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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, six NI 43-101 have been completed.

During 2016, exploration at the San Ignacio Mine consisted primarily of underground drilling to better define the Mineral Resource in the Intermediate and Melladito zones. A surface drill program to expand the Mineral Resource started after the effective date of this Mineral Resource and, therefore, has not been included. Development in the period between Mineral Resource effective dates of July 31, 2015 and August 31, 2016, was conducted along the Melladito, Melladito FW, Melladito Splay, Intermediate, and Intermediate 2 zones.

At San Ignacio, plans for 2017 include 8,000 metres of surface exploration drilling along the continuation southeast from the present Mineral Resource to the historic mining areas of San Pedro and Mexiamora and on the sub-parallel Plateros trend. An additional 13,025 metres of underground drilling will focus on converting Inferred Mineral Resources to the Measured and Indicated categories.

At the Guanajuato Mine, underground exploration in 2016 was focused on the Los Pozos, Valenciana, and Guanajuatito areas to increase the Mineral Resource. The focus of exploration in 2017 will be on those three zones and the Promontorio zone. A comprehensive evaluation of historical workings is also being undertaken with emphasis on undeveloped veins with mineralization of economic significance. This will include the Rayas, upper Cata, Los Pozos, Valenciana and Guanajuatito zones.

Along with the Mineral Resource Estimates, the Company also considered Geological Potential at the Guanajuato Mine, which was estimated within ranges for areas that contain pillars and remnant material in historical mining areas with limited topographic control. Geological Potential includes 186,908 - 311,514 tonnes grading between 96 - 137g/t silver and 1.56 - 2.22g/t gold. These areas have often been drilled and evaluated underground by detailed sampling and geological mapping and include the Promontorio area, and parts of Los Pozos and Valenciana areas. Between July 31, 2015 and August 31, 2016, it is estimated that approximately 35% of Guanajuato Mine production came from Geological Potential and other areas outside the Mineral Resource.

The El Horcon Project is located approximately 100 kilometres by paved highway northwest of Guanajuato and is considered to be within trucking distance of the processing Cata Plant. Consequently, it is included in the GMC Mineral Resource Estimate. No work was completed on this project in 2016 but a drill program is budgeted for Q4 2017 to test the continuity of mineralization.

Summary Table of the Updated 2016 Mineral Resource Estimate for the Guanajuato Mine Complex¹

MEASURED

Mine

Tonnes

Ag (g/t)

Ag (oz)

Au (g/t)

Au (oz)

Ag eq (g/t)

Ag eq (oz)

San Ignacio

408,327

116

1,525,584

2.88

37,760

319

4,191,435

Guanajuato

114,695

264

974,318

1.53

5,647

372

1,372,961

Total Measured

523,022

149

2,499,902

2.58

43,407

331

5,564,396

INDICATED

Mine

Tonnes

Ag (g/t)

Ag (oz)

Au (g/t)

Au (oz)

Ag eq (g/t)

Ag eq (oz)

San Ignacio

133,398

106

453,762

2.56

10,987

287

1,229,462

Guanajuato

36,480

216

253,876

1.19

1,393

300

352,218

Total Indicated

169,879

130

707,368

2.27

12,380

290

1,581,680

MEASURED & INDICATED

Mine

Tonnes

Ag (g/t)

Ag (oz)

Au (g/t)

Au (oz)

Ag eq (g/t)

Ag eq (oz)

San Ignacio

541,725

141

1,979,346

2.80

48,747

311

5,420,897

Guanajuato

151,175

253

1,228,195

1.45

7,040

355

1,725,179

Total M & I

692,900

144

3,207,541

2.50

55,787

321

7,146,076

INFERRED

Mine

Tonnes

Ag (g/t)

Ag (oz)

Au (g/t)

Au (oz)

Ag eq (g/t)

Ag eq (oz)

San Ignacio

645,318

121

2,519,826

2.15

44,551

273

5,665,137

Guanajuato

147,327

129

612,220

2.13

10,095

280

1,324,867

Subtotal

792,645

123

3,132,407

2.14

54,646

274

6,990,004

El Horcon

162,140

76

398,094

3.44

17,942

401

2,092,913

Total Inferred

954,785

115

3,530,141

2.36

72,587

296

9,082,917

 

¹ Mineral Resource Estimates use an effective date of August 31, 2016; and all used a metal price outlook of US$18.00/oz silver and US$1,300/oz gold.

