Resource World Magazine

60 www.resourceworld.com F E B R U A R Y / M A R C H 2 0 1 7 MINING GREAT PANTHER SILVER LIMITED [GPR-TSX; GPL-NYSE-MKT] recently agreed with subsidiaries of Nyrstar NV to acquire their Coricancha polymetallic (gold-silver-lead-zinc-copper) mine and mill complex in Peru. The mine is located in the central Andes of Peru, approxi - mately 90 paved-road kilometres east of the capital of Lima and has the potential to produce three million silver equivalent ounces annually giving the company a 75% increase in production. Under the terms of the acquisition, Great Panther will pay US $100,000 on closing, plus an amount equal to hold - ing company Nyrstar Coricancha's cash on hand at completion as well as an earn- out consideration of up to US $10 million. Under the earn-out, Nyrstar will be paid 15% of the free cash flow from the mine during the five-year period after which the project is cumulative free cash flow posi - tive from closing. In an interview, Robert Archer, President and CEO, told Resource World, "So not only do we not have to pay hun- dreds of thousands upfront, but we don't have to pay anything else until we have recouped our investment. When the proj- ect is profitable, only then do we pay 15% of free cash flow for five years and to a maximum of US $10 million." Great panther already owns and oper- ates the Guanajuato Mine Complex in central Mexico where the main silver- gold mines in Guanajuato City and a satellite operation, San Ignacio, 22 km away, provide feed for a 1,200 tonne per day processing plant. Great Panther also owns the high-grade polymetallic Topia Mine (silver-lead-zinc-gold) in the Sierra Madre Mountains of west- central Durango State, Mexico that includes 9 small mines all feeding a central plant operating at 270 tonnes per day. "There is already a lot of compe - tition in Mexico and there has been for a number of years. Therefore, it's very difficult to find good quality, near-term, silver production assets as they tend to be overpriced," said Archer. "Secondly, there is huge potential in Peru and we thought that having a mine in production in that country would serve as a foundation for future growth down there like we have in Mexico." Archer said that Great Panther Silver was built by acquiring past-producing mines in Mexico and successfully bringing them back into production. "The work we completed at Coricancha in 2015 and 2016, during the option term, demonstrated substantial upside and we believe that we have the expertise and dis - cipline to capitalize on that. The project has the potential for annual production of approximately 3 million silver equivalent ounces, which would be a significant con- tribution to our growth. Importantly, with more than US $54 million in cash, Great Panther is fully financed to bring the mine back into production." The Coricancha Mine is a fully permit - ted polymetallic mine that includes an operational 600 tonne-per-day flotation and gold Biox™ bioleach plant along with supporting mining infrastructure. Production dates back to 1906; however, the mine has been on care and maintenance since August 2013 when it was closed due to falling commodity prices. The 3,700-hectare property is charac - terized by gold-silver-lead-zinc-copper mineralization (~80% gold-silver by value) which occurs as massive sulphide veins that have been mined underground by cut-and-fill methods. Great Panther's exploration and evaluation work in 2015-2016 led to con - tinued negotiations with Nyrstar and Great Panther is continuing engineering and technical evaluation for the reactivation of the mine with the objective of further refining the costs and timing for start-up. "We had the project under option for a year and then terminated that option in May of 2016," said Archer. "Essentially, at Great Panther Silver acquiring the Coricancha Polymetallic Mine by Ellsworth Dickson The Coricancha polymetallic (gold-silver-lead-zinc-copper) mine located in the central Andes of Peru. Photo courtesy Great Panther Silver Ltd.

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