Overview

In 2017, Great Panther acquired the Coricancha advanced development project in the central Andes of Peru from Nyrstar NV. Coricancha 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 operation is located in an area of significant relief, and elevations at the property range between 3,000 and 3,920m above sea level.

Coricancha 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. Coricancha is a past producing mine with a land package covering more than 3,700 hectares in the prolific Central Polymetallic Belt. 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 including resue mining in the narrower veins.

Geology, Mining and Processing

Coricancha 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 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 in the wider vein areas. Mining was semi-mechanized with ore haulage principally undertaken by LHD haulage trucks to a central ore chute where locomotives, and ore carts are primarily used to deliver ore into a secondary ore chute delivering ore directly to the crushing facility. . 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 trucks to the Chinchán dry-stack tailings storage facility, approximately 35 km from the plant.

Bulk Sample Program

The mineralized veins at Topia are laterally extensive and can locally be followed for more than four kilometres. They are steeply dipping and, due to their narrow width, mine development is ‘on-vein’ rather than parallel to it. Consequently, the veins are drilled at wide spacing from surface to trace their lateral continuity, then detail sampled underground as development progresses. Very little underground exploration drilling is conducted. In this way, Inferred Mineral Resources are defined primarily from surface drilling while these are upgraded to Measured & Indicated Resources once the underground sampling is complete. This methodology also proves adequate as a guide to mine planning.

Topia Mineral Resource Estimates

MEASURED
Mine Tonnes Ag
(g/t)
Au
(g/t)
Pb
(%)
Zn
(%)
Ag
(oz)
Au
(oz)
Ag eq oz
Topia 310,600 474 1.36 4.02 4.20 4,732,807 13,579 9,920,000
               
INDICATED
Mine Tonnes Ag
(g/t)
Au
(g/t)
Pb
(%)
Zn
(%)
Ag
(oz)
Au
(oz)
Ag eq oz
Topia 165,300 436 1.34 3.57 3.79 2,317,563 7,123 4,850,000
               
MEASURED & INDICATED
Mine Tonnes Ag
(g/t)
Au
(g/t)
Pb
(%)
Zn
(%)
Ag
(oz)
Au
(oz)
Ag eq oz
Topia 475,900 461 1.35   3.87 4.06 7,050,370 20,702 14,770,000
               
INFERRED
Mine Tonnes Ag
(g/t)
Au
(g/t)
Pb
(%)
Zn
(%)
Ag
(oz)
Au
(oz)
Ag eq oz
Topia 400,400 434 1.34 2.86 2.97 5,586,431 17,248 10,720,000

Notes:

  1. 2018 Mineral Resource Ag eq oz were calculated using 80:1 Ag:Au ratio, and ratios of 1:0.0636 and 1:0.0818 for the price/ounce of silver to price/pound of lead and zinc, respectively. The ratios are reflective of average metal prices for 2018.
  2. CIM Definitions were followed for Mineral Resources.
  3. Area-specific vein bulk densities as follows: Argentina - 3.06t/m3; 1522 - 3.26t/m3; Durangueno - 3.12t/m3; El Rosario - 3.00t/m3; Hormiguera - 2.56t/m3; La Prieta - 2.85t/m3; Recompensa - 3.30t/m3; Animas - 3.02t/m3; San Miguel - 2.56t/m3.
  4. Measured, Indicated, and Inferred Mineral Resources are reported at a cut-off net smelter return (NSR) as follows: 1522 Mine US$193/t, Argentina Mine US$172/t, Durangueno Mine US$144/t, Recompensa Mine US$151/t, Hormiguera Mine US$152/t, El Rosario Mine US$173/t, La Prieta US$235/t, Animas US$149/t, and San Miguel US$248/t.
  5. Totals may not agree due to rounding.
  6. A minimum mining width of 0.30 metres was used.
  7. Mineral Resources are estimated using metal prices of US$1,225/oz Au, US$15.50/oz Ag, US$1.00/lb Pb, and US$1.15/lb Zn; and metallurgical recoveries of 94% for Ag, 60% for Au, 94% for Pb, and 93% for Zn.

Robert F. Brown, P. Eng. was designated as the Qualified Person by Great Panther for the Topia Mine under the meaning of National Instrument 43-101.

Resource Estimates

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.

Coricancha Mineral Resource Estimates

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

  1. Cut-offs are based on an estimated $140 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.  Ag eq 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 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.

NI 43-101 Technical Report
on the Coricancha Mine

Huarochirí Province, Peru
December 20, 2017

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Preliminary Economic Assessment
on the Coricancha Mine

Huarochirí Province, Peru
July 13, 2018

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