Overview

On June 30, 2017, Great Panther Silver closed the acquisition of the Coricancha Mine which is located in the Province of Huarochirí, in the central Andes of Peru.

It is 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 as registered with Nyrstar (the previous owner). 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.

Geology

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 located in the upper part of the Huamanjune Mountain at 4,500m elevation. The vein system can be described as an anastomosing system where most of the secondary and tertiary veins branch off either from a main vein or secondary veins. 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 the ownership of Gold Hawk, approximately 30 active stopes were required to achieve production of 600tpd, almost all using the cut-and-fill or shrinkage mining method. The principal stoping method for the near-vertical veins was overhand cut-and-fill, with backfill mainly obtained from development waste. Under Nyrstar’s ownership, 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 undertaken 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 40 km from Coricancha Mine.

Updated 2017 Mineral Resource Estimate for the Coricancha Mine, Peru

MEASURED
Mine Tonnes Au
(g/t)
Ag
(g/t)
Pb
(%)
Zn
(%)
Cu
(%)
Ag eq gpt Ag eq oz
(M)
Constancia 270,336 6.2 219 2.36 3.44 0.43 1,064 9.24
Wellington 92,328 6.1 184 1.69 3.95 0.51 1,028 3.05
Escondida 15,362 0.9 279 0.28 1.35 3.20 832 0.41
Constancia East 16,315 6.0 143 1.97 2.16 0.11 836 0.44
San Jose 6,922 5.8 212 4.49 2.94 0.30 1,078 0.24
Colquipallana 2,944 3.4 220 3.67 5.26 0.21 995 0.09
Total Measured 404,205 5.9 210 2.16 3.43 0.54 1,037 13.49
               
INDICATED
Mine Tonnes Au
(g/t)
Ag
(g/t)
Pb
(%)
Zn
(%)
Cu
(%)
Ag eq gpt Ag eq oz
(M)
Constancia 218,545 6.0 188 2.09 3.08 0.34 968 6.80
Wellington 77,080 6.0 186 1.68 3.66 0.52 1,004 2.49
Escondida 21,406 1.0 238 0.24 1.08 2.84 733 0.50
Constancia East 18,636 5.8 137 1.93 1.95 0.11 798 0.48
San Jose 7,673 5.7 217 4.76 2.93 0.30 1,084 0.27
Colquipallana 5,215 3.4 207 3.31 5.14 0.19 953 0.16
Total Indicated 348,554 5.6 189 1.95 3.05 0.52 955 10.71
               
MEASURED & INDICATED
Mine Tonnes Au
(g/t)
Ag
(g/t)
Pb
(%)
Zn
(%)
Cu
(%)
Ag eq gpt Ag eq oz
(M)
Constancia 488,881 6.1 205 2.24 3.28 0.39 1,021 16.05
Wellington 169,408 6.0 185 1.69 3.82 0.51 1,017 5.54
Escondida 36,767 1.0 255 0.26 1.19 2.99 775 0.92
Constancia East 34,950 5.9 139 1.95 2.05 0.11 816 0.92
San Jose 14,594 5.7 215 4.63 2.93 0.30 1,081 0.51
Colquipallana 8,159 3.4 212 3.44 5.18 0.20 968 0.25
Total M & I 752,759 5.8 200 2.06 3.26 0.53 999 24.20
               
INFERRED
Mine Tonnes Au
(g/t)
Ag
(g/t)
Pb
(%)
Zn
(%)
Cu
(%)
Ag eq gpt Ag eq oz
(M)
Constancia 532,422 5.3 215 1.71 3.29 0.40 950 16.25
Wellington 238,811 5.4 219 1.06 3.95 0.78 1,014 7.78
Escondida 96,926 2.2 208 0.26 2.24 1.90 751 2.34
Constancia East 49,234 5.7 125 1.66 1.57 0.21 760 1.20
San Jose 14,174 5.7 213 4.34 2.78 0.28 1,049 0.48
Colquipallana 11,592 3.7 117 2.98 3.15 0.15 743 0.28
Total Inferred 943,160 5.0 209 1.45 3.25 0.64 934 28.36

Notes for Mineral Resource Estimates:

  1. Cut-offs are based on an estimated $140 Net Smelter Return (NSR)/tonne.
  2. Metal prices used to calculate NSR: $1,300 per ounce (oz) Au, $17/oz Ag, $1.15 per pound (lb) Pb, $1.50/lb Zn, $3.00/lb Cu
  3. Block model grades converted to United States Dollar (US$) value using plant recoveries of 92.1% Ag, 80.2% Au, 77.3% Pb, 82.6% Zn, 52.7% Cu.
  4. Rock Density for Constancia: 3.3 tonnes per cubic meter (t/m³), Wellington, Constancia East, Escondida, San Jose: 3.2 t/m Colquipallana: 2.9 t/m³.
  5. Totals may not agree due to rounding.
  6. Grades in metric units.
  7. All currencies US dollars.
  8. Ag equivalent ounces (eq oz) million (M) is calculated from gpt data
  9.   AgEq g/t = Ag g/t + (Pb grade x ((Pb price per lb/Ag price per oz) x 0.0685714 lbs per Troy Ounce x  10000 g per %)) +(Zn grade x ((Zn price per lb/Ag price per oz) x 0.0685714 lbs per Troy Ounce x 10000 g per %)) + (Cu grade x ((Cu price per lb/Ag price per oz) x 0.0685714 lbs per Troy Ounce x 10000 g per %)) + (Au grade x (Au price per oz/Ag price per oz)).

The above updated resource estimates included in this news release 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 constructed under supervision of Ronald Turner, P.Geo. of Golder Associates S.A., the Qualified Person. The Mineral Resource Estimate was completed using MicroMine 3D geological software, and the inverse distance cubed estimation technique was utilized in the estimation of grade to each of the blocks in the block models.

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-Lima lab in Lima, Peru. The gold was analyzed by fusion with 30 g fire assay and atomic absorption spectroscopy (AAS) finish, with the resulting values reported in parts per million (code FAA313). The remaining 52 elements were analyzed by mass spectrometry of inductively coupled plasma (ICPMS) and the resulting values were reported in parts per million (code IMC12B). Any gold results that exceeded the limit of detection were re-analyzed by fire assay with a gravimetric finish (code FAG303). Any silver results that exceeded the limit of detection (>10g/t) were re-analyzed by fire assay with a gravimetric finish (code FAG313). Any other metals that exceeded the limit of detection were re-analyzed by ICP-AAS (code AAS11B).

The technical information contained in this news release has been reviewed and approved by Matthew Wunder, P. Geo., Vice-President Exploration for the Company and the Qualified Person (QP) for the Coricancha 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.

NI 43-101 Technical Report on the Coricancha Mine

Huarochirí Province, Peru   |   December 20, 2017
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