Great Panther Mining Limited, a growing gold and silver producer focused on the Americas, reports that wall movements have been detected in the west wall of the south-central portion of the Urucum Central South (“UCS”) open pit at Tucano, the Company’s wholly-owned mining operation in Brazil. Heavy rainfall, well above seasonal average, triggered higher phreatic levels in the west wall impacting slope stability. In order to ensure health and safety for workers, mining activities in UCS were temporarily halted. The mill will continue to receive ore from the Urucum North open pit and from stockpiles.
“We are working with our consultants to make operations safe, with the expectation that mining of the higher-grade gold ore in the UCS pit will start back up again in the third quarter of this year,” stated Rob Henderson, President & CEO of Great Panther. “As a consequence, 2021 consolidated guidance is being reduced by 10,000 ounces to 125,000 to 140,000 gold equivalent ounces.”
Activities are underway to improve wall stability, including unloading additional waste material and improving drainage from the upper benches. The Company expects this additional waste movement will impact ore mining in UCS throughout Q2 and Q3 2021. These activities are being carried out with monitoring of movement by radar and within strict safety protocols. Water levels are being monitored closely, and preparations are being made for horizontal drainage holes that may be required in the lower part of the west wall.
The Company’s preliminary assessment is that 2021 production at Tucano will be reduced by approximately 10,000 gold ounces (“Au oz”) to 100,000 – 110,000 Au oz. The second half of 2021 is expected to account for 60% of this guidance. All-in-sustaining costs (excluding corporate general and administrative expenses) (“AISC”) are expected to increase to $1,450 – $1,550 per Au oz sold. Revised 2021 consolidated guidance is stated in the table below.
Revised 2021 Consolidated Guidance
Tucano |
Mexico |
Consolidated |
||||
Budget |
Revised |
Budget |
Revised |
Budget |
Revised |
|
Au eq oz(1) |
110,000 – |
100,000 – |
25,000 – |
25,000 – |
135,000 – |
125,000 – |
Ag oz (000) |
– |
– |
1,500 – 1,600 |
1,500 – 1,600 |
1,500 – 1,600 |
1,500 – 1,600 |
Au oz |
110,000 – |
100,000 – |
8,000 – 10,000 |
8,000 – 10,000 |
118,000 – |
108,000 – |
AISC ($/Au oz sold)(2) |
$1,350 – 1,450 |
$1,450 – 1,550 |
N/A |
N/A |
$1,350 – 1,450 |
$1,450 – 1,550 |
(1) |
Gold equivalent ounces for 2021 are calculated using a 1:85 ratio of the silver price to the gold price, which is representative of the average ratio for the respective metal prices and approximate ratios for the price per ounce of gold to price per pound of lead and zinc. |
(2) |
AISC refers to all-in sustaining cost per gold ounce sold, excluding corporate general and administrative expenditures, and reflects the AISC at the Company’s operating mines. The calculation starts with cash cost net of by-product revenue and adds accretion of reclamation provisions, lease liability payments, sustaining exploration, evaluation and development expenses, and sustaining capital expenditures for the operating mines. Sustaining expenditures are those costs incurred to sustain and maintain existing assets at current productive capacity and constant planned levels of productive output. AISC is a non-Generally Accepted Accounting Principle (“non-GAAP”) measure. This measure is widely used in the mining industry as a benchmark for performance but does not have a standardized meaning as prescribed by International Accounting Reporting Standards (“IFRS”) as an indicator of performance and may differ from methods used by other companies with similar descriptions. Refer to the Company’s Management Discussion and Analysis for the three months ended March 31, 2021 for a reconciliation of AISC to the Company’s financial statement measures. The Company’s AISC guidance assumes a Brazilian real to US dollar exchange rate of 5.30. Actual results may differ. |
(3) |
The revised production and cost guidance for 2021 assumes no COVID-19 related shutdowns, the Company being able to successfully regain and maintain geotechnical control/stability of the UCS pit and access of the mineralization in the UCS pit, based on completion of the planned additional technical work and in accordance with the revised Tucano mine plan, such that ore mining can recommence in the UCS pit in Q3 2021 and continued thereafter without additional costs or significant interruption, as well as permitting of additional tailings storage capacity at the GMC before June 30, 2021. |
The revised production and cost guidance estimates are forward-looking statements and information. They should be read in conjunction with the Cautionary Statement on Forward-Looking Statements section at the end of this news release. The Company may revise guidance during the year to reflect actual results to date and those anticipated for the remainder of the year.
ABOUT GREAT PANTHER
Great Panther is a growing gold and silver producer focused on the Americas. The Company owns a diversified portfolio of assets in Brazil, Mexico and Peru that includes three operating gold and silver mines, four exploration projects, and an advanced development project. Great Panther is actively exploring large land packages in highly prospective districts and is pursuing acquisition opportunities to complement its existing portfolio. Great Panther trades on the Toronto Stock Exchange trading under the symbol GPR and the NYSE American under the symbol GPL.
TECHNICAL INFORMATION
Scientific and technical information contained in this news release have been reviewed and approved by Neil Hepworth, Chartered Engineer UK, Chief Operating Officer, a Qualified Person, as the term is defined in National Instrument 43-101 – Standards of Disclosure for Mineral Projects.