GREAT PANTHER SILVER LIMITED (TSX:GPR) has reported that Scott Wilson Roscoe Postle Associates, of Vancouver, B.C., has completed a NI 43-101 compliant mineral resource/reserve estimate on the Cata Clavo, Los Pozos, and Santa Margarita zones at the Company's wholly-owned Guanajuato Mine in Guanajuato, Mexico.
The new Measured and Indicated mineral resource contains 5,450,000 ounces silver equivalent. Inferred mineral resources are estimated at 2,678,000 ounces silver equivalent ("Ag eq oz"). The Measured and Indicated mineral resources include 4,372,000 Ag eq oz categorized as Proven and Probable mineral reserves, using a cut-off grade of 185 g/t silver equivalent. This is the first time that NI 43-101 compliant reserves have been estimated for the Guanajuato Mine and is a positive step in confirming the long-term viability of this historic operation.
The new resource base represents a 53% increase over the previous resource estimate (for just the Cata Clavo; see news release June 30, 2009), even after deducting the production from that zone over the last year and a half. This demonstrates the Company's ability to not only replace what is being mined, but to increase the resource base and extend the mine life with additional drilling. There were no compliant resources at Guanajuato when Great Panther purchased the property in 2005 and most of the more than 4,500,000 Ag eq oz that the Company has mined from Guanajuato since 2006 has come from non-compliant resources.
Mining of the three zones, Cata, Los Pozos, and Santa Margarita currently accounts for most of the Guanajuato metal production. Resource drilling is ongoing to delineate new resources and reserves on the upper and depth extensions of Los Pozos and the southeast strike extension of Santa Margarita but also includes Guanajuatito, Valenciana, San Telesforo, and the depth extensions of the Rayas Clavo, none of which are included in this resource estimation but which will be included in the 2011 update. In addition, drilling of the very promising San Ignacio project will continue through 2011 and will make a significant contribution to future resources for the Guanajuato Mine. As such, the resource base will continue to build at Guanajuato and it is the Company's stated objective to delineate approximately 25-30 million Ag eq oz here by 2012.
For the year 2010, production from Guanajuato is estimated to be 1.02 million Ag oz and 6,720 Au oz (1.44 million Ag eq oz). The resource and reserve estimates, together with the significant potential of the ongoing drilling programs, positively support the achievement of the growth strategy objectives for Guanajuato.
Silver equivalent values were applied to computer generated block models in order to define the mineral resource. The mineral reserve cut-off value of 185g/t (6.0 oz/t) silver equivalent is the metal content contained in one tonne of ore for which the net revenue (net of smelter and refining costs) is equal to the average full operating costs to mine and process one tonne of ore. Scott Wilson RPA used medium term projected metal prices of US$17.67/oz Ag and US$1150/oz Au (relative price ratio of 65 gold to 1 silver), 2010 concentrate sales contract terms, and typical plant performance metal recoveries and concentrate grades to calculate the net value. Total operating costs at Guanajuato, including mining, milling, and general and administration costs, are currently US$85/tonne. Experience gained from mining the veins by the cut-and-fill mining method and the upward trend in metal prices, determined that the appropriate cut-off value for defining mineral resources at Guanajuato be set at 136g/t (4.3oz/t) silver equivalent. The use of a lower cut-off for resources reflects the less stringent guidelines for resources versus reserves.
Based upon these parameters, the Measured and Indicated mineral resource contains 5,450,000 Ag eq oz including 2,495,000 Ag eq oz in the Measured category and 2,956,000 Ag eq oz in the Indicated category. Inferred resources are estimated at 2,678,000 Ag eq oz. Of the Measured and Indicated mineral resource, 4,372,000 Ag eq oz is classified as Proven and Probable mineral reserve, using a cut-off of 185g/t silver equivalent. The Proven mineral reserve is estimated at 1,935,000 Ag eq oz, while the Probable mineral reserve is estimated at 2,438,000 Ag eq oz.
The mineral resource estimate for Guanajuato was prepared using block models constrained by 3D wireframes of the principal mineralized zones. Separate block models, comprising arrays of 2.5 by 2.5 by 2.5 meter blocks, were constructed for each of the Cata, Los Pozos, and Santa Margarita zones. Grades for gold and silver were interpolated into the blocks using Inverse Distance Cubed (ID3) weighting. The samples consisted of diamond drill and production chip samples. Scott Wilson RPA capped high gold and silver grades at a range of levels depending on the zone and the type of sample (drill hole or chip). The estimates were classified according to the CIM Definition Standards on Mineral Resources and Mineral Reserves, and as such, are consistent with the requirements of NI 43-101. The estimate was prepared using GEMS software (Gemcom), which is a commercially available package, commonly used in the industry.
The Cata Clavo is separated into four zones, namely, the Veta Madre, Alto 1, Alto 1a and Alto 2. The upper limit of the main Veta Madre zone is set at the floor of the 460 metre level as it has been extensively mined out above this level. Mining of the three higher grade Alto zones is underway using a modified mining plan. The mineralized zones used in the resource represent an approximate 100 metre vertical height and a strike length of approximately 150 metres. The Los Pozos zone is a downward tapering zone of 30-90 metres strike length and widths to 12 metres. The mineral resource estimate is from the 390 level up to the bottom of the 270 level sill pillar. The Santa Margarita is separated into four zones, namely the HW stockwork, Breccia, FW A, and FW B. The mineral resource estimate was calculated from below the floor of the 390 level to the 600 level along a strike length of more than 200 metres.
The Veta Madre (at Cata and Los Pozos areas) and the Cata Alto 1 zone are complex quartz dominated stockwork and breccia zones of pyrite and argentite mineralization with argillic and propylitic alteration in the footwall shale. Footwall to the Veta Madre is a barren silica breccia with large angular shale fragments. The Alto 1a, and Alto 2 zones are silica rich brecciated zones within a hanging-wall diorite dyke. The Santa Margarita zones in the Rayas area are silica rich brecciated hanging wall conglomerates, andesite and La Sirena quartz porphyry intrusive. All zones strike generally NW-SE and dip 45 degrees southwest.
Measured, Indicated and Inferred mineral resources in the three areas were estimated by Dave Rennie, P.Eng, a Principal Geologist for Scott Wilson RPA, and the Proven and Probable mineral reserves were estimated by R. Dennis Bergen, P. Eng, Associate Principal Mining Engineer for Scott Wilson RPA. Both are independent of Great Panther as per the criteria set out in NI43-101.
Both drill core and underground chip samples were assayed independently by SGS at the Company's Guanajuato Mine site laboratory. Aspects relating to mining and metallurgy are overseen by Charles Brown, Chief Operating Officer for Great Panther and its Mexican subsidiary, Minera Mexicana El Rosario, S.A. de C.V. Robert F. Brown, P. Eng and Vice President of Exploration for the Company, is the Qualified Person for the Guanajuato Mine Project, under the meaning of NI43-101, and has reviewed these results. The Company's QA/QC program includes the regular insertion of blanks, duplicates, and standards into the sample shipments.
Great Panther owns a 100% interest in the Guanajuato Mine Complex. Historically, the Guanajuato Mine was one of the largest silver producers in Mexico and encompasses the core of the Guanajuato District, which has produced 1.2 billion ounces of silver and 4.5 million ounces gold.
Source: GREAT PANTHER SILVER LIMITED