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In late November 2010, a group of
analysts and journalists traveled to Guanajuato State,
which is a region that is rapidly becoming one of
Mexico’s major mining districts. It’s located in a
particularly rugged, mountainous portion of Central
Mexico, about 260 miles (430 kilometers) northwest of
Mexico City. One company actively involved in both
production and exploration in Guanajuato is Great
Panther Silver Ltd., headquartered in Vancouver,
British Columbia. They also own another productive
project, the Topia Property, located further north in
Durango State.
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Great
Panther began public trading in 2004, and their
first activity was to initiate exploration at
the Topia Mines.
Those
efforts justified the purchase of the mine in
2005, and in the same year they acquired the
Guanajuato properties as well.
During
2005, work took place to rehabilitate the mines
and mills at both locations and by 2006 they
were able to initiate production from both
projects. Since that time they have worked to
increase production as well as to develop
additional resources. |
Their project in Guanajuato State, where the tour visit
took place, is known as the Guanajuato Mine Complex,
while the Topia Property is the one found in Durango
State. Guanajuato is the larger of the two complexes and
figures more prominently in Great Panther’s future
plans. Both project areas are particularly rich in
mining history, going back several centuries to the time
of the Spanish Conquistadores with historic records
dating as early as 1538, less than two decades after
Cortez conquered the Aztecs and claimed “New Spain” for
Spanish king Juan Carlos.
Unlike most mining projects, the Guanajuato Mine
Complex—including several ore systems as well as the
milling operation—is located directly adjacent to an
urban area, in this case the City of Guanajuato with a
population of more than 150,000 residents. Fortunately
the mining industry formed a significant part of the
historic economic base for the city during which more
than one billion ounces of silver were produced and
residents appear to have accepted the presence of the
mine and mill as a matter of course. The company also
makes a significant contribution to the area economy by
employing about 750 workers at Guanajuato.
In order to continue to advance community relations,
Great Panther has worked with city leaders to make a
favorable impact on area residents. Community
development projects include funding for the Guanajuato
School of Mines, a reforestation program to rehabilitate
historic mine workings, restoration of old Spanish
mining ruins on Great Panther property and the
restoration of the historic Valenciana Courtyard for
tourism with the admission proceeds going to local
charities.
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The company acquired the
Guanajuato Mine Complex in 2005, and since that
time they have carried out extensive drilling
programs, both from surface and underground,
with particular emphasis being placed on the
Cata Clavo Zone. This Zone is located within the
more extensive Veta Madre vein system, which
contains all Great Panther’s Guanajuato project
areas.
By 2009 Great Panther was able to publish a
fully compliant, NI 43-101 Resource Estimate
based on the Cata Clavo Zone. The estimate used
a cut-off net smelter return (NSR) value of
$37.50 per tonne and showed a “Measured and
Indicated” mineral resource of 5,032,000 silver
equivalent ounces comprised of 351,000 tonnes
grading 359 grams per metric tonne (gpt) silver
(Ag) and 1.19 gpt gold (Au).
The Resource Estimate notes that it is based on
a length of only 150 meters and a 100-meter
vertical target area that is located within a
total strike length of 4.2 kilometers of the
Guanajuato deposit.
There are presently five designated contiguous
zones named, from west to east; the
Guanajuatito, Valenciana, Cata, Rayas and
Promontorio. Recent exploration has been focused
at two portions of the Rayas Zone known as Los
Pozos and Santa Margarita. Los Pozos is a
high-grade silver-gold area where the company
has been able to report assays of up to 783 gpt
Ag and 2.3 gpt Au over a width of 9.6 meters.
Exploration at Santa
Margarita is focused on expanding the ore body
to depth. Underground drilling activities are
initially testing along a 250-meter strike
length down to a depth of 650 meters with
exploration plans being developed to extend the
strike length to 600 meters.
One of the favorable results
of Guanajuato’s lengthy productive mining
history is the existence of abundant underground
tunnels along the entire 4.2 kilometer strike
length that have facilitated efficient
underground drilling operations. Deep
exploration drilling is also being conducted at
the Guanajuatito Zone. |
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In addition, exploration has recently been initiated at
an area known as the San Ignacio Mine Property, site of
a formerly producing mine where past production took
place at just one vein along a 500-meter strike length.
The property is located some 20 kilometers away from the
Cata Mill, and lies adjacent to Endeavour Silver’s
producing Bolanitos Mine. Exploration at San Ignacio is
in its early stages, but company geologists already
report that the first two holes have intersected several
zones of economic grade mineralization. Great Panther
plans to drill along a 4-kilometer strike length in
order to build new resources for future mill feed.
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It is
worth noting that the main deep shaft at Cata
grew to an unusually large diameter through
centuries of mining. Because of this factor, the
cages used for transporting personnel have no
side supports, but are simply lowered and raised
by cables. Some of the tour participants found
this unusual, and it is possible that this is
one factor which led to the presence of
particularly beautiful underground religious
shrines that may be found at Guanajuato.
Given the
presence of a nearby metropolitan area,
infrastructure at the company’s Guanajuato area
operations is excellent with good roads, readily
available power and water supplies, plus an
experienced labor force. |
Great Panther’s other producing mine is the Topia
high-grade silver-lead-zinc project that covers some
6,500 hectares in Sierra Madre Mountains of Durango
State. Mining from 12 veins is presently ongoing and ore
is trucked to a plant that currently operates at about
170 tonnes per day. The nearby town of Topia has 3,500
residents and provides for most of the work force,
estimated at around 275 employees. Topia is connected to
the national power grid, artesian springs provide water
to the town, and an installed satellite dish allows for
telephone and Internet services.
A recently-completed 8,815-meter drill program was
geared to expand silver production at Topia and the
company will use data gathered from that program along
with previously compiled information from 11 Topia area
mines and zones to prepare mineral reserve estimates in
the near future.
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Combined
production from Guanajuato and Topia has
increased steadily since 2006 when 638,775
ounces of silver equivalents (AgEO) were
produced. Subsequent total annual combined
production of AgEO from both properties shows
1,336,629 ounces in 2007; 1,809,720 for 2008;
2,202,456 for 2009 and a preliminary estimate of
2,300,000 for 2010. The company plans to
continue expanding their production facilities
to enable production to reach 3,800,000 ounces
by 2012.
(NOTE: “Silver Equivalent
Ounces” are obtained by combining actual ounces
of silver production with the total revenue
obtained from by-product metal recoveries
divided by the current quote on silver ounces.)
The Guanajuato mill flow chart shows facilities
for ore to be stored in two bins, sent to a
series of crushers, then to flotation cells,
then to thickeners where the pregnant solution
is skimmed off for drying, ultimately producing
a concentrate that is sold before being shipped
for final processing. Present plant capacity at
Guanajuato is approximately 1,000-1,200 tonnes
per day and the figure for Topia is 170-220
tonnes per day. |
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One notable improvement in the entire
exploration/development process at Guanajuato is the
construction of a new assay laboratory. While Great
Panther paid for construction of the facility, in order
to avoid any conflict of interest and for proper
validation of reporting, they have turned the operation
of the laboratory over to SGS Group, a leading
inspection and verification service provider. SGS staffs
the laboratory with its own scientists and prepares
independent verification of assays. The advantage to
Great Panther is a rapid turnaround of assay samples
when compared to shipping those samples to out-of-town
or even out-of-country laboratories.
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