres along strike, dipping at 40 to 60 degrees southwest.

History

The Guanajuato Mining District is one of the most prolific and best known silver districts in the world. Silver was first discovered in the La Luz area in 1548, and two years later, an outcrop of the Veta Madre was found near what became the Rayas Mine. Estimates of historic production range from 700 million to 1.5 billion ounces of silver, as well as 4 to 7 million ounces of gold. During the 18th century, the district was reportedly producing one-third of the world's silver. Guanajuato was, for centuries, one of the most affluent cities in Mexico. Countless riches poured out of its silver mines, providing the funds for monumental construction projects throughout the colonial era and leaving a cultural and architectural legacy that continues to draw visitors from all over the world. For this reason, the City of Guanajuato is designated as a UNESCO World Heritage Site.

The Valenciana Mine was once said to be the richest silver mine in the world. Bonanza-style mineralization in the Veta Madre structure in this historic mine was often considered as "direct shipping ore" (to the smelter) as the grades exceed those of the concentrates produced from average ore in the flotation plant. The Spanish developed and controlled mining in the district until 1816 when mining ceased and production facilities were destroyed during the Mexican War of Independence. The now famous Valenciana Shaft had only just been completed and, despite several unsuccessful attempts, it was not until 1868 that the Valenciana Mine was reopened with the help of British capital and steam powered hoists. In the early 1900's American promoters re-opened many of the mines utilizing the newly discovered cyanide process to extract gold and silver. By the mid-thirties there were labour demands for better working conditions and pay such that their properties were turned over to the control of a Mexican owned co-operative in 1939. The Company acquired the Guanajuato operations from this co-operative in 2005.

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