Overview

The Guanajuato Mine Complex (GMC) is Great Panther's largest operation in Mexico and includes production from the Guanajuato and San Ignacio underground mines. For the purposes of resource estimation, GMC also includes the El Horcon project as future production from El Horcon would be trucked to the GMC Cata processing plant. 

GMC is located within the Guanajuato district – historically one of Mexico’s most prolific mining districts, with past production of over one billion ounces of silver and four million ounces of gold since the 16th century. The main Guanajuato mines, Cata processing plant and office facilities are situated in the outskirts of the capital city of Guanajuato, in Guanajuato State. These facilities have excellent infrastructure with access via city streets, and an international airport only 30 minutes away. The San Ignacio mine lies approximately eight kilometres to the west and is accessed by a 22-kilometre paved road. Ore from San Ignacio is trucked to the Cata processing plant.

GMC is an underground silver-gold operation that utilizes cut-and-fill mining methods. Numerous deposits are currently being mined with access provided by interconnected ramps, these same ramps connect to a primary ramp which used for ore haulage to the surface. There also exists two additional shafts which are currently on care and maintenance. Ore is processed into a high quality, precious metal-rich concentrate for transportation to smelters overseas. The Cata processing plant, located near the central Cata shaft, consists of the following three segments:

  • three-stage crushing section, producing a (-¼ inch) fine ore mill feed;
  • Grinding section, consisting of three ball mills operated in parallel, and
  • Conventional flotation circuit with a total capacity of 1,000 tonnes per day.

Most of the supplies and skilled labour required for mining and processing at GMC are sourced from the cities of Guanajuato and Leon.

GMC is 100% owned by Great Panther.

Operating Results

  2013 20143 20153 20163 20173 20183 20193
Tonnes ore milled (000's) 222 268 310 321 320 301 188
Ore silver grade (g/t) 169 161 191 163 151 129 116
Ore gold grade (g/t) 2.3 2.03 2.35 2.43 2.41 2.27 2.26
Plant silver recovery (%) 89.7 89.2 88.5 87.9 89.2 87.9 84.7
Plant gold recovery (%) 84.1 90.8 90.2 86.4 86.9 87.1 85.2
Metal production, (000's Ag eq oz)1 2,840 2,193 3,081 2,987 2,892 2,623 1,518
Silver production, (000's oz) 1,711 1,239 1,708 1,473 1,387 1,097 591
Gold production (oz) 15,714 15,906 21,126 21,626 21,501 19,073 11,588
Cash cost / Ag oz (US$)1,2 10.42 11.12 5.77 0.85 4.32 10.23 6.74
  1. Metal production is expressed in terms of silver equivalent ounces, (Ag Eq oz), the formula for which depends on the gold and silver metal prices used in each year and hence are only indicative.
  2. Cash costs per ounce of silver is a non-IFRS measure used by the Company to manage and evaluate operating performance at each of the Company's mines. It comprises the cost of production, cost of concentrate transportation and the cost of smelter and refining charges, net of the by-product credits from the sale of gold. Refer to the "Non-IFRS Measures" in Great Panther’s MD&A.
  3. Includes production from San Ignacio.

Exploration

The Guanajuato property is situated along the core of the prolific Veta Madre silver-gold structure. The world-class, low-sulphidation epithermal deposits are somewhat unique as they locally demonstrate a vertical depth extent of greater than 600m (this is rare for epithermal deposits and implies a long-lived mineralizing system).

To a certain degree, deep extensions of mineralization can be found by following known deposits down plunge. Great Panther has been successful at discovering new mineralized zones through systematic drilling and a continually improving understanding of the structural controls. In this way, Great Panther has been successful in replacing what it mines each year. Due to the complex nature of the ore, some zones are mined as they are found, without the need (or time) for detailed drilling.

Presently, exploration at the Guanajuato Mine is focused on re-evaluation of the historical mining areas in the upper parts of the epithermal system.  Work, geological mapping, sampling, re-opening old levels, and core drilling with three underground rigs, has been focused on the Los Pozos, Promontorio, and Valenciana areas. 

At the San Ignacio mine, core drilling has been ongoing throughout 2020 with one underground rig focused on resource definition, and one surface rig focused on the evaluating the Purisima vein system between the historical San Ignacio and San Pedro mines.

Resource Estimates

 Total GMC Mineral Resource Estimates at July 31, 2020

Classification Tonnes Grade
Ag (g/t)
Contained
Ag (oz)
Grade
Au (g/t)
Contained
Au (oz)
Grade Ag
eq (g/t)
Contained
Ag eq (oz)
Grade Au
eq (g/t)
Contained
Au eq (oz)
Measured 600,941 195 3,763,303 2.16 41,741 389 7,520,049 4.32 83,556
Indicated 220,910 209 1,483,209 1.83 12,951 373 2,651,863 4.15 29,465
 Total M&I 821,851 199 5,246,512 2.07 54,693 385 10,171,912 4.28 113,021
Inferred 1,453,008 185 8,664,244 2.25 105,219 388 18,109,823 4.31 201,220

Notes:

  1. This consolidated GMC Mineral Resource estimate includes the estimates of the San Ignacio and Guanajuato mines. See detailed notes in the tables below for the key assumptions, parameters and methods used for each of the underlying estimates

San Ignacio Mineral Resource Estimates at July 31, 2020

Classification Tonnes Grade
Ag (g/t)
Contained
Ag (oz)
Grade
Au (g/t)
Contained
Au (oz)
Grade Ag
eq (g/t)
Contained
Ag eq (oz)
Grade Au
eq (g/t)
Contained
Au eq (oz)
Measured 314,802 142 1,435,252 2.64 26,746 384 3,842,386 4.27 42,693
Indicated 73,096 144 338,246 2.19 5,135 349 800,416 3.87 8,894
 Total M&I 387,898 142 1,773,498 2.56 31,881 377 4,642,801 4.19 51,587
Inferred 992,835 169 5,406,142 2.33 74,530 384 12,089,792 4.27 134,331

