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The Guanajuato Mines property is located in the State of Guanajuato, Mexico, on the outskirts of the colonial city of Guanajuato, which also serves as the state capital. The city is located 380 km by road northwest of Mexico City and is serviced by an international airport located close by near the city of Leon. 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. Overview The Guanajuato Mining District is one of the most prolific and best known silver districts in the world. Silver was discovered in 1548, and 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.
The three principal mines in Great Panther's portfolio, Valenciana, Cata and Rayas, are situated on the main Veta Madre (Mother Lode) structure that trends northwest-southeast through the district for at least 25 kilometres. 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. Elsewhere in the mine complex, silver-gold mineralization is also found in quartz veins parallel to the Veta Madre, and as large stockwork bodies on both sides of the structure. The stockworks can reach widths of 30 metres or more and locally exceed 100 metres in strike length and
The main claim block covers more than four kilometres of strike length along the Veta Madre and contains 25 shafts, 4 winzes (internal shafts) and more than a hundred kilometres of underground workings. The main shaft at each of the aforementioned mines is currently operational with ore being hoisted up the central Cata shaft where the mill plant that services the mines (1,200 tonnes per day capacity) is located. A fourth mine, San Ignacio, located in the La Luz district, only a few kilometres away, is presently closed but will be re-evaluated for it's potential to support a new mining campaign. Current Program Since December 2005 Great Panther has completed over 100 surface and underground drill holes at Guanajuato, testing the vein structure throughout its 4.2km strike length. Surface drilling has intersected four new silver-gold zones and provided further definition on the three previously known zones of silver-gold mineralization in the Promontorio area of the mine complex.
Resource Calculation On June 30, 2009, Great Panther announced completion of the first NI 43-101 compliant mineral resource estimate for the Guanajuato Mine for the zone known as the 'Cata Clavo'. The new Measured and Indicated resource estimate of 5,032,000 Ag eq oz represents only a very small part of the 4.2 kilometre strike length of the Guanajuato deposit. The Cata Clavo was the target of Great Panther's deep drilling program in 2008 and is separated into three zones, namely, the Veta Madre, Alto 1, and Alto 2. The mineralized zones used in the resource represent only this 100 metre vertical height and a strike length of approximately 150 metres. Using a cut-off net smelter return value of US$37.50/tonne, the capped indicated mineral resource contains 5,032,000 ounces silver equivalent, while the uncapped indicated mineral resource contains 6,491,000 ounces silver equivalent. Capped inferred resources are estimated at 285,000 ounces silver equivalent. Indicated capped mineral resources at a cut-off NSR value of US$37.50/tonne are estimated to be 351,000 tonnes at grades of 359g/t silver and 1.19g/t gold, while uncapped grades are 462g/t Ag and 1.55g/t Au. The capped estimate contains 4,071,000 oz silver and 13,000 oz gold, or 5,032,000 silver equivalent ounces (Ag eq oz). The uncapped estimate contains 5,239,000 oz silver and 17,000 oz gold, or 6,491,000 Ag eq oz. In addition, capped inferred resources of 24,000 tonnes grading 296g/t silver and 0.98g/t gold are estimated, containing 231,000 oz silver and 765 oz gold, or 285,000 Ag eq oz. Indicated and inferred mineral resources at the Cata Clavo as estimated by Greg Mosher, P.Geo, qualified person, and reviewed by Gilles Arseneau, PhD, at Wardrop can be viewed on our website at http://www.greatpanther.com/s/NewsReleases.asp?ReportID=354456 Mining of the Cata Clavo represents one of three main areas being mined at the Guanajuato silver -- gold mine and accounts for more than 50% of the total Guanajuato metal production. It will continue to be a major source of production as the Alto 1 zone is expected to be richer below the 460 level. An access decline is being driven beyond the 460 metre level and development and ore definition drilling of the Veta Madre, Alto 1, and Alto 2 zones of the Cata Clavo orebody is ongoing. For the year, 2009, production from Guanajuato is estimated to be 1.07 million Ag oz and 5,250 Au oz, (1.48 million Ag eq oz). The resource estimate positively supports the potential for further increases in production from Guanajuato. Production The Company officially commenced production at Guanajuato in June 2006 at a throughput of 400 tonnes per day (tpd). Commissioning of the plant had commenced in late March 2006 using low grade mineralization from older stockpiles. The other two 400 tonne ball mills and the flotation circuits in the mill have since been refurbished, allowing the mill to operate at its peak capacity of 1200 tpd. When operating at peak output, the mine will employ about 300 people working 3 shifts per day, 7 days per week. In the third quarter of 2009, Guanajuato achieved record production of 288,087 oz silver and 1,872 oz gold, (432,795 Ag eq oz), from milling 34,325 tonnes of ore. The average ore grade, at 315g/t Ag, and 2.00g/t Au, (15.10 Ag eq oz), represents a 70% increase in the silver equivalent grade when compared to Q3 2008. The discovery and development of three new ore zones helped to provide increased production at Guanajuato. Ore from the Santa Margarita vein averaged more than 5g/t Au, while the grade of ore mined from the Los Pozos and Cata Alto 2 zones was generally higher than average. Production at Cata, by cut-and-fill mining, continued from the 460 and 417 levels on the Veta Madre and the decline ramp was extended towards the 490 level. Rayas production was achieved from a combination of remnant and pillar recovery from the main Rayas Clavo and new resource development on the gold-rich Santa Margarita and Los Pozos zones. Stoping of the Guanajuatito North zone continued on the 20 and 50 levels and development was initiated on the 80 level. Guanajuato plant performance continues to excel. Metal recoveries for Q3 2009 averaged 84.8% for gold and 82.9% for silver compared to Q3 2008 when they were 77.5% and 83.0%, respectively. The quality of concentrates shipped to the IMMSA copper smelter averaged 14.13kg/t Ag and 92g/t Au. Management Management of the Guanajuato Mine Complex is by Ing. Carlos Castro Villalobos, General Manager. Robert Brown is the Qualified Person responsible for all technical information obtained and reported on. NI 43-101 Technical Report for Cata Clavo Zone - Guanajuato Mine - August 2009
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