Notes for San Ignacio Mine Mineral Resource Estimate

  1. Cut-offs are based on the marginal operating costs per mining area being US$57/tonne for San Ignacio.
  2. Block model grades converted to US$ value using plant recoveries of 87% Ag, 86.8% Au, and net smelter terms negotiated for pyrite concentrates.
  3. Rock Density for Intermediate, Intermediate2, Melladito, Melladito Step, Melladito FW, and Melladito Splay are 2.63t/m³, Nombre de Dios is 2.61t/m³, Nombre de Dios II is 2.62t/m³.
  4. Totals may not agree due to rounding.
  5. Grades in metric units.
  6. Contained silver and gold in troy ounces.
  7. Minimum true width 1.0m.

Notes for Guanajuato Mine Mineral Resource Estimate

  1. Cut-offs are based on the marginal operating costs per mining area being US$76/tonne for Cata, US$85/tonne for Santa Margarita / San Cayetano, US$72/tonne for Los Pozos, US$66/tonne for Guanajuatito, and US$74/tonne for Valenciana.
  2. Block model grades converted to US$ value using plant recoveries of 87% Ag, 86.8% Au, and net smelter terms negotiated for pyrite concentrates.
  3. Rock Density for all veins is 2.68t/m³.
  4. Totals may not agree due to rounding.
  5. Grades in metric units.
  6. Contained silver and gold in troy ounces.
  7. Minimum true width 1.0m.

Notes for El Horcon Project Mineral Resource Estimate

  1. US$110 per tonne Cut-off, considering plant recoveries of %Ag, %Au, %Pb, and net smelter terms typical for Pb concentrates.
  2. Rock Density for all veins for Diamantillo is 2.77t/m³, San Guillermo 2.78t/m³, Diamantillo HW is 2.62t/m³, Natividad 2.57t/m³.
  3. Totals may not agree due to rounding.
  4. Grades in metric units.
  5. Contained silver and gold in troy ounces.
  6. Minimum true width 1.5m
  7. Metal Prices US$18.00/oz silver, US$1,300/oz gold, and US$0.80/lb lead.
  8. Silver equivalent calculations for El Horcon include gold and lead content but not zinc, as the zinc would not be recovered in the Guanajuato plant.

The above estimates were classified per the CIM Definition Standards on Mineral Resources and Mineral Reserves and, as such, are consistent with the requirements of NI 43-101. The Mineral Resource Estimate was completed by Robert Brown, P. Eng., the Company Qualified Person. The Mineral Resource Estimates were completed using MicroMine 3D geological software, and the inverse distance squared estimation technique for estimation of grade to each of the block model blocks. A Company-proprietary Net Smelter Return ("NSR") calculator, considering mill recoveries, smelter terms, and designated metal prices converted block grades into NSR (US$) values. The stated Mineral Resources are a categorized compilation of blocks greater than the marginal operational costs of the various mining areas.

The Company's QA/QC program includes the regular insertion of blanks, duplicates, and standards into the sample shipments; diligent monitoring of assay results; and necessary remedial actions. Sample assaying was completed at the independent SGS-GTO lab in Guanajuato, GTO, Mexico. Silver assaying was conducted with AAS12B technique, with over-limits (300g/t) completed by FAG323. Gold assaying was conducted with FAA313 technique, with over-limits (10g/t) completed by FAG323. Where necessary, lead, zinc, copper, arsenic and antimony assays were conducted using atomic absorption spectroscopy.

The technical information contained in this news release has been reviewed and approved by Robert F. Brown, P. Eng., who is the Qualified Person (QP) for the Guanajuato Mine Complex under the meaning of NI 43-101. Aspects relating to mining and metallurgy are overseen by Ali Soltani, Chief Operating Officer for Great Panther.

1.55 +0.04 +2.65% Volume: 74,829 June 23, 2017
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