Notes:

  1. Totals may not agree due to rounding
  2. Grades have been estimated in metric units and contained silver and gold estimated in troy ounces (oz)
  3. A minimum mining width of 0.50 metres (m) and a vein bulk density of 2.68 t/m3 were used in the estimates
  4. Mineral Resources are estimated at a full cost cut-off net smelter return (NSR) of US$100/t using metal prices of US$17.64/oz Ag and US$1,694/oz Au (based on CIBC 2021 forecast) and metallurgical recoveries of 85.5% for Ag and 83.9% for Au
  5. Ag eq oz were calculated using 90:1 Ag:Au ratio. The ratios are reflective of average metal prices for 2020
  6. Estimates have an effective date of July 31, 2020
  7. Mineral Resources that are not Mineral Reserves do not have demonstrated economic viability
  8. Inferred Mineral Resources have a great amount of uncertainty as to their existence and as to whether they can be mined economically. It cannot be assumed that all or part of the Inferred Mineral Resources will ever be upgraded to a higher category

Guanajuato Mineral Resource Estimates at July 31, 2020

Classification Tonnes Grade
Ag (g/t)
Contained
Ag (oz)
Grade
Au (g/t)
Contained
Au (oz)
Grade Ag
eq (g/t)
Contained
Ag eq (oz)
Grade Au
eq (g/t)
Contained
Au eq (oz)
Measured 286,139 253 2,328,051 1.63 14,995 400 3,677,663 4.44 40,863
Indicated 147,814 241 1,144,963 1.65 7,816 390 1,851,448 4.33 20,572
 Total M&I 433,953 249 3,473,014 1.64 22,811 396 5,529,111 4.40 61,435
Inferred 460,174 220 3,258,101 2.07 30,689 407 6,020,031 4.52 66,889

Notes:

  1. Totals may not agree due to rounding
  2. Grades have been estimated in metric units and contained silver and gold estimated in troy ounces (oz)
  3. A minimum mining width of 0.50 m and a vein bulk density of 2.64 t/m3 were used in the estimates
  4. Mineral Resources are estimated using cut-offs based on the full operating costs per mining area of US$115/t for Cata, US$115/t for Santa Margarita/San Cayetano, US$89/t for Los Pozos, US$100/t for Guanajuato, US$125/t for Promontorio, and US$102/t for Valenciana
  5. Block model grades converted to US$ value using plant recoveries of 85.5% Ag, 83.9% Au, and net smelter terms negotiated for concentrates
  6. Ag eq oz were calculated using 90:1 Ag:Au ratio. The ratios are reflective of average metal prices for 2020
  7. Metal prices US$17.64/oz silver, and US$1,694 gold (based on CIBC 2021 forecast)
  8. Estimates have an effective date of July 31, 2020
  9. Mineral Resources that are not Mineral Reserves do not have demonstrated economic viability
  10. Inferred Mineral Resources have a great amount of uncertainty as to their existence and as to whether they can be mined economically. It cannot be assumed that all or part of the Inferred Mineral Resources will ever be upgraded to a higher category

TECHNICAL DISCLOSURE AND QUALIFIED PERSONS

The GMC Mineral Resource estimates included herein were classified per the CIM Definition Standards on Mineral Resources and Mineral Reserves (CIM Standards) and are consistent with the requirements of National Instrument 43-101 – Standards of Disclosure for Mineral Projects (NI 43-101). The Mineral Resource Estimates were completed under the supervision of Robert F. Brown, P. Eng., and Mohammad Nourpour, P. Geo. (each a Qualified Person within the meaning of NI 43-101 and together, the Company Qualified Persons). The Mineral Resource estimates were completed using MicroMine 3D geological software, and the inverse distance cubed estimation technique for estimation of grade to each of the block model blocks. The estimated Mineral Resources are a categorized compilation of blocks greater than the full operational costs of the various mining areas.

Analyses from San Ignacio and Guanajuato underground sampling, operational and exploration drilling are completed at the Company’s GMC laboratory. Exploration drill core is re-assayed by SGS in Durango, Mexico.

Great Panther’s QA/QC program for drill core includes the regular insertion of blanks, standards, and duplicates into the sample shipments, diligent monitoring of assay results, and necessary remedial actions. The GMC laboratory uses the following analytical techniques: atomic absorption spectroscopy (AAS) for silver with over-limits (300 g/t) completed by fire assay, AAS for gold with over-limits (10 g/t) completed by fire assay, and lead, zinc, copper, arsenic and antimony analyses completed using AAS. QA/QC monitoring of the GMC laboratory includes shipping all exploration drill hole pulps to SGS-DGO for re-analysis and statistical comparison of assay values using correlation coefficients.

The technical information contained herein, including the sampling, analytical, and test data underlying the Mineral Resource estimates, has been reviewed and approved by Robert F. Brown, P. Eng., and Mohammad Nourpour, P. Geo., who are the non-independent Qualified Persons for the GMC under the meaning of NI 43-101. Aspects relating to mining and metallurgy are overseen by Neil Hepworth, M.Sc., C. Eng., Chief Operating Officer for Great Panther. Great Panther’s Qualified Persons confirm there were no limitations from the Company in verifying the drilling and sample data underlying the mineral resource estimate which were verified through site visit observations and monitoring of the QA/QC program.

NI 43-101 Technical Report on the GMC

Guanajuato, Mexico   |   July 31, 2020

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