On June 30, 2017, Great Panther Silver closed the acquisition of the Coricancha Mine, in the central Andes of Peru, from Nyrstar NV (for terms of the acquisition, please refer to the December 19, 2016 press release). The Mine is located in the Province of Huarochirí, approximately 90 km east of Lima and is accessed by the Central National Highway connecting Lima to La Oroya. The travel time by road from Lima is approximately three hours to the processing plant and lower level of the mine. The operation is located in an area of significant relief, and elevations at the property range between 3,000 and 3,920m above sea level.
The Coricancha Mine holds many of the licenses and permits necessary to re-start operations; all valid and in good standing. The project includes an operational 600 tonne per day flotation and gold BIOX® bio-leach plant along with supporting mining infrastructure. The Coricancha Mine has been on care and maintenance since August 2013 when it was closed due to falling commodity prices. The property comprises more than 3,700 hectares in the prolific Central Polymetallic Belt and production at the mine dates back to 1906. Gold-silver-lead-zinc-copper mineralization (approximately 80% gold-silver by value) occurs as massive sulphide veins that have been mined underground by cut and fill methods.
Great Panther is currently conducting engineering and environmental studies in order to determine the viability of restarting the operation.
Geology, Mining and Processing
The Coricancha Mine is a Cordilleran polymetallic ore deposit, comprising a system of massive sulphide veins and replacement bodies formed at epithermal to mesothermal conditions. The regional geology comprises a package of andesitic volcanic rocks and sedimentary rocks intruded by monzonite stocks. The area has been exposed to extreme structural compression, which has produced a strong fracturing pattern on a regional scale and allowed the intrusion of polymetallic mineralization in the form of quartz-galena-sphalerite-chalcopyrite veins with gold and silver.
The property is underlain by a sequence of the andesitic volcanics of the Rimac Formation, consisting of brecciated volcanics at the bottom of the stratigraphic sequence topped by andesitic flows, agglomerate, and tuff in the upper part of the Huamanjune Mountain, at 4,500m elevation. The veins can be described as an anastomosing system where most of the secondary and tertiary veins branch off from a main vein or secondary veins, respectively. At the local structural level, the veins are extensive and are known to extend more than 3,800m along strike and more than 1,500m down dip. The veins show pinch-and-swell type behaviour with a thickness of up to 2m and averaging 40-70cm.
Under previous operators, the principal mining method for the near-vertical veins was overhand cut-and-fill, with backfill mainly obtained from development waste. More recently, other mining methods such as longhole were tried without success. Mining was semi-mechanized with ore haulage principally undertaken by locomotives, and scoops used for short distance haulage. Some drilling was conducted with an electro-hydraulic drill jumbo, but development and production drilling were principally accomplished with hand-held jackleg drills.
The crusher and mill are located at the mine portal (3,140m above sea level). The concentrator, flotation circuit and BIOX® facility are located at a lower elevation, along the main highway near the Rimac River. The concentrator has produced zinc, lead and copper concentrates, and a gold-rich concentrate which is treated in the BIOX® facility. Tailings from the processing plant are hauled by rail and/or trucks to the Chinchán dry-stack tailings storage facility, approximately 35 km from the plant.
Great Panther recently updated the NI 43-101 Mineral Resource Estimate for the Coricancha Mine. While the Measured & Indicated categories were comparable with the historical estimate, the latter was prepared to JORC standards and the difference in various parameters with NI 43-101 led to a reduction in the Inferred category. This does not mean that the resources are not there; simply that the categorization is different, and more drilling will be required to increase this category again. Nonetheless, the resources at Coricancha are significant and imply the potential for a long mine life.
Bulk Sample Program
Following the announcement of the Company’s Preliminary Economic Assessment (“PEA”) on May 31, 2018, Great Panther initiated a trial stope and bulk sample program (the “Bulk Sample Program”). The Bulk Sample Program will process about 6,000 tonnes of material and is expected to be finished in the first quarter of 2019. Its objective is to validate key mine operating parameters in the PEA and further de-risk the project.